In what is reported as an EXCLUSIVE in today’s The Age, Peter Martin has the following story:
THE Coalition’s tax policies will cost Australian businesses $4.57 billion in their first full year of operation, according to the Commonwealth Treasury.
Prepared as Treasury attempts to come to grips with a suite of Coalition policies yet to be announced, the analysis includes only those to which it has publicly committed. Excluded are policies with a negative but uncertain impact on business, such as winding back the recent increase in the employee tax-free threshold from $6000 to $18,200.
The three policies identified by Treasury are the Coalition’s commitment to impose a 1.5 per cent tax levy on big firms to fund paid parental leave, its decision to axe instant asset writeoff and other tax breaks for small business funded from the carbon tax, and its decision to axe the ability for businesses to “carry back” losses and obtain refunds for tax already paid funded from the mining tax.
The analysis excludes the benefit to some businesses from axing the carbon and mining taxes.Treasury finds that businesses would lose $4.57 billion in the first full year the Coalition’s three commitments were operational, accumulating to $17.2 billion over four years.
Its calculations suggest manufacturers would pay an extra $1.34 billion a year, retailers an extra $930 million and the construction sector an extra $860 million a year.
Although business as a whole would benefit from the Coalition’s policies because of the removal of the $6.6 billion a year carbon tax and the $2 billion a year mining tax, the analysis suggests that outside of the few big companies paying those taxes the rest of Australian businesses would suffer.
There is one very truthful aspect to this piece written by Martin – the exclusive bit.
It has been pretty obvious for some time that Peter Martin is being used as the Treasurer’s go-to man by providing leaks in exchange for favourable coverage of the government’s line. I guess it has always been thus with selected journalists, but has it ever been SO OBVIOUS? There was further evidence of this lovely little loop in the period leading up to MYEFO.
But the real point I want to make is this:
WHAT THE HELL IS THE TREASURY DOING COSTING COALITION POLICIES?
There is no sense in which this is legitimate activity for public servants to undertake. And were a government minister to ask for such analysis, the appropriate action of the public servants would be respectfully to decline the request.
I am absolutely amazed that Peter Martin can’t see this.
(Governments will typically try to get around this principle by feigning consideration of Coalition policies. In these cases, there could be no such pretence as they involve direct reversals of recently enacted government policies and the rejection of the Coalition’s proposed parental leave scheme.)
And when it comes to Treasury’s reputation in this field, can I remind you of the hilarious inaccuracy of the PEFO – yes, it was expected that the 2011-12 Budget cash balance would come in around the $10 billion mark when the actual outcome was over $40 billion. I ask you: who do you trust?