Some supportive comments: no surprises

Is it too cynical to suggest that a number of groups have been requested to issue supportive comments, endorsing the RSPT proposal as well as tossing a bouquet or two on the government’s general approach to public policy and economic management?

The cheer squad has been lining up.

The Association of Superannuation Funds has weighed in by claiming that the impact of the RSPT will be less than 1 per cent of members’ balances, taking into account the lower rate of company tax and the increase of 3 percentage points in the Superannuation Guarantee Charge. Having begged the federal government for years to increase the SGC – the addictive power of the 9 per cent is clearly wearing off and the superannuation funds and the funds managers clearly feel the need for more – it is important to them that nothing upset this apple cart.

Of course, the notion that the tax concessions associated with the higher SGCs – and note there is an important debate about whether the Treasury actually accounts properly for these concessions (they are overstated) – are in any sense connected to the proceeds of the RSPT is completely fanciful. Money is fungible and, in any case, it is not sensible to hypothecate the proceeds of a particular tax to an unrelated tax expenditure.

We now have the Chief economist of Austrade, Tim Harcourt weighing into the debate from South Africa. I hope he is enjoying the football and think of all those trade possiblities with South Africa that Tim can investigate over there? (Does anyone know why Austrade – a export facilitation agency with a flimsy rationale for taxpayer funding – needs a chief economist or any economist for that matter?) Anyway, according to Tim, the mining companies having been just begging to pay more tax – or that is what he assumes given their general support of a profit-based tax to replace royalties. I suspect a case of verballing.

And now there is the coalition of the ACTU, ACOSS and green groups lining up to support the tax. There are some points of difference, it should be noted. For instance, the green groups and the Greens are not supportive of the Brown tax mechanism whereby the government provides tax credits for losses incurred and ponies up the 40% in the case of project closure. It was pointed out during the week that, in the event like the BP oil spill in the US, under RSPT, taxpayers would foot the bill for 40% of the losses associated with the consequences of the environmental accident. This is not something that is likely to attract green support.

Julian Disney who is the spokesperson for this assortment of players was prattling on about the consequences of a growing and ageing society and the need for higher tax revenue to meet ‘social justice’ objectives. It seems everyone want to get hold of this new ‘miracle’ tax, which makes the original rationale for the tax fade further from view.

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14 Responses to Some supportive comments: no surprises

  1. ennui says:

    “Is it too cynical to suggest that a number of groups have been requested to issue supportive comments, endorsing the RSPT proposal”

    Sounds like tactics learned from the mining industry!

  2. Rob w says:

    Judith, so you are saying that body representing industry super funds supports a labor party policy, well colour me surprised!
    The words of Mandy Rice-Davies come to mind.
    The government seems to have the support of some of the most credible third parties that money can buy.

  3. Taylor says:

    ASFA doesn’t represent $400 billion in self-managed superannuation funds ie 40% of total super assets. Since a lot of these guys are retired or self-employed they won’t care about Super Guarantee either. They have over $120 billion in Aussie equities and I’d guess mining shares are well-represented.

  4. C.L. says:

    What I’d lik to know is what on earth Labor backbenchers mean when they say they want this issue ‘resolved’ as soon as possible, before Parliament rises for the winter break etc.

    Surely they mean dropped.

  5. rog says:

    How dare an industry body speak in favour of the RSPT, obviously it is another cunning Marxist plot

  6. The Queen says:

    Bugger the bloody lobbyists.

    I’ll give you two weeks to wrap this one up Rudd, you annoying little swot.

    After that I’m calling the Gov-Gen.

  7. I thought the increase in the SGC was supposed to take care of the needs of an ageing society – so why do we need a super tax to take care of those needs as well?

  8. Rococo Liberal says:

    The justification of the RSPT gets sillier and sillier. Why can’t the Government just admit that it needs a new revenue source and wants to milk a profitable industry?

  9. C.L. says:

    Terry McCrann answers my question: ‘resolving’ the RSPT is impossible. It has to be scrapped outright.

  10. Paul says:

    I am not surprised by the lineup of supporters. Their attitude to other people’s money means that they will always support tax increases:
    – increased levies (Super industry)
    – less mines, less human impact, anti-industrial humans (the Greens)
    – Anti-business (ACTU)
    – More taxpayer funded handouts (ACOSS)

    Austrade?!? The miners wanted a replacement for royalties and the Government gave them RSPT which cuts in at bond rate, is retrospective, doesn’t stop royalties, adds increased administrative burden etc etc.

  11. jC says:

    How dare an industry body speak in favour of the RSPT, obviously it is another cunning Marxist plot

    Wodgie supports the “My-fair-share-tax “because he wants his fair share.

  12. Samuel J says:

    The Association of Superannuation Funds is failing their members. Superannuation trustees are required to put the interests of members above all else – yet here they roll over on a tax which (even they admit) will reduce superannuation returns only to ensure that the superannuation guarantee is increased to 12 per cent. The latter only benefits fund managers; the former damages the interests of superannuation fund members.

  13. jC says:

    Samuel:

    I don’t have super as I think there is political risk. However if I did and the manager was agitating for this tax I would be demanding that the manager be removed immediately.

    I’m surprised account holders aren’t doing this at the moment.

    People should be aware that they can remove the manager and they should try to do so if these creeps are doing this. It shows they don’t have the interests of the members at heart.

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