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.