Now Shadow Assistant Treasurer, he has announced that the carbon tax and the mining tax were such good ideas that an elected Labor government will reintroduce them. Hard to see the mining tax raising any revenue, but what the heck!
Labor really likes having these things on the books and impose high compliance costs on companies to ascertain that no tax is payable. But the real benefit is to imagine revenues over the forward estimates, spend it and then cry … OOPs, the revenue never materialised. (Ref: Sir Wayne Swan, Manual on Imagining Budget Surpluses).
I think A Leigh must have already memorised that manual by heart because he mentions the imaginary $80 billion in cuts to education and health (his party’s unfunded spending over the horizon of the forward estimates – just keep repeating the figure and someone might believe you and tell PR company to include in election ads); scorns at unachieved savings because his party has blocked them in the Senate; and includes savings that haven’t even been put to the Senate.
And as for his bleatings about the Coalition’s failure to clamp down on multinational companies and to force them to pay more tax in Australia, Sir Wayne left this area in a terrible muddle, all unlegislated. And Leigh knows this.
The proposed thin-cap rules were unworkable and would have had diabolical effects on Australian companies – good one, Swannie. And then proposed next step was completely unimplementable. And then Leigh bleats on about our delay (of one year) in introducing a common reporting regime. Because imposing an additional bill of hundreds of millions on our banks is fine?
I guess that’s what shadow assistant treasurers do. Bleat on, say things they know not to be true and hope for the best.
But thanks for the heads-up on Labor reintroducing the carbon tax and the mining tax.
Here’s Andrew’s tick the box for the week piece:
AS Australians continue to rage about the unfairness of the Government’s first budget, Treasurer Joe Hockey is preparing his second. New Assistant Treasurer, Josh Frydenberg, has flagged spending may again be slashed in the 2015-16 fiscal plan.
Australians who have watched the government rip $80 billion from schools and hospitals, $23bn from pensions, $11bn from foreign aid, $5bn from universities and $3bn from Medicare will be worried about where fresh cuts will come from. But while the Assistant Treasurer is trying to sell the idea that spending needs to be slashed further, he is ignoring the role his party’s decisions have played in deepening the national deficit.
Since coming to office, the Abbott Government has thrown out significant sources of revenue like the carbon price and the mining tax and added exorbitant new spending on paid parental leave and the Direct Action climate scheme. If the government had made more sensible decisions on all these fronts, today’s budget outlook would likely be much less bleak. Look at the carbon price. Sure, it was an important environmental measure; after all, Australia saw the biggest emissions drop in a quarter of a century under carbon pricing.
But it was also an important economic policy, raising money that was used to provide assistance to households, including through lower taxes. Ross Garnaut refers to the benefits of higher pollution taxes and lower work taxes as the ‘double dividend’ of carbon pricing.
On the Government’s balance sheet, Direct Action raises no revenue, and will actually cost billions to implement. Oh, and experts estimate that it will achieve less than one-third of the mitigation needed to meet Australia’s bipartisan 5 per cent emissions reduction target.
Then there’s the mining tax. Don’t take my word for it — look at the Coalition’s books, which show repealing the mining tax will cost the budget billions of dollars.
The government cynically left its Paid Parental Leave scheme off the books in its first budget, citing ongoing negotiations with the states. But the National Commission of Audit priced it at $5.5bn a year, rising to over $8bn a year over the next decade.
This makes it three times pricier than our current equitable Paid Parental Leave scheme. And yet the Productivity Commission estimates that this change would have no impact on productivity or participation.
The bottom line is this: if the Abbott Government hadn’t scrapped the carbon price and the mining tax while splashing out on an unfair parental leave scheme and an ineffective carbon plan, the budget would be comfortably back in surplus in 2017-18.
That’s not even factoring in the $1.1bn the government has given to let multinational companies like James Hardie shift their profits offshore.
So when Frydenberg says further cuts to essential services are needed, Australians should ask why this government’s only economic instinct is to get out the axe.
There are many ways to balance the books, but few involve paying companies to pollute, reducing the tax of mining magnates and spending tens of thousands on the highest-earning mums.
By slashing spending in its first budget, the Government broke almost every pre-election promise it made. Instead of scripting Budget of Broken Promises II, the government reconsider some of their decisions that have worsened the deficit. As the saying goes, when you are in a hole, the best thing you can do is to stop digging.