June 18th 2005

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Articles from this issue:

COVER STORY: OPINION: The European Union - charting the future

EDITORIAL: New industrial law needs amendment

FINANCE: Leading banker calls for Development Bank

CANBERRA OBSERVED: Kim Beazley's tactics backfire

WESTERN AUSTRALIA: New law to deny patients life-saving treatment

QUARANTINE: Pork industry wins major court victory

FOREIGN AFFAIRS: Behind the defection of a Chinese diplomat

DEFENCE: Australia ill-prepared for new threats

FAMILY: Is Australia facing a new baby boom?

OPINION: Bioethics and the biblical worldview

ENVIRONMENT: Debunking myths about the Great Barrier Reef

STRAWS IN THE WIND: Disillusioned Europeans / Can the Euro last? / Some more unintended consequences for the Greens / Not another oil-for-food scam? / The Year of the Octopus

Democracy vs. the courts (letter)

Destroying lives to benefit others (letter)

Informed consent (letter)

Washington's "Deep Throat" a hero? (letter)

BOOKS: C.S. Lewis for the New Millennium, by Peter Kreeft

BOOKS: Until the Final Hour: Hitler's Last Secretary / The Bonfire of Berlin

Books promotion page

Kim Beazley's tactics backfire

News Weekly, June 18, 2005
The Federal Opposition leader looks set to backtrack on tax cuts.

Such is the depth of depression inside the Labor Party at the moment that conspiracy theories about Kim Beazley's tax tactics have emerged including one that Wayne Swan might have actually set his leader up for a fall.

Wayne Swan is Labor's newly-appointed treasury spokesman, who is said to have long-term designs on the leadership himself.

However, the idea of Swan sabotaging the leader is absurd, particularly as the tax debacle has done the Queenslander as much damage, if not more than it has to Mr Beazley.

The fact is, the decision to block the Howard Government's tax cuts was made jointly by a team of senior Labor tacticians during the recent "Budget lock-up''.

Each year hundreds of journalists descend on Parliament House for the traditional Budget speech.

But beforehand they are given a special six-hour secret preview of its contents and special access to Treasury and finance officials to explain the fine detail.

Similarly, senior Opposition personnel and key staff are also given the same opportunity of gleaning Budget information during the afternoon before the Treasurer steps up to the despatch box in the House of Representatives to deliver his speech.

It was in this hothouse atmosphere that Mr Beazley, on advice from senior Labor shadow ministers Swan, Stephen Smith and Senator Stephen Conroy, decided to embark on a path of blocking the Government's tax proposals while putting forward an alternative Labor proposal which would widen the tax offering to lower income-earners.

Which individual proposed the idea of using the last days of Senate power to block the tax cuts is not known, but certainly Mr Beazley was firmly and unequivocally in favour, according to Labor insiders.

Senior Labor figures proposed their own $12 across-the-board cuts. The group believed the Government's tax cuts - so heavily weighted toward the high end of taxpayers - would be unpopular.

It was, as they say, a good idea at the time.

Unfortunately, Labor Caucus was never given the opportunity of vetoing or even discussing the tactic decided in the pressured atmosphere of the Budget lock-up.

Labor "hardheads" believed that they could produce their own wedge on the Coalition Government by portraying them as supporting tax cuts for the highest income-earners while neglecting the vast majority of the wage-earners.

However, in the tactical battle between the Government and the Opposition, Labor were portrayed as spoilers and being anti-tax cuts.

Labor's plan was to vote against the Government tax package and push its own alternative plan.

Treasurer Peter Costello has warned that if Labor were to go all the way with its tax-blocking tactics, the Government's new tax régime could be delayed for months.

Labor's "tax cuts" were never going to be delivered - they were in fact a one-day wonder.

The Government has vowed to introduce tax schedules into the Senate which, unlike legislation, would have to be voted down to prevent the tax cuts going ahead.

The ALP has not said whether it will vote down the schedules.

If Labor does so, businesses would have to use a tax schedule that takes into account tax cuts announced in 2004 - not the ones announced this year.

Mr Beazley then is left in the impossible position of delaying the Government's tax cuts for months - making him more unpopular with each passing week.

Or he could take the alternative which would be to back down and agree to the new tax schedules.

At his first serious hurdle since becoming leader again, Mr Beazley will be portrayed as being "Mr Flip-Flop" and, despite the conspiracy theories, he will have no one else to blame but himself.

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