October 15th 2011

  Buy Issue 2862

Articles from this issue:

CANBERRA OBSERVED: Gillard Government undeterred by growing voter backlash

EDITORIAL: Gillard's Asian foray is deeply flawed

QUEENSLAND: Brisbane ill-prepared for coming wet season

CIVILISATION: Is culture more powerful than politics?

RETAILING: Dick Smith blasts Coles' "extreme capitalism"

ECONOMIC AFFAIRS: Still coming to grips with the global financial crisis

CLIMATE CHANGE: Nobel laureate breaks consensus over global warming

UNITED STATES: New Republican candidate for the White House

UNITED STATES: Gay agenda mandatory in California schools

TAIWAN: Taiwan celebrates centenary of Republic

EUTHANASIA: Nitschke, Nembutal and the TGA

OPINION: The error of demonising carbon "polluters"

OPINION: Robert Manne and the Quadrant affair

TRIBUTE: Max Crockett remembered

BOOK REVIEW The rise and fall of the New Left

BOOK REVIEW Cultural suicide

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Gillard Government undeterred by growing voter backlash

by national correspondent

News Weekly, October 15, 2011

There is some irony in the fact that the federal Tax Forum (October 4-5) has declared any discussions on changes to the goods-and-services tax (GST) — a tax that was designed to eliminate a raft of hidden taxes — out of bounds.

Yet, when Parliament resumes the following week, the Government will forge ahead with a new hidden tax on everything — this time on carbon dioxide emissions.

Treasurer Wayne Swan has placed tight restrictions on the scope of the forum, ruling off the agenda any changes not only to the GST, but also to the coming taxes on carbon dioxide emissions and mining profits.

And while he was talking expectations of the forum down, the person responsible for making it happen — independent MP Rob Oakeshott — was talking it up.

The Member for Lyne said that the Tax Forum’s 200 delegates would be providing the Federal Government with a “10-year road map” for tax reform.

Dispassionate observers might have mistaken the Henry Tax Review to have already provided the Government with this already.

In 2008, then Prime Minister Kevin Rudd commissioned the Henry Tax Review after another talkathon, the Australia 2020 Summit, held in April 2008. Treasury Secretary Dr Ken Henry received 1,500 submissions and the review conducted its own conference of interested parties in June of 2009.

The Henry Tax Review was delivered to the Government late in 2009 and then unveiled just before the 2010 May Budget.

Mr Rudd found most of the 138 recommendations too hard, but pounced on one — a proposal for a super profits tax on miners.

The inept selling of the 40 per cent resources super profits tax (RSPT), which appeared at the time not to be fully understood by either the Prime Minister or the Treasurer (or anyone for that matter), led to Mr Rudd’s downfall.

The tax has been stripped down and modified several times and will now be introduced as the minerals resources rent tax (MRRT) in July next year — a shadow of the original scheme conceived by Treasury.

There is something increasingly surreal about the Gillard Government’s “crash or crash through” policy implementation and its odd approach of alienating voters, albeit with the stated aim of promoting their own long-term good.

No matter how low the Government slides in the opinion polls, it seems to devise new ways to alienate itself from voters.

The botched Malaysian Solution, which is still no more than a policy pipedream, drove away voters from both the left and the right.

Proposed laws to curb gaming-machine usage, which are being demanded by another independent Tasmanian MP Andrew Wilkie, are driving even more traditional Labor voters away from the Government.

Regardless of the merits or otherwise of measures to curb problem gamblers, clubs and hotels have been able to successfully mount a campaign mobilising the rising anger among recreational poker-machines players and the community and sporting groups which receive spin-off payments from them.

The Government is now bleeding from a new issue and marginal seat-holders are telling their comrades sitting at the Cabinet table that the issue is more poisonous among the electorate than even the carbon tax.

If true, that is unlikely to worry the Gillard Cabinet, which seems oblivious to the possible disaster for Labor at an election, which, we are repeatedly told, is still “two years away”.

And not only is it determined to push ahead with a carbon tax that the Prime Minister pledged not to introduce, it now appears it intends to weave the tax so tightly into the fabric of the Australian economy that it will cost enormous amounts for any future government to unstitch it.

In fact, the carbon tax is being designed specifically to outlive the Abbott Government by setting a series of liability traps for any administration which attempts to shut it down.

In other words, companies which buy carbon credits will have to be recompensed by any future government that moves to abolish the scheme.

According to The Australian newspaper’s editor-at-large Paul Kelly, Tony Abbott will have no choice but to dismantle the carbon tax system, having first won a big mandate to do so, and then, in the event of an intransigent Senate, going back to the people to secure a double dissolution election.

Kelly writes: “Above all, Abbott knows his prime ministership would be destroyed unless he delivers on his promise to repeal carbon pricing. It is his first, second and third priority.”

Yet Kelly warns that the risks of getting rid of the carbon tax are huge because all the upper echelons and machinery of the federal bureaucracy are supportive of the tax.

“The dismantling of the carbon price scheme (would be) the most substantial and risky dismantling of any policy in Australian history,” Kelly has claimed recently.

On the other hand, Julia Gillard’s solemn pledge, on the eve of the last election, not to introduce a carbon tax will mean that voter opposition to the tax is likely to grow rather than diminish.

And everything, including the Tax Forum, however emasculated, is a reminder to voters of that broken pledge. 

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