April 9th 2016

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Articles from this issue:

COVER STORY Euthanasia: A truly counter-cultural perspective from history

CANBERRA OBSERVED Harsh realities a bridge too far for this election

EDITORIAL Malcolm Turnbull's election strategy emerges

FAMILY AND SOCIETY SSCA sets mines to basic building blocks of society

DOMESTIC AND FAMILY VIOLENCE Never mind the issue: this is the agenda

ASIA-PACIFIC AFFAIRS Taiwan, China find rapport over South China Sea

ART AND CULTURE Beauty and the beholder

OPINION Labor's princeling class licks dole plate clean

SEX ABUSE ROYAL COMMISSION Truth takes a back seat: scapegoating Cardinal Pell

POLITICAL HISTORY The Labor Split spillover

MUSIC Minimalism more than the sum of Arvo Pärt

CINEMA More like home than utopia: Zootopia

BOOK REVIEW Retrieving meaning

BOOK REVIEW Midget submarine op

BOOK REVIEW A Jewish view of universal ethics


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Malcolm Turnbull's election strategy emerges

by Peter Westmore

News Weekly, April 9, 2016

By recalling Federal Parliament on April 18 to debate two union-related bills and bringing forward the budget by a week to May 3, Prime Minister Malcolm Turnbull has signalled that he intends to have the federal election on July 2, 2016.

Bob Day

If the two bills are defeated, Mr Turnbull has further signalled that he will request a double dissolution, taking the House of Representatives and the full Senate to the polls, in the hope of breaking the Senate deadlock, where the balance of power is held by eight minor parties and independents.

The recent moves by Senator Bob Day (Family First) to reach a compromise on the union reforms will influence whether there is a double dissolution, not whether there will be an election.

With the collapse in support for the Palmer United Party and recent changes to electoral laws to prevent preference harvesting, it is likely that the influence of minor parties and independents will be weakened.

The announcement of a $4 billion health package is clearly an election “sweetener”, but it will worsen the budget bottom line.

Mr Turnbull is clearly hoping to campaign on the issue of union power, including instances of corruption unearthed by the Heydon royal commission – an issue on which Labor and its leader Bill Shorten are vulnerable.

If Labor wins the election, Mr Turnbull will be history, and Labor’s agenda on industrial relations, same-sex marriage, support for the Safe Schools program and other issues will be implemented.


What is unclear in all this is where Mr Turnbull will take the Liberal Party after the election.

It is very hard to know where the Liberal Party stands now, particularly on tackling the budget deficit, after flip-flopping on a range of tax issues since Malcolm Turnbull came to power.

The government contemplated increasing the Goods and Services Tax from 10 to 15 per cent and widening the GST net to include fresh food, goods and services.

This was abandoned in the face of widespread community hostility, the opposition of some state governments (particularly Victoria), all of which must support the change, and the firm opposition of a majority of the Senate.

In response to rapidly rising house prices, Treasurer Scott Morrison then flagged changes to capital gains taxes to include the residential home, and removal of negative gearing, which allows taxpayers who own more than one residential dwelling to offset losses on their rental properties against other income. But he abandoned these in the face of opposition from a large number of affected taxpayers and the real estate industry.

The government then flagged cuts to superannuation concessions, but seemed to go cool on that idea when confronted with opposition from the superannuation industry.

For good reason, the government’s much-flaunted economic credentials have been damaged by its indecision and by the appearance that it is capitulating to well-funded business groups.

The latest proposal, that the government will announce cuts to business taxation but not to personal income tax levels, may have the approval of the Business Council of Australia, but has little support in the electorate. Further, it compounds the appearance that Mr Turnbull, a self-made millionaire and corporate lawyer, is looking after the top end of town, not the battlers. He needs to remember that people vote, companies don’t.

If Mr Turnbull wants to tackle the government’s serious budget deficit, he could take bold initiatives to halt the high levels of tax avoidance by a minority of large corporations.

The government could introduce several reasonable measures:

•     Force transnational corporations to pay taxes at levels comparable to Australian companies. Currently, corporations such as Apple, Google, Microsoft and News Corp pay little or no tax on the billions they earn in Australia.

• End large-scale tax avoidance by large corporates. As The Sydney Morning Herald reported on December 17, 2015: “Out of 1539 of Australia’s largest corporate entities, 38 per cent did not pay any tax in 2013–14. Tax Commissioner Chris Jordan has released the tax details of [these] corporate entities with $100 million or more annual turnover – 985 of which are foreign-owned, and 554 of which are Australian foreign entities.”

•     Shift the corporate tax system to require companies to pay tax on their declared net income as provided to shareholders. This will encourage harmonisation of tax returns and shareholder statements, and discourage artificial tax minimisation.

•      End the situation where, in the words of the Tax Office, “most government departments and agencies are exempt from income tax”. As governments have introduced a corporate model of operation, government agencies should pay tax like everyone else.

These measures would be supported by most Australians and companies that pay their fair share of tax.

Peter Westmore is national president of the National Civic Council.

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