Budget for Abbott’s Australia

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The Abbott government has been working incessantly to work up to the Mother of All Scare Campaigns.  There is an emergency!  There is a crisis!  About what, the government has been careful to avoid backing up with anything factual.  Economists both left and right leaning have said not one single word in support.  We do know that there is debt, writ large with a capital D and that somehow pensioners and disabled people are the cause of it. . . or at least both Hockey and Abbott sticking to their chosen theme would have us believe so.

This brought to mind one of John Howard’s favourite techniques, this being to prime up his audience usually via the media so as to create ‘a situation’.  Newspapers, shock jocks et al would dutifully comply running numerous *shocking stories* complete with photos taken by willing neighbors/rellies and other assorted accomplices of, for example:  long haired ‘louts’ who refused thousand-dollar-a-week jobs on sublime tropical islands due to the fact that they preferred to loll about on the dole in some mall in an unnamed western suburb, or a ‘pretend’ disabled person caught by his worthy neighbor *gasp* on his roof.  Clearly people with disabilities cannot be disabled if they can find themselves on a roof.

And it worked very well.  Following a few weeks of such stories, which by some miracle would appear simultaneously in all major newspapers; to the rescue – our fearless then PM, little Johnny promising to ‘come down hard on’ such rorters.  A thankful public sighed with relief that we had such an alert PM who knew how to ‘take action’.

John Howard, did however accomplish this with at least a modest amount of subtlety, a trait which Tony Abbott and his team are the antithesis of.

Tony Abbott in an attempt to emulate his hero Howard makes a mockery of all things Liberal.  The ham-fistedness and inept handling of this government’s attempt to reshape Australia in a regression to some unknown ultra-conservative stance way beyond anything which Howard would even contemplate, nor want, is an embarrassment to all.

Abbott therefore commits falsehoods, but one must consider that he does either with such ego that ‘it doesn’t count’, or with an ignorance which cannot be excused away as ‘new to the office of Prime Minister’.

May 18, 2010:

TONY ABBOTT has told voters not to believe everything he says.

In an extraordinary admission last night, the Opposition Leader said his only utterances that should be regarded as ”gospel truth” were carefully prepared and scripted remarks such as those made during speeches or policy pronouncements.

However, it would seem that we are not to believe even the carefully prepared and scripted ones.

To date the government has encouraged speculation on (and the list is not exhaustive), that the family home of pensioners will be sold from under them if they expect to collect the pension; that pensioners are a drain on the economy and society, (while completely ignoring the contribution that people in their 70’s, 80’s and beyond have made to Australian society); that pensioners and people with disabilities should be ‘encouraged’ back into the workforce (which jobs and how? remains an unknown); that ‘everyone’ will have to pay $6.00 to visit the doctors (while dismantling the super clinics).

And now comes the penultimate of lies, that the Deficit Levy is not a tax.  That is, families on $80,000 will be losing out by $800.00pa, more than the average of one month’s mortgage payment while at the same time giving millionaire mummies a ‘gift’ of $75,000 for 6 months of bonding time with bubs.  Is something not quite jelling here?

John Howard knew not to frighten the horses.  The Tony Abbott/Credlin duo do not have that sort of finesse, intelligence nor acumen.

 

Give it up, Tony

In a post I wrote just over a month ago titled Tony Abbott and the Great Debate I provided a brief summary of the economic impact of the ‘carbon tax’ on Australia. Despite most of the country being frightened half to death from Tony Abbott’s negative campaign, the outcomes went the opposite direction. To recap, I wrote:

He [Tony Abbott] has visited every business in the country and predicted with fear and smear how the carbon tax would destroy their respective industries and how he was likely to be the last person to walk through their doors. Butchers, bakers, candle-stick makers; there’d be none left after the carbon tax annihilated them. Even whole towns were predicted to be wiped off the map.

Whyalla, I am pleased to see has survived as have his favourite butchers, bakers and candle-stick makers. The damage repeatedly predicted by Tony Abbott has failed to deliver its destruction. In fact, it has been quite the reverse. Consider the following:

The data flow covering the time period since the carbon tax started on 1 July 2012 are coming through thick and fast.

The numbers, quite unambiguously, point to the economy doing very on just about all fronts.  Share prices and house prices are both rising, business confidence and consumer sentiment is rising; jobs are being created and the unemployment rate ticked lower.

Indicator      Change since end June 2012
Market Indicators

 

Official cash rate

No change

Australian dollar (vs USD)

+2.9%

10 year govt bond yield

+0.30 percentage points

ASX200

+4.8%

    Change in market cap of ASX

+$53 billion

Economic Indicators

 

RP Data house prices

+0.7%

      Change in Housing Wealth

+$28 billion

Westpac Index of Consumer Sentiment

+3.7%

TD-MI Monthly Inflation

+0.2%

ANZ job ads

-0.8%

Employment

+14,000

Unemployment rate

-0.1% to 5.2%

NAB Business Confidence

+7 points

NAB Business Conditions

-2 points

Mr Abbott would be wise to consider some facts if he intends to continue with his fear and smear. Without them he is open to attack from every economist in the country as well as a Government ready to pounce with a few armed facts and figures themselves.

He may promise to repeal the legislation but in doing so he knows he’d be telling a big fat lie. And in a public debate the Prime Minister could put him to the task on exactly how it could be done. She won’t let him off the hook like our compliant and incompetent media.

I’d suggest that his argument on the ‘destructive’ carbon tax has no credibility left in it.

My suggestion above that the argument has no credibility was almost given the tick of approval by Tony Abbott himself a few days later when he admitted that the impact of the carbon tax may not be catastrophic. I quickly posted a short piece titled Tony Abbott’s “scare campaign was a fraud” and did so with a large dose of smugness. I wrote:

Tony Abbott isn’t getting the message: he needs to shut his mouth to prevent putting a foot in it. He has been given plenty of opportunities this week to learn this simple lesson.

In his latest epic fail he today he admitted to the Tasmanian State Council that:

. . . . the initial impact of the carbon tax may not be absolutely catastrophic.

What happened to the wrecking ball? What happened to Whyalla? What about those 1,001 visits to every butcher, baker and candle-stick maker with dire warnings that their business was doomed?

In a flash Wayne Swan jumped on the comment from Abbott that the impact of the carbon tax has not been catastrophic, declaring his “scare campaign was a fraud”.

Well, dear readers, the carbon tax that has not been catastrophic and which the economic indicators (above) reveal positive outcomes, a month later we now have Tony quietly saying this:

As soon as an election is called, the Coalition will take immediate and concrete steps to repeal the Carbon Tax.

Repealing the Carbon Tax will ease cost of living pressures on families, help small business and restore confidence to the economy.

The man is hell-bent on being a political opportunist. Tony, look at the data. Look at the economy. Even your Shadow Treasurer is starting to look intelligent in comparison to you:

Inside the Coalition, he [Joe Hockey] is waging war. He slapped down Barnaby Joyce for “freelancing” on foreign investment and is fighting to constrain promises being made by Abbott that don’t seem to add up.

These include the scrapping of the carbon and mining taxes while promising (without details) to keep a fair chunk of the goodies they pay for, such as tax cuts, higher pensions and superannuation changes that could cost several billion dollars.

Tony Abbott may have given up his scare campaign but in no way has he given up his ambition ‘scrap the tax’. Might I say . . . Give it up, Tony. We’re all doing just fine. You will be the wrecking ball of the economy – not the tax that you predicted would be.

Abbott’s taxing times

Could someone please tell the bulk of the mainstream media that Tony Abbott has a great big tax in store for us? It comes under the The Coalition’s Paid Parental Leave (PPL) scheme which will be funded by:

. . . a 1.5 percent levy on companies with taxable incomes in excess of $5 million. This will apply only to taxable income in excess of $5 million. The levy will affect approximately 3,370 out of 770,000 companies in Australia.

It’s hard to see a distinction there on the carbon price which is aimed at the largest 500 polluters in the country, which Tony Abbott calls a carbon tax, although it obviously isn’t.  But the media has let him get away with his absurd rants and to most of the populace it is now a dastardly tax.

Meanwhile, his PPL scheme is a levy. We should be returning fire and calling it a tax.

To date I’ve only found one article in the mainstream media that puts his PPL scheme under the microscope. It dates back to March 2012 when Tony Abbott was at the height of his ‘Carbon Tax Doomsday Tour’. The story has been dead since. Returning to the article, Samantha Maiden tried to put Abbott to the sword when she wrote in Adelaide Now that the PPL would ultimately have a greater negative affect than the carbon tax. The article is reproduced below and is a worthwhile read:

HERE’S a surprising fact about Tony Abbott’s paid parental leave plan that hasn’t attracted much attention: the new levy to pay for the scheme would hit more companies than the carbon tax.

Surprised? Consider the numbers. Julia Gillard’s carbon tax will be imposed on about 500 of the nation’s biggest polluters.

Abbott’s tax levy would hit an estimated 3300 businesses with a 1.5 per cent levy.

Isn’t that a great, big, new tax coincidence, to deploy Abbott’s favourite mantra ?

Let’s set to one side the world-class hypocrisy of Labor turning up its nose at the politics of “class welfare” on the schools funding debate while simultaneously diving in to slag off what it calls Abbott’s “Richie Rich” program for cashed-up working mums.

Much of the criticism of Abbott’s scheme is indeed centred on that generosity to a handful of wealthy women.

It would offer women a full replacement wage for six months funded by taxpayers, up to an eye-watering $75,000 for women earning $150,000 a year.

But even Labor concedes fewer than 500 women would gain access to the scheme that would not under their existing means-tested parental leave scheme paid at 18 weeks at the minimum wage.

Less attention, however, has been paid to the size of the Abbott scheme and the potential cost impacts for consumers.

Would a 1.5 per cent paid parental leave tax on electricity generators, for example, drive up power bills? By how much? Would Woolworths and Coles increase the price of milk and bread?

Is it possible that some low-emission, high-profit companies such as banks and retailers could actually pay more upfront under Abbott’s parental leave plan than the carbon tax? Wouldn’t that be hoot.

If the Coalition argues the cost impact would be modest, how does that stack up with their claims the carbon tax will be catastrophic?

And what happens if Abbott is elected prime minister but a hostile Senate dominated by the Greens will not allow him to wind back the carbon tax?

Would companies be forced to pay both the $5 billion carbon tax and the $3 billion paid parental leave levy? So many questions.

According to the last mid-year budget update, the carbon tax will raise $25 billion over three years, including an estimated $7.6 billion over the first year.

That’s substantially more than Abbott’s $3 billion paid parental leave scheme, but bear in mind there’s no compensation to cover cost-of-living impacts. The carbon tax by comparison will raise a lot of cash but it will also distribute $5 billion in tax cuts and welfare payments as compensation.

As the Coalition policy documents show, it would cost taxpayers a whopping $4.5 billion a year to run Abbott’s parental leave scheme.

It would be paid for by a 1.5 per cent levy on businesses with taxable incomes over $5 million.

There are also savings from rolling in the baby bonus scheme and family tax payments and replacing Labor’s scheme.

Don’t get me wrong. It was high time low and middle-income women had access to a paid maternity scheme. Abbott’s scheme is more generous for many families than Labor’s 18-week minimum wage scheme.

It’s a sign “the Coalition gets it when it comes to the modern Australian woman”, Abbott spruiked this week.

There are great arguments why parental leave should be a workplace entitlement, not a welfare cheque. By encouraging women to participate in work as a result of generous maternity provisions, there’s a strong argument that it’s a productivity measure.

In a win for women’s retirement savings, the Coalition paid parental scheme also includes the payment of superannuation contribution payments at the mandatory 9 per cent.

But if you think it’s cheeky that Abbott wants to bang on and on about the impact of the carbon tax while introducing a $3 billion levy on business to pay for parental leave, you are not Robinson Crusoe.

It’s an ordinary state of affairs when a probing analysis like this takes a back seat to Abbott’s scare campaign for months on end.

What do you think?

Mad Monk

Mad Monk (Photo credit: liamalexander)