It seems the government is trying to form an economic policy by the sniff test.
Over the last few days we have been barraged by a plethora of ideas leaked to the newspapers, presumably to see how they fly with the public.
We have the ‘opt out’ of superannuation idea which would see low income earners choose to receive the superannuation guarantee as wages instead. The idea was described by Council of Small Business of Australia chief executive Peter Strong as “absolutely silly.”
Aside from undermining our world-class compulsory retirement savings system, Mr Strong said giving some workers the ability to opt-out of super would also add an unmanageable layer of compliance for employers. Payroll would get a lot harder as workers would be on different hourly rates. They would also have to pay tax on the extra 9.5% income.
Then there is the idea to increase the $80,000 tax threshold to $100,000, a proposal which would help the wealthy up to 10 times more than average wage earners, according to an analysis of Treasury data, and it would be women who gain the least.
For someone for whom a recent inflation-adjusted pay rise has taken them to $82,000, the benefit of a new $100,001 threshold for the 37 cent rate is extremely small – less than the price of a cup of coffee per week at $1.70 or $90 annually. For someone earning above $100,001, the benefit will be tenfold at $17 a week or $900 a year.
We also have Kate Carnell (is anyone else getting as sick of her as I am?) in a budget submission suggesting that the Age Pension be paid as a loan to retirees who own a home, and then the ‘debt’ would be paid back by selling the house.
One-third of Australian pensioners are living in poverty, according to Oxfam, and the money spent on the Age Pension by the Australian Government, expressed as a percentage of GDP, is the third meanest rate in the OECD nations. But I guess Kate has to find savings to cover her “essential” cut to the company tax rate.
On negative gearing, we are told that Labor’s plan is a disaster, while the government floats its own idea of either limiting the number of properties that can be geared or capping the annual deduction while still enabling average tax payers to gear new and existing properties.
Those who expected Scott Morrison to give some indication of the government’s direction in his address to the National Press Club last week were sorely disappointed. We saw a lot of graphs but heard no ideas which, for a government a few months out from an election, is extremely disappointing. Very soon they are going to have to stop trialling things in the Daily Telegraph and start making some decisions. The policy vacuum for a government ending their first term is flabbergasting.
That mess ‘on the table’ needs sorting.
