Axing the taxes equates to self harm
I am trying to understand why we are repealing the carbon and mining taxes.
“The carbon tax is a $7.6 billion dollar hit on the economy. As you (the Minerals Council of Australia) noted in your submission to the Emissions Reduction Fund Green Paper, the burden on the minerals sector alone is estimated to be $2.6 billion by 30 June 2014.
There is no reason for the repeal to be delayed – the carbon tax is hurting Australian families and businesses and from 1 July is estimated to cost them $21 million per day.”
This is the spin from Greg Hunt. They just love to say this is costing “a big scary number”. When he says the carbon tax is a hit on the economy, he means it is a hit on polluters. They are the ones who pay the carbon tax. The fact that they passed on any imposte to the consumer is a failing in the legislation if you ask me.
And excuse me if I don’t think $2.6 billion very relevant in comparison to the superprofits that mining companies are making digging up OUR resources.
Why we are protecting profitable mining companies at the expense of families and small business is beyond me and seems contrary to the Coalition rhetoric.
The tax free threshold was set to increase to $19,400. For low income earners, that would save $228 per year and it would mean those who earn between $18,200 and $19,400 would no longer have to fill in a tax return. The repeal of the carbon tax will scrap this.
Low income earners will also lose the low income superannuation contribution scheme, which pays $500 to low-income individuals to boost inadequate retirement savings.
A family with three children, one at primary school and two in high school, and where both adults earn just above the minimum wage of $37,000, would lose $2050 from the abolition of the Schoolkids Bonus, according to the Australian Institute.
It is questionable as to whether this was even attached to the mining tax as it was actually introduced to replace a previous payment that was being underutilised – the Education Tax Refund.
The government will also delay (scrap?) the move of the Superannuation Guarantee to 12%. This will affect the retirement savings of all employees which, with the proposed increase in the retirement age to 70, and the lowering of indexation to pensions, seems a counterproductive move.
They are also scrapping the Income Support Bonus, which includes payments to the children of veterans and is a lump-sum supplementary payment made twice a year to people on certain income support payments.
They are hurting small business by unwinding the instant asset write-off. This policy allowed small businesses to write off depreciating assets costing less than $6,500, and the first $5,000 was offset against the mining tax.
They are also discontinuing the company loss carry-back, a benefit for small businesses, and dismantling the accelerated depreciation for motor vehicles.
And of course, we have to attack renewable energy. Existing income tax law provides an immediate tax deduction for expenditure incurred when exploring or prospecting for minerals, petroleum or quarry minerals. In 2012 this was extended to geothermal exploration. They are cutting the deduction for geothermal but not for the hydrocarbons.
Add to all these cutbacks the cost of Direct Action should it pass the Senate. I was going to work out the individual cost but Hockey’s budget says one thing in the text and another in the figures as pointed out in Business Spectator.
“The budget text states that the government will provide an “initial” $2.55 billion to establish the Emissions Reduction Fund, which is consistent with what the Coalition had promised prior to the election over the first four years of the scheme.
Yet the table which accompanies this text listing the hard dollars provides a contradictory and highly confusing story. It outlines a total funding allocation over the next four years of just under $1.15 billion.”
So who can tell? I think we all are coming to realise this will never happen at any meaningful level.
As for the mining tax, that is also very confusing with the Coalition arguing so many different views depending on what we are talking about.
They say the mining tax has hurt investment while boasting “As Minister for the Environment, I have approved more than $500 billion worth of new projects in the mining and resources sector.”
They say the mining tax has cost jobs but everyone agrees that we are moving from an investment phase to a less labour-intensive production phase. This shift is causing a loss of jobs but it would see an increase in revenue.
So what do we do? Accept the inevitable job losses and forego between $3.4 billion (budget) and $4.4 billion (PEFO) projected revenue over the forward estimates. We also increase the 457 visa intake and decrease the oversight of it so mining companies can have a fluid malleable workforce.
I cannot understand why anyone other than high polluting miners and their high falutin’ sidekicks would think that axing these two taxes is in anyway good for the country.
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Return to home pageA must not miss tonight. We should be following g the lead of California.
http://www.abc.net.au/4corners/
“It’s ridiculous. Australia’s the Saudi Arabia of renewable energy. There’s so much sun, there’s so much wind off the coast, and so it makes absolutely no sense when you have an abundance of renewable energy, [to] rely on a depleting supply of fossil fuels with all of the attendant consequences to society and the planet.”
Yup.
Not if I heard Palmer correctly today, although he was a bit unsure on some details. But he apparently had a written list made available at the Press Clud. We’ll know soon enough.
Palmer played every ‘populist’ trick in the book.
KL this mob of wreckers is not interested in what is good for the country. Their benefactors pleasure is their only concern and the privileged kickbacks that come with the support proffered.
They are more derelict in the execution of their elected duties to assist all members of the community, not just their mates in business and farming as the days go by.
There will be a day of reckoning, how long before the nation says enough is enough?
MN,
Yes I listened to Clive today. A very “sincere” version of ice creams for all.
David,
Liberal politicians and their benefactors have a lot of power…until it comes to election time. That is the day that I have equal power with Gina Rinehart.
According to Lenore Taylor:
http://www.theguardian.com/world/2014/jul/07/clive-palmer-switch-threatens-to-blow-9bn-hole-in-budget
What a thorn in the side he’s proving to be. And it’s all based on ‘hate’. Clive is not happy about spending on submarines and the like – not the quantum but the quality of the spend.
But it’s early days – the honeymoon.
Nevertheless, a double dissolution election seems even further away.
Govt. have won vote to have scrapping carbon price debated and passed today. Won by 3 votes, interesting count unsure who supported them.Strange with 3 votes of PUP makes sense but other independents support as well. Interested to see who the 3 are.
I like the idea of an incremental tax where higher earners have a slightly higher tax bracket (fractional percentages) but although they are taxed more they still don’t take home less than anyone below them, ultimately culminating at a maximum in the 90’s%. I have crunched some numbers and it seems possible, but then I’m not an economist.
A 90-something % tax rate on a maximum wage was installed to break the Great Depression and was maintained into the 1960’s, when the private sector and the Military Industrial Complex began eroding it. Now, by way of clever accounting, tax deductions from charity and decent lawyers on the payroll, those in the higher salary range, such as Mitt Romney admitted, can get away with as low as 13% tax rate, albeit Romney said he could have cut 4% more but decided to be patriotic. (a lot of what I am saying is going on what I have gleaned from the U.S model, how it translates in Australian history I am unsure of)
Considering charity can count in preferential ways, like donating to your kids private school or your particular church community, this can become a dangerous incentive, notably we see it in Scientology, but it happens all over the shop, and basically the average tax payer foots the bill for disproportion towards elite organisations. Kind of like how companies that advertise in Murdoch rags pay for a lot of that industry, and that transfers onto consumers, basically the public fund their own brainwashing.
Australia exports coal, iron ore and the like, and perhaps more importantly, also exports the profits. In the case of Rio, approximately, 83% of profits go offshore. That is, such monies are not spent in the local economy but provide an economic boost to countries other than Australia. In a sense by exporting these very large profits, we are also exporting jobs or at least the capacity to create same. In addition, by sending funds overseas we are also exporting investment capital.
With a bit of effort, reintroducing the Mining Tax could be a vote winner.
One argument Palmer made today in justifying the need for an ETS was that, when our trading partners develop same (and they are in the early stages of doing just that), these nations will impose taxes on Australian imports so those imports don’t have an advantage over local products. According to Palmer, that’s why we need to keep the current ‘architecture’ so that we can move quickly when that time comes.
It would appear that Gore had some influence, given that Palmer was rather cold on global warming a little time ago.
There are some things we could learn from the US.
“Gina Rinhart has secured $7.2 billion in funding for the Roy Hill iron ore mine in Western Australia from a global consortium of banks including Australia’s majors and a group of national export-import finance banks.
The funding is reported to be the largest debt financing for a mining project in the world. (apparently Gina doesn’t think debt is so bad)
The Export-Import Bank of the United States approved a $694.4 million loan to Roy Hill, as long as it buys mining and rail equipment from U.S. companies such as Caterpillar Inc. and General Electric Co.
This is part of how the iron ore mined at Roy Hill will get to market, with both a rail line to and new hub in Port Hedland needing to be built.”
Wouldn’t it be nice if we insisted that Gina actually use Australian equipment, steel and labour.
That ‘news’ has been around for some time, but it received little or no mention in the local media let alone any negative reaction. It’s interesting also because the ‘free market’ ideology is readily abandoned when it comes to local effects. No longer is it the case that ‘price’ will reign supreme. Now other conditions are ‘tagged’ as well.
BTW, much of the ‘infrastructure’ spending on mines in WA and elsewhere is tied to Chinese companies. The locals don’t get any opportunity to compete.
It would seem ‘Australia is open for business’ – but not if you’re a ‘local’. And that includes resident ‘labour’ as well.
And of course, we have to attack renewable energy.
First Solar, an American based solar company with an Australian as a co-founder, one of the top solar companies in the world and a leader in out of daylight energy delivery has stated it’s pulling out investment in Australia. They stated Australia is going the way of the dodo in energy production and will be left behind the rest of the world.
I remember renewable energy also abandoning Australia in a big way under Howard.
I was beginning to think I was the only one who thought that the legislation should have prevented the cost being passed on to consumers. It seems to me that we then pay the polluters to go on polluting, which rather negates the point and causes the kind of friction Abbott is playing on.
Matt,
And then they squeal like stuck pigs. Trade exposed industries were compensated….we should not have had ANY price increases. The whole idea was to make polluters pay for their pollution or invest in better practice to cut their bills. Somewhere along the line, that morphed into “we pass on all costs so let our customers pay.”
Four Corners showed, in its coverage of renewable energy, how far Australia is falling behind the progressive world particularly the USA and China.
Sadly, the ABC, by telling it as it is, has probably sealed its own fate as this government will not , as it has shown with the recent Board selection appointments, tolerate criticism.
This government, quite incredibly, seems to have gone to war against renewable energy as they do the bidding of the big coal interests: very worrying in a world that is going the other way.
Yes Terry. Was a great show.
“The Government has an ideological agenda. They want to carve out the impact of renewable energy on the network and they want to stop renewable in their tracks.” John Grimes, Australian Solar Council
Meanwhile, back in Australia the Federal Government is being lobbied by power producers using coal and gas to wind back the renewable energy targets that would see 20 per cent of this country’s power generated by renewables by the end of the decade. Little wonder they want the targets lowered. The explosion in wind farms and solar rooftop panels in homes across Australia has already cut the demand for electricity and left them with gold-plated infrastructure that can no longer be justified.
http://www.abc.net.au/4corners/stories/2014/07/07/4038488.htm
Kaye, You write well and explain well, I sincerely hope that your letters go to “all” the major newsgroups around Australia as well as here.
I’m trying to pinpoint the time and date the Australian populace stopped thinking.
When the carbon tax was introduced, targeting only the major polluters, they turned around and effectively said:
“You must be kidding, we can’t have our vast profits affected by a minute cost on our nefarious and damaging activities – instead we will simply transfer those costs (plus a few more) onto our customers and the government will have to subsidise the public for the inconvenience.”
Somewhere before this point we blithely accepted that the profits of business were considered sacrosanct. So we simply accepted their statement without question and nobody batted and eyelid. The flaccid populace listened to the lies and just accepted that big business should be free to continue to make the same or more money, even though they were damaging our environment and our health.
Not once would they be held responsible for their pollution.
Never would they have to ameliorate their activities.
Why should they have to change their processes and become energy efficient, which coincidentally would help them avoid the tax completely.
No, those businesses just refused to wear the costs, and instead of being penalised, they demanded we all just bent over while the politicians handed them the KY.
Tony Abbott’s government is ‘recklessly endangering’ the future on climate, says UK chief
Read more: http://www.smh.com.au/federal-politics/political-news/tony-abbotts-government-is-recklessly-endangering-the-future-on-climate-says-uk-chief-20140708-zszx4.html#ixzz36qaDU0nt
Anomander and Matt Cardier make an excellent point and, one not lost on Greg Hunt.
Hunt said recently that imposing a carbon tax on major emitters would not change their behaviour and clean up their emissions if they were able to pass the tax penalty on to somebody else i.e. their customers. Hunt went on to say that his plan was to reward the major emitters based on paying them when they actually cut their emissions.
Maybe he has a point; whichever way , the cost is ultimately born by the Australian taxpayer so it’s a question of finding the most efficient mechanism to drive change.
“Maybe he has a point; whichever way , the cost is ultimately born by the Australian taxpayer so it’s a question of finding the most efficient mechanism to drive change”
No point.
The public was compensated for the rises, from money from the cost put on emissions., Money was made available from this cost, to pay those who wanted to move away from relying on fossil fuel. Yes, to move on to new technology that saved them money for evermore. That came from what they big emitters were made to pay.
One avoids the payment by moving to none fossil fuel. Yes, power fuelled by fossil fuel will be forced out of business.
The British are condemning Abbott tonight for his stand on carbon emissions. He does not seem to have many friends.
True. Big emitters can do just that now except in the background is a financial penalty called a ‘price on carbon’. They can pass on their increased ‘costs’ by raising prices and still reap profits UNTIL other players enter the market with lower ‘costs’, because these other players emit less. With lower costs, such lower emitters will rapidly steal market share.
That’s how the ‘market’ is supposed to work. Lower costs (in the guise of lower emissions) brings greater rewards because lower emissions equates with lower costs.
Under Hunt’s model, the encouragement comes from an ‘incentive’ (read government subsidy) to lower emissions. A financial reward for being ‘less bad’.
Imagine offering a chronic speeding motorist who (say) offends 5 times a month, a cash bonus if they reduce their breaches to 4 times a month.
If that logic is to be followed, we should be rewarding every ‘patient’ who genuinely overuses each and all medical services.
Lateline a must tonight. Abbott condemned in the strongest words, by the British on his lack of carbon emission policies. They say he is putting the world at risk. They claim that Abbott is incapable of listening to anyone.
A family with three children, one at primary school and two in high school, and where both adults earn just above the minimum wage of $37,000, would lose $2050 from the abolition of the Schoolkids Bonus, according to the Australian Institute.
The question Kaye, as politically incorrect as it is – is why did they have a 3rd child when earning so little? Did they take into consideration the costs, are they expecting to be propped up by others? Let’s remember, the schoolkids bonus has been in operation for barely a year, so these people never counted on this bonus anyway.
You do know the schoolkids bonus is just “free money” with a name? There is no restriction on what that money is spent on – and there is no study to say how much this money goes towards the kids. That was the coalitions main argument the whole time – why name an unrestricted welfare handout with “schoolkids” when there is no guarantee it will go towards the kids? :Labor can put as many cushy names to waste as they want – but facts are the vast majority of agencies, bonuses, funding that is being scrapped was for areas that never spent it responsibly. Do you not agree? I dont see too many reports of how effective any of these things were (theres a few, but its literally pittance in the grand scheme of things).
Chris, kids a good for Australia, whether firs or tenth. Education is not a privilege but is an investment in the nations future. We will need that baby in a couple of decades.
The argument that one needs to produce receipts for money spent, is hollow. No parent can send their kids to school for less than the bonus., In fact will be spending much more,
Parents on low incomes, needs the money before they spend it, not 12 months down the track. Requiring receipts would only be unnecessary expense in distributing it.
Yes, and by the way, there has always been such a rebate. It used to be in the tax system, which benefits the wealthy more than the poor
The present bonus is paid in the most prudent and efficient manner..
Chris you must be young, if you believe prevention always works.
Chris,
It’s called the Schoolkids bonus because it goes to families with kids at school. All kids need uniforms and equipment and the start of the school year can be very expensive. And I’m just wondering….are you suggesting that pregnancy should be means tested and how do you go about that? Enforced abortions for people with low income? Sterilisation?
I am also wondering what you think about the over $11 million that Tony Abbott and Scott Morrison are paying to an army of spin doctors to push their bs to people like you. Surely if they were telling the truth and their measures were sound, they wouldn’t need advertising companies to try to, in their words, “sell” their budget.
No, Chris, I disagree with your broad statement that cuts were only applied to inefficiencies, they were often applied for ideological reasons. Examples like the clean energy finance scheme and the CSIRO, operating at profit, were canned or slashed.
As for the removal of the ‘schoolkid bonus’, if the reason was non-accountable spending by parents, rather than penny pinching combined with a desire to demolish any Labor initiatives, they would have modified it into a voucher system.
Do not tell me that an administration that subsidises religious preaching as the only worthwhile form of child counseling is all efficiency and no ideology.
Florence, I personally disagree that all kids are good for Australia. When I see large families ‘reared’ by people with antisocial tendencies and anti-intellectual attitudes, I fear for the future. Nature, nurture, or a little from both, the Bylynahs and Jaiydehns being progenated by substance addicted bogans are unlikely to enhance our society.
I’m a great supporter of the School Kids Bonus having seen it in action – much more so than Howard government’s Baby Bonus and all that ridiculous malarkey about having one for Mum, one for Dad and one for the country : give me a break !
A single mum that I know was never able to get new school uniforms but was content to go to the school second hand shop without complaint; she could never pay for the excursions or for the extra curricula activities provided by the school at a fee. Instead, when she finished work she would take her two kids to a public basketball court and try to make up for what they were missing out on; she still does that.
With the school kids bonus she was able to buy new uniforms and shoes in 2012 and the look of pride on her face was worth every cent of the ‘cash splash’ as Hockey called it. She was delighted when I told her, the other day, that the July payment of the school kids bonus would still be made as she has some substantial dental bills looming with her younger child and the necessary treatment could not even be contemplated until she had paid a deposit.
By all means, you can means test this sensible social policy but please don’t scrap it, after all it really had nothing to do with the MRRT.
May I suggest it not the child or large families that are at fault. It is drug addiction, which is the problem, The child, unlucky to end up in this family, is still of benefit.
In fact the size of the family has nought to do, with whether there should be some government and community contribution to each child’s education
There are many large families, that are a credit to any society. Not that I would go down that track mnyself, deliberately. I ended up with four, beautiful kids, but not by choice.
A well educated adult, benefits us all.
The child in dysfunctional families deserve more support.
The school kids bonus arose from the educational rebate, one got when they put their tax returns in. Added to this bonus was a replacement for the three year laptop scheme, which had come to and end, to all high school students.
Well, well QANTAS have said that they will be removing the carbon tax fare levy when the repeal legislation passes BUT they will not be passing the savings on to passengers. Over to you Clive and ACCC.
http://www.smh.com.au/travel/travel-planning/travel-news/qantas-puts-carbon-taxes-in-frame-for-fare-increases-20120202-1qvo1.html
After a chaotic morning, including government gagging and guillotining it’s own bill with a filibuster, no repeal of the so-called carbon tax.
Yes, methodical, steady adult….. government, indeed not.
We saw Hunt and Abetz running from their press conference today following questioning on the PUP amendments on Carbon tax repeal. What seemed to worry them in particular was the requirement that all companies who have passed the carbon tax onto consumers – including Coles, Woolies, Qantas, Virgin etc – reduce their prices when the tax is gone or face a 250% penalty if not done so within 12 months.
The government were only saying that power (electricity & gas) companies pass on the savings.
In the meantime Tony was in WA ready to go to a press conference celebrating the repeal of the tax – dressed up in hi-viz and prepped by Sky – but it didn’t work out as planned. Peta is furious.
Interesting days……
Financial bill now before the house. Another that deserves to hit the dust.