By Denis Bright
At federal and state levels of government, the LNP seeks to dazzle its support base with financial rewards.
Josh Frydenberg’s budget on 6 October 2020 advanced the timetable for tax relief for business and middle- income constituents as noted by Scott Morrison after the tax changes had cleared the senate:
The tax relief package, for both individuals and business, is part of our COVID-19 Economic Recovery Plan for Australia to create jobs, rebuild our economy and secure Australia’s future.
The Australian Taxation Office (ATO) will update its schedules next week, with software payroll companies to update over the coming weeks, to get more money into the pockets of hard-working Australians as quickly as possible.
Getting money into the pockets of Australians will give them more to spend at their local shops helping to create more jobs.
The package brings forward Stage two of our Personal Income Tax Plan by two years. From 1 July 2020:
- the low-income tax offset will increase from $445 to $700;
- the top threshold of the 19 per cent tax bracket will increase from $37,000 to $45,000; and
- the top threshold of the 32.5 per cent tax bracket will increase from $90,000 to $120,000.
The NSW Budget Papers from 17 November 2020 show that the focus on distributing dollars and cents as a celebration of neoliberalism brought some challenges to NSW Treasurer Dominic Perrottet at a time when net incomes from interest on reserves, dividends from state enterprises and royalties are all in decline during the current recession (Image of Revenue Sources in the 2020-21 Budget Statement):
Deviations in total revenue since 2019-20 Half-Yearly Review
Revenue from federal grants including GST is down in real terms by over a billion dollars to 40.6 per cent of total projected revenue for 2020-21.
These scenarios were anticipated by NSW Treasury which released its draft report on Federal Financial Relations on 1 July 2020 to call for discussion on a revision of the revenue tax base for NSW. NSW is very disadvantaged by the current carve-up of federal tax revenues as well as the current tax largesse by the federal LNP towards its crucial middle-income support base.
Using data that predates the current COVID-19 financial crisis, NSW Treasury has promoted discussion on a more equitable taxation formula that would take net income from Victoria ($16.9 billion), Queensland ($16.8 billion), SA ($4.2 billion) and Tasmania ($2.3 billion).
Both federal and state Labor should be joining in this national debate on tax reform as the Morrison Government continues to bask in the glory of its largesse to the business sector and to the largely LNP voting segments of its middle- and upper-income support bases.
To cap off the LNP’s taxation farce is the extent of the deficit which has been imposed on NSW for the maintenance of its service delivery and the added burden of the $500 million Out and About Reward Vouchers offered in the current NSW budget.
Channel Nine News offered some details of eligibility for the for viewers (Image from Channel 9 News 17 November 2020):
NSW residents will receive four $25 vouchers, totalling $100.
The idea of separating the $100 lump sum is to try and encourage residents to spread their spending around multiple businesses instead of pouring their free lunch or day out into one.
Every NSW resident aged over 18 will receive the vouchers. Those under 18 will miss out.
A pilot of the scheme will operate throughout December 2020 in Sydney’s CBD. It’s theorised that after a successful pilot scheme it will be rolled out across the state next year.
At a time when capital expenditure from both government revenue and the NSW Generations Fund is likely to peak in the two financial years prior to the 2023 state elections, NSW can hardly afford to splash a half a billion dollars on vouchers for restaurants and entertainment.
Some other suggestions from NSW Treasury are certainly worthy of bipartisan consideration. discussion initiatives to review burdensome property transfer taxes and payroll taxes deserve support from across the political spectrum.
NSW surely needs more real government priorities to build on the outreach of its Generations Fund which is largely from the proceeds of electricity privatization.
Keeping service delivery and new public sector investment going into the future requires great foresight which has been a real challenge to past administrations on both sides of politics. Even Labor has experimented with unsustainable neoliberal strategies which have assisted in placing it on the Opposition benches.
There are real opportunities for Opposition Leader Jodi McKay and Shadow Treasurer Walt Secord to repeat Queensland Labor’s successes on 31 October 2020 in the about to be redistributed electorates of NSW with the politics of a return to the basics in the spirit of William McKell and his successors who offered the people of NSW thirty years of Labor administrations until the defeat of Premier Jack Renshaw in 1968.
The revival of Labor at the state level in NSW may indeed have an unsettling effect on federal politics. An early federal election can be expected after the 2021-22 federal budget and before the NSW state elections. Might I add, that the Word of the Prophets are perhaps written on the Silo Walls. I suspect that the silos shown in the regional budget papers are long out of use like the public policies which generated this nostalgia for such far-off times.
Denis Bright is a member of the Media, Entertainment and Arts Alliance (MEAA). Denis is committed to citizen’s journalism from a critical structuralist perspective. Comments from insiders with a specialist knowledge of the topics covered are particularly welcome.
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