Rather than prosecuting the case for their policies, such as they are, the Coalition have decided their best chance of re-election lies with their “Kill Bill” strategy where they try to convince us, mainly through puerile name-calling like “Unvelieva-Bill”, that Bill Shorten can’t be trusted because he “says one thing in Canberra and another thing in Queensland/Victoria/Western Australia.”
Considering their own track record, that is a very dangerous road for them to go down.
It is true that Labor have argued for, and made, company tax cuts in the past but they were accompanied by increased taxes elsewhere to help pay for them.
When Paul Keating cut the company tax rate from 49 per cent to 33 per cent, he paid for it by a massive broadening to the base of the tax system: capital gains taxation at full marginal rates, a comprehensive fringe benefits tax, the abolition of entertainment as a deduction, tax on company cars etc.
The Gillard government went to the 2010 election proposing a modest cut to the company tax rate reducing it to 29%. The policy also referred to the introduction of “new resource tax arrangements including a Minerals Resource Rent Tax for coal and iron ore and an expansion of the Petroleum Resource Rent Tax for oil and gas.”
At the time, the Coalition opposed any spending attached to the MRRT and so also opposed the company tax cuts.
When asked “If the legislation is introduced separately, which way will you vote on the company tax cut?”, Joe Hockey said they would still oppose it.
“The total amount of revenue to be raised by the mining tax over the next three years is the equivalent of just three months of borrowings by this Government in the last few weeks. This government is on track to have a deficit of nearly $40 billion this financial year. The mining tax is estimated to bring in around $10 billion over the next three years. It is a simple equation.”
Yet now, with government debt hundreds of billions higher, the Coalition feel they can give substantial company and personal income tax cuts with no broadening of the tax base or reduction of concessions whilst also delivering a surplus, mainly by relying on what appear to be unrealistic estimates of wage growth and the hope that the windfall from increased commodity prices and surging company profits will continue.
And if we want to revisit what the party leaders have said in the past, it is worth looking at what Malcolm Turnbull wrote about negative gearing, capital gains tax discounts, and concessions for the wealthy in general.
In his 2005 tax policy paper, Turnbull described negative gearing and the CGT discount as a “sheltering tax haven” that is “skewing national investment away from wealth-creating pursuits, towards housing”, and has caused a “property bubble”. Turnbull also acknowledged that “Australia’s rules on negative gearing are very generous compared to many other countries” and that “the normal deductibility principles do not apply to negatively geared real estate such that the taxpayer is not obliged to demonstrate that the negatively geared property will generate positive cash flow at some point in the distant future”.
In 2014 he said “Looking at Australia’s tax regime you would say that it is too tough on people earning income… but is incredibly concessional to older people who have made their money…”
But according to Scott Morrison, Labor’s policy to stop refunds for excess franking credits is “ripping off retirees, pensioners, nannas, nonnas and yayas all over the country.”
There was a time when Malcolm Turnbull spoke the truth about important things.
In a speech to the House of Representatives in February 2010, Malcolm warned that “having the Government pay for emissions abatement, as opposed to the polluting industries themselves, is a slippery slope which can only result in higher taxes and more costly and less effective abatement of emissions.”
He told Lateline in 2011, “If you want to have a long-term technique of cutting carbon emissions, you know, in a very substantial way to the levels that the scientists are telling us we need to do by mid-century to avoid dangerous climate change, then a direct action policy where the Government, where industry was able to freely pollute, if you like, and the Government was just spending more and more taxpayers’ money to offset it, that would become a very expensive charge on the budget in the years ahead.”
They have avoided that by refusing to commit any more money to Direct Action and not giving a shit about emissions rising.
When the Coalition say that you will always pay higher taxes under Labor, they seem to forget that they introduced the GST, adding enormously to the cost of living in one fell swoop.
They were also the ones who introduced the budget repair levy, removing it before the budget is repaired but in time for an election. Suggestions by Labor that it should be kept until the budget is repaired bring howls of class warfare from the very people who introduced it in the first place.
They also conveniently ignore the fact that the Gillard government tripled the tax-free threshold putting thousands of dollars back into the hands of low income earners.
Whoever is advising government strategy would do well to remember the words of Matthew:
“You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.”
We will never achieve genuine tax reform with a government who is more interested in name-calling than honesty.