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Saga of Super Saturday: Will the LNP’s $144 Billion Tax Plan Deliver for Braddon?

By Denis Bright

A month out from Super Saturday, the five simultaneous by-elections are already part of Australian political folklore. The forthcoming by-elections now have elements of a US mid-term election which can either confirm the existing administration or move it into a lame-duck phase.

With the passage of the three-staged tax package by the Senate on 21 June 2018, this unprecedented round of by-elections has become referenda on the drift to a more unequal Australian society. In Phase 3 of the tax package, billions in future federal revenue will be wiped away. Tax concessions to corporations might follow in the next phase of the tax plan which will be tested in the Senate and perhaps used as a campaign weapon before Super Saturday.

Federal deficits will persist as the federal government’s revenue base is eroded. Australia’s insurance against downturns in the global economy is lessened. Only a change of government can unscramble the mess.

Despite last minute pleas from thirty-three progressive senators, the federal LNP had already secured the support of senators from One Nation and the Centre Alliance through private negotiations. No explanations were given of reasons for the final betrayal of principles.

Voters in Braddon should be outraged by the potential erosion of the size of the federal tax take in an electorate which is so dependent on financial assistance from Canberra. While public sector austerity lives on in federal cabinet, Prime Minister Turnbull continues his financial largesse on the campaign trail in Tasmania. State budget day in Hobart brought a commitment from Prime Minister Turnbull to a new motorway crossing at Bridgewater on the Lower Derwent with more federal-state funding for completion by 2024.

Posing next to an awkwardly placed map of Tasmania, Prime Minister Turnbull provided some words of caution to his support base in Braddon:

Your Liberal candidate in Braddon, Brett Whiteley worked hard to help deliver more jobs and better services and facilities for West and North West Tasmania. If he is elected at this by-election, Brett will be a very strong voice for his community in our Government.

By contrast, Labor and Bill Shorten pose a real risk to our economy. Labor voted against tax relief for small and medium businesses and want to increase taxes by more than $200 billion over a decade – including on housing, small businesses, workers, investment and retirees.

A vote for Justine Keay in this by-election is a vote for Bill Shorten. Braddon can’t afford to take that risk.

The key to a better future for Tasmania is a stronger economy, which means more jobs and better services. That’s what the Liberals plan delivers.

Labor sensibly ignored such provocatively targeted ideological shots. At the front-line in Braddon, Labor’s Justine Keay holds the seat with a margin of 2.2 per cent margin after preferences. There is no room for such off the mark side-kicks.

LNP candidate Brett Whiteley has not been idle after losing Braddon to Justine Keay. The federal LNP has assisted its former colleague with a temporary role as policy advisor to the Assistant Federal Minister for Cities and Digital Transformation (The Advocate 1 May 2017). This has given Brett Whiteley just enough time to review the special needs of the Braddon federal electorate. Its needs are the subject of a recent Australia Institute discussion paper (February 2018).

In Braddon, new investment is needed to cope with the relative decline of mining, logging, rural industries and traditional manufacturing. It is the quality of this federal government financial support which needs close examination during a time of difficult economic transition for Braddon.

Data from the Tasmanian Department of Treasury and Finance shows that the state’s average weekly earnings are the lowest of all Australian wage jurisdictions. There are high levels of casualization and underemployment particularly in the two main employment growth sectors.

Employment Trends in Tasmania’s West & North West Region

Tasmania continues to be highly dependent on an enriched financial drip from the federal government in GST allocations, grants and on levels of the Tasmanian Freight Equalisation Scheme (TFES).

Other states and territories do not have the benefit of this rather uncritical federal largesse. 62.6 per cent of total revenue in the current Tasmanian state budget is derived from Canberra. This is a notch more than support for the Northern Territory (Tasmanian Budget Paper No.1 2018).

Tasmania has done well in the short-term out of the bipartisan largesse. The state economic growth rate was 3.5 per cent for 2017-18. Tasmania will achieve a small budget surplus in 2018-19. Current budget papers herald the possibility of zero net debt level from 2020-21.

The benefits of federal assistance to Braddon and the wider Tasmanian economy just keep on coming despite the overall financial austerity from Canberra. Winning Braddon means everything to the federal LNP as a timely morale booster after a long phase of internal tensions within the coalition. The tax changes are a bit for consensus-building between the conservative and liberal ranks within the federal LNP.

The Advocate (19 June 2018) announced that the Commonwealth had found another $164 million to fund social housing in the next five years under the National Housing and Homelessness Agreement which will be topped up by the state government’s own initiatives.

The favourable debt prognosis was achieved by tentatively capping new capital works at 28 per cent below current levels after 2020-21. The spike in the state’s capital expenditure to a record $752.4 million in 2018-19 carries $121.1 million in under-spending from 2017-18.

Sections of the mainstream media speak of a golden age for the Tasmania economy (Channel 9 News Hobart 14 June 2018).

Graphs showing falling net debt levels should of course be looked at in the context of increasing federal financial support for Tasmania which is a real asset in winning back Labor seats lost at the 2016 federal elections.

Tasmania’s Net Debt Levels

In the context of concerns about eliminating state debts, it could be noted that the long-deceased Labor veteran King O’Malley (1854-1953) represented Western Tasmania in federal parliament in the former electorate of Darwin. This become known as Braddon after 1955.

King O’Malley was an advocate of a strong investment multiplier of major capital works with credit from a national people’s bank long before Keynesian economics became fashionable. Alternatives to old style debt financing were King O’Malley’s dream for a young nation just federated within his life-time. All this evaporated as the Hughes Labor Government split over the extent of commitment needed to assist the British Empire’s war efforts.

Some positive elements of this federation era nationalism still linger on in the Tasmanian economy.

Productive Tasmanian state entities include Hydro Tasmania, its various subsidiary electricity units, Sustainable Timber Tasmania (STT) and the Tasmanian Freight Equalisation Scheme (TSS), the Tasmanian Ports Corporation (TasPorts) and the TT-Line Shipping Company to name a few entities.

Conversation online (4 October 2017) showed that intervention in electricity generation had served Tasmanians well as measured by interstate comparisons of interstate base household electricity prices.

Comparing Base Household Electricity Prices

Environmentally sustainable sites for new hydro-electricity generation sites are virtually exhausted.

Just in time for the Braddon by-election, the Australian Renewable Energy Agency and Hydro Tasmania are investigating the possibilities of a $500 million revitalization of the 80-year-old Tarraleah Power Station (The Advocate 21 June 2018).

Alternative forms of energy have been sought by Hydro Tasmania in solar panels and wind farms.

Households and businesses across much of Tasmania are now linked to an undersea gas pipeline from Bass Strait through commercial investment by Tasmanian Gas Pipelines (TGL). This pipeline now fuels the Tamar Valley Power Station.

Some industry leaders across Tasmania have called for the bulk purchase of all gas supplies by Hydro Tasmania to eliminate TGL’s command of gas pricing as the sole supplier. Both sides of politics have strongly supported these vital levels of regulatory intervention which protects Tasmania in the coldest weather (ABC News Online 13 December 2017).

Projects of such proportions really need the support of an Energy Transition Authority to tap global private capital flows into state or federal national investment capture funds. This is little difference in kind between dividend earning from investment in productive infrastructure and politically opportune grants from Canberra out of tax coffers.

New generation federal LNP leaders show no interest in such possibilities (Mathias Cormann at the launch of The Forgotten People-Updated by Paul Ritchie 16 June 2018):

As the Prime Minister wrote “our Party’s conservatism is an anchor that points to our values, tempers our exuberances and reminds us of our history and traditions; and our Party’s liberalism is our compass that points to freedom, opportunity, and a future where more Australians can share in our country’s bounty.”

Our party is a living, breathing institution that continually seeks to use our values to interpret and improve our times.

The strength of this book is that it is not about ‘the forgotten people’ of Menzies time but it is about ‘the forgotten people’ of our time.  It is a marker in our intellectual journey as a party.

Despite an initial lead by the federal LNP in the Sky News Poll for Braddon, many battlers might now be insulted by the tokenism of tax concessions in Phase 1 (2018-22) (Sky News Online 2 June 2018).

Calls for fiscal discipline on behalf of aspirational voters also co-exist with some sloppy uses of federal funding by the LNP’s Hodgman Government in Tasmania.

Rob Inglis of The Examiner Online (14 September 2017) provided vital specifics on capacity of TFES to serve the Tasmanian logging industry. Containers of wood chips from government timber reserves are now trans-shipped through mainland ports in a partnership with the Cayman Islands-incorporated Global Forest Partners LP

ABC News Online (9 November 2017) claims that logs and wood chips transported across Bass Strait attracts a federal subsidy of $700 per container from TFES.

Rob Inglis’ reporting in the Advocate Online offered a more balanced perspective on the Tasmanian economy with the imprimatur of economist Saul Eslake. It is the quality of federal financial support which trumps the current political largesse.

However, some federal-state projects have been financially successful in Braddon itself.

The Wilderness Railway from Regatta Point, Strahan to Queenstown in 2003 is a major source of tourist income. Tasmanian Labor is committed to the re-opening of other scenic tourist railways across Tasmania which once served an old rural and resource base economy.

Perhaps apathy and current spells of cold windy weather in Braddon combine to reduce interest in such policy debates. The federal LNP hopes that constituents will focus on their token tax cuts in Phase 1 of the new deal to 2021-22.

What of the possibility of alternative perspectives during the forthcoming by-election campaign?

Re-enactments of musical The Legend of King O’Malley by playwrights Bob Ellis and Michael Boddy might stir up some interest in alternative forms of funding for Tasmania’s continued sustainable development. Cosy bars across Braddon might welcome excerpts from the production by local drama students to arouse interest in politics and social justice issues during the forthcoming winter vacation. Street theatre to lampoon the federal LNP’s tax package would also be highly appropriate in the spirit of King O’Malley’s vision for the new Australian federation.

Image from monumentaustralia.org.au

The plaque to honour Labor veteran King O’Malley (1854-1953) in Burnie Park near the Bass Strait coastline is not completely isolated from contemporary debate about government debt levels and the exclusion of MPs who were born overseas.

Not being too sure of his precise birthday or even the country of his overseas birth, King O’Malley may have needed a high court clearance to serve as a member of parliament in today’s more disciplined political environment.

King O’Malley was defeated at the khaki-wartime federal elections in 1917. This brought a paradigm change in Australian federal politics which lasted until the Great Depression. Despite two more attempts to win another federal Tasmanian seat, King O’Malley did not make it back into the House of Representatives.

His optimistic spirit is still relevant advocates of social justice and commitment to peaceful international relations in contemporary Australia.

The federal LNP working towards a completely different paradigm based on the needs of aspirational voters and support for market ideology.

There are no precedents since 1901 in having five simultaneous federal by-elections on a single day. Probability in Braddon might appear to be on Labor’s side. My quick perusal of federal by-election results suggests Labor has not lost a federal seat at a by-election to a sitting conservative government since the fall of Kalgoorlie and Maranoa in 1920-21. The political headwinds of a conservative era also thwarted the re-election of King O’Malley in the Tasmanian seats of Denison (1919) and Bass (1922).

In fairness, probability illustration is hardly relevant. There are no precedents for Super Saturday. It is a risky political outreach exercise by the federal LNP.

History will tell us if Prime Minister Turnbull and Finance Minister Mathias Cormann are really in the ascendancy. Only the federal LNP’s game plan for Braddon is obvious. The Burnie-based Advocate Online will keep everyone well informed on developments in the campaign. The situation in Braddon is too close to call so far out from Super Saturday.

Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic public policies that are compatible with contemporary globalization.

 


17 comments

  1. New England Cocky

    An excellent factual analysis, thank you Denis.

    “Federal deficits will persist as the federal government’s revenue base is eroded. Australia’s insurance against downturns in the global economy is lessened. Only a change of government can unscramble the mess.”

    The solution to the LNP mantra of “bringing the Budget into surplus” obviously lies in reducing and eliminating the LNP RAbbott Morriscum Dutton Turdball misgovernment charity gifts to corporations and the undeserving wealthy that presently amount to about $150 BILLION PER YEAR.

  2. Jaquix

    Mmmm its going to be interesting!

  3. Peter F

    If you want to know where it is all heading just follow the Murdoch media- sadly, many people do.

  4. DrakeN

    “Master and Serf” in steady metamorphisis into “Mogul and Wage-slave”.

    The wealthy and priviledged increasing their wealth and priviledge by means of the same.

    “Game of Mates” – How favours Bleed the Nation, https://gameofmates.com/

    Well worth the read.

  5. Leila

    Thanks for a most informative & well researched article Denis.
    The old quote “ Follow the money trail “, may tell us what happens in these next set of by elections.
    Hopefully people think of the whole community & not just themselves at the ballot box, only time will tell.
    It is a much safer & progressive option with Labour

  6. My say

    I really hope the voters in the by elections remember what this government with the help from Hanson have taken from them already and what more they will loose if they give this government more power,They are killing the low and middle income earners, so they can make the rich richer,

  7. Ingrid

    Denis, thanks for an interesting article on the upcoming federal by elections.

  8. O'Malley's Ghost

    Great expose of the tax fix in place for 28 July: Will the voters take the bribe which can be as low as $4 per week for casual employees earning between $20-30,000?

  9. Mia

    An empathetic assessment of the needs of Braddon.

  10. Tessa_M

    Long live the progressive Tasmanian state

  11. James Robbo

    Will the voters of Braddon take the insulting bribe offered by the Turnbull Government.

  12. James Robo

    Will the voters of Braddon take the insulting bribe offered by the Turnbull Government.

  13. O'Malley's Ghost

    That;s the $144 billion question James Robo. The new generation LNP is keen on offering bribes to Tasmania as well as middle income voters. I spoke to someone yesterday on $40,000 who thought that the tax cults were going to be massive and not just $530 a year at the expense of schools, the ABC and the wider quality of Australian society. I am haunted by that news pic of Mathias Cormann and Joe Hockey smoking a cigar to celebrate the Horror Budget of 2014, This tax package is worse in its implications as it is so long-term in its consequences. Perhaps it is being sustained by O’Malley’s Ghost as he seeks a new Tasmanian seat to influence.

  14. Chris

    Great coverage of the mismatch between financial austerity and spending big to win votes in Braddon.

  15. Paul

    Thanks for the interesting article Denis! It will be interesting to see how it all unfolds on super Saturday.

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