The OECD said its 34 members plus six of the biggest emerging economies – China, India, Brazil, Indonesia, Russia and South Africa – were spending up to $200bn a year supporting the consumption and production of coal, oil and gas.
That’s twice as much as was needed to meet the climate-finance objectives set by the international community at climate change summits, which have set a target of mobilising $100bn a year by 2020.
In the 2015–16 Budget, the Government reaffirmed its commitment to growing the Defence budget to two per cent of GDP within a decade.
The Government will provide Defence with $31.9 billion in 2015–16 and $132.6 billion over the Forward Estimates.
That does not include defence materiel whose 2014-15 Budget Estimate was $12.6bn. Why do we need strike force capability? I would have thought a car industry would be a better investment than at attack force.
We have just signed a $665 million contract for a new “telecommunications provider to the battlefield that will increase flexibility and interoperability in the field, giving commanders increased capability to share information and increased responsiveness. “
Meanwhile the rest of us endure copper broadband and mobile blackspots.
At about half a billion dollars a year, this is one area that can surely come up with some savings and, considering recent scandals, would be well received by a cynical public.
It should not cost half a million to fit out an office. Use telecommunications more rather than flying hither and yon for a chat and a photo. Build an accommodation wing at Parliament House and save on comcars at the same time. Family reunions should be paid for by the family. Catch commercial flights rather than summoning private jets. And stop wasting so much money on spin doctors.
The hundreds of billions shelled out for these things do nothing to improve productivity so let’s get genuine about looking at the benefit for what we spend.
I welcome your call for a mature debate on taxation. I too deplored the “screaming match” that surrounded the introduction of carbon pricing and am pleased you realise how counterproductive that sort of approach is to constructive governance.
As a concerned citizen I would like to make a few suggestions to get the ball rolling.
Your opening gambit is to increase the GST. This is a regressive tax which will, once again, disproportionately hit lower income earners. Treasury modelling done for the previous government showed that even a modest increase in the rate to 12.5 per cent – along with removal of exempted items such as food, health, childcare, and school fees – could hit a two income two-child family by as much as $205 per fortnight.
Perhaps there is a better way. For example:
Fossil fuel subsidies.
The Australian Government is set to spend over $40 billion in the form of tax rebates and concessions, foregone revenue and expedited write downs of assets per year from 2013/14 to 2016/17. This assessment only includes tax measures, and does not include direct grants or State Government measures, which could add billions more to the annual totals.
The proposed replacement climate policy, the Emissions Reduction Fund, relies on paying companies as an incentive to reduce their emissions. A fundamental contradiction exists between such a policy and the continuation of a range of existing fossil fuel subsidies. Many subsidies significantly reduce the economic signal for companies to identify efficiency opportunities.
Polluter handouts are also highly inequitable. For instance, the mining industry receives a 32c per litre discount on fuels such as petrol and diesel for off‐road use. So while most Australians are paying full price for their fuel at the bowser, their taxes also cover the cost of a huge discount to the mining industry. In all, this handout costs Australian taxpayers $2 billion each year.
Australia, along with all other G20 nations, committed in 2009 to phase out inefficient fossil fuel subsidies over the medium term. In his recent State of the Union address, US President Barack Obama reiterated the need to phase out tax‐based fossil fuel subsidies. Other organisations like the International Monetary Fund, the World Bank, the United Nations and the International Energy Agency are also calling for nations to end fossil fuel subsidies.
In 2009, the Commonwealth Treasury identified $8 billion in annual savings that could be made if Australia fulfilled this commitment. This money could be used to fund a wide range of nation‐building projects, yet to date we continue to use these funds to line the pockets of polluting, and in many cases highly profitable, industries.
Prime Minister Abbott has said that there is to be an end to corporate welfare. Statements by Treasurer Joe Hockey have warned that “the age of entitlement is over,” and that “everyone in Australia must do the heavy lifting now.” It is critical that this rhetoric, if applied, is applied consistently.
A study by the Australia Institute found the rate of growth of super tax concessions is greater than that of the pension despite the ageing population, meaning the cost of the tax concession will soon overtake the pension to become ”the single largest area of government expenditure,” by 2016-17.
”’The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14,” the study found.
It notes that the Commonwealth bill for these concessions is projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.
”The overwhelming majority of this assistance flows to high-income earners,” the report finds.
”Low-income earners receive virtually no benefit. The combined cost of these two policies will be $74 billion in 2014 alone.”
The Grattan Institute’s report, Balancing budgets: tough choices we need, included a section on abolishing negative gearing, which it claims would save the Budget around $4 billion per year initially, falling to a saving of around $2 billion per year over the longer term.
Grattan highlights a number of non-budget (social) benefits from reforming negative gearing, namely:
1.increasing home ownership rates by reducing returns at the margin for landlords relative to first homebuyers; and
2.increasing investment in other more productive assets.
The report also debunks claims that reforming negative gearing would raise rents, since “for every landlord that sells, there would be a renter that buys and becomes a home-owner. The supply of rental properties would fall at the same rate as the number of renters”. It also does not believe that the construction of dwellings would be materially affected, since “almost all of investment property loans are now for existing dwellings”.
A report by the Tax Justice Network – an international group focused on investigating tax avoidance – and the United Voice union says almost a third of companies listed on the ASX 200 pay 10 per cent or less in corporate tax.
This is substantially less than the statutory 30 per cent corporate tax rate.
Some companies, such as James Hardie and Westfield Retail Trust, pay zero tax.
Rupert Murdoch’s 21st Century Fox pays 1 per cent tax and casino group Echo Entertainment pays 5 per cent tax.
The report says the government is losing out on at least $8.4 billion in tax each year, which is substantial but may be the tip of the iceberg.
According to the research, 57 per cent of all ASX 200 companies have subsidiaries in tax havens.
Several big-name companies, such as 21st Century Fox, Westfield, Toll Holdings and Telstra, have more than 40 entities in well-known tax havens such as the Cayman Islands, Luxembourg, the British Virgin Islands and Bermuda.
Fourteen in the 20 top companies, including two of the country’s big banks, also hold entities in these locations, according to the report.
“Secrecy jurisdictions play a key role in multinational tax dodging and undermine the ability of democratically elected governments to levy taxes in a just and fair way,” the report’s authors say. “Corporate tax avoidance must be addressed.”
Financial transaction tax
Introduce a Financial Transactions Tax on various categories of financial transactions including: stocks, bonds and currency. If implemented on a global basis, its projected revenue could be as much as US$400 billion a year, depending on the size of the levy imposed, the size of the reduction in trading (if any), and the number of implementing countries/jurisdictions. In the US alone it has been estimated that annually, between US$177 and $353 billion could be raised.
A flat rate of 0.05% has been proposed on all financial market transactions, many experts actually advise vary rates (of between 0.01 and 0.5%) depending on the transaction (stocks, bonds, currency, commodities, swaps, derivatives, etc). The UK stock exchange, one of the largest in the world, already has a 0.5% tax on share transactions.
(1) An FTT will reduce the instability in the global financial system by reducing the volume of trading in financial markets, especially the sort of trading that increases market instability and has led to the turbulence in the financial markets over the last decade.
(2) An FTT will provide an effective way of raising revenues for both domestic purposes, such as assisting governments help pay for the costs of post-financial crisis bailouts, as well as for spending for international public goods, such as the funds needed for climate change adaptation, and to assist countries in meeting the Millennium Development Goals.
The tax is specifically designed to target high frequency traders, especially of securities, where the average holding period is often minutes or seconds. High-frequency traders currently account for 70% of US equity market trading and 30-40% of the volume of trading on the London Stock Exchange.
The tax will only affect financial institutions and funds to the extent that they are involved in this type of high-frequency trading.
Australia is a leading player in global finance in its own right: the Australian Securities Exchange (ASX) is the ninth largest stock exchange in the world. Australian support of the FTT would be a significant boost to the cause of the global campaign. Moreover, Australia is a G20 country and plays a significant role in the group whose endorsement would effectively make the FTT a reality.
You could always keep the mining tax and close the rorting of FBT car leases and…dare I say, bring back the carbon tax…if you are mature enough to admit when you are wrong.
So let’s have some mature debate on these issues Mr Abbott before we jump to charging pensioners more for their bread and single parents more for childcare and sick people more for their medicine.
Life is a series of choices and decisions. Within the constraints of time and finite resources, decision makers must learn to prioritise – to decide what is most important.
If you listen to anyone outside Australia, the greatest challenges facing us at the moment are climate change caused by anthropogenic global warming, income inequity leading to poverty, the Ebola crisis, pollution, peak resources, health and education in developing nations, the growing tide of refugees, providing enough food and clean water, sanitation, overpopulation, unemployment, species extinction, human rights abuses, affordable housing….and a fair way down the list would be a group of some tens of thousands of disaffected testosterone-filled teenagers that someone has been crazy enough to give guns and rockets to.
When faced with these global problems, the response of the Abbott government brings into question their ability to assess risk and respond appropriately.
On climate change, our Prime Minister tells us that “coal is good for humanity” while our Treasurer denies the fact that we are the world’s largest per capita emitter and that does not even take into account our exports. (When you hear the phrase “I deny the premise of your question” that is Coalition for “I can’t hear you, here comes the Party line”)
“Australia’s coal is one of the globe’s fourteen carbon bombs. Our coal export industry is the largest in the world, and results in 760m tonnes of CO2 emissions annually. The urgent goal of Tony Abbott’s government, and his environment minister Greg Hunt is to ship as much climate-devastating coal as possible, as quickly as possible.
Every day, this Liberal-National government, led by Tony Abbott, provides new examples of its nastiness, its short-sightedness, and its willingness to destroy livelihoods, communities and the environment to enrich coal barons.”
A new report by The Australia Institute “The Mouse that Roared: Coal in the Queensland Economy” demonstrates that the coal industry’s risks and damage completely outweigh its benefits.
Felicity Wishart the AMCS Great Barrier Reef Campaign Director said that the Queensland Government was prepared to risk the Great Barrier Reef, its international reputation and its $6 billion tourism industry for a coal industry that employs less people than Reef tourism, exports most of its profits and provides just 4% in royalties.
“The Australia Institute report reveals that there are under 25,000 jobs in coal mining in Queensland and 80% of the profits go overseas. This compares with 69,000 jobs in the tourism industry, and almost all the profits stay in Australia.”
When the world’s leaders met to discuss climate change, our leader couldn’t make it due to a prior engagement with Rupert to get his lines about why the war is good straight. Our deputy leader couldn’t make it because he is too busy planning thousands of kilometres of bitumen heat islands to carry millions of fossil fuel burning imported cars. Our environment minister didn’t even seem to be considered or mentioned which is hardly surprising when he points to his plan for the Great Barrier Reef as a success. Ignoring ocean acidification, warming, and salinity while approving the dumping of dredged silt and the expansion of coal ports is considered a success? Oh that’s right, you removed a few starfish by injecting each one by hand. Instead we sent Julie Bishop because she is good at stonewalling and death stares.
As representatives from the Philippines and Kiribati make heartfelt pleas about the damage being done to their nations, we have reneged on our promised contribution to the Green Fund to help developing nations deal with the havoc we cause. As marathon runners in Beijing choke on the pollution, we tell them that burning more coal will make them richer.
Everyone from the Pope to the head of the IMF has pointed to poverty and income inequity being a growing scourge, yet every action taken by this government will have the effect of increasing poverty and widening the gap. Internationally we have slashed Foreign Aid and domestically we have hit the poor with the budget from hell.
Joe Hockey and Mathias Cormann say, because the poor get more government handouts, they have more to give back when looking for spending cuts. Raising revenue will not be considered. The poor, the sick, the elderly, the disabled, the students, the unemployed, single parents, low income families – these are the people to provide Mr Hockey with a surplus to brag about. In the meantime, one in seven Australians live in poverty with that number predicted to rise.
Austerity and trickle-down economics are failed experiments which this government seems intent on pursuing despite the mountain of evidence and advice warning against such measures. As the majority of people get less disposable income, demand will dry up, production will fall, unemployment will rise, and the downward spiral will continue.
While we seem to have endless money to bomb countries, the money to help build infrastructure and provide humanitarian aid has dried up.
Our response to the Ebola crisis is hugely inadequate. The excuse about evacuation of affected health workers just will not wash. We already have in place agreements with the US about medical evacuation of military personnel to Germany should they become critically ill. Australian doctors and nurses are highly-trained and if they feel that they have adequate protective regimes in place then It is unlikely that we would be talking about a large number of people needing evacuation. Considering the urgency of addressing this emergency, I cannot believe that the US or the UK or Germany would deny health workers the same service they offer to our military personnel.
Our Immigration Minister smugly claims success for his quasi-military war on refugees. He tells us this has been the humanitarian thing to do because he cares so much about asylum seekers that he can’t have them risking their lives at sea. Unfortunately, he also cut our humanitarian intake by 7000 and has failed to successfully resettle anyone. He would rather spend billions on OSB and offshore gulags and bribes to corrupt officials of other countries to absolve us of any responsibility at all rather than a cent on helping refugees. All he has done is bottle refugees up in other countries while we sit back and refuse to help.
In response to growing unemployment, this government has removed restrictions on 457 visas encouraging employers to hire people who will work for less than award wages, no workplace entitlements and no job security. They have removed industry assistance from manufacturing to help them during a time when the high Aussie dollar hit the industry hard while giving billions of dollars in subsidies to the mining industry which caused the problem in the first place.
When Toyota, Ford and Holden leave the country for good in 2017, around 50,000 people who work in the automotive supply chain, mostly in Victoria and South Australia, will face the risk of unemployment.
Despite Industry Minister Ian Macfarlane telling us that ”Australians are smart, innovative and creative. We have the ability to remake our industry sector and the time in which to do it.”, according to European Union data from 2011, only 2.3 per cent of materials shipped out of Australia are high-tech – far less than the US, where the figure is closer to 20 per cent.
The OECD found in 2012 that Australia’s investment in high-tech industries was lower overall than other advanced economies yet the latest budget has slashed funding for research and development and decimated bodies like the CSIRO.
Remy Davison, the Jean Monnet Chair in politics and economics at Monash University, says despite the talk little has been done to create a realistic transformation scheme for industry.
”We talk about investing in smart industries and moving into high-tech industries, but nobody actually does it – not state governments, not federal governments, and to be fair the private sector doesn’t really invest in it either.”
When it comes to the war against ISIL, this is where the Abbott government steps up with seemingly unlimited resources to provide military assistance and to conduct over-the-top raids and surveillance at home, but where is the discussion about what led to the rise of this group? Where are the questions about how we are failing members of our own society so badly that they can be lured into this conflict? Where is the strategy to help young people here to feel like they belong and encouragement to help them become productive members of our society? Where is the support for our Muslim community?
Risk assessment is part of life and a crucial factor for all businesses. How much more so for a government when the consequences of their decisions are so far-reaching? We have a government who came to power with a specific agenda to which they are determined to stick. They are deaf to the advice of experts other than their hand chosen sycophants and choose to ignore the risks. On all counts, in the most pressing problems facing the world, Australia has been found wanting.
Before casting your vote at the next election, Australians should consider the risk of allowing the Abbott government to continue down the path of nationalism and corporate greed at the expense of our duty as global citizens and our responsibility to protect the vulnerable.
“This decision says something significant about this government. We do not believe in government by chequebook . . . We don’t believe in any normal circumstances that government should be playing favourites between private businesses.”
When Tony Abbott made this statement yesterday I thought to myself hang on . . .
“The Federal Government spends over $10 billion per year on subsidies that encourage the production and use of fossil fuels. About $65 million per electorate or, if you want to make it really personal, $430 per taxpayer each year.”
“Abolishing the private health insurance rebate could save the budget $3 billion a year, dwarfing the savings that would be generated by introducing a $6 fee for GP visits, according to a think tank.
The 30 per cent private health insurance rebate was introduced in 1999. Its annual cost has risen faster than any other component of government health spending, from $1.4 billion in 1999-2000 to $5.5 billion in 2012-13.”
“Professor Kevin Davis says the government’s guarantee of all bank, building society and credit union deposits up to $250,000 is far too generous and is damaging the business of life insurance companies, finance companies and other non-bank financial institutions.
Professor Davis said the guarantees had contributed to falling sales of life insurance products, finance company debentures, cash management products and property trusts, while the amount of retail savings held in government guaranteed bank deposits had soared.”
“Prime Minister Tony Abbott has chided Labor for pursuing him over a $16 million grant to Cadbury on the day Qantas announced the axing of 5000 jobs.
Labor asked five questions of the prime minister, quizzing him about the role Alastair Furnival – a former chief of staff to Assistant Health Minister Fiona Nash – played in the decision.
Mr Abbott revealed Mr Furnival was employed by Cadbury as an economist when the coalition announced, as an election promise, funding to assist the company upgrade and reopen the visitors centre at its Hobart chocolate factory.
Opposition Health spokeswoman Catherine King wanted to know whether Mr Furnival or his wife’s lobbying firm, Australian Public Affairs, would directly benefit from the funding.”
“Within minutes of Treasurer Joe Hockey declaring an end to ”the age of entitlement” on Monday, assistant Infrastructure Minister Jamie Briggs stood on a highway on the outskirts of Hobart and announced a grant of $3.5 million to a Tasmanian seafoods manufacturer, Huon Aquaculture.
It would help ”provide the equipment to process fresh fish, as well as smokehouses and other machinery for boning, skinning, portioning and mincing”, he said.”
“While the WA Government announced last week it was increasing household fees to manage “the state’s finances in difficult times”, in 2011-12 it handed $61,829 for an “innovative drilling” program, to Mr Forrest’s Fortescue Metals Group, which is worth about $10.74 billion.
And though the Government has been demanding “efficiency” cuts from its agencies for the past four years, it gave a further $38,551 from the same program to Hancock Prospecting, whose boss, Mrs Rinehart, was last year reported as earning about $600 a second.
Since 2009, the drilling program, which is part of the royalties’ Exploration Incentive Scheme, has paid more than $9.2 million to resource companies, some worth several hundred million dollars.”
“Ah, but the age of entitlement is over”, we’re told. Unless you happen to be a needy football club, that is. During the election campaign, Abbott promised $5 million to the Brisbane Broncos – owned by Rupert Murdoch’s News Corp, no less – to ”kick-start the revitalisation” of their ”sporting precinct at Red Hill”. The Manly Sea Eagles were offered $10 million to renovate Brookvale Oval, which just happens to be in Abbott’s electorate of Warringah and where he’s the number one ticket holder.”
In September 2013, then host of the G20, Russia, produced a 27 page long G20 Leaders’ Declaration outlining their future priorities and goals. Contained in that document was the following:
“We welcome efforts aimed at promoting sustainable development, energy efficiency, inclusive green growth and clean energy technologies and energy security for the long term prosperity and well being of current and future generations in our countries.
It is our common interest to assess existing obstacles and identify opportunities to facilitate more investment into more smart and low-carbon energy infrastructure, particularly in clean and sustainable electricity infrastructure where feasible. In this regard we encourage a closer engagement of private sector and multilateral development banks with the G20 Energy Sustainability Working Group (ESWG) and call for a dialogue to be launched on its basis in 2014 that will bring interested public sector, market players and international organizations together to discuss the factors hindering energy investment, including in clean and energy efficient technologies and to scope possible measures needed to promote sustainable, affordable, efficient and secure energy supply.”
In Australia, the Clean Energy Finance Corporation is doing just that.
“The CEFC investments in renewable technologies span a range of energy sources- wind, solar and bioenergy – and different financial structures. The CEFC has co-financed utility scale investments along with other Australian and international banks, co-financed businesses to maximise their potential use of renewable energy resources, and participated in refinancing deals.”
What’s more, they are attracting investment, creating jobs in new industries, and making a profit for the government while doing it.
“Since its creation 18 months ago, the CEFC has matched private sector funds of $2.90 for each $1 of CEFC investment to catalyse over $1.55 billion in non-CEFC private capital investment in projects and programs, while it has committed $536 million. Those projects account for a reduction in 3.9 million tonnes of carbon.
The CEFC is earning an average return of 7 per cent, and its abolition would cost taxpayers up to $200 million annually in lost revenue.”
There can be absolutely no justifiable reason for closing down the CEFC. It is the ultimate example of cutting off your nose to spite your face.
The 2013 G20 report also said:
“We appreciate the progress achieved since the establishment of the G20 Global Marine Environment Protection (GMEP) Initiative and welcome the launch of the GMEP Initiative website as a key element of the GMEP Mechanism for the voluntary exchange of national best practices to protect the marine environment, in particular to prevent accidents related to offshore oil and gas exploration and development, as well as marine transportation, and to deal with their consequences.”
“According to a press release from the Australian Recreational Fishing Foundation, the peak body representing angler interests nationally, Environment Minister Greg Hunt said the Government would come good on its promise to “suspend and review” the controversial marine parks process initiated by Labor and the Greens.”
“Unfortunately, soon a massively destructive coal port will be built just 50 km north of the magnificent Whitsunday Islands. The port expansion was approved by the Abbott Liberal National government on Wednesday 11 December, and it will become one of the world’s largest coal ports.
The coal export facility is ironically located on Abbot Point. The construction of this port will involve dredging 3 million cubic metres of seabed. The dredge spoil will be dumped into the Great Barrier Reef World Heritage Area.”
“While Western Australia’s shark cull policy was meant to protect beachgoers, it has alarmed and horrified marine conservationists since it goes against the global effort to protect the declining shark population.”
Not to mention the whales…really…don’t mention the whales.
Another of the G20 goals was to phase out fossil fuel subsidies.
“We reaffirm our commitment to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption over the medium term while being conscious of necessity to provide targeted support for the poorest.”
Christine Lagarde, president of the International Monetary Fund, has warned that climate change is one of the greatest economic threats facing the world.
“The planet is “perilously close” to a climate change tipping point, and requires urgent cooperation between countries, cities and business, International Monetary Fund chief Christine Lagarde has said.
Addressing an audience in London, Lagarde said reducing subsidies for fossil fuels and pricing carbon pollution should be priorities for governments around the world.
“Overcoming climate change is obviously a gigantic project with a multitude of moving parts. I would just like to mention one component of it—making sure that people pay for the damage they cause,” she said. “We are subsidizing the very behaviour that is destroying our planet, and on an enormous scale.
Both direct subsidies and the loss of tax revenue from fossil fuels ate up almost $2 trillion in 2011—this is about the same as the total GDP of countries like Italy or Russia.”
I wonder if they realise that:
“the Australian Government plans to gift over $10 billion of taxpayer’s money to subsidise fossil fuel use.”
Australia has assumed the presidency of the G20 for 2014 and Tony Abbott has released his agenda.
“Australia’s G20 Presidency in 2014 will structure leaders’ discussion around the key themes of:
Promoting stronger economic growth and employment outcomes
Making the global economy more resilient to deal with future shocks
We want to maintain a tight focus on practical outcomes that will lift growth, boost participation, create jobs and build the resilience of the global economy.”
Okay, reasonable goals, but what about clean energy and sustainable practice. This is what Tony has to say on that:
“Strengthening energy market resilience
Well-functioning energy markets and reliable supply are essential to every household and business and have a significant impact on the cost of living and the cost of doing business. Emerging economies are expected to account for more than 90 per cent of growth in energy demand to 2035. In 2014 the G20 will support international efforts to improve the operation of global energy markets and increase cooperation between major producers and consumers. The G20 will also explore how it can advance work on energy efficiency and continue its work to improve the transparency of energy markets. These efforts will help position us to meet the energy demands of the future.”
The only environment mentioned in his document is the investment environment.
Abbott and Newman must be expecting a hot old time at the G20 meeting later this year in Queensland. In typical Queensland fashion, they have made new laws to cope with it.
“The Queensland Government last night passed legislation to strengthen police powers during the G20 events in Brisbane and Cairns.
The legislation declares special security areas in the two cities, gives police extra search and arrest powers, and creates offences for actions such as crossing barriers and disrupting meetings.
Police Minister Jack Dempsey says locals who do not pass criminal history checks will be denied access to restricted zones and alternative accommodation will be provided at the cost of a few hundred dollars.
“We’re expecting 99 per cent of people being able to go freely once they’ve had their criminal history checks and balances in place.”
The bill prohibits a series of items from G20 zones, including weapons, cans, jars, whips, eggs, insects, reptiles, banners that measure larger than 100cm in height by 200cm in width, and remote-controlled planes.”
I wonder how many patrol cars will be out there armed with Mortein, or capsicum spray for anyone caught with eggs in their groceries.
I would suggest that Tony is more likely to need protection from the people he has screwed over inside the conference centre rather than from the Joe Blakes outside.