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Tag Archives: OECD

Merry Christmas Gina and Rupert

If you go to Tony Abbott’s facebook page, at time of writing, you will find six threads about the Martin Place siege and one about the slaughter of innocent children in Pakistan. Four days after its release, you will not find any comment about Hockey’s MYEFO. That in itself should be cause for concern.

Tony Abbott has admitted he has little interest in the “dismal science” of economics and it appears he is hoping that applies to the rest of us. He is sticking to his forte – death cults and shirt-fronting.

Despite telling us all to carry on our lives as normal, he seems determined to class the acts of one deranged individual as a terrorist attack on home soil.

When Australians responded by showing solidarity with the Muslim community through the “I’ll ride with you” campaign, the odious Miranda Devine found a new target.

“Thus it was that on Monday, while real people were suffering at the hands of an Islamic State-inspired terrorist in Martin Place, hashtag activists sprang to the defence of theoretical victims of an Islamophobia that wasn’t occurring.

The meaningless, narcissistic, one-sided nature of this “near silent encounter” perfectly symbolises the leftist ­approach to Islamist terrorism.

Denial, deflection, projection. They see themselves as morally superior to the rest of Australia, which they imagine as a sea of ignorant rednecks. In their eyes the threat is not terrorism but Islamophobia.”

This view was endorsed by LNP member for Dawson, George Christensen who tweeted

“#illridewithyou is a typical pathetic left wing black arm band brigade campaign, casting Aussies as racists who will endanger Muslims”

The colourful characters who frequent Andrew Bolt‘s blog joined in with a barrage of hate.

Whilst Abbott, Devine, Bolt and Christensen continue to pander to the minority of xenophobic racist rednecks, others have been commenting on the policy direction of this government and none of it is good.

Firstly, Joe Hockey has cost us $28.6 billion in foregone revenue over the forward estimates through his own decisions.

Carbon Tax $12.8 billion

MRRT $3.4 billion

FBT on cars $1.8 billion

Tax on super earnings $313 million

Work-related self-education $266.7 million

Closing corporate tax avoidance $775 million

RBA $8.8 billion (classed as foregone dividends)

Add to that his spending on Direct Action, the “war on terror” at home and abroad, and the extra spending on Operation Sovereign Borders and PPL and we would go close to wiping out his deficit of over $40 billion.

So when you hear the girlinator Cormann talking about Layboor’s debt and deficit disaster, understand you are being sold snake oil by a con man.

Speaking of con men, the G20 leaders must be wondering about our commitment to join the war on corporate tax avoidance which has been shown to be yet another example of Joe “over my dead body” Hockey’s ‘tell em what they wanna hear’.

The head of the Australian Tax Office, Chris Jordan, has described a tax lurk for multinational companies that is being retained by the Abbott government as having been “abused” by foreign corporations at a cost of “hundreds of millions of dollars” a year to the Commonwealth but Hockey, following consultation with the big four accountancy firms and the Corporate Tax Association, which represents the biggest listed companies, decided not to tinker with section 25-90 of the act. And they had the hide to criticise Gillard and Swan for caving in on the mining tax though that was one time I found myself in agreement.

And they will have more pressure coming as the world insists that we take action on climate change.

During an appearance before a British parliamentary committee meeting held early Wednesday morning Australian time, British Prime Minister David Cameron was asked by an MP whether there was hope Australia would do more because “the new Australian government is in denial” on the issue.

Mr Cameron did not disagree and told the hearing there was hope Australia would step up its efforts.

“Australia will respond to international pressure and do more on climate change because it will not want to be seen as the “back marker”.”

The new revised GP co-payment has also been blasted.

The Australian Medical Association (AMA) has expressed its formal opposition to the Federal Government’s new co-payment model, labelling it a “wrecking ball”.

“That this should be instituted and ready to go by January 19 is, I think, absurd,” Associate Professor Owler said. “Particularly when there has been absolutely no consultation on this issue.”

The OECD was also not impressed with Hockeynomics slamming his budget measures and stating that ‘close monitoring’ was required mentioning everything from changes to Newstart and pensions through to Direct Action, deregulation of uni fees, and choice of infrastructure spending. They were particularly critical of superannuation tax concessions. The overall implication was “you haven’t thought these measures through”.

And as Abbott has his photo taken in front of lots of Christmas trees, presents are being delivered around the country.

Up to 100 ABC journalists have been told they will become redundant and ADF personnel will face rent increases as well as other charges for live in accommodation and meals.

Australia has transformed into the global Scrooge just in time for Christmas, with spending on foreign aid set to plunge compared to other wealthy industrial countries.

An analysis of Treasurer Joe Hockey’s $3.7 billion cut to the aid budget announced on Monday – on top of the $7.6 billion cut in May – reveals that Australia’s generosity towards the world’s poor will fall to an all-time low.

Australia will soon devote a paltry 22¢ cents in every $100 of national income to foreign aid – less than half the amount spent by the Coalition government more than 40 years ago.

This is the news Tony Abbott and his band of elves don’t want you to discuss as they take from the poorest in the world to give generously to wealthy corporations and mining companies. Gina and Rupert should be well pleased.

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Invisible ink

Image from abc.net.au

Image from abc.net.au

If you are looking for Tony’s signature PPL policy in the budget you will need “a scanning electron microscope” according to John Daly of the Grattan Institute. It only appears in one paragraph.

We are told that the government will cut the company tax rate by 1.5 percentage points (to 28.5%) from 1 July 2015. For large companies, the reduction will offset the cost of the Government’s 1.5% Paid Parental Leave levy but we are not told how much the levy will raise. We are told that provision has been made for PPL in the contingency reserve, a bucket of money reserved for decisions taken but as yet not announced by government, decisions too late to be included in portfolio estimates and so on, but no specific figures. We are told the cap reduction to $100,000 has made a small change in the cost, but not how much.

And that is the only thing that you will find in terms of references to paid parental leave – apart from a single line in the Treasurer’s speech – in literally hundreds and hundreds of Treasury documents about the budget.

Tony’s signature policy is written in invisible ink.

The official Treasury explanation is the Commonwealth is still negotiating with the states about their contribution to the scheme, and the funding is included in the budget’s contingency reserves. The same response has come from Treasurer Joe Hockey.

“We are still negotiating with the states about the scheme and, as you know, we’ve reduced the threshold from $150,000 to $100,000 in relation to the PPL,” he said. That might prove a little more difficult than expected considering how the Premiers are feeling right now.

Mr Daley does not buy this excuse.

“I would note that there are lots of other things about which there are uncertainties which, nevertheless, go into the budget, particularly at the point that they are formally government policy. What that doesn’t explain is why there is so little airplay for an important policy. Even if there are plenty of uncertainties around it, it’s already in the numbers in effect.”

When costing the Coalition PPL scheme, the Parliamentary Budget Office said that its estimate of the cost of the paid parental leave scheme is only of low to medium reliability because it is subject to assumptions including working women’s fertility rates, female labour force participation, the wages parents earn and how much leave parents take after the birth of their children.

The Productivity Commission found that PPL schemes like Abbott’s with “full replacement wages for highly educated, well-paid women, would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits”.

Studies done by the Grattan Institute showed that for every dollar you spend on paid parental leave, you would get double the impact on female workforce participation if you spent it subsidising child care.

A study last year by the OECD on drivers of female labour participation found PPL schemes definitely did improve participation, but the increase in participation from increased spending on such leave schemes is less tangible.

What it did find, however, was that the link between increased spending on childcare and improved female participation was “unambiguous”.

It compared spending on PPL and childcare and noted that “policies to foster greater enrolment in formal childcare have a small but significant effect on full-time and part-time labour force participation – and these effects are much more robust than the effects of paid leave or other family benefits”.

This reflects the work of the IMF last year, which found that “if the price of childcare is reduced by 50 per cent, the labour supply of young mothers will rise on the order of 6.5 to 10 per cent.”

But participation isn’t everything. If female participation is high, but women are mostly working in low-paying jobs with little chance for advancement, that is hardly a good result. A 2012 study attempted to examine the situation from a broader context.

It looked at the “inputs” each country had in place to improve female participation – from steps that governments and the private sector did to improve the economic position of women to the education attainment of women as well as maternity leave and childcare access.

It then looked at the “outputs” of women’s participation in the national economy – such as the ratio of pay between women and men, as the proportion of women among technical workers and also numbers of senior business leaders.

According to these measures Australia, it may surprise you to know, is ranked equal highest with Norway.

On the “Access-to-Work” input, which included pay childcare access and maternity leave provisions, Australia ranked 6th.

The current PPL scheme is not poor in comparison to most other nations. And some nations with smaller PPL schemes like Canada and New Zealand actually have higher female participation rates among 15-64 year olds than does Australia.

Currently 58.4% of all adult women participate in the labour force (ie. as workers, or looking for work); compared with 70.9% of adult men.

The reason for the gap is because of the decline in participation of women aged 25-34 compared to men.

In the early 1980s the drop in participation for women after 25 years of age could be up to 18 percentage points. And it would never recover. Now there is virtually no difference – in fact the age bracket with the highest female participation rate is the 45-54 age group.

The reality is that given our current position, any gains in women’s participation are always going to be at the margin – our big steps in women’s participation occurred in the 1980s and 1990s owing to societal changes as much as anything else.

Despite all the evidence suggesting that affordable childcare is far more important than increasing paid parental leave, the current review of childcare conducted by the Productivity Commission stipulates any recommendation must “consider options within current funding parameters” – ie. no extra funding.

It seems apparent that in this, like so many other areas, we are ignoring the advice and experience of experts to waste a lot of money satisfying the PM’s vanity.

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