To tax or not to tax
On August 29 2012 Joe Hockey addressed the Committee for Economic Development of Australia (CEDA). During his speech he said
“business would be right to feel misled by the government’s false starts and policy backflips on cutting the company tax rate. The Minister for Finance had committed to delivering the promised 1% small business and company tax rate cut on over 45 separate occasions, going so far as saying that “We can guarantee we’ll support this”. In turn the Treasurer had committed to delivering the small business and company tax rate cut on over 70 separate occasions, describing this policy as ‘critical’. This promise was dumped in this year’s Budget. It is understandable that many in the Australian business community are unimpressed.”
Mr Hockey promised
“The Coalition will cut through the uncertainty and backflips on tax. We make clear and certain promises.”
So imagine my surprise to learn that the Federal Government has formally revealed it will not go ahead with its promised company tax cut for big businesses.
In the same speech, Hockey criticised the carbon and mining taxes saying they “introduced very significant business risk in Australia.”
In September 2014, Tony Abbott said the mining tax had dragged down the Australian economy and the mining sector for too long.
“We have seen the back of the mining tax – possibly the most foolish tax in the history of our country – a tax that destroyed jobs, a tax that damaged investment, a tax which cost money and a tax which did not raise any revenue,” he said.
Association of Mining and Exploration Companies chief executive Simon Bennison said the abolition of the tax would produce tangible economic benefits.
“This will improve investor confidence and create more jobs for Australians,” he said.
The Office of the Chief Economist just released the March “Resources and Energy Quarterly” report. It tells a different story of declining investment and job losses.
“While housing construction expenditure has increased recently, it has not been large enough to offset the decline in mining investment.
Despite initiatives to streamline approval processes and award major project facilitation status, there are fewer projects entering the investment pipeline. Mining industry capital expenditure was down 15 per cent on the December quarter 2013.
Given the projected softness in commodity prices over the medium term, the outlook for further investment in the mining sector is subdued. As high-value LNG projects are completed over the next few years, the stock of capital investment will be substantially drawndown. The downturn in investment has come from a very high point.
Mining sector employment was 228 900 people in the December quarter 2014, down 6 per cent compared with the September quarter, and 16 per cent lower than the December quarter 2013. As part of cost cutting and productivity enhancing initiatives, many producers have sought to reduce staff numbers through job cuts or insourcing some functions that were previously undertaken by contractors.”
So according to our own Department of Industry and Science, investment was at a high when we had the carbon and mining taxes and, since their repeal and the deregulation of environmental safeguards, investment has declined and employment has dropped.
Falling commodity prices have been blamed but these are in part due to a deliberate oversupply in a time of falling demand. Many developments are also moving from the investment phase to the production phase.
Emissions of toxic pollution by EnergyAustralia and Origin Energy have increased by more than 500% in the past financial year, and AGL has become the country’s biggest carbon polluter, a new study claims.
Together the trio account for 13% of Australia’s total carbon emissions, according to the report by the activist group GetUp.
Investment in large-scale renewable energy in Australia has plummeted by 90 per cent in the last 12 months and lenders are leaving the market, according to analysis from Bloomberg New Energy Finance (BNEF).
The report shows only one large-scale renewable energy project has been financed this year for $6.6 million, following zero investment in the last quarter of 2014.
Since the Federal Government announced its review of the Renewable Energy Target in February 2014, $206.9 million has been invested in the sector. In the 12 months prior to the announcement of the RET review, investment was around $US1.9 billion.
“The Australian large-scale clean energy industry has become practically uninvestable [sic] due to ongoing uncertainty caused by the government’s review of the Renewable Energy Target,” the report reads. “[This year] also saw Banco Santander, the world’s third largest clean energy lender, exit the Australian market.”
Yesterday the Australian Bureau of Statistics revealed the renewable energy sector had lost 2,300 jobs in the last two years.
So the Coalition have reneged on their promise to cut company tax, removed the carbon tax causing an increase in pollution and a loss of billions in revenue, repealed the mining tax and reviewed the RET which has been followed by a large decrease in investment and a loss of thousands of jobs.
Listening to Tony Abbott addressing the Australian Chamber of Commerce and Industry this afternoon, he ruled out any change to taxation on superannuation during this term. There is also some suggestion that he might bring back the small business $6,500 instant asset write-off that they retrospectively got rid of with the mining tax (backdated to January 1, 2014) despite Joe Hockey saying in that speech from 2012 “we will continue to oppose retrospective tax legislation which disadvantages taxpayers.”
Tony Abbott once spoke of a trust deficit with respect to the Gillard government.
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.
Not only is there a trust deficit with the Abbott government, one must question their motivation and doubt their competency. They seem incapable of telling the truth or adapting to changing circumstances.
They have a mission and come unemployment, poverty, recession, or global destruction, they are determined to follow their course.
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The RET. Yet another smokescreen from the COALition. In reality the RET or better called the REET, one of the E’s standing for electricity, represents just under nine per cent of total energy consumed, if you assume electricity accounts for one third of all energy comsumed in Australia (.27 x .33). We should be aiming for a 100% RET to bring our total energy comsumption from renewables to at least 33%. Origin energy, what a joke, less than %1 from renewables. Now Grant King wants nuclear power here. Before that it was hydro from PNG. Why? But he was in a joint venture in geothermal would could have amounted to something substantial. Instead he could smell the blood in the water after the carbon tax came in and abandoned geothermal and then went into coal, Erarang. Now he, along with others, wants the RET reduced to a real 20%. Oh we can increase it later. But the damage will be done, oh the damage has been done. Oh well we’ll have to go nuclear now, they’ll say.
Divergent and most assuredly Kaye … correct on each and every count ….
I was in business for many years, but thank goodness no longer as the convoluted messages about business taxes coming from the LNP would have been enough to give me nightmares.
The mote in Abbott’s eye is more like a bloody great ocean of dung riddled deception as failure raises its ugly head. Yet, for some of us, it is an accurate vindication of a dithering dunderhead.
Could’t happen to a bigger liar and obnoxious mindless dilettante.
If the Foo shits wear it.
Please don’t hold back on our account!
Beg to disagree. But let’s start with the ‘they’. Abbott and Hockey are now in ‘survival’ mode..
Hockey knows he can’t survive without Abbott but in the short term, at least, Abbott needs Hockey to create a ‘popular’ set of figures. But make no mistake Hockey is completely vulnerable, in the political sense.
He has lost his political ‘mojo’. Just look at the polls.
As for the Abbott government’s commitment to the IPA ‘agenda’, that’s now been confined to the historical dustbin.
The driving (and only) consideration is now political survival. Yes Abbott et al will continue to mouth the IPA agenda but their actions will prove otherwise.
Very true Matters Not. They swept into power thinking it would be oh so easy and they have been, as my North American friends would say, “skating” ever since. I can’t believe that Abbott keeps saying we got rid of the carbon and mining taxes like it was some sort of achievement. As we have seen, it did nothing to help employment or investment. Ban Ki Moon is calling for global carbon pricing and an end to fossil fuel subsidies.
Abbott is trying a new narrative about them being the builders and Labor being the wreckers…..as he unwinds our action on climate change, destroys the NBN, rips up signed agreements with the states on education and hospitals (whilst abusing Daniel Andrews for doing likewise re the East West link), and decimates research in this country.
Politics is one area where you can claim success out of failure. In the corporate sector you get fired for mismanagement. I thought the bottom line was to manage the economy not get involved in every hair brained scheme to save the rich from contributing to the betterment of society. More unemployment; more debt; a whole lot more blustering that we saved you from the big bad resources tax and carbon tax while signing away our sovereignty through trade agreements and the TPP. Then screw up health welfare and education. Where the hell is our high speed rail and modern infrastructure program. Destroy the renewable energy industry and claim ruining the environment is a good thing. As for indigenous people who cares lets just shift them around the chess board and blame them for our own mismanagement. Those leaners, low income, disabled and unemployed it’s all their fault. Undermine and defund science the very core of capitalist technological innovation and growth. The scary debt that is not a debt would have reduced if we followed a program of stimulus not austerity. The list is long and the incompetence runs long and deep.
Conservatives know that even with austerity the economy will eventually begin to revive so you can always claim success by destroying the life opportunities of a generation just to meet your ideological obsessions and ethical myopia.
Labor demonstrated the effectiveness of stimulus and the viability of the resources tax and carbon tax yet success means failure. Only emotionally crippled sentient beings could be so irrational and illogical as to vote against their best interest.
The way things are going maybe we deserve to become extinct.
This government does my head in. When it comes to the Petroleum Resource Rent Tax they say this….
“The bottom line is that tax (PRRT) has been designed in a way that actually stimulates investment, and more importantly stimulates exploration, because the companies have confidence in the way that tax works,” Mr Macfarlane said.
Speaking of exploration….
“Permits that would allow industry to look for petroleum in marine sanctuaries have been quietly granted by the Abbott government while it reviews 40 freshly minted marine reserves.
The permits could lead to seismic testing in areas off the West Australian coast, where no mining exploration could have occurred if the government had not called a review.
The licence has been granted to Oslo-based company Spectrum-Geo, which wants to conduct seismic testing off the WA coast from Geraldton and the Abrolhos Islands.
The permit gives the company authority to conduct exploration other than drilling a well.
Environment group Pew says the area covers three sanctuaries near the Abrolhos Islands that are important migratory habitat for humpback whales, blue whales, sea lions, and breeding habitat for the western rock lobster.”
There will be nothing left by the time these vandals are thrown out 🙁
Absolutely Kaye the day to day hidden deals tend to pass by the general populace so while the IPA list is temporarily throttled they play out their agenda by quietly handing more and more over to their corporate buddies. The point is you have to be totally skeptical about anything this government does because their motives are single mined corporate oligopoly damn the consequences. We also have to be very wary of the motives of Labor.
Meanwhile the political media plays its fair and balanced agenda by not taking a strong stand against injustice which continually muddies the ground leaving people confused and bemused. That is exactly what the corporate media wants. We are passing through the most underhanded and deceptive period of double speak and ideological media indoctrination ever perpetrated against the public in this country.
Good to see that at least swing voters are not taking the bait.
Fortunately there is some concerted exposure of the vile agenda of the L-NP.
Greg Hunt’s bargain carbon auction
First Dog on the Moon
“Politics is one area where you can claim success out of failure. In the corporate sector you get fired for mismanagement. I thought the bottom line was to manage the economy not get involved in every hair brained scheme to save the rich from contributing to the betterment of society.”
Perhaps the ‘Peter Principle’ is in play Stephen? (Ad astra at TPS Extra)
Kaye continuing your theme re: mining permits in reserves here we have a factory trawler quietly operating in Australian waters with no public disclosure by the Abbott government.
These deceptive criminal bastards have no social or moral conscience and damn the Australian publics opinions. Pure unadulterated corporate dictatorship.
This was taken from an email I received this morning.
If only it had been an April Fool’s joke. But it’s true. On 1 April, the 95-metre industrial factory trawler the Dirk-Dirk (now reflagged as the Geelong Star) arrived in Australia, and it’s starting to fish in our waters right now.
Unbelievably, the Abbott Government has welcomed this foreign factory trawler, despite huge opposition from recreational fishers, conservation groups, tourism businesses and local communities alike.
Join us for a weekend of action at these events around Australia to Stop the Trawler. Bring your friends, banners and boats along!
Melbourne: 11am Saturday 18th rally at the Victorian State Library
Fremantle: 11am Saturday 18th banner event outside Cicerello’s on Mews Road
Hobart: 10am Sunday 19th boat rally on the water or 12noon outside Fish Frenzy at Elizabeth St Pier
Sydney: 5pm Sunday 19th banner event on the beach opposite Havana Beach Bar, Manly
Perth (TASMANIA): 10am Saturday 18th boat towing to rally at Lions Park
Adelaide: Sunday 26th banner event at Birkenhead Bridge, Port Adelaide (note, the weekend after)
For more details on the events visit http://www.stopthetrawler.net/
And if there isn’t a rally being organised near you, you can take a photo with your ‘Stop the Trawler’ message, and post it on social media using the Stop the Trawler Alliance’s hashtag #StopThisBoatTone or email it to us on firstname.lastname@example.org
This is the largest factory trawler to be fishing in Australia, and it’s starting to fish in our waters now. But we don’t know where or we don’t know what they caught, because the company is protected from providing this information!
Massive freezer-factory trawlers represent the most extreme excesses of global over-fishing, wreaking ecological havoc in our oceans. We must not let them get a foot in the door.
Please take part on our national weekend of action to protect our marine life, our fisheries and the future of our local fishing communities. In 2012 we stopped the Margiris, and we can do it again.
For our marine life and fishing future,
Michelle and the team
Save our Marine Life & Protect our Coral Sea
Had a proper mining tax been employed in the 00’s then investment would have been lower. With lower investment less production would have ensued. With less production there would be less supply. With less supply falling demand would have meant prices would not have fallen so much and thus the government would be in a better position now as a) spending would have been adjusted downward earlier b) profit levels for existing production would be high meaning more tax could be obtained or b) loss write levels would be lower meaning more overall tax over a cycle.
I am not sure but I think the mining tax we ended up with far too late was fraught with danger in the current environment of much lower prices – the tax concessions for losses may have cost us billions. Anyone know enough to confirm this?
It would take a lot for them to make a loss. From a year ago…..
“BHP Billiton has recorded a 5.9% increase in revenue and a massive 82.9% spike in profit for 2013.
In its latest results, the global miner announced an increase in its year on year revenue to US$ 33.95 billion, and an enormous leap in profits for the year of US$ 8.1 billion compared to the previous period, although it was still a drop from in net profit from its June 2013 US$ 10.9 billion results.
In a similar result to fellow international miner Rio Tinto, which last week announced a jump in profits to US$ 3.67 billion, BHP recorded across the board revenue increases as it slashed costs”
I’d like to think the LNP is now in survival mode but I’m not seeing much evidence of that. After telling us that Medicare co-payments were “dead, buried and cremated” they’re now trying another scheme that will result in the patients paying more. They’re not interested in making big business pay more tax, even though the noise of the voters is increasing on this issue. They haven’t made any convincing attempts to address domestic violence either.
According to Hockey, the recently released Tax White Paper was supposed to start a conversation on Tax within the Australian community.
Odd that Abbott came out yesterday and said that Negative Gearing was off the table and that Superannuation Tax Concessions – currently costing the budget $35 billion 2013/14 and estimated to cost $50 billion in 2016/17 – was also off the table.
He then said that COAG would be focusing on domestic violence, the scourge of Ice and National Security : whilst these are worthy of discussion surely it is the state Commissioners of Police who should engaged in these matters.
Surely even the most rusted on Liberal supporter must realize that allowing this man to remain as Prime Minister is damaging our federation and our economy.
Our country will look like Mordor by the time these fools are done with it.