Category Archives: Politics & Government

Gonski 2.0 – has Labor lost its soul?

We have been told over and over by respected journalists that Labor is only opposing the Coalition’s Gonski 2.0 schools funding scheme for base political reasons. Laura Tingle, Phillip Coorey, Bernard Keane and others said it. Andrew Probyn on the 7.30 Report last week, crossed the line from reporter to judgemental pontificator last week, basically saying that Labor was a disgrace. Back in May, when Gonski 2.0 was announced, Paula Mathewson declared that Labor had “lost it’s soul to Abbott-style negativity”. Tingle and Coorey accused Labor of voting against its own policies.

Excuse me, that was never the case. Labor had worked hard against rabid opposition to sign up the 27 entities involved in funding schools in Australia. The deal was to roll out the funds over six years, albeit backloaded in the last two, just beyond the budget estimates. Now Turnbull comes up with a cheaper deal, snatching away the final realisation of needs-based funding schools have been preparing for over the last four years, extending it out over another 10 years. Labor had signed agreements delivering the funding to the relevant school funding entities. Were they expected to rat on the deals they had entered in good faith? Continue reading Gonski 2.0 – has Labor lost its soul?

Adani – a mirage that will dissolve into mist?

The Adani board has given the nod to the $16.5 billion Carmichael projects which would generate 10,000 direct and indirect jobs, with pre-construction works starting in the September quarter of 2017.

Yet there are some cautionary voices:

Continue reading Adani – a mirage that will dissolve into mist?

How the 2017 budget was made

There was a story around that Mark Textor had a hand in the creation of the 2017 budget. Joe Aston in the AFR says Forget Mark Textor, JWS’ John Scales was the Treasurer’s budget pollster. Aston says that Scales, who was a protégé of Textor’s did the real work, or at least his company JWS Research.

However, Textor did play an important role. The Daily Telegraph reported back in early April that Textor’s research (for the Liberal Party) “highlighted the critical issue of housing affordability”, following which, ScoMo proposed changes to negative gearing that were shot down immediately by Mathias Cormann and Peter Dutton. Continue reading How the 2017 budget was made

Budget 2017: we live in a Labor world

As I said in the post on infrastructure and debt, Peter Martin heaved a sigh of relief that the Coalition Government finally understood that the services, infrastructure and welfare that we depend on to function have to be paid for, by raising revenue if necessary. Laura Tingle goes further. She says the Coalition has reset the debate on the role of government by moving to:

    a more central position which embraces, and even advocates, a bigger role for government, both in terms of its fiscal position and its interventions in the economy, whether that be by building, owning and running airports or regulating product and labour markets.

She says that the government is actually seeking to own Labor’s modern signature policies – Gonski, the National Disability Insurance Scheme and Medicare. Continue reading Budget 2017: we live in a Labor world

Budget 2017: good debt, bad debt infrastructure con?

Peter Martin states it directly:

    Those sighs of relief are prayers of thanks for a budget that embraced reality: the reality that schools, healthcare, roads, railways, pensions, the National Disability Insurance Scheme and the other things that we want need to be paid for.

Except that almost nothing happens immediately except slugging the big banks. Spending, including infrastructure is weighted to the out-years, even beyond the normal four-year projections. Revenue improvement depends on heroic assumptions – $44 billion from income tax bracket creep from higher wages, when wages have actually been falling, more than 40% increase in company tax even though company tax cuts are assumed, an increase of 60% in capital gains tax receipts by 2021. Continue reading Budget 2017: good debt, bad debt infrastructure con?

Power tipping point

The Four Corners program Power Failure added to the sense of crisis around our power system, beginning with the breathless comment that there was almost a breakdown of civil order in South Australia when the lights went out in September. The program looked at the difficulties experienced when the power went off for three days. Recently in some places affected by Cyclone Debbie, crews couldn’t get in to start fixing for about double that time. I’ll come back to Four Corners via a series of articles published on the same day.

First, in the AFR tucked away on page 8, Mark Ludlow penned an article Renewables, EIS ‘make gas-fired power redundant’ (paper edition title). Ludlow interviewed Professor Frank Jotzow, director of the Centre for Climate Economics and Policy at ANU, who said gas had been overtaken by renewable energy, including battery storage, in the transition away from coal-fired power. We should skip gas and go straight to renewables with batteries. Continue reading Power tipping point

University funding: drifting to mediocrity?

Andrew Norton from the Grattan Institute says the modest university ‘reforms’ signalled for the budget will entrench the status quo, and will affect universities more than students.

George Morgan says the universities are drifting to mediocrity, and these cuts will not help.

The headline figure is a saving of $2.8 billion over the forward estimates, and a 7.5% increase in student fees over the period. Total Commonwealth Government payments to universities over the next four years amount to of $74bn, so the impact of this $2.8bn reform package is less than 4% of the revenues to universities from taxpayers and students, according to Simon Birmingham. Continue reading University funding: drifting to mediocrity?

Gonski 2.0: will it help the Turnbull government?

Phillip Adams recently talked to Laura Tingle about her Monthly Essay Wicked Problems: What are the real reasons behind the rise and stall of Malcolm Turnbull? (locked content). Turnbull has aged 10 years in the last 20 months. He feels the weight of the whole government’s fortunes on his shoulders and does not get enough sleep.

He has lost his sharp tongue and tendency to anger, but has become a transactional politician, chair of the committee. He became prime minister and maintains continued support simply because he is not Tony Abbott.

Recently he has resolved a number of issues which have dogged the government since the horror budget of 2014, but will it add up to a narrative that changes his party’s electoral fortunes? In the latest education changes Simon Birmingham may have become the “fixer” Christopher Pyne claimed to be and may have neutralised one of Labor’s strengths, by stealing Gonski. Continue reading Gonski 2.0: will it help the Turnbull government?

Saturday salon 22/4

1. Theresa May’s brave gambit

She didn’t need to, so why did she, especially after promising absolutely definitely that she wouldn’t?

Given a lead of about 20% in the polls, she possibly sees a chance of decimating Labour and governing virtually as a one-party state for the next five years.

However, Nate Silver at FiveThirtyEight warns that the British polls are basically not worth a cracker. Their abysmal performance translates into a margin of error of 13 to 15%. Continue reading Saturday salon 22/4

Should We Charge the GST on Exports?

Exporters often seem to be able to pay less tax than other businesses.  One of the key reasons for this is that exporters pay no GST on their exports despite benefiting from government expenditure on things things like education and various forms of assistance to industry including assistance that is specific to export industries.

This post asks whether it is about time to start charging the GST on at least some exports. Continue reading Should We Charge the GST on Exports?

Should We Get Rid of the Company Tax?

The Commonwealth government has just gained support for a tax cut for business’s earning less that $50m per yr. The benefits of this change are debatable. The only things we can be sure of is that badly needed government revenue has been sacrificed and if anything, the administration of this tax will become more complex.

It might be smarter to get rid of this complex and difficult to administer tax altogether and replace the lost revenue by either increasing the take from already existing taxes and/or some new and simpler tax.

This post looks at the implications of getting rid of company tax. Continue reading Should We Get Rid of the Company Tax?