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Not So Taxing Times

The Minerals Resource Rent Tax has commenced and it’s causing problems for the Gillard Government, including in particular, the Treasurer. What most people would not have expected is the way in which it is causing trouble for Wayne Swan. Instead of having to defend a huge tax grab, the Treasurer today was forced to respond to reports in newspaper The Australian that the MRRT failed to raise any revenue in it’s first quarter of operation. This is a circumstance few would have seen coming, though tumbling commodity prices should have provided somewhat of a warning to the pundits.

You see, the Minerals Resource Rent Tax, the renegotiated version of Kevin Rudd’s Resource Super Profits Tax was designed in an interesting way. Even though the name was changed, the new iteration was still a tax on profits. Therefore, when profits were high, the tax would be paid and when they were low, it would not.

Budget papers, released earlier this week in the Mid-Year Economic and Fiscal Outlook showed that the government believed the tax would still raise $2 billion this financial year.

A failure to clearly sell the way the tax works is the main reason that the response today was as it was. Too little time was spent saying that the tax would not raise revenue in bad times, but would in good times.

It is also a failure of design. If the ALP wanted to be sure of revenue then pegging the new tax to profits as they did was not the way to achieve a certain stream of revenue, especially one so easily impacted by poor commodity prices. To make matters worse, the new mining tax is not to prop up revenues with proceeds put away for future benefits. No, the tax revenue raised was to pay for promises made by Labor.

Clearly the turn of events this week, including the broader revenue shortfalls announced as part of MYEFO, make the prospects of returning to surplus extremely unlikely. Commodity prices for one would have to not just get back to where they were, but likely higher to make up for the time when the price was below expectations. Those prices could yet stay low for some time.

But the tough week, more accurately the tough day today did not end there for Mr Swan.

Speaking to reporters in Brisbane today, Treasurer Wayne Swan twice made a mistake when saying how much revenue the Minerals Resource Rent Tax would provide to the budget bottom line. Twice the Treasurer said that the tax would make $9 billion this financial year.

Actually, the resource rent tax is set to make $9 billion, not over the first year, but over the forward estimates, the next four financial years. It was a case of third time lucky for Mr Swan.

Ordinarily a simple gaffe like that does not mean much. It happens to politicians from time to time. However,for a Treasurer battling for a surplus and not having the numbers add up, it adds to a perception of confusion and uncertainty on the part of Wayne Swan and the Gillard Government.

The Opposition of course were crowing, enjoying a day where again, the Treasurer has been squirming over economic issues. But the celebration should also have been a tad on the difficult side for them too. The tax raised no revenue, so it was not doing the damage to the economy and businesses that the Coalition had warned about.

Federal Labor are seeing any remaining hope they had of returning the budget to surplus, which was delusional in the first place, evaporating before their very eyes.

But it is not the surplus the ALP should be most worried about the most. It is a worry, but the least of them. What they should be worried about the most is how much they might have to borrow to pay for the spending promises associated with this new tax of theirs.

Question Time Ahead of Time

Question Time for Monday began almost entirely as predicted, with the protests by some members of the Islamic community in Sydney being the first thing mentioned in Question Time after procedural matters. Both the Acting Prime Minister, Wayne Swan and the Acting Opposition Leader, Julie Bishop rose, on indulgence to condemn, in no uncertain terms, the actions of a violent minority of demonstrators who caused mayhem in Sydney on the weekend. But the actions on the weekend did not result in any questions as predicted prior to the commencement of parliament. There were simply the statements by the two leaders and then Questions Without Notice began for the day.

Question Time on Monday, as far as the Coalition was concerned, was pretty evenly split between two issues. There was the return of the usual prominence of the anti-carbon tax campaign, which has taken somewhat of a backseat and then there was a number of questions in relation to the visa of a member of Hizb ut-Tahrir, an extremist group, who spoke at a conference here.

The Gillard Government through the Dorothy Dix pursued, as has become their strategy for some time now, a much broader range of policy areas in an attempt to highlight positive differences in policy and perceived shortfalls of the Opposition in these policy areas. There were questions on the economy, taxation, duplication of the Pacific Highway, disability, healthcare and school education, all now regular features in questions from Labor backbenchers.

Question Time on Tuesday looks like it will play out in a similar fashion to Monday. It now seems likely that the Coalition will return to asking questions related to the carbon tax, around power bills quite likely, as it was today. Questions on the carbon price could also centre around the dropping of the floor price as well as the decision to not seek the closure of the 5 biggest coal-fired power stations and the impacts of the policy on businesses not compensated for price impacts.

Questions about the Hizb ut-Tahrir conference matter may continue tomorrow, but if this occurs it seems likely to not be as prominent as it was today.

Another issue which may compete for top billing, but was non-existent during Question Time today during Opposition questions would be matters related to spending priorities and the budget and what services would be cut, or taxes increased to pay for the significant new policy promises from the ALP.

Even more certain is the broad range of areas that the government will ask questions of itself on during Question Time. This will likely included comparative economic performance, healthcare and school education reform and could just as likely include infrastructure. taxation, the environment and families and community services questions.

Nobody was asked to leave the chamber under Standing Order 94a, but that could all change tomorrow as our parliamentarians begin getting back into the parliamentary groove.

Question Time Ahead of Time

Parliament and Question Time are back after just a weekend break. It has been a rather eventful weekend, with tensions exploding from within elements of the Islamic community of Australia in response to a lame video by an American individual. The government here and most across the Western world, including the United States of America, were quick to condemn the video when it became known. These events seem likely to change the complexion of Questions Without Notice early in the week at least as the government seeks to explain their position and possibly answer questions on the matter from the Opposition.

Last week, like the previous sitting week, was all about the Opposition asking questions about the spending priorities of the Gillard Government, especially in relation to the budget, which the government is trying to say, will return to surplus.

The carbon price was next in line on the list of priorities of the Coalition, with a number of questions on the issue throughout the week. But unlike many previous weeks in this, the 43rd parliament, it actually took a backseat to something else on the political agenda of the Liberal and National Party Coalition.

Of course too, it would not have been a parliamentary week, or even a week in politics in general, without the Tony Abbott led Opposition asking the government some questions on asylum seekers and refugees.

The government again continued to have their backbencher’s ask questions on a number of issues including the economy, health, education, infrastructure, the environment and workplace relations as well as immigration.

In the week ahead, not much is likely to change as far as the overall make-up of Questions Without Notice goes. Early on in the week, probably limited to Monday, there is likely to be a question or questions from both sides of the political fence as Australia seeks to make sense of the angry protests which took place at the weekend.

After that, it is likely that the Coalition and the government will return to other issues. But the policy areas considered will likely remain the same.  Only the number of questions on each regular issue will change.

Asylum seekers might well dominate the week, at least early on, as the Opposition seeks to goad the ALP into allowing the re-introduction of Temporary Protection Visas and the turning back of asylum seeker vessels. This comes after the first asylum seekers have begun to head to Nauru

If asylum seekers isn’t the main political game this week, it will again be government spending priorities, taxation and the budget that make up the majority of questions that come from the Liberal and National Party’s.

That small matter of the carbon price will also make an appearance, but it may not be as prominent again as it has been in previous weeks of parliament.

The Labor Government for their part will also aim to respond to the events of the weekend during Question Time, with Government MP’s likely to ask a question or questions on the matter, but probably limited to Monday.

After that, attention will again to return to the spending priorities of the government, those announced and half-announced, including health, education and infrastructure in particular. There will however, also be questions on the environment, the economy in general and workplace relations.

The only unknown factors in Question Time are the exact make-up of questions on each issue, whether any other topical issue arise during the week and just how bad the behaviour is and how hammy the theatre.

Question Time Ahead of Time

Congratulations Australia, we’ve almost made it through another week of parliament, and more importantly, Question Time. It’s not been the most rancorous, loud or boisterous of weeks, but nonetheless, it hasn’t exactly been subdued. We could hope that this is down to the words of caution from Malcolm Turnbull about how poor the parliamentary and broader political debate has been, but it’s more than likely that it’s just been a slightly nicer week of behaviour from our federal parliamentarians.

It’s also been a bit of a strange week in the way of the questions asked by the Opposition. For the most part, the Coalition, led by Tony Abbott has not prosecuted the case against the carbon tax. Most of the focus this week from the Liberal and National Party Coalition has been on the state of the budget. They’ve asked how, with lower government revenues and more high cost promises in recent weeks in particular, that it will be possible for the government to return to surplus in time.

The price on carbon though has repeatedly made appearances throughout the week so far. But the comparative absence of questions on the matter from the Coalition is very surprising, given that it’s been the central plank of Opposition attacks since the government got back in power under minority government.

There has also been a question or two from the Opposition over the week about asylum seekers. This has been in relation to the re-opening of the Nauru and Manus Island immigration facilities recommended by the Houston panel just a matter of weeks ago. They’ve also been centred around pushing the government to adopt other elements of the Howard-era ‘Pacific Solution’ which included Temporary Protection Visas, colloquially known as TPV’s and turning back the asylum seeker vessels when safe to do so.

The government again this week has been all about a broader explanation of government policies and promises. They’ve spent this week talking about education, health, infrastructure, jobs, skills, wages and vulnerable groups of people in the community.

It’s more than likely that the Opposition will continue to pursue the government over the budget and their spending priorities and whether or not new or increased taxes will be instituted to pay for the shortfalls in revenue and existing funds after these promises are funded.

They will likely again have a question or two, perhaps a number of questions, devoted to the carbon tax which no longer has a floor price and now won’t rely on the closure of the five biggest coal-fired power stations in order to reduce emissions.

Just as likely, but perhaps less prominent as has been the case this week, is the possibility of a question or two on asylum seekers and the now almost ready detention centres on Nauru and also the one on Manus Island.

The strategy of the Labor Party, through their use of the Dorothy Dixer has been just as predictable, though the mix of questions slightly uncertain. This however, changed yesterday. With the Queensland budget calling for big staff cuts and NSW also looking to take a slice out of education funding, the government used answers to warn that a Coalition Government at the federal level would do the same. These questions though will likely still cover the areas of education reform, health, infrastructure, communities, families, employment, wages and skills. 

This in some way, shape and form has been the way it has been all week and will likely continue to be until the next big issue comes along to steal some political thunder.

Question Time Ahead of Time

Another day of federal parliament and Question Time has passed us by. Tuesday was a bit of a noisy one, louder than Monday anyway. Tuesday’s session of Questions Without Notice saw the Member for Mayo, Jamie Briggs booted from the lower house under standing order 94a for abusing a point of order he raised in relation to an answer from the Acting Prime Minister, Wayne Swan. Despite that, a wide array of issues were canvassed from across the parliament, though the variety of policy areas was more diverse on the government side through the use of the Dorothy Dixer.

The Opposition spent the bulk of Questi0ns Without Notice pursuing the government over their spending priorities, in particular the so-called “big new spending” announced by the government this financial year. The questions pointed out the spending and revenue problems that the Gillard Government faces as they prepare to, most likely in vain, return to surplus next year. Most of the questions asked whether or not taxes would be raised in order to aid the government in returning to surplus.

Though there were a majority of questions focused on the budget, the price on carbon did make a much larger return to the Question Time arena on Tuesday, with questions about hospitals and the carbon tax and closing coal-fired power stations which will at this stage no longer occur as the government seeks to cut carbon emissions.

Oh, and there was the obligatory asylum seeker question from the Coalition at the start of Question Time.

The government again was much less focused on one or two issues during Question Time and continued using the Dorothy Dixer to ask a number of different questions on different policy areas. There were questions on the economy, supporting those in need, the so-called ‘super trawler’, schools investment, health, jobs, skills, wages and housing.

Because of the predictable nature of this, the 43rd parliament, it is almost certain that the strategy for Questions Without Notice for both sides of the political divide will remain the same, or at least largely identical.

On Wednesday, again the Coalition will most likely focus questions to the government around the budget. They will again ask how the government will return to surplus with new and continued spending commitments and whether or not this will require tax increases or whether or not it just won’t happen.

A second major focus may be the price on carbon again which was the focus of the second part of Question Time on Tuesday afternoon. This will likely focus around coal-fired power and businesses and organisations that are impacted by the carbon price but will not receive compensation from the government.

Of course, it being the Coalition, there is always the distinct possibility that there will be at least a question or two on asylum seekers and refugees as the government prepares to send the first boat arrivals to Nauru.

The ALP for their part will again try to prosecute their case for having acted in a wide selection of policy areas. This will likely include again, the comparative strength of the economy, schools investment, health, vulnerable people, jobs, wages, skills, housing and infrastructure.

The only unknown is how bad the behaviour will be, but we can all live in hope that it might just be a little more constrained and dignified than we have become accustomed to when it comes to politics.

Question Time Ahead of Time

Question Time for Monday has now passed. A wide array of issues were examined in general. But first, the parliament spent the first half of Questions Without Notice expressing their condolences for the loss of six Australians since parliament rose for a short break. Those who died were 5 soldiers across two incidents in Afghanistan and the Prime Minister’s father who passed away suddenly at the weekend while Prime Minister Gillard was at the APEC Summit in Russia.

But just after 2:30pm, questions began in the lower house with spending priorities and the federal budget the main focus of the Tony Abbott led Opposition as well as asylum seekers early on.

The Gillard Government, with Wayne Swan as Acting Prime Minister breached a wider selection of issues including the economy as compared with the world, infrastructure and education.

Tomorrow of course presents the the very high possibility, indeed certainty of exactly the same kinds of issues being brought up during Question Time, with perhaps slight differences in the amount of time dedicated to each issue. But nonetheless, the same general formula and topics will be used to frame questions for Tuesday’s session of Questions Without Notice from Canberra.

Again, the Coalition will probably focus a large part of Question Time on the new and existing big spending items that the Gillard Government has announced. This includes the NDIS, the new dental health plan and the as yet undisclosed contribution to be negotiated with the states and territories to fund the Gonski recommendations in education.

The Liberal and National Party Opposition too, could decide to return to asking questions of the government over the carbon tax which recently saw the floor price dropped by the government as well as plans to purchase five power stations, crucial to combating polution, being scrapped last week.

In fact, it was quite a surprise given these developments and the fact that attacking the price on carbon has been a long-term strategy of the Coalition in and outside of the federal parliament. Perhaps the Opposition Leader did heed the words of Malcolm Turnbull last week, though the variety of issues that questions were asked on did remain narrow despite the slight change.

The ALP through the Dorothy Dixer will continue the strategy of examining a wide selection of government policy areas. That is likely to again include a mix of at least some of the following including carbon price compensation, the economy compared with others around the world, health, education, infrastructure and workplace relations.

We were blessed with comparatively improved behaviour, though a few MP’s did manage to test the patience of the Acting Speaker, the usual suspects really. Will they be as lucky tomorrow?

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