Blog Archives

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.

Channelling ‘The Boss’, But Still Bashing the Bosses, Well Some of Them

The rich person bashing seems to be coming in waves. First we had the phase of talking down the likes of Clive Palmer, Andrew ‘Twiggy’ Forrest and Gina Rinehart. This first particular episode of the politics of envy came from the moment Wayne Swan’s article in The Monthly made its way into the public eye.  The second wave, which we’ve been pre-emptively warned about will commence this evening with renewed attacks highlighted by the Treasurer as coming our way when he gives the annual John Button Lecture in Melbourne tonight.

Let’s be honest, it’s not about all billionaires and other extremely rich people, if it was Mr Swan would have targeted the likes of Frank Lowy, Kerry Packer, Harry Triguboff and others. He hasn’t, it’s all about the mining billionaires, the ones who’ve spoken out against the Minerals Resource Rent Tax. The others don’t even rate a mention. Does Swanny think that they pay enough tax? He clearly does, there’s no additional profit tax being proposed for them.

While we’re being honest, who wouldn’t complain about having to pay extra tax? Let’s face it, we’re all self-interested individuals, well most of us at least. I’m pretty sure that just about anyone, from the richest among us to the poorest among us would be uncomfortable having to pay extra tax. This is especially the case when the services provided with the money people already pay in tax aren’t exactly all glowing examples of efficiency and the smart use of money.

Is it really smart for the Treasurer of our nation to be publicly knocking someone for having an opinion? Why not knock the countless individuals that don’t want to pay more tax and in many cases want to pay less tax? We all know that happens too.

Let’s get serious again for a minute. Clive Palmer employs an estimated 3000 plus people across his businesses. Andrew ‘Twiggy’ Forrest through his company Fortescue Metals Group (FMG) employs over 2000 people. Not only that, but Mr Forrest, through his Australian Employment Covenant has reached his target of finding 50,000 jobs for indigenous people a massive and very worthwhile initiative. Gina Rinehart, for her part employs and will seek to employ in the future a not insignificant number of people either.

Do we really want to bash Australians that create so many jobs? Do we really want to attack those at the head of companies which are involved in an industry which has played a major part in saving us from recession? Those who own companies in an industry that is currently still saving us from very poor economic results? I don’t think so.

Is Wayne Swan’s claim that these particular individuals are having too much of an influence on democracy actually true? Well actually no it isn’t. Pretty sure the Deputy Prime Minister has actually gone ahead with both the carbon tax and the mining tax despite the protestations which spawned the spending of millions of dollars on advertising campaigns against the two taxes.

The reality is they’re still going to pay them. That is, they’re still going to pay them until a Liberal Government takes power which you’d say is a dead certainty on the back of continued poor poll figures for the Labor Government. Yes, Clive Palmer is involved within the LNP in Queensland but at the same time I’m pretty sure a central tenet of liberalism is lower taxes and well isn’t that the result? Wouldn’t that play a part in making it easier to do business?

All this lunacy from a man that takes his inspiration from Bruce ‘The Boss’ Springsteen. Springsteen is a guy who’s made millions of dollars from a music career in which some of his song bash the rich, all in the name of making himself feel better about his own substantial wealth, estimated at about $200 million. But hey, his music is brilliant.

Question Time Ahead of Time

Question Time on Monday was a bit of a shock, in a positive way, with the expected debate over asylum seekers not eventuating within the hour and ten minutes in the lower house. Instead we were back on the familiar ground where we’ve been mired for some time with a major focus of questions over a new tax from the Gillard Government, the carbon tax and in a very minor way the Minerals Resource Rent Tax which also made a brief appearance today.

The ALP Government used Question Time again to highlight payments and tax benefits that have been made to and will be made to people as a result of the May 8 federal budget and through the carbon tax compensation package.

It’s hard to imagine that Tuesday will see any change, major or minor in the make-up of the political discourse during Questions Without Notice in both houses of parliament at least as far as the strategies of the major parties go. With the asylum seeker issue having not reared its head during Question Time yesterday it seems highly unlikely that it would become part of the debate in any big way on Tuesday afternoon, but stranger things have happened in politics lately.

The Coalition will certainly continue to focus attention on the incoming carbon price, now less than a week away. They will, as they have lately comb for any report of any company, organisation or government body saying that the carbon price, beginning on Sunday will result in, particularly power prices, but also all other costs rising above and beyond the carbon price modelling produced by Treasury.

The Labor Party for their part, through the use of the Dorothy Dixer will continue to focus on a slightly broader array of policy but all in the form of payments and benefits to low and middle income earners. This has been the case particularly since the budget was delivered by Treasurer Wayne Swan on May 8, announcing payments for education purposes and family tax benefit changes.

But there has also been another message that the government have been trying to break through with and having no success doing so according to recent polls and that is convincing the public that one, many will receive compensation and two, compensation will at least fully recompense for any price effects of the incoming carbon tax and in some cases provide extra funds.

That’s the way the Question Time cookie will crumble.

 

Question Time Ahead of Time

It’s Thursday folks and that means, for those who get their political fix from watching the nightly news bulletins that it’s the last day of the week that you have to endure shouty and often silly grabs. It’s been a rather subdued week of Question Time from Canberra with the House of Representatives not seeing a single motion to suspending Standing Orders in the three days that have elapsed in this sitting week and that doesn’t look set to change today. It has however been a week full of one-off vitriolic comments and that is an immense shame. It has been a very predictable week in Australian politics again and that will almost certainly continue today to round out the week.

The Coalition have spent the first 3 days of Question Time this week focusing on the Roy Hill Enterprise Migration Agreement (EMA) and the reported consultation gaps (read complete lack thereof) between the Prime Minister and her Minister for Immigration. Aside from the nearing carbon price commencement on July 1st this issue has completely dominated political debate in the parliament since the decision was announced by the Immigration Minister last Friday at the National Press Club.

Things could change slightly today in Question Time in the wake of comments from the Prime Minister to a group of miners overnight which could precipitate a return to questions around the Minerals Resource Rent Tax.

Of course, the other focus of the Coalition as it has been since the broken promise just after the 2010 election will be on the carbon tax which will be commencing in just over a month. It is entirely possible that this could become the main focus of tomorrow ahead of, or in place of the EMA debate which only has so much to give.

The Gillard Government will undoubtedly pursue the same two-pronged post-budget, pre-carbon price commencement Question Time strategy that has been used almost continuously since the budget was delivered on the 8th of May. This will mean most attention is drawn to selling the family and low income earner assistance that was delivered as part of the supposed surplus-returning fiscal statement delivered by Treasurer Wayne Swan only three and a bit weeks ago. The questions as they have relentlessly, will focus around the education payments and the increased family tax benefits.

The other focus which has been essential for the Gillard Government in an attempt to claw back ground on the issue after losing it just after the election has been to highlight the overcompensation that many will receive after the carbon price commences in July. This means many questions about how the Household Assistance Package will help the electorates of those asking Dorothy Dixer’s to the Prime Minister, the Minister for Climate Change, the Minister for Family Services, Communities and Indigenous Affairs, Treasurer and perhaps other ministers.

Further, although minor in focus during Questions Without Notice and not guaranteed, the ALP Government backbenchers have asked their ministers about environmental issues and education, although the latter has largely been tied to the payments tied in with the budget.

So that’s likely to be Question Time for Thursday with only minor exceptions likely or the level of focus of each topic varying a little bit. After today we’re set for two weeks respite from the Canberrra theatre before two more weeks of parliament and then the long winter recess saves the day for those of us not too keen on the theatrical side of politics, especially when it ain’t no Shakespeare and isn’t funny enough to match the likes of Gilbert and Sullivan.

Question Time Ahead of Time

Today marks the last day of budget week from the hallowed halls (yes, a stretch at times I know) and is set to be another full-on day in Australian politics where the predictable has of late been met with just as much unpredictability. The budget is now out and the government in a flutter trying to sell it in order to gain back the key constituencies they have managed to shed like fur and the Coalition are trying to shoot holes in it. But the week hasn’t been all about the budget, the Craig Thomson and Peter Slipper issues continue to hang around like that guy you don’t really like but are too afraid to say “bugger off”. Oh and then there’s also the carbon tax and the Minerals Resource Rent Tax.

In the last hour and ten minutes (or thereabouts) of Question Time for the week the Coalition will likely focus on a combination of budget items, the carbon and/or mining tax and quite possibly the allegations surrounding Peter Slipper, though that is far from certain given that the Speaker issue has in a way been mollified with Mr Slipper standing aside.

It is also much the same case with the pursuit by the Liberal Party of Craig Thomson, the temporarily Independent, but still unashamedly Labor MP who is also facing allegations of wrongdoing after being under investigation for over 3 years. The matter was rather spectacularly and completely unexpectedly brought to a head during a motion to force the Member for Dobell to make a statement to the House of Representatives, giving him the ability to use parliamentary privilege to tell his side of the story.

The motion failed, but the Member for Dobell leapt up toward the end of the motion to inform the parliament that he would, in the next sitting week make a full statement to the House on the allegations against him that were investigated by Fair Work Australia. This will probably mean that the Coalition will at least hold back the dogs on the matter, but perhaps not call them off completely.

The Gillard Government will be continuing to try to sell the budget, both for its social spending and for its purported surplus, even though the latter claim is incredibly dubious, especially given the small number of the projected surplus, $1.5 billion dollars.

As always the tantrums and name-calling are set to continue, after all it wouldn’t be Question Time without them would it? The tolerance of the Deputy Speaker seems low and Standing Order 94a may well get a good workout.

As always, it starts at 2pm AEST tomorrow and you can catch it on television, the radio or your computer, but don’t expect to win too many friends if you choose to view it somewhere public.

Question Time Ahead of Time: Budget Day Special

It’s that special day that comes around but once a year. It’s that day when the Treasurer strides to the despatch to spend a good amount of time outlining the budget priorities for the fiscal year ahead, what will be key priorities and what will be the focus of cuts. Undoubtedly too, in times like these deferrals also form a part of the budget.

Question Time and the House of Representative sitting itself today will be the first one out of the chair for Peter Slipper since taking the role while investigations continue into claims of misuse of Cabcharge and sexual harassment are investigated. This puts ALP MP for Chisholm and Deputy Speaker Anna Burke in the chair for Question Time and the all important budget address and could see fiery exchanges if the last time Ms Burke was in the chair for a brief period in Question Time is anything to go by.

The Coalition will quite likely not be focusing entirely on the budget in this sitting of Question Time, commencing just five and a half hours before the budget is delivered from the House of Representatives at 7:30pm. Aside from the budget and the new spending, cuts and budget tricks, the Coalition will still likely ask questions on the carbon tax, maybe the Minerals Resource Rent Tax and perhaps even Craig Thomson and Peter Slipper investigations, the latter of which reached a head yesterday with a Fair Work Australia report yesterday naming him hundreds of times in relation to alleged wrongdoing of a civil nature.

The Gillard Government will likely focus all of their efforts in Question Time through the Dorothy Dixer on key aspects of the budget that they believe will be items which have electoral benefits for them. To this end, questions from their own side will likely focus on the National Disability Insurance Scheme, the aged care reforms  and the cash handouts for education.The government will also likely focus on the fact that they are trying to return the budget to surplus for financial year 2012-13.

Question Time as always begins from 2pm and can be caught on your television, radio or computer.

The Sunday Sandwich (That’s a Wrap)

By far the biggest political action in Australia this week occurred in the state of Queensland, which overnight saw its majority eviscerated at the hands of a unified Campbell Newman led Opposition. But alas, this blog is about Australian politics and aside from some electoral implications for the federal Australian Labor Party and the change in complexion of the Council of Australian Governments (COAG), the events of the week in Queensland have little relevance when examining the events of federal politics over the past week.

Yes, the result is in many respects another stake in the heart of federal Labor which on results tonight would be all but wiped out across Queensland if swings were uniform statewide. When the Gillard Government is already in a minority government situation, the trend toward the Coalition in Queensland alone, if it were borne out at the next federal election would see the government fall easily, before even adding in New South Wales where there is potential for catastrophic losses.

An incoming Newman LNP Government means that another Coalition Premier has a seat at the COAG table, along with the Premier’s of Western Australia, New South Wales and Victoria. This probably will not have a major impact as COAG in recent years has tended to be fairly tame and “cooperative federalism” has reigned supreme. However from time to time issues may present themselves where the Liberal Premiers feel the need to join together in opposition to something that the ALP Government chooses to pursue. It would appear that the carbon tax is in the sights of the Premier-elect, so this and the MRRT appear to be at least two exceptions to the rule.

Julia Gillard and her government saw the passage of their Minerals Resource Rent Tax (MRRT), by the Senate this week which was alone in major events in Canberra for the week in Australian politics, the last sitting period before the budget is handed down by Treasurer Wayne Swan in May. Tony Abbott and the Opposition have vowed to continue to fight the tax after its implementation and to repeal it in government and their parliamentary strategy over that and the carbon tax in recent months have echoed those words.

The parliament shared its focus  in Question Time between the carbon tax, largely as a result of Opposition questions and the newly passed mining tax. The Opposition focused on perceived effects of the carbon tax on business and households and the revenue projections of the mining tax and the effect the tax  may have on the economy.

The government focused on the spending associated with the Minerals Resource Rent Tax and the tax cuts to small and big business which the Coalition opposes because it opposes the tax.

Also this week, Canberra descended into gaggles of laughter which transcended political boundaries after a very strange speech from mining magnate Clive Palmer who has since tried to put distance between himself and his comments. Mr Palmer claimed that the Greens were funded by the CIA to wreck the Australian economy by destroying the mining industry which helped keep the nation afloat during the GFC.

As Australia continues to meander toward the May budget, the focus outside of the parliament will be on Treasurer Wayne Swan and the ability he and his government have to deliver the surplus they promised for fiscal year 2012-13. The focus  of the media will be on trying to get a picture of the extent of the task before confirmation of the severity of any further cuts and just how much the effort will rely on the sneaky deferral of spending priorities for the budgetary year. There promises to be much political fodder over the coming weeks and the political discourse will certainly not be dull.

Question Time Ahead of Time

Today marks the last sitting day of the parliamentary week and the last day of parliament before the budget is announced in Canberra on Tuesday May 8 by Treasurer Wayne Swan. Consequently economics will continue to be the focus of the day in Question Time and the energy of our politicians will be at an almost anxious high as they try to get attention on their programs for Australia and the Opposition throw everything at the Gillard Government in trying to hold them to account.

The focus of the Opposition will continue to be on the two or three key areas that the Coalition have pursued for some time now  in their Question Time and broader political strategy. The two main focal points of the Abbott-led Opposition questions today will continue to be both the carbon tax and the mining tax which have had varying degrees of focus since both have been announced. They have both now been passed by the government and the Coalition will continue to pursue them as they come into force and for any negative impacts they have.

The Coalition also may ask some questions of the ALP Government about Fair Work Australia and its investigation into Craig Thomson, a long-running affair which has provided much political and parliamentary material for the Liberal and National Party Coalition.

The Opposition is likely to also ask questions of the government about the deal announced today to keep Holden producing cars in Australia for the next 10 years at least.

The government, as has been its strategy all parliamentary year will be to focus on their big programs, at the moment the Minerals Resource Rent Tax (MRRT) and how the revenue from it is projected to benefit the community, including low income individuals and small and big business. Some Dorothy Dixer’s, as has been the case this week may be devoted to other topical or even less discussed policies, like the Murray-Darling Basin Plan which received questions in the House of Representatives yesterday.

The Gillard Government will certainly use some Dorothy Dixer’s to ask ministers associated with the car industry about the deal with Holden to keep car production in Australia for at least 10 years and to highlight the benefits of this for the local and national economy.

The usage of the motion to suspend Standing Orders is another eventuality that cannot be discounted, particularly as we head toward a grand total of 50 of them for this the 43rd parliament of Australia. The motion however is less likely to occur as the topics discussed have been the focus of the motion in the past.What may work in favour of a suspension of Standing Orders is another topical issue presenting itself before Question Time today, likely not the Holden issue, or the fact that it is the last session of Question Time until the parliamentary week beginning the 8th of May.

Look for fireworks and restless pollies slanging remarks across the chamber today in the Lower and Upper House. Expect to see a high number of ejections from both sides and even Ministers sat down by the Speaker for not being “directly relevant” to questions asked by the Coalition and even their own side as they attempt to use Dixer’s for having a go at Coalition policy rather than explaining their own. Get your last fix for over a month from 2pm AEDT today

Question Time Ahead of Time

There are only two more days left in the last parliamentary sitting period before the budget is handed down by Treasurer Wayne Swan on behalf of the Gillard Government in May. As a result, the ALP Government will be competing hard with the Coalition for the remaining two days in Canberra this week to try to create momentum going into what will have to be a very difficult fiscal tightening if the government are to reach the surplus they have promised. All this and more points to a big two days of Question Time before parliament rises late tomorrow.

The Coalition look set to continue pursuing the government over questions about the Minerals Resource Rent Tax (MRRT) and to significantly focus on the already passed carbon tax which comes into force in just a matter of months. Both the carbon tax and the MRRT look like they will focus of a High Court challenge and this will play out in the coming months.

The Opposition may also decide in small part, to continue to pursue matters related to Craig Thomson and the Fair Work Australia investigation into alleged improprieties at the Health Services Union which have already seen a recommendation that 3 former officials in Victoria face Federal Court action.

The government look set to continue to focus on the economy specifically through the revenue raised by the MRRT and how it will fund programs and tax cuts for business.

There looks set to be less and less “Opposition bashing” during the answers to Dorothy Dixer’s in particular but also in responses to questions from the Coalition thanks to very strict policing of the “direct relevance” Standing Order which saw the Treasurer kicked out of the parliament under 94a for one hour yesterday and others effectively warned to become relevant.

The noise, with two days in parliament to go will surely be at a high, with temper tantrums flaring up from time to time throughout the hour and ten minute session of Question Time. A number of MPs will surely be removed for an hour under Standing Order 94a. Who will they be and just how entertaining or frustrating will Question Time be? Find out at 2pm AEDT.

Question Time Ahead of Time

It’s Tuesday in the last parliamentary sitting week before  a short recess leading into our politicians meeting in Canberra to hear what the May budget will bring. Debate is set to continue to be vigorous through the rest of the week with the of the conflict determined for some time now and redrawn from time to time when topical daily or weekly issues have been uncovered.

There are three main subjects on which Coalition questions during Question Time today could be based, the Minerals Resource Rent Tax (MRRT), Craig Thomson or the carbon tax. The former, the MRRT was passed last night by the Senate and so is most likely to dominate Coalition questions in both the House of Representatives and the Senate.

The Craig Thomson affair was in the news again yesterday because the Coalition demanded a more explanatory medical certificate than was provided in order to grant him a pair for the rest of the week. A specialist has provided advice on the health of Craig Thomson and the Coalition have since granted him a pair. Therefore it is less likely that the Craig Thomson story will play a role in Question Time, except perhaps a question or two on the investigation itself.

Like it has been for some time, since the broken promise and before and after it was debated and passed by the parliament, the carbon tax could also play part in the Coalition strategy.

There is one last possibility for questions and that is any issue that arises in the media today that is very topical which the Coalition may choose to run with for the day in Question Time. It would appear that the mining tax is the most topical issue of the day and that there are no other topical issues that the Coalition will use for its questions in the parliament from 2pm today.

The Gillard Government will focus the use of the Dorothy Dixer on the spending involved with its tax on miners and what this will mean for different constituent groups. The government will certainly too use part of each answer on the Minerals Resource Rent Tax to attack the Coalition for opposing the tax cuts which are funded by the MRRT. Questions on the broader economy are also likely if government questions are not completely dominated by MRRT statements.

One a broader front, the usage again of the motion to suspend Standing Orders cannot be discounted as we head toward its utilisation 50 times some time surely in the near future though it seems less likely to be invoked today due to the fact that all the likely issues to be interrogated today have extensively been used for such motions before.

So it should be a fairly predictable Question Time from 2pm AEDT, though the exact mix of questions is still open for debate and determination at this stage. It cannot be discounted that there will arise, between now and the commencement of Question Time a topical issue that will supersede questions on issues that have already been canvassed for a prolonged period of time.

To watch all the action and theatre, if you’re a politics wonk or just a sucker for punishment, tune in to Question Time from 2pm AEDT on your television or your radio.

%d bloggers like this: