Sure way to surplus: tax the people as Howard did    

    by: Craig Emerson
    From: The Australian
    May 18, 2013

 

YOU could see this one coming: the opposition claiming the budget's economic projections are unreliable and it will therefore wait until the release of the pre-election economic and fiscal outlook 10 days into the election campaign before setting out its costed policies and savings decisions.      

Better still, why tell the Australian people of your true intentions before an election when you can establish a post-election audit commission and unleash the full array of cuts to an unsuspecting public?      

In his budget reply, Tony Abbott confirmed he would go down the same path as the Newman government's audit commission that is chaired by former federal treasurer Peter Costello. It is a device to declare all bets are off, justifying the repudiation of any and all pre-election promises.

As foreshadowed by the Prime Minister at her Press Club speech in January, this week's budget sets out the structural savings decisions needed to ensure long-term fiscal sustainability while making room for major new investments in schools and disability services.


These savings decisions include paring back middle-class welfare, an efficiency dividend for universities and reductions in compensation for carbon pricing now the Australian emissions trading scheme is to be linked to the European scheme.

None of these decisions is popular but they are necessary in the face of an unusually high dollar and associated squeeze on company profits.

To dispel the myth Labor is a big-spending government, average growth in spending under Labor - which includes necessary stimulus spending during the global financial crisis - is almost identical to that of the previous Coalition government.

Over several budgets the Labor government has unwound the middle-class welfare extended during the first mining boom by the previous government. The real income levels at which family payments are phased out have been reduced, the private health insurance rebate has been means-tested and the Baby Bonus abolished and replaced with a more modest means-tested payment.      

The Coalition is complaining the budget was not brought into surplus this year. There was, in fact, a straightforward way of delivering a surplus in 2012-13: apply the same tax burden as the previous Coalition government did. The budget papers show the present tax burden is 21.5 per cent of GDP, sharply down from the 23.7 per cent in the last year of the previous government.

If the Gillard government were to impose the Coalition's tax burden on Australian businesses and households, revenue this year would be more than $32 billion greater and the budget would be in surplus by more than $12bn.

The Abbott-led opposition has voted against most of Labor's attempts to rein in middle-class welfare. This should not be surprising, since Abbott continues to condemn Labor's reductions in middle-class welfare as "attacking the middle class", describing the private health insurance rebate and family payments as "tax justice".

But the mother of all middle-class welfare policies is Abbott's paid parental leave scheme. Compared with Labor's affordable scheme, Abbott's gold-plated policy is targeted directly at higher income earners.    

It would be funded by a 1.5 percentage point increase in company tax for the 3200 businesses with incomes greater than $5 million. Many of those businesses already have their own paid parental leave schemes. They would neither want nor be able to scrap them, since they have been negotiated with employees through enterprise-bargaining rounds.

Based on costings from the Parliamentary Budget Office, Abbott's paid parental leave scheme would be a $5bn annual slug on business - or $20bn over a full budget period. Some major business groups have been remarkably sanguine about such an impost, having argued for years for a reduction in the company tax rate and now seemingly accepting a $20bn company tax hike.

They know, as Abbott does, that they can pass on most of the company tax rate increase to customers through higher checkout prices, higher interest rates for home buyers, consumers and small businesses, higher fuel prices and higher insurance premiums.      

To the extent that the Abbott cost impost could not be passed on, its burden would be felt by shareholders, including superannuation funds, through reduced dividends and capital gains.

Either way, major business organisations such as the Business Council of Australia and the Australian Chamber of Commerce and Industry seem relaxed and comfortable about the prospect of a hefty increase in the tax burden on the companies they purport to represent.

Craig Emerson is the Minister for Trade and Competitiveness.

Emmerson is the dumbest and most extreme member of gillards fabian front bench.

What he says is even more worthy of ignoring but taking the lies to fuel your rage at labor.

RightSadFred wrote on May 19^th, 2013 at 7:43am:



The conservatives $100 Billion of unfunded spending will ensure that the coalition can not hope to produce a surplus inside a decade.  Abbott and Hockey will never produce a surplus, you would need to be crackers to think differently.

Howard delivered surpluses through economic success

Costello produced surpluses based on the strong economic position he inherited coupled with the strongest world economic growth in over a century.

Sure way to surplus: tax the people as Howard did    

    by: Craig Emerson
    From: The Australian
    May 18, 2013





does Mr Emmerson have another way of paying off the




why doesnt he tell us what he would do?????

philperth2010 wrote on May 19^th, 2013 at 8:33am:





what did this last 6 years do???.. dont talk about NDIS that hasnt left the paper yet...

dont talk about baby bonus that they almost doubled or maternity leave...in the news everyone wants them GONE....they are both killers and you know it... what roads did they build... we kn ow we got a lot of fancy shades at schools..pity about gonski...how much did that report cost??? and again much ado about nothing......nothing changes phil....I am one of those that seeing is believing...bugger all this promising for 5 years hence..you can live on that I cant,.

philperth2010 wrote on May 19^th, 2013 at 8:33am:


philperth2010

I think he should have toned down the pork, but its a political reality ..... he used it very well to keep them in power for so long.

He did leave the nation with a surplus, the ALP could have started much of what you said back in 2007 but they blew it all on political motives as well.

So why does the ALP have a secret 400 million dollar election stash again ?

This supports my comments on the ALP, they have acted like an opposition since 2007 ..... its only just now they hae realised they are in government, just before they get booted out.

cods

This is just a political non argument, without pork you don't get into government (or stay in it), look at the ALP during the Howard years ..... they played MeToo on everything Howard threw up during an election. For the part of the electorate that counts (swinging voters) their attention span is not the biggest so you need simple binary messages of what's in it for me.

Usually this is about 5-10% of the population, but with the ALP irrelevancy it looks more like 10-15%, FYI this presents a big risk to the Libs also.

The very reason most ignored Swan's abstract piece of work as the cupboard is bare. Why would a swinging voter be interested in a budget that offers them nothing ?

cods wrote on May 19^th, 2013 at 8:28am:


The Australian economy although robust is still being hit by a Global downturn that only the stupid or ignorant would dispute.....Australia has been able to maintain steady growth whilst most other nations have fallen into recession and will take many years to recover.....Australia needs to take advantage of our economic position and drive reform to boost our market share and forge ahead of our competitors.....Our debt is modest and can be sustained whilst the reforms needed are put in place to build the social and economic backbone that will ensure Australia is able to take advantage of our economic position.....Now is not the time to talk down the Australian economy and fall back to the pack with AUSTERITY.....Australia has a once in a lifetime opportunity to really become the smart country!!!



The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognize the opportunity.
John F. Kennedy (1917 - 1963), Speech in Indianapolis, April 12, 1959