The most shocking thing in the treasury analysis delivered to Scott Morrison on January 25 isn’t the finding that a cut in income tax funded by a lift in the goods and services tax would boost the economy not at all.
Source: Scott Morrison’s tax change would have taken from the poor and given to the rich
Malcolm Turnbull’s task of convincing wary state governments and Senate crossbenchers to back a GST increase has been made more difficult by new research showing it would have a severe impact on the least well off but leave wealthier households unscathed.
Source: GST hike to hit poor hard and leave rich unscathed, research shows
On economic reform and now on national security, New Zealand can see beyond scare campaigns and political opportunities – unlike their cousins across the ditch, writes Barrie Cassidy.
There’s no doubt about the Kiwis. Sometimes – well often in fact – they show a political maturity streets ahead of their cousins across the ditch.
Just this week Prime Minister John Key delivered a speech to the Institute of International Affairs on national security and the IS threat.
In that speech he talked about his obligations to secure the country and to support stability and the rule of the law internationally, and that’s just as you would expect.
But Key – the leader of the conservative National Party – and prime minister since 2008 – spoke at length as well about a longer term strategy; dealing with the root causes of extremism; and that’s something that gets precious little attention from the major parties in Australia.
Key said defeating IS (also known as ISIL) “will mean winning the hearts and minds of those vulnerable to its destructive message.”
“There is little doubt,” he said, “that a lack of movement towards a two-state solution in relation to Palestine, and the recent high number of civilian casualties in Gaza, serve to make the task of recruiters to extremist causes a significantly easier one.
“The unresolved issue of Iran’s nuclear capabilities hangs over the region as well.
“We also need to redouble efforts towards reaching a political solution to the violent stalemate in Syria. This has been another cause of ISIL’s rise, and has seen almost 200,000 killed, and led to more than three million Syrians fleeing their country.”
He went on to say that “the seeds of ISIL’s success lie in the failure of the Maliki regime to adhere to acceptable standards of governance, and to treat all citizens, regardless of ethnicity or religion, with respect.”
Key emphasised that military support is one thing, but the new al-Abadi government will need significant international backing if they are one day to fight their own battles.
In Australia, Tony Abbott talks incessantly about a “death cult”, or if you’d prefer, just this week, “an apocalyptic millennial extremist ideology”, that essentially beheads and crucifies people simply because they don’t like us. He likes to keep it simple. And the Labor opposition too steers away from sophisticated discussion about root causes for fear something they say might be interpreted as a lack of bi-partisanship. That could cost votes.
But then again, New Zealand is the country that introduced a GST at 10 per cent in 1986, increased it to 12.5 per cent in 1989, and then finally to 15 per cent with big personal tax cuts as compensation. And then Key got re-elected. In Australia, a GST was introduced in July 2000, at 10 per cent, and both the base and the rate have stayed the same since.
The debate in New Zealand was not particularly acrimonious and the public broadly, if not grudgingly, embraced each increase. Why? Partly because the politics being played out was not as self serving and destructive as that experienced here whenever the issue is raised. The electorate apparently understood they were not being asked to pay more taxes; but rather to accept a more efficient and sustainable mix of taxation.
On economic reform – and now on national security – they can see the issues beyond scare campaigns and political opportunities. The New Zealanders somehow manage to find a place in the world that is commensurate with their size and influence, and at the same time, retain a strong degree of independence.
And just by the way, the threat of a terrorist attack in New Zealand is officially “possible but not expected
The Abbott Government has finally revealed what it has long denied: the Plan B to its savagely unfair Budget — raising the GST.
As I predicted in a remarkably prescient piece written within three days of the Abbott being elected, a rise in the GST was always coming. Despite being a clear broken election promise and still a vicious attack on the poor and underprivileged, it will nevertheless be used by Abbott as political camouflage as he works towards being re-elected in 2015.
But now Credlin has, almost mercifully, added a new act.
Now, in response to questions about the Government’s obvious plans to raise the GST, Tony Abbott has this week arisen to intone solemnly about the need for a new debate about “reforming the Federation”. Something this 56 year-old man child says should be done “constructively”, in a “mature and measured fashion” and in a “spirit of bipartisanship”.
Yes, anyone who saw Abbott as Opposition Leader knows just how constructive, mature and bipartisan he can be.
The truth is, this has nothing to do with the “future of our Federation” ‒ Abbott couldn’t give a rat’s clacker about states’ powers, except insofar as they limit his own ‒ but rather is a cynical ploy to raise revenue and put pressure on the Opposition.
It is passing ironic that a PM who, as opposition leader, derided the then Government for a carbon tax, which he described as a “great big tax on everything” ‒ and which was anything but, given it only applied to big polluters ‒ to hike up an actual great big tax on everything that was implemented by a government in which he was a cabinet minister.
To raise the GST, Abbott will first blame the Opposition for not passing the Budget. He will then gain the rubber stamp approval of the states – who will, of course, jump at any proposal to rescue their uniformly parlous financial positions – and which he will hide behind, claiming the decision was an act of inclusive “federalism”.
This proposal he will take this into the next election, claiming it is necessary to solve the debt that is ballooning under his profligate, war-hungry Government — but which he will, of course, all blame on the Opposition.
The tactics are fairly obvious.
And the electorate may well buy it at the next election, because a 2.5% rise may not seem to them so much — not when compared, say, against losing their dole, or paying a GP tax, or losing their disability support. And it will be accepted by Australia’s dull, complicit mainstream media and policy commentariat as the “least of all evils” and not a broken election promise at all.
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