Extract from The Guardian
The Coalition and Clive Palmer benefit from axing the carbon and mining taxes but changes to super will only hurt workers
- Lenore Taylor, political editor
- theguardian.com,
The best way to understand the machinations in the Senate is to follow who wins and who loses.
In two months Palmer United party senators have voted to axe the carbon tax, axe the mining tax and defer legislated superannuation increases.
Let’s see how that works out for Clive Palmer: Axing the carbon tax saves him the annual $6m carbon tax bill for his Queensland nickel refinery; deferring ongoing superannuation increases delivers a significant saving given the $8.4m wages and entitlements bill reported in the 2013 Mineralogy financial accounts; and axing the mining tax will ensure the millionaire won’t have to pay it if he ever gets his Queensland coalmine going. (He still insists he has no problem with conflict of interest.)
To persuade PUP to take these “difficult” decisions, and also to pass controversial changes to financial advice laws, the government has agreed to the following concessions: some added bureaucracy around pre-existing requirements for electricity retailers to pass on carbon tax savings; keeping three spending programs it had slated for abolition for just two and a half years before they are abolished anyway; and adding a series of minor amendments to the financial reforms that make little difference to consumer protections but add considerably to paperwork. In other words, they haven’t been forced to make many concessions at all.
Oh, and they have agreed to set up a parliamentary inquiry into an “Australia fund” to provide emergency taxpayer-funded relief, loans or even the nationalisation of “rural and manufacturing industries in crisis”. Even the Liberal who co-sponsored the inquiry says it is an idea that would never succeed “with any government anywhere at any time.”
This outcome is considerably different from what Palmer promised, even taking into account that what he promised has changed over time.
Lately he had been insisting he would never support the abolition of the low income superannuation contribution, the low income bonus (a $200 a year top-up payment for pensions) or the schoolkids bonus. But then his senators did vote for the abolition of all of those things in time.
But from the outset he had been absolutely adamant that he would not vote for the abolition of the income support bonus for a very specific, and small, subgroup of recipients – namely 1,240 children who have been paid the bonus following the death or incapacity of a parent who had served with the military overseas.
“I certainly won’t be one that takes away $200 off the orphans of dead servicemen that defended our country that don’t have a mother or father and that’s just a reality,” Palmer vowed.
“The Palmer United party supports the repeal of the mining taxes but it must be done in the best interests of Australia. Repealing the payment of welfare benefits to the innocent children of deceased or injured veterans isn’t in the best interests of the nation and we hope the government will see sense. If a person has made sacrifices for their country it’s an absolute disgrace for a government to attack their children,” he said.
But the government has confirmed that the income support bonus for this group will also be gone at the end of 2016, and the fine print of the bills hastily passed by the Senate this week show that is indeed the result. Turns out Palmer thinks it is in the national interest to take benefits from orphans if you delay it for 24 months.
So the Coalition eventually managed to implement some of the promises it made before the election, while conceding very little. The chaotic scenes in the Senate are obviously bad for a government that wants to appear in control and the delay in the passage of much of its agenda bad for its determination to “get on with the business of governing”, but the pattern emerging is positive from the government’s point of view. It gets there in the end. Winning, as far as it goes.
Palmer’s own interests has benefitted and his promised “stand” for the interests of workers and the disadvantaged didn’t amount to very much, but he got a lot of publicity for it along the way. Not a bad result either.
But there was one entirely unexpected change in this week’s mining tax deal – yet another delay in the gradual increase of compulsory superannuation from 9% to 12%.
The government proposed the delay, with no warning or consultation or discussion, as an “offset” to claw back budget savings, but it was no great sacrifice because the Coalition has never been an enthusiastic fan of increases in compulsory superannuation.
The Financial Services Council, headed by former NSW liberal leader John Brogden, said this would reduce Australians’ retirement savings by $128bn by 2025. The government insisted this was not true, because workers would get the same amount of money in the form of pay rises “in their pockets” every week.
But this argument is obviously baloney. While it follows that legislated increases in superannuation will probably reduce pay rises in that year, and it follows that if the superannuation rises don’t happen, employers will be better able to afford pay increases, it does not follow that employers will top up pay increases by exactly the same amount as they would have paid in super.
Business leaders freely admitted this.
The chief executive of the Australian Chamber of Commerce and Industry, Kate Carnell, said it was absolutely true that employers who were not required to pay increased compulsory superannuation would have greater capacity to pay higher wages, but the correlation would “obviously not be linear”.
“Many factors come into the mix when employers and employees negotiate over wages, including general business conditions, which have been subdued, but obviously if employers don’t have to pay the extra money in superannuation they will have greater capacity to pay higher wages … [but] in the end employers will pay what they can afford to pay,” she said.
The chief executive of the Australian Industry Group, Innes Willox, said “over the next couple of years, we would not expect wages to rise to completely offset the postponement of the superannuation guarantee increases.”
The big losers are likely to be about 8 million Australian workers.
In two months Palmer United party senators have voted to axe the carbon tax, axe the mining tax and defer legislated superannuation increases.
Let’s see how that works out for Clive Palmer: Axing the carbon tax saves him the annual $6m carbon tax bill for his Queensland nickel refinery; deferring ongoing superannuation increases delivers a significant saving given the $8.4m wages and entitlements bill reported in the 2013 Mineralogy financial accounts; and axing the mining tax will ensure the millionaire won’t have to pay it if he ever gets his Queensland coalmine going. (He still insists he has no problem with conflict of interest.)
To persuade PUP to take these “difficult” decisions, and also to pass controversial changes to financial advice laws, the government has agreed to the following concessions: some added bureaucracy around pre-existing requirements for electricity retailers to pass on carbon tax savings; keeping three spending programs it had slated for abolition for just two and a half years before they are abolished anyway; and adding a series of minor amendments to the financial reforms that make little difference to consumer protections but add considerably to paperwork. In other words, they haven’t been forced to make many concessions at all.
Oh, and they have agreed to set up a parliamentary inquiry into an “Australia fund” to provide emergency taxpayer-funded relief, loans or even the nationalisation of “rural and manufacturing industries in crisis”. Even the Liberal who co-sponsored the inquiry says it is an idea that would never succeed “with any government anywhere at any time.”
This outcome is considerably different from what Palmer promised, even taking into account that what he promised has changed over time.
Lately he had been insisting he would never support the abolition of the low income superannuation contribution, the low income bonus (a $200 a year top-up payment for pensions) or the schoolkids bonus. But then his senators did vote for the abolition of all of those things in time.
But from the outset he had been absolutely adamant that he would not vote for the abolition of the income support bonus for a very specific, and small, subgroup of recipients – namely 1,240 children who have been paid the bonus following the death or incapacity of a parent who had served with the military overseas.
“I certainly won’t be one that takes away $200 off the orphans of dead servicemen that defended our country that don’t have a mother or father and that’s just a reality,” Palmer vowed.
“The Palmer United party supports the repeal of the mining taxes but it must be done in the best interests of Australia. Repealing the payment of welfare benefits to the innocent children of deceased or injured veterans isn’t in the best interests of the nation and we hope the government will see sense. If a person has made sacrifices for their country it’s an absolute disgrace for a government to attack their children,” he said.
But the government has confirmed that the income support bonus for this group will also be gone at the end of 2016, and the fine print of the bills hastily passed by the Senate this week show that is indeed the result. Turns out Palmer thinks it is in the national interest to take benefits from orphans if you delay it for 24 months.
So the Coalition eventually managed to implement some of the promises it made before the election, while conceding very little. The chaotic scenes in the Senate are obviously bad for a government that wants to appear in control and the delay in the passage of much of its agenda bad for its determination to “get on with the business of governing”, but the pattern emerging is positive from the government’s point of view. It gets there in the end. Winning, as far as it goes.
Palmer’s own interests has benefitted and his promised “stand” for the interests of workers and the disadvantaged didn’t amount to very much, but he got a lot of publicity for it along the way. Not a bad result either.
But there was one entirely unexpected change in this week’s mining tax deal – yet another delay in the gradual increase of compulsory superannuation from 9% to 12%.
The government proposed the delay, with no warning or consultation or discussion, as an “offset” to claw back budget savings, but it was no great sacrifice because the Coalition has never been an enthusiastic fan of increases in compulsory superannuation.
The Financial Services Council, headed by former NSW liberal leader John Brogden, said this would reduce Australians’ retirement savings by $128bn by 2025. The government insisted this was not true, because workers would get the same amount of money in the form of pay rises “in their pockets” every week.
But this argument is obviously baloney. While it follows that legislated increases in superannuation will probably reduce pay rises in that year, and it follows that if the superannuation rises don’t happen, employers will be better able to afford pay increases, it does not follow that employers will top up pay increases by exactly the same amount as they would have paid in super.
Business leaders freely admitted this.
The chief executive of the Australian Chamber of Commerce and Industry, Kate Carnell, said it was absolutely true that employers who were not required to pay increased compulsory superannuation would have greater capacity to pay higher wages, but the correlation would “obviously not be linear”.
“Many factors come into the mix when employers and employees negotiate over wages, including general business conditions, which have been subdued, but obviously if employers don’t have to pay the extra money in superannuation they will have greater capacity to pay higher wages … [but] in the end employers will pay what they can afford to pay,” she said.
The chief executive of the Australian Industry Group, Innes Willox, said “over the next couple of years, we would not expect wages to rise to completely offset the postponement of the superannuation guarantee increases.”
The big losers are likely to be about 8 million Australian workers.
No comments:
Post a Comment