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Byron Shire
April 19, 2021

Thus Spake Mungo: Just another economic talkfest

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By Mungo MacCallum

The so-called economic summit convened by the combined forces of NewsCorp and Fairfax is to take place next month, with much ballyhoo and very little prospect of actually getting anything done.

Sure, there will be lots of good ideas, many of them eminently suited to the much needed process of genuine reform of a clearly moribund system. But the problem is that the politicians who would need to implement them will not be present.

And this is entirely intentional; they will be snubbed. The whole rationale of the summit is that the participants have despaired of Tony Abbott, Bill Shorten, Joe Hockey and Chris Bowen (just to mention the most prominent and noisy) of ever coming to the point of even discussing proposals, let alone agreeing to them.

So the forum is to be thrown over to the people – well, some of them. In fact a select group of the most powerful institutions and organisations are to get together for a talkfest, after which they will go back to their real concerns while the politicians chorus, singly or in unison: nope, nope, nope.

Abbott’s last chance of providing leadership is his assembly of recalcitrant premiers this week: on the evidence to date, his aptly named retreat is more likely to end up in an undignified rout. He is happy to listen, but he remains committed to consensus, which can only happen with a lot of time and effort, neither of which he has ever been prepared to give nor is it likely to happen.

It is not as if some of the politicians do not have ideas of their own. Hockey’s first budget, for instance, was a mass, or mess, of drastic measures which were scuttled by the opposition, the crossbenches and, largely the general public on the grounds not that they were ineffective, but that they were unfair.

Shorten and his colleagues have suggested superannuation and negative gearing as ideas worth considering, to be derided by Abbott as robbing piggy banks and fiddling. Even when Glenn Stevens, the governor of the Reserve Bank, attempted to reprise the possibility of revisiting negative gearing and capital gains tax, Abbott was unmoved: he was against taxes, the Labor Party was in favour of them, and that was all that needed to be said on that subject – or on just about any other for that matter. So we are stuck with a mixture of pig-headedness and apathy pretty much across the board.

But no example is more depressing than the sheer gormlessness and gutlessness of the rejection of any thought of dealing with the GST. This is not an easy impost: because it is inherently regressive (all flat taxes necessarily hurt the poor more than the rich) the left instinctively recoils from it. Nonetheless Paul Keating was prepared to prosecute it vigorously for months before Bob Hawke and the unions eventually torpedoed it in 1985.

John Hewson revived it as part of his epic Fightback! manifesto, a document so elaborate that not even he could master all the details. Keating campaigned ferociously against his own former policy and when he won the 1993 election, that was thought to have settled the issue, at least for the foreseeable future.

Indeed, when he became Liberal leader John Howard called the GST ‘never ever’; but it turned out that he really meant hardly ever, or perhaps not yet. Howard had always been attracted to the idea, and once again resurrected it after becoming Prime Minister.

But this time he tweaked it a bit: all the proceeds were to go to the states, whose premiers Keating had notoriously declared that they were so desperate for revenue that the most dangerous place in the world was to stand between them and a bucket of money. Even so, many were reluctant to take the loot, but in the end they agreed, with a raft of conditions.

However Keating and the federal Labor Party was still opposed, which made it a contest as vigorous and ruthless battle of ideas as any since Gough Whitlam devised Medibank back in 1969. Howard ran on the slogan ‘Not a new tax – a new tax system’; he foreshadowed compensation measures to protect low income earners and a series of state taxes which were to be abolished if the GST got up.

He also broke all the rules and conventions by unveiling a massive advertising campaign funded by the taxpayers. In the past the practice had always been that such advertising was only allowed once legislation had been enacted and it could be justified on the basis of familiarising the voters with what was, inevitably, coming. In 1998, the legislation had not even been drafted, let alone debated and passed, and indeed there was considerable doubt that the senate, then as now composed of a majority of non-coalition members, would let it through.

In fact, when Howard squeaked through the election with a minority of the popular vote, the senate seemed destined to block the GST forever. But the Democrats, under Meg Lees with considerable resistance from their members, secured a raft of exemptions and qualifications, which effectively destroyed the real purpose of the exercise, which was its universality and simplicity, and so the bastardised GST was born.

It had been a long and bruising struggle but in the end Howard’s determination and persistence prevailed. Compare and contrast the pusillanimity of Abbott and Hockey; at the first sign of dissent, they ran out the white flag and threw in the towel. It was all too hard, what was the point of spending all that effort – all that political capital? It is presumably to be hoarded for slogans and abuse.

Hockey capitulated without a whimper the moment the current Victorian premier, Daniel Andrews, said no. No matter that most of the other premiers were at least to discuss broadening the scope of the GST, and Mike Baird in New South Wales even wants to raise the rate; if Smokin’ Joe could not have unanimity, total submission at the first hurdle, he preferred abject surrender.

And Abbott, in spite of all his talk about serious discussion, has consistently avoided any as soon as it emerged that there was any real opposition from opponents; he has simply dismissed them and moved on. So much for being the love child of John Howard and Bronwyn Bishop; Abbott might be a flailing fighter in the boxing ring, but he has no stomach for any serious contest of ideas, or even debate about them.

And that being the case, the non-political economic summit will be an ineffective series of thought bubbles; a feel-good party for the participants with no hope of actually reforming the country. Why do they bother, and for that matter, why do we?


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4 COMMENTS

  1. You want success. Here is success:
    In 1983 Bob Hawke was elected prime minister.
    From April 11 to 14, 1983, prime minister Bob Hawke conducted an ‘Economic Summit’ meeting in Canberra. Political parties, unions and employer organisations worked together for a national consensus on economic policy. A by-product of that success from the meeting was the ‘Wages Accord’ with unions and that Accord became a major part of government economic policy.
    The Hawke government also floated the Australian dollar on international money markets and allowed the operation of foreign-owned banks as first steps towards deregulating the national economy.

  2. I was racking my brain to work out how a pensioner (like I) who had to pay 15%GST could claim back the additional 5% that Mike Baird said I should be compensated for……it would be manifestly unfair for me to receive a lump sum, along with every other pensioner because perhaps some of them had not paid any extra GST at all which meant they were getting the money unjustly; others would have paid a lot and some would have paid a little. The only solution I came up with was for all pensioners to have a barcode tattoo on the wrist which we would offer at the checkout and the cashier would swipe that and deduct the extra 5% from the bill…..which I could then pay…..but who would pay for the tattoo…..would it be covered by Medicare which would run the Health Budget further into the Red. Poor Tony Abbott……he cannot possibly survive another Hockey Budget so he must go early…..say March….the attempted smear of the Unions and Shorten is negated by Bronigate…..thank God he had a spare Refugee Boat stashed away so it could magically appear off the W.A. Coastline……probably captained by Credlin and his spare Office Staff…….what a planner

  3. What a Government on ‘L’ Plates! (not L for liberal which they are not, but L for lousy because they certainly have not Learnt!)
    If there is a problem with the Health system, increase the Medicare levy. That is the tax linked to the Health system. They could also consider removing the tax deduction for Private health insurance, but cover ALL costs up to the common fee as was originally proposed. Then if people want choice, they insure for he extra. This means private hospitals can accept public patients if they are prepared to accept the common fee for the stay, or else the patient must stump up for the balance by cash or insurance. Of course public hospitals would be fully covered as they are now.
    If we need to reform the tax system, why not tax the money movement as the red haired bimbo suggested all that time ago & Jackie Lambie is now proposing? A tiny tax like that immediately taxes the speculation on the international money market, & the speculation on the share trading, so might make some of those manipulators think twice which would be a positive, but would also let the stamp duty be removed to a saving for home buyers. The few $s it would cost the average taxpayer would be small beer compared to the regressive increase of the GST, or applying the GST to everything.
    Another way these L government procrastinators could save a wad of cash is by winding back the fuel subsidies to the mining companies. This subsidy was to reduce the inputs to Australian manufacture, which seems to no longer happen, so why subsidise the return from mining royalties? This would have one positive effect in that the mining Companies would then embrace electric vehicles more quickly, which again reduces our balance of payments on fuel imports, & reduces the carbon pollution another positive.
    Next we could introduce a proper Carbon (Pollution) Trading scheme, so the costs are born by the producers, who then take steps to reduce their costs by reducing the pollution (You would think someone smart would have already thought of such a scheme, but obviously it was a bad thought!). By having a proper Pollution trading scheme (because it should apply to all pollution, not just carbon), we can then remove the taxpayer impost of the current foolish costly idea of ‘Direct Action’.
    I hope these few ideas start the Government think tanks moving along a road that would be acceptable to Voters who are the important ones in this conversation, because they actually vote for the lackluster lot we currently have in Parliament.
    May we please have a viable third party! It seems the current two front contenders are unelectable next time. Vive la Revolution!

    regards, Doug

    • I support your thinking except for the CO2 part.

      1 Carbon Dioxide is not a pollutant – there is no correlation between the increase in CO2 and temperature change for 18 years.
      2 Climate Change is a continuing phenomenon. Fish fossils in the Arizona dessert.

      Thanks for thinking!

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