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Thus Spake Mungo: Turnbull’s business tax-slash fails

Mungo MacCallum

Malcolm Turnbull spent the last week of the current parliament howling at the moon – baying about just how wonderful his corporate tax cuts would be, the remorseless logic of the laws of supply and demand, the purity of Economics 101.

There was just one problem: he didn’t have the numbers to pass them, and in spite of his insistence that he would just keep coming back until the senate saw things his way, the fact that he has already been trying for two years suggests that further effort does not look promising.

The indefatigable Matthias Corman managed to corral the Hansonites, and a handful of other crossbenches with a combination of arm-twisting, back-handers and essentially whatever it takes, but two, Derryn Hinch and Tim Storer (who?) remained intransigent and despite Turnbull’s determined optimism, it looks likely that they will stay unbribed.

In the circumstances Turnbull ranting away in question time seemed only mildly sillier than the Business Council mounting a television campaign to convince the uninterested masses that when business thrives, the whole country thrives – a line about as convincing as the old slogan ‘What’s good for General Motors is good for the USA.’

The fact that an indignant member has leaked the outcome of a BCA survey that has revealed that if the businessmen ever get their hands on the loot, fewer than a fifth of them will use it to increase jobs, let alone raise wages – they would much rather shovel it out to themselves and their shareholders – suggests that their expensive (but of course tax-deductible) advertising will involve pushing shit uphill. And it got worse when another leak revealed that the BCA crusaders also refused to commit to transparency over their affairs (others might call it simple honesty) or even to paying tax; stronger together indeed.

Bill Shorten has promised to repeal any tax cuts that, improbably, the parliament might eventually pass. There has been a bit of confected outrage about sovereign risk – how can businesses prepare for the future if governments keep changing the rules – but under that logic no incoming government could ever change anything that mattered and in any case the bulk of the cuts would not even come through until some years after the next election. And all the evidence is that not too many Australian businesses spend a lot of time preparing for the future, so it won’t make much difference.

The spin-doctors will need a lot of Viagra to move the masses towards enthusiasm for a policy they have repeatedly shown they do not really want. And it will not help that the Royal Commission is daily unearthing further atrocities from the big banks…

So why does Turnbull keep raising the stakes when everyone else around the table is certain he has a losing hand? Because, as he kept insisting last week, it is economic orthodoxy, written in stone in Economics 101. And besides, it seems he hasn’t any other ideas.

So presumably Corman will reload his carpetbags to be ready for the budget session and keep offering larger and larger concessions and inducements to and Storer until they fold – while praying that the somewhat tenuous deals he has made with the other crossbenchers will hold firm before they realise that they too can get away with a bit more gazumping as Turnbull scrabbles desperately for a win.

But, if and when he gets one, then what? If the economy is expected to leap like a startled springbok into vibrant life, scattering jobs, growth and wages in all directions, then think again: any tangible (meaning actually affecting ordinary voters) benefits will be meagre and distant – if they happen at all.

So the spin-doctors will need a lot of Viagra to move the masses towards enthusiasm for a policy they have repeatedly shown they do not really want. And it will not help that the Royal Commission is daily unearthing further atrocities from the big banks – the symbol of fear and loathing, the archenemy of fairness and equality.

It is unlikely that the voters will spontaneously applaud Turnbull when – if – he finally delivers vast sums of money to the bankers who have lied, cheated and defrauded them for years and have finally been hauled to account. Obviously they have not yet got the message: has there ever been a more egregious example of chutzpah than the Commonwealth Bank, which, while drawing breath between fending off charges of years of blatant corporate chicanery, has found time to withdraw its sponsorship from cricketers who have been involved in ball tampering?

But this is the pattern from the big end of town and its political supporters: they are above the rules, beyond the normal standards they preach with such unctuous determination. It is not just the culture of the Australian cricket team that needs an urgent renovation. And until Turnbull faces the complexities of a culture in which the politics transcend Economics 101, he will continue to struggle, and probably fail.

Yes, there is a class war, the one Turnbull and his millionaire mates have dominated so effortlessly and so long. But by so blatantly taking the side of the rich and powerful, his attempts to gain favour with the rest looks both like humbug and futility.

His current attempt is to search out the elderly and income poor to claim that Shorten’s revised tax plan will reduce them to penury. Using this tactic on real pensioners showed promise until Shorten declared blanket exemption from them so Turnbull moved on the so-called self-funded retirees, some of whom are indeed income poor.

The problem is that they are, by definition, asset rich – otherwise they would be entitled to the pension. It is difficult to imagine that the battlers will have much sympathy for those who have engineered their tax affairs to retain a million or more in shares and super.

Shorten has warned that the next election will be a referendum on tax. Turnbull can hardly deny it; assuming that Hinch and Storer cannot be bribed into submission, the choice will be between Turnbull’s cash splash for the companies or Shorten’s removal of some of the perks of the profligate Howard fat years to make way for tax cuts and social programs to benefit those in greater need – not to mention the chance of reducing a chunk of the long-running deficit.

Put that way (which is how Shorten and his allies will undoubtedly put it) Turnbull will need all his agility, nimbleness and legendary talent for innovation. Which means that his current strategy – shouting into the empty ether that the coalition wants you all to be unimaginably rich, honestly, truly, while Labor wants to steal your savings and flush them down the toilet – may not be sufficient.

 

 

 

 


8 responses to “Thus Spake Mungo: Turnbull’s business tax-slash fails”

  1. Hotspringer says:

    Spot on, Mungo, as always!
    Though I live 2,000 km away, I get the Echo just to read your column. Thanks.

  2. robot says:

    A choice between economics 101 and social studies 101, both about the goodies. The left likes to to talk about equality, the buzzword for a while there, would it ever mean equally rich or just equally poor. We could remove the Lotto and that would be our last chance gone, at Las Vegas. Many don’t want much, fair enough. But to be stripped of the possibility? Unfair.

  3. robot says:

    And no mention of the new big end of town, renewables, currently some oz some us some nz, eventually probably all china, involving trillions of dollars in time … but hey it’s good for us … not so much good for eagles and hawks … what do environmentalists see when they look in the mirror? Historical determinism no doubt. And spruce their moustaches.

  4. Jimbo says:

    Malcolm Turnbull spent the last week …
    That is not the way to begin Mungo.
    The government are in debt.

  5. Hell, I can’t even afford a Ping-Pong rum ball. Me haiku says:

    Asset rich…
    remembering your face
    in firelight

    At least love & ethics are free.

  6. robot says:

    I like the image, the lead-in line has no point.
    What are ethics but morals that don’t really matter, and morals opinions that only matter to some. As for love, it has no cost like air and water that used to be free until the bureaucrats stepped in, but free love was a concept. I think Russell would reconsider this time and age. Love involves many things and one of them is working to live up to it. The highest tax is loss. Me haiku goes:
    the grey gecko pair
    gathers at the window
    faced with light

  7. robot says:

    No, sorry, Stefanie, I get it now. I had a landlady once who remembered her best times, with her husband then, were in the tent. So good lead-in.

  8. robot says:

    As much as I like to dwell, I will: a 5 kW h solar system, almost as good as it gets, goes for about $30,000, a cost which could be expected to lessen. Even so, it’s just enough to cover a two-person household, barely. You take into account 100 days of less sunlight. That’s two thirds of free energy amounting to about $600 yearly, plus a little of payed for extra energy into the grid, say $400, which would be a generous estimate. So do the maths. If solar panels were to halve in price we’re still looking at 15 years to pay them off. And then there’s the question of batteries and insurance. The only people who can afford that can afford to do the right thing at a loss. So it’s a charity. Plain and simple. A regulated charity. With armageddon thrown in. Inferior technology and a belief system.

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