John Menadue. What a dreadful week.

Jul 20, 2015

Last week an important public debate on key issues facing Australia was sabotaged by Tony Abbott, Joe Hockey and News Corp. The old scare campaigns were back again. Bill Shorten’s timidity did not help. Paul Keating commented ‘We have a political culture that has the ambition of a gnat’. He is right.

Instead of a sensible discussion on climate change and carbon pollution, News Corp, via The Australian and the Daily Telegraph picked up a draft options paper on climate change which was being prepared for the ALP Federal Conference. This options paper suggested that the ALP is considering an emissions trading scheme. The paper apparently did not propose a carbon tax and it should be quite clear that an emissions trading scheme is not the same thing as a carbon tax. But that didn’t concern the Daily Telegraph which attempted to derail any sensible public discussion by depicting Bill Shorten as a zombie crawling from the carbon tax grave.

It is worth noting that The Australian, together with the Australian Financial Review, is sponsoring a summit next month on policy reform. But what hypocrisy it is for News Corp to be sponsoring a summit whilst it is a major contributor to debasing public debate on climate change in Australia as it does also consistently in the US and the UK.

Of course Tony Abbott couldn’t help joining in the ‘debate’ on an emissions trading scheme and a carbon tax when News Corp, as is the usual practice, gave him the lead in he wanted. We saw again the one-liners. He said ‘We’ve always said … that if Labor came back the boats would be back, the mining tax would be back and now we find that if Labor came back the carbon tax would be back’. He didn’t rerun his old one-liners on Labor increasing the deficit and the debt because his own policies have done just that.

It was John Howard who first proposed an emissions trading scheme in 2007. Malcolm Turnbull supported Kevin Rudd’s carbon pollution reduction scheme in 2009 and crossed the floor to do so. Almost every reputable economist believes that a market mechanism like an emissions trading scheme is the best way to reduce carbon pollution. It is the lowest cost and most efficient way and one would think that it would appeal to a government that espouses a belief in market mechanisms. Neither News Corp nor Tony Abbott can help themselves in their politics of demolition on climate change. Only the previous week Tony Abbott had stepped up his attacks on renewable energy.

The public wants something better in public discussion on climate change. The Business Council of Australia, the Australian Industry Group, the Australian Conservation Foundation and the Australian Council of Social Services have established an Australian Climate Round Table. They called for a ‘civil and constructive’ discussion on the subject. Clearly Tony Abbott and News Corp are not interested in such a discussion.

It is ironic that last week The Australian and Australian Financial Review also announced that they would be sponsoring a summit ‘to fix Australia’ The agenda includes ‘reforms to the federal and state taxation systems that taken as a whole are both efficient and fair’. Yet Neil Chenoweth reported in the AFR on May11 this year the ‘the Australian Tax Office has only one company in its highest risk category for tax avoidance- Rupert Murdoch’s News Corporation’. On April 9 this year Michael West in the Sydney Morning Herald wrote ‘Rupert Murdoch’s US empire siphons $4.5b from Australian business virtually tax free’. That may be efficient for News Corp but it does not sound fair for other taxpayers.

Last week Joe Hockey told us once again that we needed tax reform. But he has already ruled out key reform measures like changing superannuation deductions and payouts. He has also ruled out negative gearing that even the Reserve Bank now says we must consider. The ALP has made some timid proposals in both these areas, but instead of treating them as a useful contribution to a public debate on tax reform, both Tony Abbott and Joe Hockey seized on it an opportunity for attack and ruled out reform in both these areas.

Joe Hockey said again last week that we needed to reform the GST, but then ruled it out unless all the states and territories agreed. Surely national leadership on tax reform must come from the Australian Treasurer and not run for cover as soon as the states disagree. Joe Hockey shirked his responsibility.

The only tax change that is now in prospect is bracket-creep which is increasing government revenue.

During the week the Business Council of Australia president, Catherine Livingstone said

‘Within hours of the Treasurer outlining a compelling case for the need for fundamental tax reform and balancing of the tax mix, both major parties began ruling out key elements of sensible tax reform, including changes in the GST. Our political representatives are elected and paid by the community to implement policies that will best serve the country. Their leadership responsibility is to ensure that there is a constructive, well informed debate, leading to implementable outcomes; it is not to undermine the debate in the cause of party-political posturing. Leadership requires being open and honest with the community about the challenges we are facing. It requires the energy and conviction to take on difficult and complex reform imperatives.’

Catherine Livingstone spelled out very clearly that we have had a very bad week.

See link to the policy articles that Mike Keating and I have edited on the need for policy reform in Australia.

As Ken Henry said in the foreword to the series

‘I can’t recall a poorer quality of public debate on almost any issues, that we have had in recent times in Australia.’

Perhaps it is always darkest before the dawn!

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