MUNGO MACCALLUM. Turnbull howls at the moon

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 in any case 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.

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 Hinch 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 which 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 arch enemy 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 unimaginablyly rich, honestly, truly, while Labor wants to steal your savings and flush them down the toilet – may not be sufficient.

 

 

 

print
This entry was posted in Economy, Politics. Bookmark the permalink.

3 Responses to MUNGO MACCALLUM. Turnbull howls at the moon

  1. Kathy Heyne says:

    I watched Matthias Corman stand in for Turnbull in Question Time after Tim Storer kicked the corporate tax cuts to the kerb. Corman reminded Penny Wong more than once that she supported corporate tax cuts and the jobs she was sure they’d bring as recently as 2015. He reminded her Chris Bowen and Bill Shorten were all for them, too. Each time he said it, Wong pretended she couldn’t hear him. I found myself shouting “For god’s sake, Penny, just admit it! Admit Labor used to drink the Kool Aid, but it’s clean and sober now. Tell the Australian people Labor doesn’t believe in trickle down economics anymore. FFS! Just say it!”

    Will Labor ever wake up to the fact that it needs to adopt a genuine leftist position on economics if it’s to get anywhere, or will it persist in this neoliberal centrist crap forever? Does it want votes- particularly Millennial votes- or not?

  2. Ben Morris says:

    Our politicians fail to understand the basic pub test on tax which is that all Australians believe no-one is paying more than their share of tax than themselves. Unfortunately for the Liberals, big business keeps proving this basic pub tax tenet right.

    With over a third of Australian businesses paying no tax currently then tickle down economics should be working and business should be booming and wages climbing but the majority of normal taxpayers/voters’ reality does not match this rhetoric. The leaks from the Business Council of Australia just affirm this.

    Tax reform should go to the basic rule that savings equals investment and the main focal point of taxation should be on spending and forget about income.

    As the ATO tells us on their website assessable income equals the amount that you’re taxed on after subtracting your tax credits and allowable deductions from monies received. Under the current system if you can afford tax advice then the incident of income can be spread so has to reduce the amount of income received hence the size of your income can shrink with a stroke of an accountant/lawyer’s pen. Therefore, under a real tax reform regime if you spend money that expenditure should be taxable. It should help to stop the opportunism of the opposition’s snake oil potions to allure voters to support them by giving special tax deals on income. The current system does not help long term budget planning beyond the next election. Unfortunately, some of our politicians seem to be able to bay at the moon for some time.

  3. Andrew McRae says:

    Great article Mungo. But regarding the confected question of “how can businesses prepare for the future if governments keep changing the rules?” brought on by Shorten’s saying he’ll repeal any corporate tax reduction for big business, you might have mentioned a recent “classic” – Abbott’s axing of the “carbon tax”. No doubt he still claims it as his biggest accomplishment.

Comments are closed.