“How did they ever make a film of Lolita?” was the tag line for Stanley Kubrick’s adaptation of the infamous novel. As anyone who had read it knew, the answer was of course that they didn’t. In the great Hollywood tradition, the book and the film didn’t have much to do with each other. There was much in the novel that never made it into the film, and much in the film that had nothing to do with the novel.
And so it was about an hour into yesterday’s lock-up (well, it took me an hour, brighter sparks probably worked it out much more quickly) that we realised that we’d been lured in on the basis that the government was unveiling its response to the Henry review, but the response bore little resemblance to the review. The physical documents told the story: the review documents were a couple of inches thick, the response was four booklets and some press releases in a nice sleeve. And half the government’s announcements weren’t in the review.
How did the government respond to the Henry review? It didn’t.
That’s not to say yesterday’s announcements weren’t solid reforms. I suggested a super profits tax a couple of years ago, targeted at the big banks, given that mining profits had slumped in the face of the GFC. The return of high commodity prices restores the case for levying one on the mining sector.
For a while I’ve been suggesting retirement incomes would be boosted by forcing the superannuation industry to remove commissions, rather than the Keating option of moving the Superannuation Guarantee to 12%. The government has instead done both, but phased-in over an extended period.
That meant there was at least one Liberal happy about yesterday — John Brogden could scarcely contain his glee as fronted up to present IFSA’s response to the package.
It also means that, if the commodities boom stays on track, there’ll be an extended, albeit small, counterweight to demand-driven inflation as workers are compelled to progressively move more of their income into superannuation.
After the opposition’s reaction on super yesterday and today, it’s clearer than ever that they simply don’t get it, and never have. Joe Hockey, flanked by Abbott and Andrew Robb, gave a good press conference yesterday afternoon — there was much to agree with in his description of the government’s response, or lack thereof, to the review. And the line that the government is simultaneously gutless for not pursuing some of the review’s recommendations and also plotting to inflict those nasties it hasn’t specifically ruled out doesn’t make any sense if you think about, but that’s a condition that doesn’t apply to most voters, so it should work a treat.
But the Liberals — former senator John Watson honourably excepted — seem only able to see compulsory super as an imposition on business, rather than employees’ contribution to their own retirement income. Maybe it’s because Liberals tend to the view that employees are just one more cost input among many for business, and any government interference there amounts to taxation. Perhaps that’s why the Howard government’s superannuation reforms amounted to little more than trying to push some working Australians’ superannuation back into the corporate sector via superannuation “choice” and lining up an array of handouts to high-income earners. Perhaps that’s why in opposition superannuation has been left to amiable lightweight Luke Hartsuyker when the government has its best up-and-comer, Chris Bowen, on the issue.
Still, if the opposition thinks it’s such a massive tax grab, they can always block the package. They’re blocking everything else this government does. They correctly accuse the government of being gutless in refusing to tackle reform, but then block what reform it does take and refuse to say what reform they support. The only tax policy we have from the coalition three months out from an election is one to raise business taxes.
If the government isn’t credible on economic reform, the other mob aren’t either. What did we do to deserve this Parliament?