Companies

Sep 3, 2014

End of the mining tax guarantees more tax for the poor

The government's delay in lifting compulsory super contributions means low and middle income earners will pay more tax.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

For months the government has been under fire for trying to address the “fiscal emergency” solely by spending cuts aimed at low- and middle-income earners, while tens of billions in tax breaks flowing disproportionately to high-income earners via the superannuation system have been untouched. Now, finally, the government has moved to reduce the cost of super tax breaks flowing to … oops, well, low- and middle-income earners.

Some of us predicted that when the Coalition decided to “support” Labor’s increase in superannuation from 9% to 12% in November 2011, the actual result might be more like John Howard and Peter Costello’s “support” for Paul Keating’s planned increase in superannuation to 15% in 1996 — it would simply be abandoned on fiscal grounds once the Coalition had got elected. So it has proved, with Finance Minister Mathias Cormann yesterday announcing that as part of the deal to pass the abolition of the mining tax the increase in compulsory superannuation from 9% to 12% would be further delayed beyond the already-delayed timetable the Coalition promised before the election. The cost of the deal with Clive Palmer to abolish the mining tax — which includes preserving for a couple of years the schoolkids’ bonus, the low-income support bonus and the low-income super contribution — will leave the budget $6.5 billion shy of the government’s original expectations. The delay is intended to recoup that cost over the medium term.

Free Trial

Proudly annoying those in power since 2000.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions

14 comments

Leave a comment

14 thoughts on “End of the mining tax guarantees more tax for the poor

  1. Jaybuoy

    without the fofa reforms it’s basically just giving the spivs a bit less…its an unintended consequence..

  2. David Gewin

    really don’t know what anyone else expected of this govt. if this is NOT a one term govt then i can only shake my head at the level of unAustralian spirit inherent within our ‘rich’ and decidedly upper class ‘give us everything and give nothing away’ approach to fiscal responsibility.

  3. Itsarort

    The Coalition – of themselves, for themselves and hopefully not too soon, by themselves…

  4. Emma Percy

    The government has been able to sneak this through even with the effort of blogging and news articles. It is up to all of us to have the conversation and to keep people aware and politicians honest to their word.

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details

Sending...