Are you confused about the timing of the budget? About the date of the election? About whether the Senate will stymie consideration of the budget or the election trigger, the Australian Building and Construction Commissioner bill? Are you unclear when there’ll be a tax reform statement from the government, and what might be in it?
So, apparently, is the government. And after yesterday, the first of three sitting days before the budget in May (whichever week it might be), things aren’t much clearer.
The content of the government’s tax reform package has been shrinking regularly for some months now. For a government that wasn’t playing the rule-in-rule-out game, it’s sure ruled a lot out — first the GST, then negative gearing, and now, it seems, income tax cuts are off the agenda. That might be the result of removing everything other than superannuation tax concessions and an increase in tobacco excise (aka a “workers’ tax”, as Tony Abbott couched it) from options to increase revenue, confining any income tax cuts to a level likely to elicit derision rather than gratitude from taxpayers. Or it might be a recognition that when the budget is deep in deficit, giving a tax cut to voters is not merely fiscally irresponsible but politically confusing as well.
Either way, yesterday Treasurer Scott Morrison — speaking at an Australian Financial Review function where the bulk of the questions were about why the government wasn’t cutting corporate taxes — declared “the best way to drive income tax cuts ultimately, is off growth.” So no sandwich-and-a-milkshake tax cuts coming up, then.
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Morrison did, however — doubtless to the fury of the superannuation sector’s friends at the AFR — virtually confirm that the government would be coming after superannuation tax concessions. Just over two years after Joe Hockey actually killed off Labor government measures to reduce super tax concessions, that at least is a welcome turnaround from the government — although Abbott has called curbing super concessions “a seniors’ tax”, so watch out for a backbench ginger group to try to knock that off as well.
The problem is, though, that even by the government’s own logic, income tax cuts were the raison d’etre of tax reform — remember when bracket creep was the great clear and present danger to the Australian economy, a productivity-destroying dragon that needed to be slain with income tax cuts? Luckily, as Finance Minister Mathias Cormann pointed out a while back, bracket creep isn’t a problem because no one’s getting a pay rise these days.
Meanwhile in Parliament the government was doing its own tortured remake of Seven Days in May, appearing to finally rule out a May 3 budget as Labor and the Greens — at each other’s throats in the Senate — appeared to agree they wouldn’t co-operate in any move to bring a Senate sitting forward to enable the passage of supply bills (and the ABCC bill) to meet a double dissolution election timetable.
That doesn’t fully kill off the idea of a double dissolution election — or for that matter an earlier budget — but already last week some Labor MPs (perhaps drawing on their experience of Kevin Rudd) were predicting Turnbull would “bottle it” on an early election.
Meanwhile the government is in a tearing hurry to get its Senate voting reforms through, and it convinced the Greens to co-operate by dedicating the entire week in the Senate to debating the bill. This was like a red rag to a bull for the crossbenchers. David Leyonhjelm decided he wanted the Greens’ same-sex marriage bill brought on for debate, requiring the Greens to vote against consideration of their own bill (cue some vertiginous high dudgeon from Labor Senate leader Penny Wong). The now-bearded Ricky Muir, displaying a cunning you would never have anticipated when he arrived in Canberra, wanted the ABCC bill brought on for debate, on the basis that if the bill were so important to the government, and a potential double dissolution trigger, why on earth wasn’t it being considered?
Thusly did the government vote against bringing on the very bill it says is so important we may have to go to an early election over it. To add to the confusion, Morrison literally complained in question time about Labor that “they could pass the ABCC Bill today, which would ensure that we could improve productivity in the building industry” not long after the government had voted against bringing the bill on for consideration.
The government is clearly aware of the atmosphere of indecision and confusion that it has created, and it is anxious to do something to correct it. In a bizarre media conference yesterday, Turnbull and Industry Minister Christopher Pyne announced appointments to “a new-look Innovation and Science Australia Board”, joined by two of the appointees, Maile Carnegie and Michele Allan. They were, doubtless coincidentally, the only two women on the eight-member board. When journalists insisted on asking about other political matters rather than some part-time board appointments that normally would have merited a ministerial media release, Turnbull and Pyne walked out. This is a government that can’t even create the illusion of achievement effectively.
No wonder Turnbull is keen to rush to an election. He’s certainly not getting anything done.