jacqui lambie tax
Independent Senator Jacqui Lambie (Image: AAP/Sam Mooy)

Well that didn’t last long. Forty-eight hours after suggesting some major misgivings about the stage three tax cuts, newly returned Senator Jacqui Lambie has waved through the Morrison government’s tax cuts, with the vague promise that the federal government will forgive $157 million in housing debt. There are even vaguer intimations around the traps that a few other things were got for the Apple Isle, but nothing on the record.

They’d have to be prrrettty good to make this deal a good one, for Tasmania, for Australia and for the low-income people Lambie claims to represent. The $157 million “debt” is, of course, nothing of the sort. It’s simply an extra transfer of cash from the Tasmanian government to the federal government. It’s not even chickenfeed; it exists only as a ledger sheet ghost, which legitimates the federal government cutting $15 million from a $28 million dollar housing payment. The state has a $6.4 billion budget, 40% of which comes from GST, around $30 million of which has been cut recently.

So effectively the deal Lambie secured is worth $45 million over three years of this parliament, with no iron-clad guarantee that the Liberal state government will not just tip all or part of it into general revenue, as Tasmania tips into public debt.

In exchange for that, Lambie is voting up a deal that pretty much ends the prospect of social democracy in Australia, by legitimating a flattening of taxation. That applies to states as well as individuals. Since the median income of Tasmania is $30k, it is effectively a taxpayer below the threshold at which the tax cuts give any advantage.

Effectively the tax deal is shifting the national tax burden towards Tasmania, and away from the metropolitan states, Victoria and NSW. Any deal which doesn’t emphasise the need for a federal system to be transfer-rich is one that lets Tasmania down. The state will always be peripheral. Its further development and support will always rely on the notion of progressive redistribution. Selling that out sells the state out.

The notion that a debt forgiveness would make a good deal for the tax cuts is one that’s been spruiked by the Hobart Mercury for a while now; Lambie appears to have fallen in line with it. But the Murdoch Mercury is a firm believer in the trickle down effect, the ludicrous notion that tax cuts will buoy the state’s economy — more people having helicopter-in holidays, presumably. What the state needs is massive federal-state investment in health and education, and to campaign on the basis of its right; it will always be peripheral and transfer-dependent.

The ease with which Lambie is handing over her vote suggests that she is still in the Liberal mindset, if not the Liberal fold. She was staffed and run by ex-Libs in her first term, and — no doubt a coincidence — she appeared to run dead in the last ten days of the 2017 state election, which allowed the Libs to gain a majority. This time around, it appears that she’s being “mentored” by the Centre Alliance. In her ABC AM interview this morning she spoke of cutting “green tape” to build new housing in Tasmania, which is spurious nonsense, but indicative nonetheless. The CA has never made any secret that they’ll support the government of the day, with review. Their base is the leafy Adelaide Hills, and they are the descendants of Steele Hall’s Liberal Movement, which arose from the Liberal Party.

Lambie is an allegedly populist representative of Northern Tasmania, the poorest non-Indigenous region in the country. The area has a third-rate health system, and schools that don’t go past year ten. It is being offered fools gold in the form of ruinous salmon farming and kwikbucks logging of the Tarkine. There is no commonality of interest between Centre Alliance and Lambie voters. She went round Tasmania for eighteen months and asked people what they want. They told her: strong state investment in services. Not an accounting fiddle which might get 50 houses built.

To be fair Lambie has to be wary of One Nation, who have said they won’t vote stage 3 cuts up — and would of course rollover if the price is right. But Lambie has given it away for practically zilch. Her claim is that if the government welch on this deal, they wont get her future vote.

But the trade is so pissweak the government won’t need to welch; and if they did, what do they care? The tax cuts is their whole programme. They’ll be running on stage 3 in 2022. Not exactly hardball. Nor softball. More like a foam party. Some have said that the days of independent Brian Harradine are back. Maybe there’s a secret deal as part of the mix, but it would have to be a pretty good one. And it’s an insider’s business-as-usual way to operate in any case, where the point is to blow that stuff open. For a $95 billion second-rate tax cut, Harradine would have got every Taswegian an apartment, a jet pack and an ice-cream. If Lambie votes this through on this deal, then her caravan of courage didn’t go far before the wheels fell off.

Has Lambie made the right move? Write to [email protected] with your full name and let us know. 

Peter Fray

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Peter Fray
Editor-in-chief of Crikey