Part 2 of Alan Austin's exposé of the Abbott Government's massive failure to implement just one improvement to the 20 aspects they claimed, pre-election, to be performing badly. A "must read" for anyone who thinks building a strong economy is top of Abbott's agenda.
See Part 1 'What are Abbott and Hockey really trying to achieve? 20 tries for 20 failures' here.
SPEECHES BY Prime Minister Tony Abbott and Treasurer Joe Hockey before the last election refer to 20 aspects of the economy which they said were performing badly. They promised improvement. As shown here on Sunday, all 20 have deteriorated in the 19 months since the election. Many have declined disastrously, such as trade which recorded the worst deficit in Australia’s history and budget deficits which have trebled. Not one of the 20 items has improved.
What can be deduced from this?
Tougher economic times? Clearly not. When the global financial crisis hit the world in 2008, 32 out of the 34 developed economies comprising the Organisation for Economic Cooperation and Development tumbled into recession. Only Australia and Poland – two countries with well-targeted stimulus responses – avoided two negative quarters of GDP growth and a negative year.
Global conditions have recovered since. By 2012, 13 countries were still in recession. By 2013 – the time of the last federal election – ten countries had two consecutive negative quarters. Now, 2015 first quarter figures show only two countries are in recession — Finland and Greece. Conditions are now more buoyant than at any time during Labor’s administration.
Nor can Abbott and Hockey credibly blame Labor. Not when it is clear all wasteful spending decisions were made by them. Not when the disastrous revenue decisions were all the Coalition’s. And certainly not when the 20 variables they identified as critical have all deteriorated from the levels Labor bequeathed.
Joe speaks #auspol pic.twitter.com/P9Y9Uz9TLX— Mark David (@mdavidcartoons) June 9, 2015
So how has this come about? Naturally, conspiracy theories abound. These include: (1) deliberately decimating workers’ wages to boost company profits, (2) enlarging the pool of unemployed so current workers can be sacked and replaced with others desperate to work for lower wages and conditions, (3) killing off manufacturing in Australia in order to enrich the big importers, (4) shifting the tax burden towards the poor to enrich wealthy Liberal Party backers, and (5) creating an economic emergency along with a security crisis to scare voters into backing a ‘strong Abbott Government’.
By the nature of these theories, proving them is impossible. But it is feasible to point to significant events as evidence of other agendas than that of building a sound economy for all.
Here are an unlucky 13, from which readers may draw their own conclusions:
1. Proposed cuts to Family Tax Benefit Part B will disadvantage more than 575,000 families with children aged between six and 18. Figures revealed in Senate estimates last Thursday show sole parent and single bread winner families will now be worse off by more than $3,000 each year after their youngest child turn six.
2. Tax cuts promised many times by Abbott and Hockey to take effect on 1 July were cancelled last week. The financial burden of this broken commitment will fall most heavily on lower income earners.
3. These follow earlier moves to disadvantage aged pensioners, the sick, welfare recipients, people with disabilities, asylum seekers, war veterans and students.
4. Swift action has been taken to protect the personal financial interests of wealthy Liberal Party backers such as Alan Jones. Action which could have required other supporters such as Rupert Murdoch to pay due taxes have been averted.
5. The Government now wants to exempt about 1,000 Australian-owned private companies from complying with established tax disclosure rules on the wacky grounds that tax details might increase the kidnapping risk for the mega rich.
6. Treasury stood to gain about $3.6 billion in revenue simply by proceeding with simple changes to tax and superannuation rules framed by the previous Government. Bizarrely, Abbott’s cabinet abandoned this reform during the so-called ‘budget emergency’ despite agreement it was fair.
Wealthy employees over 60 are continuing the rort of diverting part of pre-tax income into super funds. They pay just 15 per cent tax and can then withdraw it tax free.
7. Abbott and Hockey failed to pursue $1.1 billion in revenue – also announced by the previous Government – derived from stopping multinational companies shifting profits overseas. Large companies such as Glencore simply arrange fake loans between subsidiaries to avoid recording income in Australia, where it is generated.
8. The Government has not replaced the glaring revenue shortfalls resulting from axeing the carbon and mining taxes. Revenue options available include changing unfair negative gearing rules, increasing tobacco, fuel and other excises, broadening capital gains taxes and ending fringe benefits rorts such as novated vehicle leasing. Most of these would eliminate unfair advantages now given to wealthy taxpayers.
9. The Government reduced the Australian Tax Office (ATO)’s capacity to combat tax avoidance when it cut staff by about ten per cent. ATO second commissioner Neil Olesen advises that every dollar invested in ATO staff generates up to six dollars in revenue.
10. Last November, the Government promised to ‘introduce a targeted anti-avoidance provision after detailed consultation with stakeholders.' But the December Mid-Year Economic and Fiscal Outlook revealed:
‘The government will not proceed with a targeted anti-avoidance provision to address certain conduit arrangements involving foreign multinational enterprises.’
11. The Government wants to kill off the Clean Energy Finance Corporation despite the facts that it (a) returns regular healthy dividends, (b) is the only infrastructure outfit now doing so, (c) is reducing Australia's greenhouse emissions and (d) made a profit of $25 million for the Commonwealth last year by financing $3 billion of renewable infrastructure projects.
12. At the same time the Government is setting up the Northern Australia Infrastructure Facility — sometimes referred to as the Dirty Energy Finance Corporation. According to Fairfax’s Michael West, this is the $5 billion loan scheme ‘targeted at projects likely to generate returns not sufficient to attract full commercial funding’ announced in the May budget. In other words, an infrastructure outfit sure to make a loss.
Clean Energy Finance Corporation to Dirty Energy Financing Corporation http://t.co/PEjJjmDdIj. Who makes this stuff up?— Michael West (@MichaelWestBiz) May 26, 2015
13. Last week, the Government tried to score a tawdry political point against Labor by goading it to pass the small business tax incentives bill ‘as quickly as possible’. To its dismay, Labor – which supports the bill – accepted, and moved for an immediate vote in Parliament.
Government members then voted against that motion, thus ensuring delays in both that and other urgent items of business.
All these moves – along with the verifiable failure to maintain the 2013 state of overall economic health — strongly suggest that building a strong economy for all is nowhere near the top of this Government’s agenda.
Final instalment this weekend: 'What are Abbott and Hockey really trying to achieve? Part three: How the mainstream media’s economic gurus keep voters in the dark.
You can follow Alan Austin on Twitter @AlanTheAmazing.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
If there was a uni degree in being an economic/financial dullard and dunce - Tony Abbott and Joe Hockey would be Honours students!! #auspol— Luke Baz Mortimer (@LukeBazMort) December 27, 2012
No accident that Abbott chose Robb & Hockey as his economic sideshow team. Ensures he doesn't stand out as the only economic dunce. #auspol— The Reject PM (@geeksrulz) February 12, 2012
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