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| The Australian: Morrison Government Ministry 2019 |
The
Monthly,
9
July 2019:
As
Australia’s economy falters, the government’s fiscal heart is
hardening, not softening. Treasurer Josh Frydenberg’s determination
to deliver his much-vaunted budget surplus for 2019–20 and retain
Australia’s AAA credit rating – which is hardly in danger – is
of a piece with junior minister Luke Howarth telling the homeless to look on the bright side. In
prospect is more of the same punishing austerity towards anyone doing
it tough; it’s the flipside of celebrating those who aspire and get
ahead, and who are rewarded with taxpayer largesse through subsidies
and tax loopholes. Last week’s $158 billion tax-cut package is
going to accelerate the trend to an increasingly unequal Australia,
which has resulted from the Coalition’s agenda since it was elected
in 2013. As former treasurer Joe Hockey said when defending his first
budget, the worst-received in living memory: “Governments have
never been able to achieve equality of outcomes … It is not the
role of government to use the taxation and welfare system as a tool
to ‘level the playing field’”.
Flanked
by his assistant minister, Michael Sukkar, and the tax commissioner,
Chris Jordan, Frydenberg today announced [$]
that more than 810,000 Australians had already filed their 2018–19
tax returns and could be receiving their rebates of up to $1080 by
the weekend. But, resisting calls from the Reserve Bank governor,
Philip Lowe, he stressed that there would be no further stimulus,
citing the “non-negotiable” imperative of reaching a budget
surplus this year, and saying that the government would be focused on
reducing debt….
Doing
the same thing over and over while hoping for a different result is
clearly not working. Today’s NAB business confidence survey showed that
the post-election bounce has been short-lived, and the first of the
RBA’s two recent rate cuts has failed to improve conditions. A
small uptick in employment growth is positive, but NAB’s chief
economist, Alan Oster, says the overall decrease in business
conditions has been “relatively broad-based across states and
industries – suggesting that there has been sector-wide loss of
momentum over the past year”. The share market is jumpy, selling
off sharply today as APRA, in a sign of nervousness, lowered its
capital requirements for banks, and bond markets are reportedly
“screaming
economic downturn”…..
And
so it passes, the greatest assault on the safety net from which
Australian life is built. Scott Morrison’s tax cuts are through and
the revenue base that provides for health and education and social
welfare is shredded. The legacy of the 46th parliament is there in
its very first week: the destruction of the social compact that made
this country stable.
On
analysis by the Grattan Institute, to pay for these cuts at least $40
billion a year will need to be trimmed from government spending by
2030. The Coalition argues it will not cut services. It says jobs
growth will reduce spending on welfare. A surplus will mean less
interest paid on debt.
The
assumptions are heroic and unsustainable. They show an extraordinary
indifference to reality. More than that, they are indifferent to
need. People will be worse off under these cuts. They will face
greater hardship, have less access to health and to quality
education. The people worst affected did not vote for Scott Morrison.
Half the country didn’t. The damage done is near irreversible. It
is infinitely easier to cut taxes than to raise them. This is a
triumph of greed and political cowardice. The Labor Party waved it
through.
The
principles of this policy were first written on a paper napkin in
1974, when the conservative economist Arthur Laffer sketched out his
famous tax curve for Dick Cheney and Donald Rumsfeld. That serviette
is one of the most pernicious documents in modern politics. It made
the case for what became trickle-down economics. It became the lie
through which governments gave money to the rich and pretended they
were helping the poor.
The
year Scott Morrison became treasurer, the Australian Chamber of
Commerce and Industry brought Laffer to Australia for a speaking
tour. He met with Josh Frydenberg. His doctrine has its most explicit
contemporary expression in the cuts passed this week…...
In
his first major speech as prime minister, Morrison said he didn’t
believe people should be taxed more to improve the lives of others.
He said people had to work for it: they had to have a go. “I think
that’s what fairness means in this country,” he said. “It’s
not about everybody getting the same thing. If you put in, you get to
take out, and you get to keep more of what you earn.”
This
is a fundamental misunderstanding of the purpose of taxation. You
don’t pay tax in exchange for services. You pay tax for a society.
Under Morrison, you pay less tax and you have less society. The
obliterating self-interest of this week will be felt for generations.
Morrison’s victory is a huge, huge loss.
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