Their master's voice has spoken. Where to now for tax reform under Abbott & Co?

On 30 March 2015 the Australian Treasurer Joe Hockey released a tax reform discussion paper titled Re:think, which is supposed to mark the start of a conversation about how we bring a tax system built before the 1950s into the new century.

Presumably this is to be a step towards the 'lower, simpler, fairer' revenue raising system Prime Minister Tony Abbott was banging on about during the 2013 election campaign.

The problem for the Abbott Government is that the propaganda power behind Abbott's 'throne', the ubiquitous far-right think tank pressure group the Institute of Public Affairs (IPA), is increasingly disenchanted with the federal government's approach to both taxation and superannuation.

So where to now for tax reform in the face of the slump in iron ore prices and company tax receipts that the prime minister and treasurer complain about.

Well, we know that Abbott has ruled out changes to company tax, intends to leave the superannuation loopholes in place for the rorting rich and will go ahead with tax cuts for small business in the face of that projected falling government revenue.

Capital gains tax breaks and negative gearing on investment properties also appear to be exempt from review.

Hockey is now promising no new taxes at all when he talks to the media, despite recently announcing the proposed 'Google' and 'Netflix' taxes.

He is also signalling no significant alteration of dividend imputation or any indexing of income tax thresholds to tackle bracket creep.

This is a mixed bag for the very rich and comfortably well-off.

They will not like the federal government abandoning its promises to cut the company tax rate and reduce 'bracket creep'.

However,  Abbott & Co are obviously not going to take tax perks away from those same very rich and comfortably well-off Australian citizens and would have a weather eye out for the irritable mood of its right-wing backers.

 So that leaves it with limited options for cost savings in the 2015-16 Budget.

All of which indicates more bad news may be coming for vulnerable sections of society, because those sections are where Abbott in particular likes to hunt.

BACKGROUND

IPA in The Drum, excerpt, 7 April 2014:

This Small Business Fetish Has Gone Too Far

As part of its back to basics campaign, the Abbott Government has telegraphed a small business tax package for the 2015 budget.

The plan, as far as we know, is that small business will get a tax cut of about 1.5 per cent. Big business will be left paying the standard rate of 30 per cent.

The Coalition has long had a romantic attachment to small business as a sort of moral heart of Australian private enterprise, but this policy is the worst sort of small business fetishism.

It threatens to further undermine an already complicated corporate tax system, confuses the sources of economic growth, and will distract policymakers from the much more fundamental task of opening protected areas of the economy up to competition.

Let's take these one at a time.

It beggars belief that while the political class is banging on about the convoluted the tax code, "unfair" tax concessions, and clever corporate tax minimisation, the Government is planning to increase the complexity of the corporate tax system.

How long before we see the first exposé in Fairfax business pages about large corporates rearranging themselves to take advantage of the concessional small business rates?

The proposed small business tax cut would make the Australian corporate tax system explicitly progressive. Just as we pay a higher rate of income tax according to our wealth, firms would pay a higher rate of corporate tax depending on their size. The United States has a progressive corporate tax. Ours is flat - 30 per cent no matter what.

Now, in practice, firms don't pay the same 30 per cent rate. As my Institute of Public Affairs colleague Sinclair Davidson has documented, all those deductions, offsets and credits mean the effective tax rate - that is, the amount of tax paid - hovers about 25 per cent. On top of this, small businesses tend to have much more variable profitability, so they tend to pay less than big business already.

Even with this caveat in mind, progressive corporate taxes are a terrible idea.

IPA in the Australian Financial Review, excerpt, 13 April 2015:

Moral Panic Overlooks Real Company Tax Problem

The corporate tax profit shifting debate is a classic example of moral panic. First, it's incredibly complicated. How many Australians could explain how company tax is calculated, let alone what business practices a "double Irish Dutch sandwich" refers to?

Second, it's driven by hyperbolic and simplistic reports of companies paying little to no tax. These stories pivot on even more complicated scandals, such as "Lux Leaks", and the technicalities of foreign tax systems.

And third, it's wildly overstated. The best current estimates of how much corporate tax is shifted across borders is in the realm of 2 per cent to 4 per cent of total corporate tax.

It's true that earlier estimates in the 1990s were much more than that. It was those high estimates that got the Organisation for Economic Co-operation and Development interested in the issue. But the firm- and affiliate-level evidence is better now. It's pointless to scrutinise a moral panic for the clarity of its claims. But the corporate tax debate is missing the point.

As a society we don't value firms for the money the government extracts from them. We value firms because they produce goods and offer services that make us richer, our lives easier, more convenient and more enjoyable, and our standards of living higher.

We ought to design our tax system to encourage foreign firms operating and doing business on Australian shores, bringing investment and jobs. Any attempt to tackle profit shifting that raises uncertainty or lowers Australia's investment climate would be a disaster.

The corporate tax is not a good tax. As a recent Treasury paper pointed out, it is one of the most inefficient taxes levied by Australian governments. The burden of the corporate tax is scattered and obscure.

IPA, media release, April 2015:

'Google Tax' will damage Australia's investment reputation

"The government's proposed 'Google tax' is nothing more than a tax grab and will damage Australia's investment reputation," says Chris Berg, Senior Fellow with the Institute of Public Affairs.

Treasurer Joe Hockey announced yesterday that the government has drafted legislation to go after companies accused of "profit shifting" across international borders to reduce their taxes.

"Companies should pay tax for economic activity in the countries in which that activity occurs. However to follow the United Kingdom's lead and introduce a Diverted Profits Tax would be to damage the integrity of our corporate tax system for little revenue benefit," says Mr Berg.

Mr Berg and Professor Sinclair Davidson put a submission into the Senate Inquiry into Corporate Tax Avoidance in February 2015.

"Institute of Public Affairs research has found that the profit shifting problem has been vastly overstated," says Mr Berg.

"There is little evidence to suggest the existing system is broken. Large firms are responsible for the vast bulk of Australia's corporate tax revenue. And past inaccurate Treasury forecasts of future corporate tax revenue are due to changing commodity prices, not corporate tax avoidance."

"Joe Hockey has a spending problem, not a revenue problem. If the government wants to get the budget back into shape it needs to focus on the size of government, not penalise successful companies for investing in Australia," says Mr Berg.

Mr Berg and Professor Davidson's submission is available at http://ipa.org.au/portal/uploads/2-feb-15-Submission_to_the_Senate_Inquiry_into_Corporate_Avoidance.pdf

IPA, excerpt from media release, 30 March 2015:

Tax reform must deliver tax cuts: IPA

The government's Tax Discussion Paper released today fails to address the need to reduce the size of government in Australia, says the free market think tank the Institute of Public Affairs.

"Australia does not need new or higher taxes. The Abbott government should immediately rule out the idea of a bank deposits tax, and reverse its previous tax increases," says Dr Mikayla Novak, Senior Research Fellow at the Institute of Public Affairs.

"The Tax Discussion Paper rests upon the false assumption that Australia is a low taxing country."

"But superannuation contributions, health insurance premiums, and workers' compensation premiums effectively act as taxes, since non payment of these obligations carry tax penalties," says Dr Novak.

IPA research shows that if these payments are added to the OECD tax statistics, the Australian tax to GDP ratio increases from 27.3 per cent to 34.3 per cent in 2012, above the OECD average of 33.7 per cent.

"There's no doubt that Australia would benefit from tax reform. Urgent problems that need fixing include the threat of bracket creep which is exacerbated by a steeply progressive income tax system. The compliance costs borne by tax complexity also needs to be substantially reduced," says Dr Novak.

"Australia needs to radically reduce and simplify the overall burden of its taxation regime, to unleash entrepreneurship, innovation, and investment for growth and prosperity."

"The best way forward is to very substantially reduce government spending, helping to provide room for tax cuts right across the board," says Dr Novak.

Institute of Public Affairs in The Canberra Times, excerpt, 6 March 2015:

Tinkering with the tax treatment of superannuation when people are forced to invest in a compulsory super regime bodes ill

Since the Keating government, the Commonwealth has forced people to forgo higher salaries for the sake of contributing to super funds that cannot be accessed until later in life.

Given the inconveniences of this financial policy paternalism, not to mention endless superannuation policy tinkering, tax biases against long-run savings patterns, and the existence of welfare programs, there are disincentives for individuals to save even more for retirement, which would seem to justify at least some sort of concessional treatment for super.

The rates of tax applicable to super contributions and earnings serve as a role model for the lower, flatter general income tax regime that Australia should aspire to, but, in the final analysis, the concessions would not garner such political discord if we abandoned compulsory superannuation altogether.

To do so would likely increase take‑home pay for workers, ease financial repression experienced by lower income earners, reduce skewness in asset holdings such as housing, help deflate a boated financial sector, and treat Australians as adults who can confidently come to their own trade-offs between consumption and savings.

Ending compulsory superannuation would be a much more durable reform than a shameless revenue grab aimed at tax‑captive superannuants.

IPA, January 2015:

No to the GST attack

Following recent direct and indirect tax increases, there has been speculation that the Abbott government is considering extending the GST to low value imports of $1,000 or less.

Putting a GST on low value imports is unlikely to revive Australian retailing in the face of intense online shopping competition, given the significant price differentials for many popular consumer products.

There are several important drivers of high retail costs in Australia, including a highly regulated labour market, severe land use restrictions, and trading hour conditions, which are not being addressed by governments.

Available estimates suggest that the administrative costs of ending the GST exemption threshold would greatly exceed actual revenues collected, violating a basic principle of tax policy if implemented.

If the GST low value import exemption is abolished, there can be no assurances that governments will spend the additional revenue in ways that give good value to taxpayers.

The Abbott government should rule out the anti consumer and anti taxpayer proposal to extend the GST to low value imports.

IPA, excerpt from media release, December 2014:

Government should reject call for higher taxes on Australians: IPA

The Abbott government should publicly reject the OECD's recommendation to slug Australians with higher taxes, according to free market think tank the Institute of Public Affairs.

"The latest OECD economic survey of Australia explicitly calls for Australians to bear an even heavier tax load," says IPA Senior Research Fellow Dr Mikayla Novak.

"This call for higher taxes to bring Australia more in line with the OECD average is misleading. IPA analysis has clearly demonstrated that Australia is not a low taxing country."

"The IPA has shown our 2012 tax-to-GDP ratio of 33.5 per cent (including superannuation and health insurance contributions) is now virtually level with the OECD average of 33.7 per cent."

"The tax recommendations, such as raising the GST to 15 per cent, higher land taxes, road user charges, and withholding future income tax cuts through a stabilisation fund, are an invitation for economic disaster if implemented."

"OECD calls for higher Australian taxes are precisely the wrong policy prescription for our budget overspending problems, and must be rejected by government in favour of more vigorous expenditure savings."

"If the government is to change Australian taxes, they should make our overall tax burden lower," says Dr Novak.

Who guards the guards in Abbott's Australia?

On 25 February 2015 the Abbott Government presented a bill to the House of Representatives titled Migration Amendment (Maintaining the Good Order of Immigration Detention Facilities) Bill 2015.

This bill seeks to amend the Migration Act 1958 to allow a private company under contract and its immigration detention centre management team to use reasonable force against any person or thing an authorised employee reasonably believes is necessary to protect the life, health or safety of any person or to maintain the good order, peace or security of an immigration detention facility.

The Abbott Government has given itself a ‘get out of gaol free’ card if any such use of force results in serious injury to or death of an asylum seeker being held in detention:

197BF  Bar on proceedings relating to immigration detention facilities

             (1)  No proceedings may be instituted or continued in any court against the Commonwealth in relation to an exercise of power under

                   section 197BA if the power was exercised in good faith.

             (2)  This section has effect despite anything else in this Act or any other law.

             (3)  Nothing in this section is intended to affect the jurisdiction of the High Court under section 75 of the Constitution.

             (4)  In this section:

                   Commonwealth includes:

                     (a)  an officer of the Commonwealth; and

                     (b)  any other person acting on behalf of the Commonwealth.

The Explanatory Memorandum authorised by the Minister for Immigration and Border Protection, Peter Dutton, appears to extend this immunity from prosecution to include an authorised employee of the private company.

His explanation to Parliament on 25 February 2015 concerning the need for this bill included this statement:

In the absence of legislation, officers and staff of the detention services provider rely on common-law powers, as conferred on ordinary citizens, to exercise reasonable force when it is necessary to protect themselves and others from harm or threat of harm. The extent of this authority is, however, limited. Clearly, using reasonable force to manage issues of physical safety, good order, peace and security in an immigration detention facility is a matter for parliament to decide, not the common law.

On the other hand the Parliamentary Joint Committee on Human Rights considers that this bill engages and limits a number of rights, including the right to life; the prohibition against torture, cruel, inhuman or degrading treatment; the right to humane treatment in detention; and the right to freedom of assembly and worries that in relation to meeting human rights obligations under international law there may be inadequate oversight and control of private detention facilities by the Australian government.

The Australian Human Rights Commission submitted 9 recommendations to the Committee, including recommendations that: a) the Committee seek clarification from the Government as to whether it intends to authorise employees of contracted detention service providers to use lethal force and, if so, what controls and limits will be put in place to ensure that the right to life is adequately protected; b) private contractors use excessive force, both the contractors and the Commonwealth should be legally accountable; and c) new provisions be added after s 197BA(5) dealing with the limitations on the use of force in relation to children.

Further concerns were articulated in The Guardian on 16 April 2015:

The president of the Australian Human Rights Commission, Gillian Triggs, said the bar on proceedings would make it “virtually impossible” to bring forward an action, because of the difficulty of demonstrating bad faith in legal proceedings.

“Senior courts have ... explained the very high threshold that you must prove to demonstrate bad faith. It’s very hard to show a subjective intent of bad faith of a serving officer acting in the course of their employment,” Triggs said.

She said the language in the bill surrounding the scope of the powers “need to be significantly tightened up.”

Triggs added that if the powers were to be included into the Migration Act then the limits to the exercise of the power should also be clearly spelt out.

Gabrielle Appleby, associate professor at UNSW, said “the individuals authorised under this bill are not department officers, they are contractors”.

Appleby raised concerns about the training requirements for guards, which are not expressly set out in the bill and will instead be left up to the minister. The explanatory memorandum suggests the standards will be a certificate II in security operations, which are a base level training requirement for security operations.

“The determination by the minister is not a disallowable instrument. This means it’s not subject to parliamentary scrutiny,” she said.

While the Asylum Seeker Resource Centre issued a media release on 2 April 2015 which stated in part:

“These proposed laws will give officers in detention centres more power to use force than are granted to prison officers,” CEO Kon Karapanagiotidis said today. “They also introduce a subjective test where officers themselves get to decide if violence is warranted. When they do use excessive force, they will effectively be immune from legal action except in the rarest of circumstances. This virtually gives them the green light to use force without fear of repercussions. “There is no reasonable basis for granting broad, sweeping powers to authorised officers to use force indiscriminately. These laws are unnecessary and they are dangerous. “It is another example of the Government’s ongoing push for unchecked power when it comes to their treatment of asylum seekers.”

                                                                                                                                

There is legitimate cause for concern with regard to this bill, as excessive use of force is already an issue in detention centres.

The Age 24 February 2015:

...a Fairfax Media investigation that revealed three reported attacks on detainees housed at the centre in December and January alone, and internal concerns among the workforce about a growing culture of brutality.

Confidential documents from within private security firm Serco, which runs the centre on behalf of the Australian government, detail incidents including a middle-aged Chinese woman allegedly being kicked in the stomach by a guard and a Sri Lankan man being punched in the face.

The Commonwealth Ombudsman has launched an inquiry into a third case in which several officers allegedly harmed a detainee who was handcuffed behind his back and held down on his stomach for 45 minutes. The Turkish national said he struggled to breathe and was denied repeated requests for water.

Fairfax Media this month revealed Serco sacked two of its guards after internal reviews into violent clashes at Maribyrnong.

Serco officers said the spate of attacks reflected a disturbing "prison camp" culture coming from hard-line managers, who were sanctioning the use of brutal force.

On Tuesday, the Australian Immigration Department confirmed new allegations raised against Serco guards were being "taken seriously and escalated through appropriate channels"......

Dozens of complaints have been lodged by inmates at the Maribyrnong centre in recent years, mostly about staff harassment and bullying. But insiders say physical assaults have become regular occurrences since Serco transferred a number of ex-corrections managers out of the prison system into the detention centre late last year.

One said detainees were being "literally bashed" and "viciously assaulted", while another described how senior staff were condoning the use of excessive force on volatile detainees......

The provisions of the Migration Amendment (Maintaining the Good Order of Immigration Detention Facilities) Bill 2015 have been referred to the Senate Legal and Constitutional Affairs Legislation Committee for inquiry and report by 12 May 2015.

Suicide is still the leading cause of premature death in Australia yet it took the Abbott Government ten months before it blinked over mental health funding cuts

In the May 2014 budget papers Australian Prime Minister Tony Abbott, along with Treasurer Joe Hockey and Finance Minster Mathias Cormann, wielded an ideological razor on health funding provided by the Commonwealth .

It has taken the Abbott Government ten long months to realise that the mental health sector, a traditionally underfunded area, could only respond to mooted federal funding cuts by reducing services or closing agencies.

The Minister for Health Sussan Ley finally announced a funding extension for a further twelve months on 2 April 2015 - two days after an Australian Bureau of Statistics media release which confirmed that suicide was still the leading cause of premature death in Australia.

It's almost as though someone in the Prime Minister's office finally put two and two together and realised that there was a public relations disaster of monumental proportions in the offing.

BRIEF BACKGROUND

Excerpt from an Australian Bureau of Statistics media release on 24 July 2010: New South Wales was found to have the lowest suicide rate at 8.6 deaths per 100,000 people for the period 2006-2010.

NSW Government Suicide by Local Health District and year:

The suicide rate for Northern NSW in 2010 was 10.7 deaths per 100,000 people and for the Mid-North Coast the rate was 6.2 per 100,000 people.

By 2013 New South Wales had a suicide rate of 9.1 per 100,000 people for 2009-2013.

In 2012-13 hospitalisation of young people aged between 15 and 24 years for intentional self-harm was significantly higher than the state average in Ballina, Byron, Clarence Valley and Coffs Harbour local government areas and, on par with the state average in Kyogle, Lismore, Tweed and Richmond Valley local government areas.

ABS 3303.0 - Causes of Death, Australia, 2013:

 There were 2,522 deaths in Australia from intentional self-harm in 2013.

(a) All causes of death data from 2006 are subject to a revisions process - once data for a reference year are 'final', they are no longer revised. Affected data in this table are: 2009-2011 (final), 2012 (revised), 2013 (preliminary). See Explanatory Notes 52-54 and Technical Note, Causes of Death Revisions, 2011 and 2012. (b) Includes ICD-10 codes X60-X84 and Y87.0. Care needs to be taken in interpreting figures relating to suicide. See Explanatory Notes 87-93. (c) Age-specific rates of deaths are the number of deaths per 100,000 population. See Glossary and Data used in calculating death rates (Technical Note) for further information. (d) The age-specific rates published in this table are calculated for the 2009-2013 reference period. As such, they may differ from age-specific rates published elsewhere in Causes of Death, which are calculated for a single year.  (e) Includes deaths of persons whose age was not stated.

(a) All causes of death data from 2006 are subject to a revisions process - once data for a reference year are 'final', they are no longer revised. Affected data in this table are: 2009-2011 (final), 2012 (revised), 2013 (preliminary). See Explanatory Notes 52-54 and Technical Notes, Causes of Death Revisions, 2011 and 2012. (b) Cells with small values have been randomly assigned to protect the confidentiality of individuals. As a result, some totals will not equal the sum of their components. Cells with a zero value have not been affected by confidentialisation. (c) Includes ICD-10 codes X60-X84 and Y87.0. Care needs to be taken in interpreting figures relating to suicide. See Explanatory Notes 87-93. (d) Includes 'other territories'. (e) Includes deaths of persons whose age was not stated.

np not available for publication but included in totals where applicable, unless otherwise indicated.

The Sydney Morning Herald 8 December 2014:

Mental health organisations are cutting services and shedding staff because of uncertainty about their funding, according to the sector's peak body.

Forty per cent of mental health agencies say they have already lost staff as a result of the uncertainty, while more than half report a reduction in services to their clients, according to a survey of 75 organisations which receive Commonwealth funding, conducted by Mental Health Australia.

Almost half of those surveyed reported difficulty in attracting new staff, and 81 per cent reported a decline in staff morale.

Fifty six per cent of organisations said they had not had communications with the government regarding the future of their Commonwealth funding after June next year, and 85 per cent reported a loss of trust in government among management and staff.

Mental Health Australia chief executive Frank Quinlan said the typically short-term funding cycles for mental health programs, a lack of clarity about how the National Disability Insurance Scheme would affect funding arrangements, and a national review of existing mental health programs had combined to create a "perfect storm of indecision."

"Nobody argues about the need for these programs but at the moment we just can't seem to find anybody to own the future of that problem," Mr Quinlan said.

Health Minister Peter Dutton is considering the review of existing services, conducted by the National Mental Health Commission, after receiving the report late last month….

Excerpt from Australian Bureau of Statistics (ABS) media release, 31 March 2015:

Suicide was once again the leading cause of death for Australian's aged 15 to 44. Suicide accounted for 2,520 deaths in 2013 at a standardised death rate of 10.7 per 100,000 people. The median age at death for suicides is lower than for many other causes at 44.5 years of age. As a result, suicide accounted for over 85,000 years of life lost making it the leading cause of premature death in Australia. [my red bolding]

ABC News 2 April 2015:

In a move worth $300 million, mental health services will have their funding renewed for a further 12 months.

The announcement made today by Health Minister Sussan Ley follows a campaign by Mental Health Australia, after some mental health services began to shut down, unsure of future funding.

Hundreds of contracts were due to end on June 30.

Ms Ley said the 12-month extension would allow services to continue to be delivered while work continued on the current Mental Health Review.

MANDATORY DATA RETENTION: Many a true word has been spoken in jest*

No-one was laughing in my house when this reply by the Australian Assistant Minister for Infrastructure and Regional Development, Jamie Briggs, turned up in the Twitter timeline of Crikey journalist Bernard Keane:

* An old saying of unknown origin

Australian Immigration Minister Peter Dutton: a photo study in lifestyle contrasts

This is 109 Jefferson Lane, Palm Beach, Queensland. It is what is described as an investment property owned by the Australian Minister for Immigration and Border Protection, Peter Craig Dutton.

He reportedly purchased it for $2.32 million. In September 2014 the real estate agent described it as a lifestyle address that is simply unrivalled.

This is where many of the asylum seekers in his care live. None of this accommodation can be described as ‘a lifestyle address’.

All detention centre images were found at Google Images

As we approach the Abbott Government's second set of Budget Papers due in May 2015 - a timely reminder of how far we are going backwards

Sky News on 3 April 2015 telling Australia what social media commentators have known since December 2013:

In the year ended 30 June 2013 the then Labor Federal Government reported total revenue of $338.7 billion, total expenses of $381.4 billion (est. 25.1% of GDP) and a fiscal balance deficit of $28 billion. Net government debt and net interest payments on that debt stood at stood at 10 and 0.5 per cent of Gross Domestic Product (GDP) respectively.

The Abbott Coalition Government was sworn in on 18 September 2013.

In the month Tony Abbott took hold of the reins of government the Department of Finance listed Australia’s net debt at $174.5 billion and an underlying cash balance (deficit) of $22.9 billion projected to fall to $18 billion by 30 June 2014.

The Abbott Government reported total revenue of $374.6 billion, total expenses of $415.2 billion (est. 26.2% of GDP) and a fiscal balance deficit for the year ended 30 June 2014 of $42.2 billion. At that time net government debt stood at 12.5 per cent of GDP and net interest payments at 0.6 per cent.

In February 2015 and just on halfway through the Abbott Government’s term in office, the Department of Finance listed net debt at $254.9 billion and an underlying cash balance (deficit) of $40.4 billion projected to fall to $40.3 billion by 30 June 2015. At which time net government debt is expected to be 13.9 per cent of GDP and net interest payments at 0.7 per cent of GDP.

So why did budget deficit and public debt increase so dramatically in those first nine months and why is it barely decreasing to date?

Well, there have been signposts along the way and the most obvious place to start is with the borrowing spree that Treasurer Joe Hockey went on almost from Day One of the Abbott Government.

By 4 December 2013 (after less than 3 months in office) Abbott Government borrowings were averaging in excess of $203 million a day. At 30 June 2014 borrowings stood in excess of $351 billion and the 2014-15 budget papers predicted that borrowings will be 23.3% of GDP by 30 June 2015.

Then there was the $8.8 billion grant to the Reserve Bank in October 2013 and the loss of est. $2.9 billion over the 2015-16 and 2016-17 financial years due to the repeal of the Mineral Resources Rent Tax.

Add to this the cost of The War On Terror conducted Abbott-style, which is conservatively estimated to cost $400 million in this year alone for troops deployed in the Syria region, plus the $5.3 million a month cost of an ongoing and inevitably fruitless search for a long gone commercial aircraft.

Throw in the approximately $4.7 million spent on the prime ministerial fleet of bomb-proof cars (which will be stationed around the country for Abbott's convenience) and the est. $250 million reportedly being spent on a new VIP aircraft sometime this year primarily for the prime minister's use .

Factor in the cost of servicing political egos found in the Dept. of Finance lists of parliamentary entitlements paid and the additional expense of VIP flights for political elites.

Add the est. $2.4 billion in tariff revenue foregone due to international trade agreements signed since 2013, along with the est. $86 million spent on two royal commissions into 'pink batts' and trade unions.

Pour in the mix that $400 million plus reportedly spent on hosting the G20 Summit in 2014.

Then toss in a reported $1 billion in public service redundancy payouts expected to flow from the Abbott Government's 'restructuring' of government departments and downsizing of the public service between September 2013 to 2016-17.

Insert the increasing costs of immigration detention and the in excess of $2 billion in contracts awarded in early 2104 for the management of two overseas detention centres. This equates to these contracts costing over $420 million annually. The National Commission of Audit's February-March 2014 report states the projected detention costs for all centres over the forward estimates currently exceeds $10 billion.

Top it all off with the unfair 2014-15 federal budget, which for all the ideologically driven pain it intended to inflict was expected to only save $27 billion over a four-year period and which has now been effectively gutted by the Abbott Government is a desperate grab for some degree of popularity.

Combine all of the above with Prime Minister Abbott's recent conversion to a 'debt is good' philosophy and it is easy to see why government finances are mired in red ink. With the non-Treasury document being circulated by the Treasurer, the March 2015 Intergenerational Report Australia in 2055, predicting net government debt could be as high as 60 per cent of GDP in forty years' time.

Now Tony Abbott has abandoned his 'debt and deficit disaster' rhetoric he has decided that the real budgetary crisis is actually federal government spending. Spending is probably the slowest growing line item in all the aforementioned figures, nevertheless Abbott was quoted in The Australian on 2 April 2015 as stating;even with the changes that we’ve already made, we’re still heading for government spending at around 31 per cent of GDP".

If all this sounds a mite confusing, remember one of the features of budget predictions and economic outlooks produced by the Abbott Government to date is that rarely do all of the documents contain the same basic assumptions or numbers. Since September 2013 creative writing not reliable economic policy appears to be the order of the day.

Abbott Government advertising for new contractors at Nauru & Manus detention centres

In early 2014 the Abbott Government extended the Transfield Services* contract to cover both Nauru and Manus Island centres and this contract was reportedly worth $1.2 billion.

In February 2014 an asylum seeker was murdered in the Manus detention centre.

In May 2014 the Cornall report into the incident leading to his death and serious injury to other asylum seekers was handed to the government.

By November 2014 the Abbott Government was in possession of the Australian Human Rights Commission report on the treatment of children in these centres.

In September 2014 it was reported that inadequate medical attention on Manus Island resulted in the eventual brain death of an asylum seeker in a Brisbane hospital.

In December 2014 it was announced that International Health and Medical Services (IHMS) had received a contract renewal, to provide medical services on Nauru and Manus Island worth around $900 million over five years.

By January 2015 the Australian Department of Immigration and Border Protection had begun advertising these contracts on AusTender:

The Department of Immigration and Border Protection invites interested parties to submit Tenders in accordance with this Request for Tender for the provision of services in Regional Processing Countries. 

Services will be required to be delivered within the Regional Processing Centres on Nauru and Manus, Papua New Guinea, as well as limited services within the local communities of Nauru and Manus to support settlement activities for Refugees.  Potential suppliers will be able to bid for one or both service categories listed below.

The Request for Tender seeks responses in relation to two service categories. 

Service Category 1. Health Services, which includes:
(a) Health screening and assessment processes;
(b) Health promotion and education programmes;
(c) Management of mental health and public health risks;
(d) Medical escort services;
(e) Supply and management of medical equipment and pharmaceuticals;
(f) Environmental health services;
(g) Health advice services;
(h) Outreach health services; and
(i) Telehealth.

Service Category 2. Garrison and Welfare Services, which include:
(a) Programmes and Activities;
(b) Management of property of Transferees;
(c) Communication management;
(d) Management and maintenance of assets;
(e) Cleaning;
(f) Security and Incident Management;
(g) Catering;
(h) Environmental management;
(i) Logistics;
(j) Personnel accommodation;
(k) Transport and Escort;
(l) Complaints Management;
(m) Individual management of Transferees;
(n) Complaints and request management;
(o) Specialist care for vulnerable cohorts (infants, families with children, minors);
(p) Independent observer services; 
(q) Communication Management; and
(r) Business Services.

Further details of the Services are set out in the RFT documentation.

The current contracts for garrison, welfare and health services on Nauru and Manus expire on 31 October 2015.  New arrangements must be in place and fully transitioned by this date.

The euphemistically named regional processing centres are requiring new contractors it seems.

In March 2015 the Report of the Special Rapporteur on torture and other cruel, inhuman or degrading treatment or punishment was released and quickly followed by the Moss report on sexual abuse and sexual assault allegations at the Nauru detention centre.

So which company or companies are walking away from any further engagement in the Abbott Government's overseas detention centres?

  

Is it IHMS (or possibly a subcontractor) and Transfield's subcontractor Wilson Security? 

Has corporate greed finally been overridden by a need to protect their brands?

Or are the aforementioned contract details merely being advertised due to competitive tender requirements and the usual suspects will still be in place after October this year. 

* Transfield Services is in the process of rebranding the company as Transfield Holdings has served notice on the company to cease using the trademarked Transfield name and logo.
Industry super fund HESTA appears to be in the process of divesting itself of shares in Transfield Services in response to pressure from a section of its membership.