Another time bomb left behind by a politically & fiscally incompetent current member of the World Wide Speakers Group and sometime Liberal MP for Cook, Scott John Morrison

 

Then Prime Minster Scott Morrison & Treasurer Josh Frydenberg - political mates and housemates before the Liberal-Nationals Coalition sank the ship of state. IMAGE: The Australian, 26 August 2020

 

On 5 July 2018 then Australian Treasurer & Liberal MP for Cook Scott Morrison unveiled his plan to overhaul the Goods & Services Tax (GST) state distribution scheme.

This involved changes which ‘would protect all taxpayers, update the grants commission process and deliver certainty to States and Territories. “This problem has been kicked down the road for too long and it is time we now got on and fixed it,” he said. “A fair and sustainable transition to a new equalisation standard will be ensured, through an additional, direct, and permanent Commonwealth boost to the pool of funds to be distributed among the States."

By 12 November 2018 the Australian Coalition Government now lead by Prime Minister Morrison introduced Treasury Laws Amendment (Making Sure Every State and Territory Gets Their Fair Share of GST) Bill 2018 which was duly passed by Parliament and became law on 29 November 2018.

On 25 February 2019 Treasurer John Frydenberg put his signature to this contentious document.

Thus a political and fiscal time bomb with a relatively long fuse was activated…...

The Age, 14 November 2022, p.3:

A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation's taxpayers 10 times more than forecast, helping drive up federal government debt and interest payments to record levels.

Originally pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that expected to cost $2.3 billion is now on track to cost more than $24 billion. [my yellow highlighting]

WA, which delivered four seats to Labor at the May election on the back of a 10.6 per cent swing, is vowing to fight to keep the arrangement, due to expire in 2026-27.

Morrison struck the deal at a time when WA's share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state's revenue sources and expenses.

Under Morrison's deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA's share of the GST pool would therefore rise. Instead, prices have soared.

The Morrison government ensured other states and territories wouldn't be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool.

It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.

The October budget revealed that last year, the deal cost $2.1 billion and is forecast to jump to $4.2 billion this financial year. By 2025-26, the cost of the entire deal is on track to reach $22.5 billion, with another $2-3 billion likely the year after that.

Throughout the entire period, the budget is expected to be in deficit, forcing the extra cash to be borrowed. In percentage terms, the blowout in cost is larger than the NDIS, aged care, health or defence.

Independent economist Chris Richardson said the deal had been ill-conceived from the beginning with the cost to be borne by future taxpayers.

He said all significant spending programs needed to be properly assessed, including the GST deal.

"Yes, the politics of it are difficult. But we have a whole host of other issues, like the NDIS, and the economics of them have to be dealt with," he said…….

The extra borrowing for the GST deal has contributed to the lift in gross debt, which on Friday reached a record $909.4 billion.

Treasurer Jim Chalmers said the cost of servicing the debt was getting more expensive and was the budget's fastest-growing expense. [my yellow highlighting]

Australia 2020: and now for some economic bad news

On 23 July 2020 Australian Treasurer and Liberal MP for Kooyong Josh Frydenberg delivered a national economic and fiscal update.

He dutifully posted an upbeat media release and published the official update documents.

Here is a preliminary takeaway from this update*:

• total federal government payments have increased by $58.0 billion in 2019-20 and increased by $187.5 billion over the two years to 2020-21. The net impact of policy decisions since the 2019-20 MYEFO has increased payments by $58.0 billion in 2019-20 and $113.7 billion in 2020-21.

• declines in taxation receipts were $31.7 billion in 2019-20 and are expected to be $63.9 billion in 2020-21;

• the underlying cash balance is expected to decrease to an $85.8 billion deficit in 2019-20 and an $184.5 billion deficit in 2020-21. This is a a deterioration of $281.4 billion over these two years since the 2019-20 MYEFO;

• as a percentage of GDP the underlying cash balance is expected to be -9.7 per cent in 2020-21;

• debt levels have increased significantly. Gross debt was $546 billion (28.1 per cent of GDP) at 30 June 2019 and $684.3 billion (34.4 per cent of GDP) at 30 June 2020 and is expected to be $851.9 billion (45.0 per cent of GDP) at 30 June 2021. With net debt at 30 June 2019 standing at 373.5 billion (19.2 per cent of GDP), expected to be $488.2 billion (24.6 per cent of GDP) at 30 June 2020 and increase to $677.1 billion (35.7 per cent of GDP) at 30 June 2021;

• on a calendar-year basis real GDP fell by 3.75 per cent;

• real GDP is forecast to have fallen sharply in the June quarter 2020 by 7 per cent;

• nominal GDP is expected to be -4.75 per cent in 2020-21;

• nationally 709,000 jobs were lost in the June quarter 2020;

• the unemployment rate in June 2020 was 7.4 per cent and is expected to peak at around 9.25 per cent in the December quarter 2020 and is forecast to be at 8.75 per cent in 2020-21;

• Treasury has predicted that immigration will fall to 31,000 individuals in 2020-21 which is likely to affect the national budget bottom line; and

• the Morrison Government's go-to remedy for the poor economic outlook is to (i) consider reducing the federal government's taxation income even further by est. $143 billion in personal income tax receipts over 10 years commencing in 2021-22, (ii) reduce welfare spending by further limiting eligibility and reducing payment levels for JobSeeker and JobKeeper recipients from 25 September 2020 with the Coronavirus Supplement due to be removed completely by 31 December 2020, (iii) incease the level of casual and insecure work via industrial relations 'reform', and (iv) encourage women to have more babies to compensate for the current moribund population growth rate.

NOTE

* The Economic and Fiscal Update June 2020 is affected by the economic impacts of the 2020 COVID-19 pandemic and to a lesser extent by the the impacts of the 2019-20 bushfires. 

Componding the situation is the high level of federal government borrowings which regularly occurred after 18 September 2013.

On 30 September 2013 the gross national debt stood at est. $220.67 billion and net national debt was $174.55 billion. At that time net national debt was in the vicinity of 13% of GDP. 

By 2 April 2019 the Abbott-Turnbull-Morrison Government had raised the gross national debt to $534.42 billion. That's more than double the national debt left by the previous Labor federal government. 

On 2 April 2019 Frydenberg was predicting that gross national debt would rise to $627.26 billion by end of June 2019 with net national debt coming in at $373.47 billion and net debt predicted to come in at 19.2% of GDP by end of June. 

By 30 June 2019 the federal government paid est. $18.15 billion in interest on this debt in the 2018-19 financial year. 

The bottom line is that before either the bushfires or the pandemic even began the Morrison Government gross national debt stood at $546 billion or 28.1 per cent of Australia's GDP and net debt stood at 373.5 billion or 19.2 per cent of GDP by 30 June 2019.

Therefore emergency national funding for bushfires and pandemic only accounts for est. 23.5 per cent of the current national debt.

As at 30 May the Morrison Government's total liabilities in 2020 ran to $1,324.95 billion against assets of $700.74 billion according to Australian Government General Government Sector Monthly Financial Statements May 2020.

This isn't the first time Coalition MPs have lied about costings

“FEDERAL Opposition Leader Bill Shorten's populist "tax grabs" would cost Australians an eye-watering $150 billion over 10 years, the Federal Government will reveal today……Independent modelling by the Parliamentary Budget Office (PBO) and Treasury shows that under a Shorten government small business, mum and dad investors, older Australians and higher-income earners would be slapped with higher taxes.” [The Northern Star, 14 August 2017]

The Parliamentary Budget Office exposes the lie………

PBO Media Release

This is not the first time a Coalition MP has uttered political lies about costings. Tony Abbott, Joe Hockey and Andrew Robb became rather famous for it.

ABC News, 11 October 2010:

The Federal Government says the Coalition did not tell the truth before the last election when it claimed to have had its costings audited.

The Opposition did not submit its costings to Treasury before the election, but said they had been audited by a big accountancy firm.

Fairfax newspapers quote letters between the Liberal Party and the accountants saying the work would not constitute an audit in accordance with Australian standards.

And conservative politicians wonder why the general public perceives such a yawning credibility gap.

Literally millions of Australians in the firing line as Treasurer Scott Morrison continues his assault on the poor

On current settings, more Australians today are likely to go through their entire lives without ever paying tax than for generations. More Australians are also likely today to be net beneficiaries of the Government than contributors - never paying more tax than they receive in government payments.

There is a new divide – the taxed and the taxed nots. [Australian Treasurer & Liberal MP for Cook Scott Morrison, Bloomberg address, "Australia must take action to strengthen our economic resilience", 24 August 2016]

John Passant* writing in Independent Australia on 29 August 2016 is not impressed by Scott Morrison:

THE one sided class war continues. Only the words have changed.

Under Abbott and Hockey it was "lifters and leaners" and "ending the age of entitlement".

The "logic" behind this rhetoric gave us the horror Budget of 2014 and its proposed $80 billion in cuts over time to public health and public education.

Public opposition to that Budget was widespread, and angry. The Abbott Government never recovered and the 18 months of negative polls and the prospect of a Liberal wipe-out at the election, saw Malcolm Turnbull take over and win a bare one seat House of Representatives majority and an unpredictable Senate in the July 2 election.

Treasurer Scott Morrison has found some new weasel words to try to disguise the class war he is leading against the poor, pensioners, the sick, the unemployed and low paid workers.

After years of denying it Morrison has admitted we have a revenue problem, although he called it an "earnings" problem. According to Morrison, the great divide in Australian society is between the taxed and the taxed-nots.

In ScoMo world it is "the taxed" who have been bearing the burden of Budget repair while "the taxed-nots" have been bludging off us. Time for the taxed-nots to pull up their socks and start contributing to fixing the Budget problem.

Just who do Morrison and Turnbull have in mind as the taxed-nots? Could it be the 676 big businesses (36% of the group) which, according to the Commissioner of Taxation’s corporate tax transparency report, paid no income tax in 2013-14? Not on your life.

Could it be the likes of Don Argus – former Bank of America chairman – and his wife with their tax free pension of $1.2 million a year? Not on your life.

Could it be the 56 millionaires who pay no income tax? Not on your life.

Morrison’s prescription for the earnings problem is not to tax big business and the rich but to cut welfare payments to those who most need them — the sort of people he and others claim pay no tax.

As Duncan Storrar, in replying to one accusation that he pays little or no tax, said on ABC's Q&A:

“I pay tax every time I go to the supermarket. Every time I hop in my car.”

In fact, as I have written previously for IA:

Analysis from NATSEM, contained in the ACOSS report on inequality, shows that Australia’s tax take (including GST as well as income tax) across various income quintiles fluctuates around 25%, with those on lower incomes as a generalisation a bit below and those with higher incomes a bit above that figure. However, it gets worse when we compare the two ends of the income spectrum. The bottom 5% pay 34.2% of their income in taxes while the top 5% pay 30.1% in tax.

In other words, Australia does not have a progressive tax system.

Morrison also argued that there were millions on ‘welfare’ who paid no net income tax. By this he means that the government payments they receive are greater than the tax they pay.

Let’s be clear about this. The sort of people Morrison has in mind – and in his sights – are pensioners, the unemployed, students, the disabled, the homeless, those women fleeing domestic violence, the low paid and the list goes on.

Among these groups, the main people who pay little tax and receive much more in payments and other benefits from government are pensioners — all 2.4 million of them….

Read the full article here.

* John Passant is a former Assistant Commissioner of Taxation in charge of international tax reform in the ATO.

New Matilda, 30 August 2016:

“The new divide – the taxed and the taxed nots”

Here was an opportunity to state categorically that we need to increase our taxes, and to make those who are well-off pay their share. Instead we have been presented with a rambling discourse, dominated by his claim that there is a large proportion of Australians who “go through their entire lives without ever paying tax”.

That is plain wrong.

This year the Commonwealth is budgeted to collect $59 billion in GST, and $25 billion in excise and customs duty on tobacco, fuels and certain imports. That’s around $9,000 a household, in taxes that are practically impossible to avoid. Not even a Carmelite nun can avoid the GST.

And that’s before we consider state taxes such as drivers’ licences and car registration fees, and state and local government property taxes paid directly by homeowners or by tenants through their landlords.

Most of these taxes are regressive. The lower one’s income, the higher is the proportion of that income devoted to consumption and therefore to paying the GST, and the registration fees for a Corolla and a Porsche are pretty much the same.

That’s not to mention road tolls, private health insurance, fees at government schools and higher co-payments in health, all of which are high-cost privatised means of paying what we could be paying more fairly and efficiently through our taxes.

Morrison reluctantly admits that Australia has a public revenue problem, but he fails to acknowledge the yawning gap between what we presently collect in taxes and what we should be collecting if we are to fund adequately the public goods and a social security system appropriate for a high income country.

Our tax collections, as a percentage of GDP, are close to the lowest of all OECD countries – among prosperous developed countries only the USA collects less tax, and contrary to partisan spin, our taxes are falling.

Over the early years of this century Commonwealth taxes were around 24 per cent of GDP, before plummeting to 20 percent during the GFC and recovering to only 22 per cent now.

Read the rest of the article here.

NOTE

The Australian Goods & Services Tax (GST) taxes the final consumer of a good or service. Most unprocessed and raw foods as well as most education, childcare and medical services are GST exempt. The current GST rate is 10 per cent of the retail cost of goods and services and this tax is paid by est. 23.96 million people living in an est.10 million households. This tax is not included in government calculations of how much net tax is paid by any individual after government pensions/benefits/tax concessions received are deducted. Low income individuals/households pay proportionally more GST that middle and high income individuals/households.

[The Conversation, 24 July 2015]

The Peril Of Intergenerational Theft

In his speech to the Press Club on 2nd February, Tony Abbott once again called up the spectre of intergenerational theft:

And reducing the deficit is the fair thing to do – because it ends the intergenerational theft against our children and grandchildren.

We’ve never been a country that’s ripped off future generations to pay for today.

And under my government, we never will.

http://www.liberal.org.au/latest-news/2015/02/02/prime-minister-address-national-press-club

"Intergenerational theft" has been a catchcry of the Prime Minister and other ministers such as Joe Hockey and Eric Abetz.  It has invariably been used in defence of the Government's budget and its cost-cutting measures.  According to them we should suffer some pain now in order to leave the nation in a sound state for our children and grandchildren.

On one level this seems eminently commendable.  But it completely misses the point of another area of government policy where today's Government is severely ripping off future generations. Our children and grandchildren and their descendants are being ripped off because of the Government's tepid and ineffective policy on climate change.  There is no Government understanding of a need for urgent action and of the impact ineffective action now will have on the economy of the future and the health and lifestyle of our descendants as well as the health of the natural world.

And the truly amazing thing is that no-one in the Government seems to recognise the inconsistency of their position on inter-generational theft.  A cynical person could claim that at least some Government MPs do see this inconsistency – and just choose to ignore it. After all it would be decidedly awkward to concede that climate change is a really important and urgent issue and therefore know that not taking effective action will severely penalise future generations.  It's much easier to pay lip-service to the climate problem with a shonky "direct action" plan and to claim that the government will do more when other major emitters take more action.  Interestingly, the fact that many other major emitters are starting to take more action appears to have escaped the attention of the Abbott Government.

Obviously the Government's tepid climate policy suits those dinosaur Liberals and Nationals – and there appear to be quite a few of them - who are climate change deniers.

I suspect that the inconsistency about intergenerational equity/theft probably is seen by very few, if any, government MPs. After all, many of them still don't seem to understand that a great number of people oppose their budget because it is inherently unfair – that it places all of the pain on the less well-off in our society. The Prime Minister, the Treasurer and many others just don't get it.  Many Coalition MPs still seem to believe that the policies can be delivered if they improve their communication strategy. In their self-centred view those benighted electors just don't understand.  In reality very large numbers of electors understand only too well.

The core of their problem is that they are out of touch with ordinary Australians.  They are purblind inhabitants of a series of ivory towers.

Until the Government starts to take effective action on climate change, it should stop using the argument of intergenerational theft to justify other aspects of policy.  That would eliminate one of the areas in which it renders itself ridiculous.

Hildegard

Northern Rivers

*  Guest Speak is a North Coast Voices segment allowing serious or satirical comment from NSW Northern Rivers residents. Email ncvguestpeak at gmail dot com dot au to submit comment for consideration.

Just how big is the ABC's slice of the federal budget pie?

Business Spectator 20 November 2014:

When members of the Abbott Government talk about a need to rein in Australian Broadcasting Corporation (ABC) spending, they rely on graphs like the one above (which displays funding in terms of millions of dollars) in order to scare voters about current and future public broadcasting sustainability.

Here is just a small visual reminder to the Abbott Government of how little, in the grand scheme of things, ABC television, radio and digital platforms actually cost.

A relatively small 0.271% of the total federal budget according to BudgetAus:

So what is Australian Treasurer Joe Hockey telling the country in the December 2014 Mid-Year Economic Outlook (MYEFO)?

What has the implementation of the Abbott Government's ideologically-driven economic policy left Australian families and businesses facing for the rest of its term in office?

For an in-depth look at the nation's prospects go to the MID‑YEAR ECONOMIC AND FISCAL OUTLOOK 2014‑15.

For the time being here is the briefest of outlines:

The December 2013 MYEFO stated that tax receipts had reduced by more than $37 billion for the period 2013-14 to 2016-17 – now total taxation receipts have been revised down by $6.2 billion in 2014‑15 and $31.6 billion to 2017-18, bringing the total write down in tax receipts since the Government was elected to over $70 billion .

In December 2013 company tax receipts were revised down by $180 million in 2013-14 and $7.1 billion across the four years to 2016-17 – now a mere twelve months later company tax receipts are being revised down by $2.3 billion in 2014‑15 and $14.4 billion over the forward estimates.

Weaker wage and employment growth is expected to continue through to at least 2017-18 - with 2016-17 to 2017-18 wage growth now predicted to be much lower than was anticipated in the December 2013 MYEFO.

The unemployment rate will rise even further than the 6.25% predicted in December 2013 – it is now predicted to reach 6.5%* in 2015 and stay that high until at least June 2016.

In December 2013 the consumer price index for the 2014-15 financial year was supposed to come in at 2 – it is predicted to rise to 2.5.

Despite repeated warnings about a predicted sharp fall in commodity prices which the December 2013 MYEFO failed to fully recognise – by December 2014 there appears to be an element of faux surprise at finding how sharp that fall actually was and a decision made to cast iron ore prices as the arch-villain of the piece.

The December 2013 MYEFO stated that the underlying cash deficit would be $33.billion for 2014-15 – now an underlying cash deficit of $40.4 billion is expected in 2014‑15.

In 2013-14 net government debt was $191.5 billion. Public debt (on which interest has to be paid) will be $425 billion in 2014-15

Total interest expenses on all public debt have risen from an predicted $16.3 billion for 2014-15 in the December 2013 MYEFO to $16.3 billion for the same financial year in the December 2014 MYEFO and, are projected to rise to $19.9 billion by 2017-18.

Unsurprisingly, despite May 2014 budget cuts, further announced cutbacks in federal government agency numbers and public service employee numbers; Abbott Government gross operating expenses are predicted to rise from $119 billion in 2014-15 to $120.9 in 2016-17 and $125.2 billion in 2017-18.

Miraculously and perhaps over-optimistically, in the latest MYEFO the nation's real gross domestic product (GDP) growth has been revised up from 2.5% for the 2014-15 financial year and 3% for the 2015-16 to 2016-2017 financial years to 3% and 3.5% respectively. Nominal GDP has also been revised up.

In the face of all this Joe Hockey is telling the world that he will now have the budget back in a very small surplus by 2019-20. Presumably if the Abbott Government gets a second term and he remains as federal treasurer.

Hockeynomics at its best.

* An unemployment rate of 6.5% represents in excess of 803,952 Australians without a job and the regular pay packet which comes with it.

NOW we have a budget in trouble and it's all the fault of Abbott, Hockey, Cormann and the rest of those mindless ideologues

Herald Sun 1 December 2014:

Forget Treasurer Joe Hockey's prediction of a balanced budget in 2017-18 because it's "well and truly toast".

That's the assessment of Deloitte Access Economics economist Chris Richardson, who is predicting bigger budget deficits across the forward estimates in the mid-year economic and fiscal outlook.

Mr Richardson, who has long criticised both sides of politics for their handling of the budget, expects the 2014-15 deficit to blow out to $34.7 billion, about $5bn more than forecast.

Deficits will be $10bn larger in each of the following three years.

"Red ink will once again be the new black," Mr Richardson said about the MYEFO on Monday.

Australian Financial Review 1 December 2014:

Around half the policies in the May budget will never see the light of day and will have to be recast or replaced.

Economic conditions mean that the Coalition’s boasts that it could fix the budget faster than Labor are in tatters. The budget bottom line deteriorates by the day.

Women will bear the brunt of the Abbott government's budget cuts

The Sydney Morning Herald 11 September 2014:

Women will bear the brunt of the Abbott government's budget cuts.

New analysis drawing on National Centre for Social and Economic Modelling budget impact models and latest census and Australian Bureau of Statistics data, shows women in low and middle-income households can expect to suffer the biggest financial losses from the Abbott government's budget savings.

And the worst hit – by far – will be women in low-income households.

A single mother in the lowest disposable income group can expect to lose one of every four dollars lost by that group in the budget's aftermath come 2017.

Women in middle-income households will suffer much more than high-income women.

The analysis comes as Prime Minister Tony Abbott released a video on the weekend in which he said one of his government's main motivations in future will be "protecting the vulnerable."

The new slogan marked a deliberate and noticeable change of rhetoric from Mr Abbott's previous public messages, and follows months of criticism that he and his Treasurer, Joe Hockey, have endured for their budget's likely negative impact on poor households…..

A senior economist at the Australia Institute, Matt Grudnoff, said women are, on average, poorer than men in Australia, and the analysis showed the budget would not help matters.

"This budget is reducing gender equality even more. If you look at the pay gap between men and women, it's an issue that's getting worse, not better," Mr Grudnoff said.

Recent figures from Bureau of Statistics show the pay gap between men and women in Australia had widened to 18.2 per cent, up from 17.1 per cent at the start of the year.

Between November 2013 and May 2014, Australian men's salaries increased an average $24.90 per week and women's increased only $7.09.

Read more here.

The Real Age of Entitlement: State governments spent $17.6 billion supporting mineral & fossil fuel industries between 2008-2014 and Australian Government intends spending more than $40 billion over three years supporting fossil fuel industry

Excerpts from The Australia Institute’s, Mining the age of entitlement: State government assistance to the minerals and fossil fuel sector, Technical Brief No. 31 June 2014:

Supporters of the minerals and fossil fuel industries, like Queensland Premier Campbell Newman and the New South Wales Minerals Council, regularly emphasise the money that these industries pay to state governments. Much less is said about the money that state governments pay to assist these industries.

State government assistance to the minerals and fossil fuel industries is considerable.

Based on an analysis of state government budget papers, we estimate that a total of almost $18 billion has been contributed by the taxpayer over the last six budgets.

This assistance takes many forms. Sometimes it is a direct cash payment. For example, the New South Wales government gave multinational coal companies $10 million in 2009 as an ‘assistance package’. Other times it comes in the form of discounted access to services provided by the state and its businesses – Queensland has provided the coal industry with ‘concessions’ on access to rail services worth over $1 billion between 2012-13 and 2013-14.

Often assistance comes in the form of infrastructure or projects that wholly or partly benefit the minerals and fossil fuel industries. Sometimes this expenditure brings a financial return, as in the case of Western Australia’s hundreds of millions of dollars spent on developing port infrastructure. Sometimes it doesn’t – the New South Wales government is unlikely to see any return on its $76 million expenditure on the Cobbora Coal project…..

At the federal level, The Australia Institute publishes an annual study on subsidies of the mining industry, which totalled $4.5 billion in 2013, up from $4.0 billion in 2012.

Other organisations publish estimates of subsidies provided to fossil fuel use and production, which also focus largely on assistance at a federal level….

...the loss to the New South Wales government relating to the treatment of the Coal Research Levy.

This levy for $0.05 per tonne of coal mined is fully deductable from royalties that coal miners pay to the New South Wales government for the rights to mine the state’s coal. This deduction is effectively a subsidy of millions of dollars per year from the New South Wales government to the Australian Coal Association Research Program….

Environment Victoria, Ending the fossil fuel industry’s age of entitlement: 

An analysis of Australian Government tax measures that encourage fossil fuel use and more pollution, 2013:

The assessment concludes that the Australian Government is set to spend over 

$40 billion (see Table on page 4) in the form of tax rebates and concessions,
foregone revenue and expedited write downs of assets per year from 2013/14 to 
2016/17. 

This assessment only includes tax measures, and does not include direct grants or 

State Government measures, which could add billions more to the annual totals.

UPDATE

Australian Productivity Commission, Trade & Assistance Review 2012-13:

Almost 40 days later and Australian voters still not convinced that the Abbott-Hockey-Cormann federal budget is fair

Nielsen Poll of 1,400 voters on 19-20 June 2014 in the Australian Financial Review on 23 June 2014

On 11 June 2014 Treasurer Joe Hockey told guests at a Sydney Institute function that; The average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian.

He also admitted to basing his welfare ‘bill’ per average worker on an average monthly income of $4,800 to $6,500 per person and the projected $140.6 billion welfare spend for the 2014-15 financial year.

So let’s look at the welfare spend and income taxes paid in the last financial year to place this alleged $6,000 cost to workers in perspective.

The 2014-15 Budget Papers show that the Federal Government spent $140 billion on social security and welfare and expects to collect a total of $354.8 billion in tax in the 2013-14 financial year [Statement 5 – Revenue (continued)].

Personal income tax accounted for 63.23 per cent of total taxes collected.

However, as the government estimates it will be paying out $26,800 million in personal income tax refunds, the real total amount of personal income tax retained in treasury coffers will be 55.68 per cent of all taxes collected.

According to the Australian Bureau of Statistics there were an estimated 11.4 million people in paid employment during the 2013-14 financial year and, of these it is likely that around 10.2 million would receive a tax refund.

Approximately 1.1 million of those paying income tax would receive refunds in excess of $6,000. With an est. 477,970 of these taxpayers receiving refunds of $9,999 or over. While the remaining 9.1 million would receive refunds of somewhere between $1 to $5,999. [based on Budget Papers 2011-12 & 2012-13]

These figures indicate that in doing his calculations Mr. Hockey: (i) also assigned incomes to people not in the workforce; (ii) did not take into account the fact that the federal government collects taxes other than income tax; (iii) did not factor in that many workers are/will be receiving tax refunds which cancel out their supposed $6,000 cost in days worked to assist other individuals he classifies as ‘leaners’; and (iv) failed to recognise that some of the “average working" Australians he mentions would also be receiving welfare payments in the form of Family Tax Benefit.

With rubbery figures such as these, created by the old ‘back of an envelope’ method, Hockey seeks to convince voters that his first budget is fair.

ABC TV show Clarke & Dawe reviews the Abbott Government's performance

https://www.facebook.com/ClarkeAndDawe

The cost of Australia's offshore detention centres

According to the Australian Customs and Border Protection Service at 28 February 2014 there were 1,325 asylum seekers in the Manus Island detention centre and another 1,107 asylum seekers at Nauru detention centre.

Under a contract negotiated by the Abbott Government with Transfield Services (Australia) Pty Ltd, over the next twenty months housing these 2,432 detainees in offshore centres will cost Australia $1.22 billion (medical and counselling services excluded).

That is over $25,000 per month paid to for each Manus Island detainee (living in tents behind a crude wire fence and serviced by a field kitchen) and Nauru detainee until sometime in November 2015.  

This of course does not include the cost of air transport contract/s.

Under the previous 2013 security services contracts Manus and Nauru detention centres combined management costs were estimated around $503 million over twelve months.

The entire cost of border protection policies laid out in the September 2013 Liberal Party-National Party Coalition document only budgeted for a total of $701 million in net spending up to 2016-17, which factored in a ‘saving’ of $1.08 billion over four years from “stopping the boats”.

Detention centre costs were not a specific line item in the document so one has to guess how the Abbott Government originally expected to pay for offshore detention over the forward estimates.

It is obvious that in 2014-15 any so-called savings will be eaten up by the blow-out in detention centre management costs.

It will be interesting to see how Prime Minister Abbott and Treasurer Hockey explain these increased detention centre expenses during May 2014 budget week, given there appears to have been no increase in actual service delivery and very little in the way of additional infrastructure.

NOTE: Nationally in Australia in 2011-12 the cost per prisoner/offender per day in state adult correctional facilities was $305 or an estimated $9,455 per month.