Labor's crack-up is taxing patience

THE whole logical basis of the Rudd Government's latest Budget is utterly destroyed by the competing claims that it makes about the effects of taxation.

On the one hand, slugging smokers with a 25 per cent increase on tobacco tax last month was sold as a means to deter nicotine addicts and raise an extra $5.2 billion over the next five years. On the other hand, whacking the mining companies with an extra 40 per cent super tax on top of the royalties and company tax they currently pay, and bringing in the super tax retrospectively (making Australian mining the highest-taxed in the world), will both grow the industry and raise $12 billion over four years from its proposed introduction to 2013-2014. The Labor apparatchiks who inhabit cyberspace and infest the blogosphere may like to believe that making tobacco - or alcopops, for that matter - more expensive by increasing government taxes will make them less attractive. But they cannot be believed when they simultaneously claim that taxing mining operations will make them more attractive to investors. As the enigmatic Professor Julius Sumner Miller once used to ask on a popular ABC television series: "Why is it so?" The answer, of course, is it is not "so". It cannot be so. Only in Rudd-land are punters put off by the prospect of paying more for cigarettes and booze but queuing to throw their hard-earned superannuation funds into shares in companies they know will have to deliver less in dividends because of a greatly increased tax whack. The Rudd Government is not known for its honesty. It is also not known for its transparency ... and it is definitely not known for its courage. And now it is has shown its lack of intellectual integrity. In the past, the Rudd Government has distinguished itself with its rat cunning, its lies, its reversals of policy and its gutlessness. To all of which it can now add lunacy - unless it believes that its multi-million-dollar disinformation campaign will so confuse voters that they will believe both arguments at the same time. The American writer F. Scott Fitzgerald, probably best known for his novel The Great Gatsby, wrote that: "The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function." He used the line in a 1936 essay. It was titled The Crack-Up. The same title could easily be applied to an essay on the Rudd Government. Or, more specifically, on Prime Minister Kevin Rudd, given the nervous hysteria he demonstrated when quizzed about his moral cowardice by Kerry O'Brien on The 7.30 Report on Wednesday evening. Given the obvious schizophrenia displayed by this Government, it truly beggars belief that it could not find it in its heart to provide extra funding to meet the needs of the growing numbers who are applying for assistance from the nation's stretched mental-health resources. It's not just that Kevin Rudd has boasted being both "an economic conservative" and "an old-fashioned Christian socialist". It's that, above all else, he has led a Government that has dismally failed to perform - and that he has ducked responsibility for its failures. We've become used to seeing Rudd sending junior ministers out to cop the flack when his big plans explode. Yet, invariably, the Prime Minister is front and centre, hogging the limelight, when there is a new gimmick to announce. He was there in his hard-hat (along with deputy Prime Minister Julia Gillard) when the Building the Education Revolution was launched, for example. But Rudd was nowhere to be seen when the rackets started to be revealed. He was there (along with Environment Minister Peter Garrett) when the Chinese-supplied pink batts were being wheeled out. As you'd expect, of course, the Prime Minister was again missing when four young installers were killed and the scheme was quietly abandoned. He has yet to speak to the thousands of men and women who have lost their jobs as a result of the collapse of this crudely implemented economic stimulus program. Likewise, he is yet to discuss the billion- dollar cost of remediation, or the question of compensation for those whose homes have been burnt down or damaged because of this ill-conceived stunt. Rudd was also prominent before the last election, pledging to send the asylum seeker boats back to where they came from. But he has been missing since he reversed the Howard government's straightforward illegal-migrant policy. Seriously, the very least he could do is welcome those who have been encouraged by his open-door policy to transit Christmas Island on their way to a luxury hotel in WA or Queensland. This Budget is meant to supply Labor with its "narrative" for this year's federal election. It is yet another Labor failure. Only a rusted-on True Believer prepared to suspend any normal rational scepticism could possibly swallow its flawed premise. As the most cursory examination of the hard numbers contained in the Budget shows, despite all its claims of being fiscally responsible, the Rudd Government has in fact increased spending. Despite expecting faster economic growth and lower unemployment than it predicted just six months ago, producing an extra $56 billion over the next three years, it will still not return to surplus until 2012-2013. There has been no serious discipline, just an assumption of continuing strong economic growth that the Rudd Government can recklessly plunder. When Labor was in opposition, it claimed the Howard government was opportunistically seizing the windfall revenues from the mining boom to buy votes. In fact, the fiscally responsible conservatives used their surpluses to put money into Future Funds for infrastructure, education and other worthwhile purposes. In government, Labor has not only promised to retrospectively plunder the profits of Australia's mining investors, including superannuation funds, but it is going to effectively nationalise the mining industry by taking a 40 per cent stake in all mining operations. Former US President Ronald Reagan may as well have had the Rudd administration in mind in 1986 when he said of socialist government: "If it moves, tax it. "If it keeps moving, regulate it. "And if it stops moving, subsidise it." Crack-Up describes the Rudd Government to a "T".