PM finds delivering reforms too taxing

AT his first press conference after accepting the job of Treasurer from Malcolm Turnbull, Scott Morrison summed up the task ahead of him saying: “We have a spending problem — we don’t have a revenue problem.”

But now, six months later, it’s all about revenues, not spending, and the shift is coming from the Prime Minister’s office where Turnbull has ­installed former Treasury secretary Martin Parkinson as his head of Prime Minister and Cabinet, and given him charge of the tax reform agenda. Parkinson had been dumped by former prime minister Tony Abbott a week after the September 2013 election. He had been key to the creation of Labor prime minister Kevin Rudd’s disastrous emissions trading scheme as head of the ultra-green Department of Climate Change. Turnbull’s embrace of Parkinson was a direct snub to ­Abbott, of course, but also a clear sign of his own enchantment with global warming philosophy. Parkinson is a member of Turnbull’s inner circle. ­Morrison is not, hence his ­initial view that spending is the problem, not revenue, has been erased from the new Turnbull economic narrative. While there are many good arguments that can be made in favour of a new, competitive federalism, Turnbull has displayed his now familiar ineptitude in communicating his policy agenda. The message the public is getting — with Labor weighing in from the sidelines — is that they will be subjected to a new tax administered by the states under the Turnbull plan. The initial assurance that the tax burden would not ­increase lasted barely eight hours and now there is only the tepid pledge that there will not be a tax increase for at least four years. This is not long-term planning by any measure. In the front bar, Mr and Mrs Taxpayer know from experience that the public service is largely inefficient at delivering the services they need. They know that for all the talk of vertical fiscal integration (is that a Point Piper yoga position?) and new federalism, the federal government is attempting to shift the ­responsibility for increasing taxes, at least partially, to the states which get to spend them. They equally understand that the state governments don’t want to earn the ire of their voters by increasing taxes, and so the blame game will continue. Neither the federal nor state governments are willing to tackle the task that Morrison initially set for himself and the Turnbull government — that of reining in inefficient government spending. If the states need more money they have the mechanism in their hands — they have the power to raise the GST. But that little exercise, ­floated with enthusiasm by Turnbull and promoted by Morrison, came to a sorry end when it became obvious the premiers had suffered their usual deficit of political courage. The cowards, not all, but in the main, preferred to kick that ball down the road at least until their terms have expired. Too hard for now. Unfortunately, Turnbull buckled rather than hold their feet to the fire and so increasing the GST was no longer among the rapidly diminishing number of items still on the table for discussion. If the states want more money and the federal government sincerely wished to lower personal income taxes, the ­increase in the GST would have been the cleanest, simplest means available. The Liberal Party mantra on taxation has always been straightforward: taxes have to be lower, they have to be simpler and they have to be fairer but the mantra can only be implemented successfully if the states behave responsibly and the Coalition government in Canberra is prepared to argue the case. Turnbull appears poll-shy. That’s the political equivalent of being gun-shy. He has every right to be. He cited Abbott’s poor polling as a primary reason for staging his coup. As his own polling begins to slide he doesn’t want to get the public further off-side. Yet he seems unable to make the arguments for his policies that he promised he would be able to when he took office. Labor is no alternative. Bill Shorten’s betrayal of the workers he was meant to represent while a union boss as demonstrated by the evidence presented to the high-value Heydon royal commission into trade union corruption, his ­desire to roll back economic reforms the Labor Hawke-Keating governments implemented with the acquiescence of the Coalition, underscore his unfitness to lead Australia. One final point. ABC commentators on television and radio continue to talk of ­Abbott’s $80 billion cuts to health and education as if they were fact yet the ABC’s own Fact Check unit on July 3, 2014, published its own extensive investigation into these claims and found they were untrue. Let me quote directly from the ABC Fact Check’s findings: “The (Abbott) Government did not cut $50 billion from hospitals in the budget. The Government did not cut $30 billion from schools in the budget.” ABC Fact Check Verdict: “The debate over the $80 billion figure, whether a cut or a saving, is hot air.” It went further and labelled such claims Fact Check Zombies — the claims that refuse to die. If incoming ABC boss ­Michelle Guthrie wants to save some money she now has a choice. Slash the salaries of the ABC’s highly paid commentators who defy the ABC Fact Check Unit’s own findings and baldly broadcast untruths to the taxpayers who pay their salaries, or she can quietly kill off the Fact Check Unit as its findings are regarded as nonsense by those who are the ­voices and faces of the ABC.