Morrison government needs to pay closer attention to the details in business policy

Prime Minister Scott Morrison at the G7 Summit in France. Picture: AAP

Most Australians would feel a sense of pride in seeing their Prime Minister being respected and consulted on world events at the G7. It opens the possibility of a new era for our nation.

But Scott Morrison’s international focus comes at a cost, and it’s conceivable that cost will be that his government becomes a one-term administration.

Australians voted for Scott Morrison for many reasons, but high on the list was his promise that his would be a government that would encourage Australians at all levels to “have a go”, and that a Morrison government would create a supportive environment.

In this week’s Business Council address, Treasurer Josh Frydenberg repeated the Morrison theme.

But in practice, parts of the government are falling apart and doing exactly the reverse of what Morrison and Frydenberg are aiming to do. Longer term this will discourage the investment the government craves.

So first, let’s quote sections of Josh Frydenberg’s speech that show what he wants the government to do. And then look at what it is actually doing.

Frydenberg: “Working with Assistant Minister to the Prime Minister Ben Morton, I am again focused on tackling the deadweight cost of red tape and putting in place practises and processes that reduces the burden for businesses and consumers.

“In particular, I want to talk about how we must increase productivity to secure a brighter future with even higher incomes.

“This means creating the right incentives for workers and businesses through lower taxes, cutting red tape and flexible labour markets” .

These are wonderful aims. Now look at what the Morrison government is actually doing:

• Without any widespread industry consultation, and against strong opposition from major employers, the Morrison government plans to fundamentally change the GST collection system in Australia and greatly increase the risk of conducting business.
• As part of the above red tape explosion, the government wants the directors of all Australian corporations — from BHP and Commonwealth Bank to the local plumber — to be personally liable for the GST that their company might owe. This represents a fundamental change to the personal liability of all directors. No consultation for such a fundamental change was undertaken.
• The government has legislation before the parliament that demands that if a company fails to answer an Australian Taxation Office question to the satisfaction of the ATO, its GST refunds will be frozen. This has the potential to send many honest smaller Australian companies to the wall. Who will invest when they can be wiped at the whim of a low-ranking tax official?
• There are lots of legitimate reasons companies don’t lodge tax returns, but under the new government plan if they don’t lodge a return they can have their GST frozen and be wiped out. The penalty far outweighs the offence.
• If you owe tax money the government wants to inform credit bureaus. Accordingly, you are in danger of being destroyed. If you actually owe the money, then it’s reasonable that the business world be warned. But the ATO uses money claims like a negotiating tool and their claims often have nothing to do with what is actually owed. I thought the legislation was fair because there was protection against false ATO claims, but the Inspector General of Tax knows the silly games that the ATO plays better than anyone, and so has exposed hidden weaknesses. Any worthwhile public servant or minister who was concentrating on their job would have checked with the Inspector General of Tax before introducing the legislation.
• Anyone who pays $10,000 cash to a person with an ABN to buy a car or pay for a renovation could be jailed for two years. Really. Who thought that up?

This is an anti-business taxation revolution the like of which Australia has never seen. It applies to everyone and there is no discussion.

There are all sorts of furphies that are being trotted out to justify this vicious attack on the entire business community. Sometimes it’s phoenix companies and at other times it’s the cash economy.

It’s good to attack these things, but the proposed legislation has been carefully prepared by public servants to achieve the their personal agendas while the Morrison ministers are looking the other way.

It’s like seeing a criminal in a crowd of people and bashing the whole crowd. Ministers like Michaelia Cash, who performed brilliantly in the Morrison ministry prior to the election, have fallen asleep. But she is not alone. It’s very disappointing for the nation.

So Scott, it’s great to see you talking with world leaders, but we need you back home because the domestic wheels are falling off your government.

In a strange way what is happening to the Morrison government is similar to what happened to Victorian Premier Daniel Andrews. Democracy works best when there is a strong opposition.

As I pointed out yesterday, Andrews set out a policy that had wide community agreement -renewable energy targets — but he did not watch the detail and the implementation was an unnecessary disaster.

Had the Victorian Coalition opposition done its homework and attacked him mercilessly over the implementation the ALP state government might have got it right.

Similarly, in the Morrison government there is a great deal of community support for attacks on the cash economy and phoenix companies, but the proposed implementation of the attacks is a complete disaster.

This time the opposition is the ALP, and like the Victorian Coalition opposition, they are letting the government off the hook. It took a long time for the Andrews energy implementation mistakes to be understood by the wider community. With the Morrison government, community understanding of its tax mistakes will come much faster.

Small and medium businesses switched from supporting the ALP to the Morrison-led Coalition, but when they realise they have been betrayed they will swing back with a vengeance.

Scott you need to get over your jet lag quickly, roll up your sleeves, wake up some of your ministers and get them working on the objectives you campaigned on and that Josh Frydenberg repeated this week.