Meetings create climate for a cash grab

LET’S strip away all the fine rhetoric and outright bombast — the meetings in Paris and in Sydney last week had just one target and exactly the same target: your money, writes TERRY McCRANN.

Scott Morrison at the meeting with his state and territory counterparts.

LET’S strip away all the fine rhetoric and outright bombast — the meetings in Paris and in Sydney last week had just one target and exactly the same target: your money.

The meetings in Sydney, first of the state and federal treasurers on Thursday, and then the Prime Minister and premiers on Friday, were meant to be about tax reform.

But it is blindingly clear that “tax reform” starts and finishes with some form of increase in the GST.

“Trust me,” says the federal Treasurer Scott Morrison, “I’ll give it all back in income tax cuts”. “No, he damn well won’t,” say the state treasurers. “It’s our tax and we want the revenue for hospitals and other services.”

So we’ve got a stalemate and this will save us from a higher GST and higher taxes?

Well, no. It might save us from a higher GST, but it won’t save us from higher taxes. Morrison’s advice to the states is to increase their other taxes.

What he — or incoming Labor treasurer Chris Bowen if the government changed at next year’s election — would then do, is to just let bracket creep pour more money into Canberra’s coffers.

The midyear budget update will be released on Tuesday. It will show the Federal Government faces huge deficits as far as the fiscal eye can see. And that’s with the benefit of bracket creep.

Further, the reality is going to be worse than those forecasts. Any suggestion of real tax reform is a fantasy. Any suggestion of tax cuts — even just giving back at some stage the insidious but all-too-real tax increase of bracket creep — is a fraud.

Ironically, incidentally, the best anti-bracket creep mechanism we would have going for us is very low growth in wages. No wages growth would mean no bracket creep.

The perfect world to protect you from government is zero wages growth and prices falling by, say, 1 per cent a year — that is to say, slightly negative inflation boosting the spending power of your income. It would also, incidentally but importantly, boost the spending power of your savings — be it money in the bank, in superannuation, or in your house.

The opposite of that, which politicians avoid talking about, is that an increase in the GST is actually also a tax exactly on those savings. That’s why, even if every dollar of extra GST was matched by a dollar of income tax cuts — and it would not — we’d still lose.

We’ve got the same fine rhetoric in Paris — supposedly about fighting climate change (now that “global warming” has fallen flat); thereby saving the planet and bestowing a secular Garden of Eden on our grandchildren and their grandchildren, verily unto the nth generation, forever.

In truth, it’s got nothing to do with that. As the truth-speaking Danish environmentalist Bjorn Lomborg has shown quite undeniably, even if you accept all the claims made by the global warming alarmists and that everybody would actually deliver their commitments, it would mean the earth’s temperature in 2100 would be just 0.05c degrees lower than where it is (supposedly calamitously) headed.

It’s got nothing to do with actually stopping the world from frying; it’s all and only about plucking money from your wallet.

First is the feel-good factor; the “do-something, anything” driver, the “looking for the key under the street-light” exercise.

So we have our politicians, led by deputy PM Julie Bishop — and it has to be noted that supposed climate denier Tony Abbott is just as guilty as climate believer Malcolm Turnbull — promising outlandish, ruinously expensive and yet utterly pointless cuts in our emissions of carbon dioxide.

We are purportedly going to cut emissions by 26-28 per cent by 2030. Because of our growing population that means the cuts per person will have to be more than 50 per cent.

It will be done (if it is) and can only be done in one way — making you pay more for your basic electricity by forcing you to buy inefficient and expensive wind and solar-sourced power.

Turnbull wants to be the “innovation PM”. His idea of innovation is to take you back to the power sources of the 18th and earlier centuries. What next? Bring back the original horse power?

But that’s only the start of the cost in Paris. The developing countries are demanding the developed world pay at least $US100 billion a year to them in “compensation” for past CO2 emitting sins.

If that got up, our share would have to run at somewhere between $2 billion and $5 billion a year — straight out of the federal budget and so, straight out of your pockets.

In sum and in short: I have seen the future — in both Sydney and Paris last week — and it is politicians plucking money from your wallet and your savings.

Originally published as Meetings create climate for a cash grab