‘I say, we have got a tax system that is penalising people who are out there making a contribution in the economy. We want to back them and we want a tax system that backs them.’
Scott Morrison ABC Radio National Breakfast 2 November 2015.
Why is our nation’s annual economic growth down to 2% and weakening? Falling world demand for commodities such as coal and iron ore? Our small population and remote location rule us out of manufacturing? Export prices down but volume up?
Nope. Nope. Nope. Amazingly, Scott Morrison has looked into the matter and come up with an answer nobody expected. It’s the tax system, stupid! Our tax system is just so unfair to the rich. The speculative capitalist just can’t get ahead without the backing of the system. The same system which protects the top end of town to the tune of 5 billion a year with its tax breaks for high earners’ superannuation is in clear need of reform.
Eureka! Who would have thought we could have had it so wrong for so long? The tyro treasurer breaks into a song and dance routine in his office. Sounds like a Beatles tune, ‘All you need are cuts, cuts, cuts. Cuts are all you need’. Cuts plus a great big new 15% tax on everything. Not that you will hear anything so clear from his lips. Morrison is the archetypal fast-talking huckster with a con-man for a boss.
Nothing is being ruled in or out. Everything is on the table. It’s all about creating a fairer system; rewarding the people who want to have a go. That’s the spin. Motor mouth Morrison has three media monologues on Monday morning in which he is all over David Gillespie for having a go but the NZ example is not his case.
The treasurer is all for ‘having a conversation with the nation’ applying the Morrison model of dialogue, which means he will do all the talking. His talk is not talk at all but a type of promo, chock-full of ‘come-on’ but offering nothing more substantial. He eagerly confirms that his government is ‘working on tax reform’ a mystical process which includes the nature and the scale of the GST. But despite his blizzard of words, his eagerness to correct his hosts as to what he is not saying, his frenetic delivery, snake-oil Morrison gives away nothing of his real intent.
Make no mistake. Morrison will cut taxes for businesses and the rich. These are his party’s fabled lifters, the winners that any respectable neoliberal government, addicted to trickle-down wealth creation mythology loves to pick. These are the people who must be looked after; the people Morrison has in mind when he says ‘ people out there …making a contribution to the economy’. The people who matter.
The Treasurer doesn’t mean people like you and me or all of us as in ‘the people’. We don’t count. But he does want us to pay the cost of tax cuts and super benefits for the wealthy. That’s why he’s set up David Gillespie, who turns out to be a National MP to run off at the mouth about New Zealand’s beaut 15% GST on 97% of everything not our namby-pamby 47.
New Zealand’s economy is not comparable to Australia’s. For starters, it’s about half the size of Queensland’s – or one-tenth of Australia’s. Dave will still run it up the flag-pole. See who salutes. Morrison can then give 7:30’s Leigh Sales the run-around by denying he’s advocating any GST increase.
The Kiwis were lucky but will their luck hold? Their economy was pumping while their dairy products could still fetch a good price in China. Before the arse fell out of international commodity prices, Australia’s economy was well in front, too. Now dairy prices are falling; the Chinese are setting up their own milk production, such as their recently purchases of large operations in Victoria’s South-west. And if the fall in milk prices is not enough, the worst El Nino effect in eighteen years threatens to bring a summer drought which could lead New Zealand into recession.
GST rates have nothing to do with it. We could double our GST tomorrow and impose it on everything and still we’d be beaten by the land of the wrong white crowd. But the instantly forgettable and obscure Dave’s not known to have any special handle on economics. He’s just been sent out to do some spruiking to soften us up.
Upping the GST will do bugger all by itself, of course, especially for employers. Employ-ERS as they say on ABC Radio are the people in the workplace who matter; the ones Kate Carnell goes on everything to whinge on behalf of. Wages are too high. Our penalty rates are crippling. We’ll never be competitive.
Or so the employ-ERS claim. Statistics tell a different story. Currently, businesses paying penalty rates are booming. The café and restaurant sector is doing so well, for example, that it will soon overtake manufacturing.
Business Council of Australia’s Catherine Livingstone says a cut in corporate tax is the only way to stimulate the economy but her case is based on modelling which supposes complete competitive and open capital and goods and services markets. As Ross Garnaut observes, however, ‘It is hard to see how it can be reasonably applied to an economy in which a majority of corporate profits are in sectors in which monopoly, regulatory and resource rents represent a pretty high proportion of the profits.’
Morrison hears employERS pain. His empathy is legendary since his spell as Border Supremo Major-domo, a time when, he says to Annabel Crabb, he had to ‘act tough to send a message to people smugglers’. Too bad about the cruelty and inhumanity; the deaths, the children in custody, the utter disregard, the trampling of Australia’s human rights obligations under international charter. Suddenly Morrison can’t do enough to ease the suffering of the top end of town. He doesn’t want employers to be burdened by paying weekend penalty rates.
Employers are important people who grow the economy. But not by paying tax. The ATO reports that one in five private companies with a turnover of $100 million plus pay no income tax. No-one in politics has the bottle to go after these tax avoiders and evaders. Luckily for the government, however, workers have no such option.
If the boss is dodging his share, his workers can pay more tax to make up for the shortfall by means of the all-new, Kiwi-inspired 15% GST. It will cost at least $4000 per year to a worker’s household budget according to Curtin University research but wage slaves can be rewarded, instead, with ‘tax credits’, an idea Morrison has called innovative, one of his government’s Turnbull-shit weasel-words. Compensation has a habit of being devoured by bracket creep in a few years. Details are of course, never available but one thing is certain. The low-paid and the poor will pay the most.
Of course, we are all ‘out there’ and making our own ‘contribution in the economy’ but the only people who matter to the treasurer are his party’s big business mates who are demanding that he cut their taxes. To pay for these tax cuts for the wealthy, Morrison wants to increase the GST and expand the base, effectively getting poorer Australians to pay the most towards giving the wealthy further tax-breaks. He claims that this is making it a fairer system.
A 15 per cent GST would cost householders $4,000 before Morrison expands the number of things you have to pay GST on but Morrison says this won’t happen. Fran Kelly had the cheek to raise this key question on Monday. Morrison brushed the facts aside. ACOSS reports that the bottom 20% of income earners pay 7% of their income in GST while the top 20% pay 3%.
By now we know that anyone who voices another point of view to Morrison’s, however, well based, however solid the evidence is always wrong. ACOS, the following day, publishes its highly respected NATSEM modelling which, of course, comes to the same conclusion but ScoMo has a monopoly on the truth.
‘No, it is not true, Fran. If you put the appropriate compensation measures in place and if you have a package which deals with all the other issues that are relevant, Australians can be better off and that is the only reason why you do it, Fran’
What, pray, tell are these ‘appropriate compensation measures’? What is this ‘package which deals with all the other issues that are relevant? Which Australians can be better off? ScoMo can offer a five percent tax cut but this does nothing to help ease the burden falling on low income earners and pensioners. Mike Baird’s proposal to protect households under $100,000 means collecting GST from 60 per cent of income earners only to embark on the wasteful process of paying it back to them as compensation. But that’s Baird’s proposal.
The truth is that the treasurer and his PM are artfully avoiding all specific commitment but every chance they get they repeat the mantra compensation hoping that just by repeating it, the GST will somehow become something other in the public mind than the great big new tax on the poor that it is.
The factual content is in the subtext; the medium is the massage: Morrison reveals himself and his party’s true position when he talks down to his host; talks over his host, spewing an endless, breathless thicket of words. It’s the same mad arrogance we suffered under Abbott. Hide the facts. Deny the facts. Talk endlessly about the virtues of the process without ever once disclosing the product. Don’t for God’s sake consult. Tell the people you know what’s good for them. But above all, just keep talking.