Monday, July 2, 2018

Today by Paddy Manning

Tax cuts vs pay cuts ... for some
Near the end of a tax cut bidding war, there is no clear winner


There’s bad optics and then there’s the shocking eyesore. Into the latter category would have to go yesterday’s pay rise for politicians on the same day that hospitality workers had their penalty rates cut. Nothing could be guaranteed to fuel cynicism about politicians more, and, four weeks out from five crucial by-elections, the government no doubt feels that the less said about it the better.

“No words.” That was just one reaction on social media to this excellent piece from Saturday, in which The Guardian’s Gareth Hutchens reported that Australia’s federal politicians, senior public servants and members of the judiciary would enjoy their third 2 per cent pay rise, following a Remuneration Tribunal ruling, while hospitality and retail workers would see their penalty rates cut for the second year in a row, in most cases by 10–15 per cent, as a result of last year’s Fair Work Commission decision. The effect was compounded by the first stage of the government’s personal income tax cuts, which also kicked in yesterday. Workers earning up to $125,000 a year will receive a tax offset of between $200 and $530 a year; higher-income earners also get a tax cut, as the top threshold for the 32.5 per cent tax bracket is lifted from $87,000 to $90,000.

The ACTU points out the Turnbull government has voted against measures to restore these penalty rates eight times. Secretary Sally McManus emphasised the contrast between pay cuts for workers and tax cuts for companies, which also kicked in on Sunday, claiming “the Turnbull government is cutting the pay of 700,000 people who rely on penalty rates at the same time as they’re delivering handouts to big business”. But the numbers are contested: the ABC’s Fact Check today traced the lineage of the 700,000 figure back to last year, and again rated it “fanciful” because it conflates the number of people under awards attracting penalty rate cuts with the number of those people who work on weekends. So, how many hospitality and retail workers are better or worse off after yesterday is also not clear: in this morning’s AFR, small business ombudsman Kate Carnell says [$] that given the minimum wage increase of 3.5 per cent, which also kicked in on Sunday (as The Guardian also noted), “unless you only work Sundays and work a lot of hours on Sundays, you are better off after today than before”.

At best, the government’s message is mixed: personal income tax cuts are a much tougher sell at the same time as hundreds of thousands of workers are suffering pay cuts. Also clouded is the government’s win on company tax cuts last week, after Opposition Leader Bill Shorten was forced to backflip on a promise to repeal already-legislated tax cuts for companies with a turnover of between $10 million and $50 million (and get how narrow that sounds).

Near the end of a complicated bidding war on business and personal income tax cuts, hip pocket nerves are twinging as everyone tries to work out which side is offering the better deal. It’s unedifying.

The prime minister might take comfort from today’s Newspoll, which shows improvement in his standing as leader, and a modest recovery in two-party support for the Coalition (albeit they still trail Labor, 49–51). But the beauty of the polling is in the eye of the beholder, with The Australian and The Guardian offering very different readings. The Australian’s columnist Peter van Onselen wrote [$] that the momentum was now with Team Turnbull, while his colleague Simon Benson asked [$] whether the government, if it couldn’t hit 50:50 after such a bad week for Labor, ever could. The Guardian, meanwhile, noticed Shorten was on a winner before his pledge was rolled by shadow cabinet last week, with 52 per cent of voters supporting his plan to scrap the legislated company tax cuts.

Lest anyone decide it’s all much of a muchness by now, ALP president-elect Wayne Swan tried to sharpen the differences on the ABC’s Insiders yesterday: “We are nowhere near a unity ticket with the Coalition … they are setting out to destroy progressive taxation both in the company tax system and in the personal income tax system.”

We are in very choppy waters.

since this morning

Greens senator Sarah Hanson-Young is seeking legal advice after sexist commentary about her was broadcast on a Sky News segment with fellow senator David Leyonhjelm.

in case you missed it

After a two-year delay over a freedom of information request, The Guardian has revealed the $39 million cost to taxpayers of the government’s six-year legal battle with the tobacco giant Philip Morris over plain packaging laws.

Female Liberal and Nationals MPs are waiting longer [$] to be promoted relative to men under Malcolm Turnbull than they did under his more conservative predecessor, Tony Abbott, according to an analysis by Senator Linda Reynolds reported in the AFR.

Pauline Hanson’s One Nation has been accused of flouting its constitution to sign up unpaid members in a rush to register with election authorities, putting its NSW party registration in jeopardy

The Australian reports [$] that coal is set to regain its spot as the nation’s biggest export earner amid higher prices and surging demand from Asia.

The New Daily reveals that an external analysis of the Department of Veterans’ Affairs, submitted to the Productivity Commission, shows performance going backwards in seven of eight key performance indicators, including suicide prevention, between 2012 and 2017.

by Mungo MacCallum
Question Time: an utterly unedifying spectacle
Has this central democratic process devolved beyond dysfunction?

by Scott Ludlam
Minding your data in a post-GDPR world
Some good news about online privacy has just popped up

Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Inside the Greens and the unauthorised biography of Malcolm Turnbull, Born To Rule?


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