Thursday, September 3, 2020

Today by Paddy Manning

The COVID-19 recession has accelerated a radical policy agenda on tax and IR

Image of Prime Minister Scott Morrison during Question Time today

Prime Minister Scott Morrison during Question Time today. Image © Lukas Coch / AAP

News that the Morrison government is planning to fast-track $158 billion in legislated tax cuts in the October budget should sound the alarm for the labour movement. Not only is the Coalition using the pandemic as cover to wage culture wars against its old enemies in universities, the media and the arts, but it is also using the recession to accelerate a neoliberal policy agenda that threatens to permanently undermine workers’ rights, reward the rich and beggar the nation’s finances. This would ensure radical austerity for years to come in what economist Richard Denniss describes as the “right-wing ratchet”. Labor premiers who have celebrated the new national cabinet, and the ACTU (which is participating in a rushed round of talks with employers), should carefully consider whether the prime minister’s all-in-it-together schtick has been entirely genuine or whether, in fact, they have been comprehensively outplayed. So far, the national cabinet has functioned as an unaccountable body that has bolstered Scott Morrison and sidelined the federal Opposition. The new labour-market flexibility reforms, introduced along with the JobKeeper legislation at a time of crisis, may prove to be a Trojan Horse for an assault on workers’ rights. Memo to Daniel Andrews and Sally McManus: are you legitimising what looks likely to be an attack on the people you represent?

As a package, the Coalition’s plan for tax cuts is highly regressive, flattening the scales so that anyone earning up to $200,000 a year drops to a top marginal rate of 30 per cent. This was clear before the last election when former Grattan Institute chief John Daley said the proposed cuts “essentially get rid of the effects of bracket creep for high-income earners”. Grattan Institute analysis also showed that, to make up for the lost revenue, the government would have to impose service cuts of some $40 billion a year by the end of the decade. Daley said that the package called for “spending growth materially lower than we have seen at any stage for the last 50 years, at the precise point at which we are expected to see substantial ageing of the population. Let’s just say it looks kind of aggressive.”

Even when the tax-cut legislation was waved through by Labor in the immediate wake of the election, the stage-two and stage-three tax cuts (due in 2022–23 and 2024–25 respectively) seemed way off in the never-never. An election or two would be held in the meantime, and Labor, if it were to win, might reverse them. Now, when the pandemic has resulted in some $214 billion in direct spending by the Commonwealth, and when the prime minister is declaring that only the Coalition knows exactly how to fix the budget (how many times has he said variants of “we’ve done it before, we can do it again”?), the implications of tax cuts favouring the rich and resulting in more radical austerity are even more frightening.  

Yet shadow treasurer Jim Chalmers was equivocal today when asked if Labor would repeal the stage-three tax cuts, telling Sky News: “We haven’t seen what the government’s proposing. We don’t know if they’ll bring it forward. We’ve said many times, probably hundreds of times through the course of last year, that we’d examine stage three closer to the date. The government has said that they might recalibrate or reshuffle or bring forward some of those tax cuts. Let’s see what they propose.”

As Sean Kelly writes in his cover essay for The Monthly, Morrison told Coalition MPs who were put out by his apparent embrace of socialism through wage subsidies and higher welfare payments that they should “not attach ideology to what is an emergency response”. The true meaning of the PM’s phrase “snapback”, Kelly argues, is to “pretend the virus hasn’t happened”. The policy prescription beforehand remains the policy prescription afterwards. In fact, the accelerator pedal has been pushed. So just when the pandemic has exposed the dangers of insecure work – the biggest cause of community transmission of the virus in Victoria – Treasurer Josh Frydenberg declares that labour market reform will be “first cab off the rank”. Just as the country enters its first recession in 29 years – and its worst since the Great Depression – with a million Australians out of work and rising, the treasurer shelves a legislated superannuation rise for workers and plans to wind back income support. 

It is not altogether surprising that the Morrison government would do these things. The prime minister is on the blue team, after all. What seems increasingly strange is that powerful figures on the red team are helping him. 

“[That the Senate] censures the minister for aged care and senior Australians for: failing to recall the most basic and tragic facts about aged-care residents, describing his management of aged care as a ‘high water mark’, dismissing deaths as a ‘function’ of aged care, and failing to take responsibility for the devastating crisis in the aged-care sector.”

Labor’s Penny Wong moved a motion censuring Aged Care Minister Richard Colbeck, which passed with the support of the crossbench by 25 votes to 21.

“To have a conservative Tory government legislate 2050 emissions is the stuff of dreams in Australia … We can only hope to emulate it.”

NSW Premier Gladys Berejiklian, speaking at a forum with former UK prime minister Theresa May, whose government last year legislated targets of net-zero carbon emissions by 2050.

How branch-stacking helps conservatives
Serious allegations of branch-stacking and factional warfare have engulfed both major parties in recent months, and the latest example even implicates senior federal ministers. Today, Mike Seccombe on why branch-stacking has become more common, and how it’s influencing key policies.


The average number of new daily coronavirus cases that Victoria will have to achieve over a two-week period before the hard lockdown can be lifted, according to leaked documents that Premier Daniel Andrews later said were “out of date” and had “no status”.

“These laws are looking to get extra money from tech, where the right argument is that Facebook and Google – as well as Microsoft, IBM, Atlassian and others – should have all the revenues that are attributed to Australia, recognised in Australia and have tax paid on it in Australia. Tech companies have structured themselves to have a very low tax base in Australia, and that’s just wrong … It is glaringly wrong because of how big they have become. The revenues would be huge and could be partially directed towards funding journalism, but the government has avoided that conversation.”


Venture capitalist and former senior Microsoft executive Daniel Petre attacks the ACCC’s proposed code of conduct to make digital platforms pay for news content.

The list

“About 15 minutes before the BLM event is due to start, police order the protesters to move on, and [Paddy] Gibson and four others are taken away and fined for breaching public health orders. Another woman receives a criminal charge for swearing at police. It’s a severe anticlimax: a proto-protest, a fraction of the size anticipated, and shut down before it began. Clumps of police mill about the Domain’s cropped lawn in loose formation, like military enthusiasts re-enacting manoeuvres at Malplaquet, but there’s not much enthusiasm in them. Bemused tourists on their way to the Art Gallery of NSW pause for photos of the strange spectacle.”

“As we mourn the visionary actor’s untimely death and reflect on his career, it is also important to acknowledge his role as a mentor to a new generation of black creatives.”

“[Brian] Fuata’s performance treads a fine line between earnestness and self-conscious absurdity. He structures his improvisation in five short acts around a Lydia Davis short story of fewer than 70 words, ‘In a House Besieged’. In the story, a couple faces an unknown threat outside – it could be wind, hunters, rain, an army. They want to go home, but they are already home, besieged in their house. Fuata’s sounds evoke the unseen forces at our doors.”

Paddy Manning

Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.


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