The Politics    Friday, May 21, 2021

Let’s talk about tax, baby

By Rachel Withers

Image of Prime Minister Scott Morrison and Treasurer Josh Frydenberg during a visit to Tasmania. Image © Ethan James / AAP Image

Prime Minister Scott Morrison and Treasurer Josh Frydenberg during a visit to Tasmania. Image © Ethan James / AAP Image

The federal government plays opposition to the Victorian budget

The federal government is doing a more comprehensive job of attacking the Victorian state budget than the federal Opposition did of attacking theirs, berating the state for increasing taxes rather than just racking up debt, like they did. It comes after the Victorian treasurer, Tim Pallas, yesterday revealed a mental health and wellbeing levy to fund the state’s $3.8 billion investment in mental health (65 per cent more than the federal government committed to the same cause last week), along with previously announced increases to land taxes and stamp duty. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have spent much of their day commenting on Victoria’s budget rather than their own, joining The Australian and the AFR in a pile-on (“Victoria’s horror budget” screams the AFR front page, giving the state little credit for the kind of responsibly funded spending it has been calling for from the federal government). The state budget is a gift to the federal Coalition, which would much rather talk about Labor’s evil taxing ways than the giant red hole in its own forecasts, and it is keen to use the opportunity to paint Labor as big taxers at both state and federal level. “Labor are just putting up taxes again because that is what Labor does,” Morrison told reporters. “Labor is whacking Victorian families and businesses with higher taxes,” said Frydenberg. But who is actually getting taxed here?

Morrison, Frydenberg and the business community are particularly incensed by Victoria’s new payroll tax, which is being used to fund its huge – and hugely warranted, according to the royal commission – new spend on mental health. Frydenberg has labelled the tax a “job killer”, while Morrison said, “this is the worst time that you could increase taxes on the Australian economy”. But the 0.5 per cent surcharge, as the Coalition would no doubt rather that no one noticed, will apply only to businesses that pay more than $10 million in wages, or the top 5 per cent of companies, with a 1 per cent surcharge on those paying above $100 million in wages. Acting premier James Merlino has been defending the “very targeted” levy, noting that many of the 9000 companies that would be affected are multinational corporations, while Treasurer Pallas said the state had approached the Commonwealth to incorporate the costs into the Medicare levy, but it had “very little inclination”. “We were left, once again, to our own devices,” he added. (The federal government is itself spending an extra $2.3 billion on mental health, but chose to go deeper into debt rather than raise revenue for that spending.)

Some of the poor employers to be hit by the levy, the AFR notes, include “Wesfarmers, Coles, Telstra, BHP and the banks” – not exactly the businesses “looking to get up on their feet” that Morrison invoked today. And as Guardian Australia’s Josh Taylor notes, the types of businesspeople speaking out against the payroll levy might just be doing the Victorian government a favour, with Chris Lucas of Chin Chin (known for underpaying its staff) and Gerry Harvey of Harvey Norman (known for pocketing millions in JobKeeper) not exactly the best business spokespeople.

But that’s not the only budget repair tax in Victoria that the formerly surplus-obsessed, now debt-happy Coalition has taken issue with. Frydenberg and his friends at the AFR are also furious over an increase in land tax and stamp duty – or “taxes on home buyers” as the treasurer puts it. These taxes are aimed at high-end property buyers, well-off landlords and exclusive men-only clubs, with the stamp duty increase only applying to properties worth more than $2 million. But you wouldn’t know it from Frydenberg’s claims that “Labor is whacking Victorian families” with higher taxes. There are concerns, in this case, that the increase may start to hit more and more Victorians, with half of the houses in Melbourne’s middle-ring suburbs likely to rise above $2 million within a decade. Pallas has defended this tax too, noting that a $2.2 million property will face a $2000 increase in stamp duty, but will likely rise in value by 100 times that amount over the next 12 months. Not exactly a taxing ask.

All this, and yet the budget bottom line is still worse off, the AFR complains, with $5.6 billion in new taxes but $11.5 billion in new measures. Imagine how much worse it would be without the taxes. The Victorian government has been mercilessly attacked for its “big spending, big taxing budget” by the very same media who either praised the federal government for its “big spending” one, or called for more responsible spending. 

Today’s tax talk is likely only a precursor to the campaign the Coalition hopes to run against Labor in the lead-up to federal election, with Morrison and Frydenberg keen to focus on what taxes Labor might inflict (or what scheduled tax cuts it might undo), rather than on the fact that they haven’t actually got a plan for budget surplus in the next decade. The Coalition will do its best to paint any tax as a tax on struggling families and desperate businesses, even if it’s directed at big business and wealthy home buyers, as Victoria’s new taxes are. The trick for Anthony Albanese’s Labor Party will be to figure out how to push back against the idea that all taxes are created equal.

“It is clear that politicians are not paying attention.”

Save the Children deputy chief executive Mat Tinkler calls on the government to listen to the thousands of Australian students striking today over climate change.

“Think of woke as an umbrella masterbrand like Unilever that has sub-brands under it. The largest four brand pillars of woke are gay, trans, gender, and race.”

Advertising creative director Sean Masters compares the multifaceted fight for justice and equality to a British multinational.

Morrison doubles down on Fortress Australia
Travel restrictions have played a crucial role in keeping Australia relatively safe from the worst of the pandemic, but the federal government has been reluctant to announce their end date. Today, Paul Bongiorno on why Prime Minister Scott Morrison is so intent on keeping our borders closed.

The chance of blood clot issues following the AstraZeneca vaccine, with new data from the Therapeutic Goods Administration showing there have been just 24 cases from more than 2.1 million doses.

“Environmental protection is set for a shake-up as the federal government launches a new threatened species strategy in a fresh approach to boosting populations and stopping threatened species disappearing from the planet in the wake of the Black Summer bushfires.”

Environment Minister Sussan Ley launches the government’s latest threatened species strategy, with a new focus on climate change adaptation and resilience (though not on actually addressing climate change, of course).

The list

“We can see what years of being paid to replace thought with provocation looks like – it’s defending Trump’s incitement to sack the Capitol and transforming climate change into a communist fantasy – but perhaps the moral and intellectual effects are unknowable to its worst practitioners … What damage occurs to the mind or nervous system when you compel yourself, repeatedly, to transform ambivalence or ignorance or hunch into clicks, followers and An Undeniable Personal Brand?”

“With trepidation, I’ve asked Nyah Shahab how she felt in the wake of the 2019 election. ‘Very, very angry. I was sad at first, but then I realised I can’t really make viable change with sadness. So I manifested that into anger.’ She is midway through Year 12, a year that I dimly recall being as stressful as hell, since I’d been told by teachers, parents and peers that how well I did would shape the rest of my life. But those among Shahab’s generation understand that the rest of their lives will be shaped by something profoundly more threatening. And so, in her final year of high school, she has been a core organiser for the School Strike 4 Climate movement.”

“The confessed serial killer David Berkowitz is and is not the Son of Sam. That’s the name by which Berkowitz has been known for the past four decades, by those who remember the indiscriminate killing of young people in New York City that started in the summer of 1976. The literal son of Sam was Berkowitz’s neighbour – a man named John Carr who lived with his father, Samuel. Nearly 45 years after Berkowitz pleaded guilty to six counts of murder, a new Netflix true crime docuseries – The Sons of Sam: A Descent into Darkness – explores the evidence that he did not kill alone: that he acted not only in concert with John Carr, but as part of an international Satanic cult.”

Rachel Withers

Rachel Withers is the contributing editor of The Politics.


The Politics

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

An epic troll

Who is the government’s “anti-troll” law actually designed to protect?

Image of Prime Minister Scott Morrison during a visit to Adelaide today. Image © Matt Turner / AAP Images

Archer becomes the target

Morrison yet again undermines a female MP, while publicly showing “support”

Image of Prime Minister Scott Morrison after Liberal MP Bridget Archer crossed the floor during a vote for the integrity commission. Image © Mick Tsikas / AAP Images

A very broad church

Morrison’s decision to prioritise religious freedom over integrity sees yet another defection

Image of Liberal senator Gerard Rennick during Senate estimates last month. Image © Mick Tsikas / AAP Images

Moderate failings

With the right extracting another concession, why is it that Liberal “moderates” never play hardball?

From the front page

Image of Clint Eastwood in Cry Macho. Image © Claire Folger / Warner Bros.

Slow motions: Clint Eastwood’s ‘Cry Macho’

Despite patient filmmaking, the 91-year-old director’s elegiac feature is unable to escape the legend of the man

Image of The Sea of Hands, representing support for reconciliation and the rights of Indigenous Australians

The truth about truth-telling

Revisiting trauma is not the road to justice for Aboriginal people

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

An epic troll

Who is the government’s “anti-troll” law actually designed to protect?

Image of coal for export, Newcastle, NSW

The fossil-fuel industry’s grip on Australian hearts and minds

Is there hope that public misconceptions of the importance of coal and gas can be overcome?