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ABC News
10 hours ago
- Business
- ABC News
Tasmania's election campaign should be fought on the budget, business leader and economist say
When Labor declared it had tabled a motion of no-confidence in Premier Jeremy Rockliff, it listed three main reasons. They were the potential privatisation of public assets, the failure to deliver the new Spirit of Tasmania ferries on time, and the state of the Liberal government's budget. On that budget, here are a few quick figures: Now, with Tasmania in an election campaign, business leaders and economists are hoping to hear the major parties' plans for repairing the balance sheet. The Tasmanian Chamber of Commerce and Industry's Michael Bailey says as the election is largely about the budget, the campaign should be fought on it. "Tasmania has a spending problem at the moment. "We need to make sure that we can get our spending back under control." That partially refers to the fact the state has a history of spending more than it budgets for, particularly in health. Here's how the Liberals and Labor have been treating the issue of spending and budget repair: Elections are often a big-spending affair. The Liberals have previously been accused of pork barrelling (slang for bribing the electorate for their votes), but they say they are simply listening to community concerns. Labor also promised a whole heap of community grants last election. The main difference is the relevant department would eventually assess them to decide if they were worthy of spending money on. There are also a whole heap of other policies, such as the stamp duty exemption for first home buyers, that will cost taxpayers money. And those spending promises really add up. Economist Saul Eslake says Treasury data shows the 2018 and 2021 elections each added $1.4 billion of spending to the budget without any mention of how to pay for the promises. Last year's was even more expensive. "[The levy is] about the only election commitment that hasn't been met since the election. "Labor would've spent an additional $2 billion over five years if they had won. "So, to hope that that wouldn't be repeated in the election campaign would be a bit like Samuel Johnson's definition of second marriage — a triumph of hope over experience." At the moment, 40 per cent of Tasmania's money comes from the carve up of GST. Around a third is own-source revenue. Mr Eslake has put forward several options to raise more money, including collecting more payroll tax from businesses, raising car registration fees, adding a duty on the purchase of expensive new motor vehicles — "with appropriate concessions for pensioners and other low-income earners". He also suggested switching stamp duty to a land tax and increasing mining royalties. He says Tasmania collects about $40-50 million a year less than it would if its scheme was equivalent to those of other states. Money could also be found by asking the salmon industry to pay royalties for the use of Tasmanian waters. "That wouldn't solve Tasmania's problems, of course, but it would make a useful contribution to reducing the deficit over time." All of these ideas have been rejected by the major parties. Mr Rockliff also pointed out that legislative changes in 2023 meant the salmon industry now pays for its own regulation. "The salmon companies cost government. They return that to government, so it's cost neutral and that's been a significant reform under our government," he said. Another way to raise revenue, selling off state-owned companies and government business enterprises has been ruled out by both major parties already. As have any new taxes. Growing the economy is also a big part of how both major parties plan to get the state out of debt. As part of that, the Liberals have been waging a war on red tape, and if some of Labor's new policies are anything to go by, they're planning to do the same. When asked about increasing revenue, Labor leader Dean Winter talked about growing the economy by unlocking $25 billion in renewable energy developments. Premier Jeremy Rockliff on the other hand said investments in key services such as health, education and community safety would help increase revenue. The TCCI's Michael Bailey is less worried about the revenue side of things. "You don't give someone with a spending problem more money," he says. Mr Bailey wants the parties to find efficiencies in the public service, arguing that it's grown by 30 per cent since the COVID pandemic. "We know that we're borrowing to pay for those wages," he said. "They do wonderful work, but it's simply too big for what Tasmania can afford right now, so we would argue that that's the first thing that should be looked at." Both major parties have revealed their plans to find some savings, and they include the creation of new units. The Liberals' plan, which was announced in March, is called the Efficiency and Productivity Unit (EPU); Labor has the Review and Evaluation Unit (REU). Two names and slightly different descriptions for two things that will do very similar things — examine the effectiveness and value for money of government programs to try and identify savings. The Liberals are assuming they will be able to cut spending to the point where in three years' time overall government expenses will be less than they are this year. They hope to find savings through: Labor's plans to "save the budget more than half a billion dollars", while not outlined in an alternative budget, were part of leader Dean Winter's budget reply speech. They hope to do this by: This list is far from extensive, however, none of the policies have been costed by treasury. If the party that wins government does not right the ship, Mr Eslake estimates Tasmania is heading to a debt of $16 billion by 2035 with repayments to hit $750 million a year. "We've gone from in the middle of the past decade, being a net creditor, that is having more money in the bank than the government owes by way of debt, to now having debt and other liabilities," Mr Eslake said.
The Australian
a day ago
- Politics
- The Australian
Liberals must seize opportunity to keep focus on super tax
The Liberals would be smart to accept Janet Albrechtsen's suggestion and accept the reality of Labor's obnoxious new super tax, but push for an amendment that exempts unrealised gains on super fund assets ('Libs' chance to expose Labor on super tax', 18/6). There must be many rusted-on Labor voters who are wincing at the prospect of the implementation of an unprincipled tax on funds, designed not only to meet one's financial needs in retirement but to improve our budgetary position by easing the pressure on Age Pension spending. Labor's legislation lacks integrity and the Liberals should keep the public focus on the issue of tax on unrealised gains. Bob Miller, Leederville, WA Those who are conducting the review of the policy and strategy of the Liberal Party will need to have skills in excess of what is required for such a 'coronial inquiry' ('Autopsy into Libs' dead duck campaign', 18/6). May I suggest that an understanding of resurrection – the ability to make someone rise from the dead – is the required skill level for this task? Tony Kelly, West Melbourne, Vic No moral equivalence Why is Foreign Minister Penny Wong refusing to directly criticise Iran in its conflict with Israel? Israel has engaged in a targeted campaign against military targets, particularly Iran's nuclear facilities. Iran is indiscriminately targeting civilians, including men, women and children. They do not care who they kill or injure. Iran has openly promised the total destruction of Israel and the genocide of Israel's people, which is the sole reason Tehran wants nuclear capacity. Unlike Israelis, Iranians cannot vote in free and fair elections and basic human rights are a joke. And yet our government apparently believes in moral equivalence in this conflict. Jeremy C. Browne, Ripponlea, Vic Anthony Albanese, Penny Wong and the rest of the Labor cabinet, in calling for diplomacy and dialogue, completely ignore that Iran and its proxies – Hamas, Hezbollah and the Houthis – have forever been totally open in their goal of destroying Israel. Where do Labor politicians see the common ground that would lead to a lasting ceasefire? Ian Porter, Subiaco, WA Powerless future As attention is once more on AUKUS and nuclear activity, Anthony Albanese needs another wake-up call, and it is not only in defence. The US is building new nuclear facilities and reopening old in anticipation of a jump in electricity demand by 2030. In Australia, winter is only just upon us and already we have concerns about electricity supply. Climate Change and Energy Minister Chris Bowen's renewables master plan is falling further behind schedule. With lack of maintenance or new construction, coal-fired generation is falling. Gas supplies are declining as projects are blocked by environmental legislation and the nuclear option remains banned. Meanwhile, electricity demand from population growth, electric vehicles and data centres is predicted to increase over the next 10 years. With rising cost and unreliability of supply, union intransigence and over-regulation, we appear powerless to halt the decline in manufacturing investment. The future literally looks dark. Graham Pinn, Maroochydore, Qld The first thing our government needs to learn from the proposed productivity summit is what productivity is, why it is important, and what governments should do and not do to increase productivity. Our productivity-destroying policies are: 1. Increasing the price of energy. Energy is an input into everything. 2. Increasing the cost of labour through industrial relations policies. 3. Increasing immigration. Migrants tend to work in less productive jobs given the same skills as resident workers. And the economy has not been able to increase investment in infrastructure to accommodate the number of migrants. 4. Blowing out the size of the public sector, which sucks workers out of the (more productive) private sector. 5. Blowing out the size of the care economy, particularly the National Disability Insurance Scheme, which draws resources from more productive activities. The government needs to have a solid workshop with the Productivity Commission or the Reserve Bank. Ross Guest, emeritus professor of economics, Griffith University Losing out on Santos It does not take much business skill to see the Abu Dhabi-based group's takeover offer for Santos is cheap and will rob Australian investors, many through their super, of the true future value of Santos's developing assets. We now need to ask, is our obsession with renewables the greatest economic folly in the history of our nation? Ian Morison, Forrest, ACT
Daily Mail
a day ago
- Business
- Daily Mail
Hold onto your wallets, Australia - more taxes are on their way! The clue that radical economic change is coming: PETER VAN ONSELEN
Jim Chalmers took to the National Press Club stage in Canberra yesterday with all the polish of a practiced political performer. But beneath the smooth delivery came a message that should make voters twitch: Labor's just getting started. Framed as a vision for 'Second Term Economic Reform', Chalmers signalled (without spelling out any details yet of course) that the promises made before the election weren't the full story. The subtext? Hold onto your wallets everyone, more taxes are on the way! Yes, the Treasurer talked up productivity, resilience and an 'evolution' of the tax system, whatever that means. But reading between the lines it is a different story. Chalmers has now confirmed that if he gets his way Labor is about to start breaking election promises: putting taxes up and cutting spending wherever it can get the Greens to agree to it in the Senate. That would be under the guise of 'tax reform', which wasn't flagged during the election campaign even though the perilous state of the budget patently required changes. Budget repair isn't magic, it's arithmetic. Therefore pain is coming. Chalmers also said he wants to 'dial up the ambition' when it comes to economic reform. More ambition usually means more spending so far as this government is concerned. But maybe not this time. Not in the context of a budget crisis. And not now that two serious economists have joined the ranks of Labor's finance team, assistant treasurer Dan Mulino and cabinet secretary Andrew Charlton, perhaps we will get thoughtful economic reforms. The pair hold PhDs in economics from Yale and Oxford respectively. Whether old school big government types like Chalmers accept it or not, less spending simply has to on the agenda - beyond the spending that has already been promised before and during the election campaign. Given the terrible state of the federal budget. Chalmers knows that. In fact he knew it well before the election but it didn't suit his purpose to flag it back then. Now that Labor has won and won handsomely it appears set to tackle the underlying structural deficit, even if none of the details as to how doing so might unfold were produced at a time when voters had the chance to judge the plans. To fix the budget Chalmers needs more revenue or he has to find savings to help restore fiscal discipline. That means… you guessed it: tax hikes, spending cuts or both. Chalmers was even prepared to leave changes to the GST on the table when asked. He did point out he's not in favour of doing anything on that front, and Labor probably won't, but at least he's not already playing the rule in rule out game. What else might be looked at? Negative gearing cut backs? Capital gains changes? Taxing the family home or inheritance? Presumably all are also now on the table. What about shifting the GST to become a federal tax, or giving states the right to set their own GST parameters? New sin taxes on sugar perhaps? And we haven't even got to the sorts of cuts that might be coming too, including duplication in the federation. It is worth noting that the Treasurer was quick to rule out a backflip on his piecemeal plans to tax unrealised gains on super accounts. Anyone hoping for a responsible debate on that policy fail can think again. That suggests that all other options for reform might genuinely be on the table. The Treasurer had actually ruled out major tax reform during this term when he was on the ABC's election night panel, but now he's laying the groundwork for a possible post-election pivot. It is ambition without a mandate mind you, dressed up as acting responsibly. While we certainly do need far reaching tax and federation reforms, such changes need to be done holistically, otherwise piecemeal changes (such as to super) usually result in more taxes, not real tax reform. If this all sounds familiar that's because it is: another page from the well-worn political playbook of saying one thing before an election only to do things differently afterwards. It is a classic Canberra sleight of hand: declare bold intentions in the vaguest of terms, delaying the details until after the votes are counted. Then claim necessity demanded a new direction, just as Chalmers did today. Albanese did it with the stage three tax cuts three years ago, now Chalmers appears set to do it with almost everything else.
News.com.au
a day ago
- Business
- News.com.au
Opposition open to tax reform, warns against hiking pressure on Australians
The opposition says it is open to working with Labor on tax reforms but is warning against putting further pressure on Australians. Jim Chalmers used a major speech on Wednesday to flag the Albanese government was looking at reforms beyond its proposal to roll back concessions on ultra-high super accounts. The Treasurer said a rethink was needed to address revenue challenges posed by an ageing population and the transition to net zero. Mr Chalmers also said it would be on the agenda at the upcoming roundtable on productivity, which measures how efficiently labour can produce goods and services. Opposition finance spokesman James Paterson has welcomed 'the government's recognition that we have a productivity crisis' and said roundtable 'is a good first step'. 'But we need more than just a meeting,' Senator Paterson told Sky News on Thursday. 'We need a plan of action to come out of it.' In his speech, Mr Chalmers said reforms would open opportunities for tax breaks for some but warned there would be 'trade-offs' that could leave some paying more. 'I am concerned that the Treasurer is possibly preparing the ground here for higher taxes and in the middle of a productivity crisis, and particularly in the middle of a business investment crisis, which is at decade lows, the last thing the Australian economy needs right now is higher taxes,' Senator Paterson said. 'We are up for a conversation with the government, to work with them constructively to make our tax system more efficient, to collect revenue and revenues in ways that are less distortionary, but we are not going to give them a blank cheque to increase taxes on Australians at the worst possible time for our economy.'
The Age
2 days ago
- Politics
- The Age
Albanese is pulling away from the US – and Australians seem to love it
That's why the sooner the institutional perception of not just Trump, but the United States, adjusts itself, the better off Australia will be. The America that Australia regarded as its great friend and protector is not what it used to be, and it is not going to come back. Americans knew that Trump oversaw a deadly, failed insurrection to overturn the result of the 2020 election that he lost, but still elected him last November. He won 31 states to Kamala Harris' 19. This suggests Albanese needs to confront some big issues within the American relationship. How willing is he to spend some of his political capital to deal with them? It's four years since the AUKUS pact was announced jointly by Boris Johnson, Joe Biden and Scott Morrison – none of whose careers came to a happy end – as a way of getting the old Anglosphere gang back together to stave off the strategic rise of China. What amounts to Labor's original sin in opposition of endorsing AUKUS sight unseen is a mistake from which it will have to find a way to either extricate itself or initiate a renegotiation. AUKUS is crushingly expensive, with unreasonably long timelines, and is almost certainly undeliverable. And it did not countenance a reborn and rampant Trump. Loading There are signs that the government is at least trying to moderate its reliance on this ill-begotten agreement. It's slowly, slowly edging towards a strategic position that is less dependent on the US. When Albanese talks about 'an Australian way' of doing things and highlights his deeper engagement with Indonesia and Papua New Guinea, our two northern neighbours that stand between us and China, he's signalling a slow movement out of the American orbit, or at least some hedging of bets. At the same time, the government has worked hard to normalise its relationship with China. The Labor Party, before its embrace of AUKUS, had a long history of a more independent security stance, going back to the Fisher government establishing the Australian navy before World War I, and John Curtin bringing troops back from Europe to defend Australia after the fall of Singapore in World War II. Labor also controversially opposed our involvement in the wars in Vietnam and Iraq. Whether Albanese has the will and intestinal fortitude to continue to create a new path remains to be seen. But what is clear is that to some degree, he understands that his job for the next three years will be to try to ensure that neither China, our biggest trading partner and source of much of our prosperity, and the United States, our legacy security partner, do not individually paint a target on us to prove a point to each other. In other words, his main task will be to mostly play a dead bat and protect us from both of them. Albanese is right to leave open the possibility of being able to catch up with Trump next week on the sidelines of the NATO summit in the Netherlands. There are so many uncertainties about an Australian leader getting time with America's leader. That says much more about the latter than the former – and about Australia's future.
