Category: Tax

Moving beyond political soap opera

by David Hetherington

A debate over fair distribution of Australia’s mining income gives Labor a platform to reconnect with ordinary voters on national values

Australia’s Gillard government resembles a half-written political drama, but the most creative scriptwriter would struggle to pack in the twists and turns that have marked its first 18 months in office.

Undoubtedly, there have been policy successes – a carbon price, a national broadband network and a streamlined income tax system. Yet there have also been serious misjudgements on the part of the government and the prime minister herself, which have surprised many since she was so sure-footed as education minister.

These self-inflicted wounds include a botched deal to repatriate asylum seekers to Malaysia, an ugly internal ‘stoush’ over same-sex marriage, and the reversal of proposed reforms to address chronic gambling. Excuses can be mounted for each in isolation, but together they’ve betrayed a worrying pattern.

The most recent twists have centred on a high-profile dramatis persona with former prime minister Kevin Rudd. After months of speculation and a sudden late-night resignation as foreign minister, Rudd formally challenged Gillard for the Labor leadership on 27 February. Despite his dramatic intervention, Rudd was roundly beaten, a loss that puts his ambitions on ice for the foreseeable future. Ultimately this was a contest of personalities rather than policies, with Rudd arguing his popularity with voters gave him the better chance of winning the 2013 election. Evidently, his parliamentary colleagues did not agree.

Barely hours after this challenge, another powerful player, senator Mark Arbib, announced his sudden resignation from the government. This in turn opened the door for Gillard to draft in Bob Carr, a wise elder statesman of the party, as the new foreign minister.

This process was far from smooth, and had all the elements of a play-within-a-play. Gillard, fresh from her resounding leadership victory, jumped at the suggestion of Carr’s appointment, with media reports hailing it a done deal. Then, in a sudden about-turn, the government poured water on the idea: it appeared the prime minister had been outmanoeveured by ambitious members of her team.

Three days later, against all expectations, Gillard called a press conference to unveil Carr as her new foreign minister, and in doing so, asserted her control of the government in no uncertain terms. This belated show of strength was certainly a win for the PM, but the stop-start process dulled much of the afterglow of her leadership ballot victory.

This may have proved compulsive viewing for political watchers, but it has left the ordinary voter with an impression of Labor more absorbed in its internal machinations than in running the country.

In need of a new, positive twist, the government found an unlikely hero, treasurer Wayne Swan. A credible if unflashy finance minister, Swan used a major essay to consider the challenges Australia faces in the fair distribution of its mining income. In particular, he highlighted the role of a handful of mining billionaires in resisting attempts to price carbon emissions and to tax mining super-profits.

These magnates have paid for mass media campaigns against the government. In response, Swan placed the debate in the context of the shared national values of egalitarianism and fairness. His intervention was successful in part because it was so unexpected. It surprised a lot of people who’d forgotten that Australian politicians could talk meaningfully about values as part of the wider public debate.

Labor has found it difficult to articulate its raison d’etre in recent times, struggling to explain how its policy achievements connect into a vision for the country. If Swan is able to drive a mature debate about inequality, wealth distribution and the role of media campaigns in policymaking, he will remind voters that Labor is addressing issues of real importance to Australia’s future – a worthy next chapter in Labor’s story.

A contribution to State of the Left, a monthly insight report from Policy Network’s Social Democracy Observatory

David Hetherington is executive director at Per Capita, a progressive thinktank based in Sydney

Democracy in Danger – Has Anybody Learned Anything?

by Thorben Albrecht 

Yet again banks have to be rescued because financial markets have gone wild. And because still no effective rules and regulations have been introduced to make banks pay for the high risks they are taking. It feels like “Groundhog Day”: Everything starts all over again, nobody seems to remember anything. Has anybody learned anything?

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Why we need nationalised Banks

by George Irvin 

As things stand, the banks are the permanent government of the country, whichever party is in power.” (Lord Skidelsky, House of Lords, Hansard Citation, 31 March 2011, c1359)

Everybody agrees that the next financial crisis is about to hit us …. bringing another economic crisis in its wake. The general view is that if we were able to prevent meltdown in 2008 by throwing money at the banks, this time the money will be more difficult to find. Unlike the last time, the OECD economies are stagnating, unemployment is high and there’s already much public anger about cuts, joblessness and bankers’ bonuses. [1]

Perhaps we should remember that in 2009, neo-liberalism was pronounced dead and buried. It was thought that a new, more thoughtful era was being born. It most certainly didn’t happen. Instead, European countries became more narrowly nationalistic and xenophobic, while the US gave the world the Tea Party. So there is good reason to believe that, as in the 1930s, economic crisis may strengthen the right more than the left. That’s one reason that progressives need to sloganise less (eg, it’s all due to greedy bankers) and think more about underlying causes.

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Eurozone Governments and the Financial Markets: A Troubled Marriage

by Douglas J. Elliott

Financial markets and the governments of advanced economies around the world are inextricably tied together in an unbreakable marriage. The two sides need each other. Governments borrow huge sums of money and, for its part, the financial system requires a large base of safe, liquid assets to function efficiently. In some times and places, however, that marriage is very troubled. Right now, the Eurozone is a prime example. The financial markets do not seem to understand or trust the governments and those sentiments are returned by many policymakers, including key ones.

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Pricing Carbon

 

by Bob Carr

It passed and it will pass the Senate.

Whyalla won’t become a ghost town and the price of Corn Flakes will not spike.Australiawill have a carbon trading scheme and the media can interrogate Abbott about how he will repeal it, forgo the revenue and struggle with a budget black-hole, and what else he will do in government.

This is no time to revisit the might-have-beens such as where we would be if Prime Minister Rudd had implemented a cap and trade scheme in 2007 instead of shuttling it to the Garnaut review; or what would have happened if the Green Party had passed the Rudd legislation in late 2009.

The government now needs to talk to investors and facilitate investment in the renewables sector so that there are ribbon-cutting milestones along the path of reduced carbon dependence.

 


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