While it may seem appealing to wait until we know where the new jobs are going to be before we start moving away from the jobs the atmosphere can no longer support, developing such a 'plan' is a fool's errand. The fact is we did not wait until we knew where photo development lab workers would be reemployed before we embraced the digital camera. And we should not wait until we know where every worker will be working in 2020 before we start tackling climate change.
Tax cuts for the rich damage the Australian economy and disadvantage the average Australian.
Right up until the end of the resources boom and the onset of the global financial and economic crisis, the government was flush with money, a result of the virtually continual 'surprises' as economic growth, and especially government revenue, came in way over budget forecasts in each of the years from 2003-04 to 2007-08. By the time of the first Swan Budget in 2008, the cumulative impact of the tax surprises in the five budgets during these years was running at $83.4 billion per annum.
There are strong equity and efficiency arguments for taxing all income from capital at the same rate; the current concessions are wrong in principle and regressive in practice. The focus should be on why the wealthy enjoy the unique privilege of having a sizeable part of their real income taxed at half the normal rate. Closing this loophole would allow the revenue thus gained to be used for meaningful tax reform that shares the burden more appropriately.
Superannuation is the most concessionally-taxed investment in Australia with contributions, fund earnings and payouts all receiving concessional treatment. According to Treasury, the effective marginal tax rate on superannuation savings is highly negative. This paper discusses how superannuation could be reformed to make it more equitable.
The CPRS in its current form is deeply flawed. If the government wants to see the legislation passed, it is going to have to amend its proposal. In order to take advantage of every additional emissions reduction and allow every concerned citizen to make a direct contribution, the government needs to convert its 'cap and trade' scheme to a 'cap and slice' scheme, whereby the number of pollution permits are reduced each year directly in line with the amount of pollution saved by voluntary action.
It is often said that there is nothing more powerful than an idea whose time has come. But it seems that in the case of Minister Wong's version of emissions trading, the so called Carbon Pollution Reduction Scheme (CPRS), there is nothing more pitiful than an idea whose time never actually came. The targets are not based on science, 90 per cent of the permits needed by the biggest polluters are being given away and the price is capped rather than set by the market.
The CPRS is looking more and more like a hotted up second hand car. It sounded good in the advertisement, had all the fancy bits added on and looked really shiny and ready to go. Unfortunately the closer you look at it, the less reliable it gets. It might not be as fancy, but an old fashioned carbon levy would be a much more reliable way of getting from A to B, especially in these troubled economic times.
The unfortunate reality is that, having waited a decade for a government to express a willingness to do something about climate change, we are now faced with a choice between a policy that locks us into failure by dictating that emissions in Australia cannot fall by more than five per cent and abandoning the CPRS altogether. What could we do instead? The simplest thing to do in the short term is to introduce a carbon tax of around $25 per tonne. As luck would have it, the administrative infrastructure the government needs to run the CPRS is almost identical to that required for a carbon tax.
How annoyed does the community need to get before further restrictions can be placed on telemarketing, junk mail and street spruiking? And which is more important, the interests of direct marketing companies or the views of the wider public? These are the kinds of issues that The Australia Institute sought to raise through its research. So far, ADMA has declined to engage with them in any meaningful way.