by Alan Thornhill
Labor has targeted tax breaks enjoyed by Australians on high incomes, in the Federal budget revisions that it announced today.
The Opposition Leader, Bill Shorten, the Shadow Treasurer, Chris Bowen and Shadow Finance Minister, Tony Burke, said these would include negative gearing and capital gains tax concessions on property purchases.
They said they were advancing a budgdet repair plan “which is fair.”
But many will not agree.
In a joint statement the three Labor leaders said: “Labor has been announcing budget repair measures over the last two years to improve the budget and support our investments in schools and Medicare.
“Today we are announcing a $10.1 billion improvement to previously-announced budget measures, as a result of 2016-17 Budget update.
“This includes boosts to our negative gearing and capital gains reforms, and VET-FEE HELP loan caps.
“Labor’s announced savings from these measures now total $122 billion over the medium term,” they added.
Then they said: “Labor is today announcing a further $6.1 billion in budget improvements through measures that better target the Private Health Insurance (PHI) rebate, reduce wasteful spending and better target family payments.
These measures have been designed to limit the impact on the household budgets of low and middle income families.
They saiid the savings would include:-
*$3.0 billion from better targeting the PHI rebate over the medium term, by continuing the Government’s 2016-17 threshold freeze and removing the rebate from natural therapies.
*Reforming Industry Growth Centres, saving $0.5 billion over the medium term.
*Re-directing DFAT spending to other budget priorities, including the abolition of the Innovation Xchange which focussed on purchasing bean bags. This saves $0.4 billion over the medium term.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, is trying to steer the election campaign back to where it started.
That is with his attempt to restore peace in the building and construction industry.
And in a speech to the American Australian Association & US Studies Centre last night, Mr Turnbull also argued that Australia’s increasing involvement with Asia is making this country’s reliance on America more important than ever.
He said the government had launched an unusually long –eight week – campaign for re-election “in order to break the deadlock between the House of
Representatives and the Senate over two critical pieces of legislation relating to industrial relations.
“and one of those is the restoration of the Australian Building and Construction Commission,” Mr Turnbull said.
That aim had – previously – been hardly mentioned during the campaign, which has now passed its half-way mark.
But, last night, Mr Turnbull declared that the course he had chosen is: “the only way we can get the rule of law restored to the construction sector.”
He said the sector employs one million people.
“ and the restoration of law to that sector is a vital economic reform, and part of our economic plan to secure our prosperity.”
“the only way we can get that passed is through this double dissolution and getting the numbers collectively in the House and the Senate to pass that law and restore rule of law through a joint sitting of the parliament,” Mr Turnbull said.
“ That’s our commitment,” he added.
Mr Tunbull also paid tribute to a previous Liberal Prime Minister, John Howard, who attended last night’s function.
He said: “John understood that the United States is the irreplaceable anchor to the global rules-based order – an order built upon shared political values and common economic and security interests.
“The truth of his insight has been affirmed by every subsequent Prime Minister of Australia.
“Earlier this year I visited and thanked our men and women serving alongside US forces in Afghanistan, in what is now the longest commitment in our military history.
“And also our forces in Iraq, where we are together with the United States and other allies jointly pushing back, rolling back the brutality and barbarity of Daesh or ISIL.
“And not a day, truthfully not a minute, goes by without our intelligence agencies working together – saving lives – in the fight against terrorism.
“Our ANZUS alliance and broader relationship is anchored in a history that is even deeper and richer than many of us realise,” Mr Turnbull concluded.
by Alan Thornhill
The Prime Minister, Malcolm Turnbull, told voters tonight that growth is necessary for Australia.
He said that is fundamental.
And – taking care to appear Prime Ministerial – Mr Turnbull said his government had a plan to achieve growth that would produce new jobs and prosperity.
The Opposition Leader, Bill Shorten, responded by saying that fairness is needed for growth.
And he said the government’s plan to give big foreign companies $50 billion worth of tax cuts over the next 10 years is not fair.
He said a well educated population, with access to good health care, is essential.
The two leaders were speaking in the second of their debates in the current election campaign, leading to national elections on July 2.
Tonight’s debate was the first to be televised publicly.
The first was carried only on pay television.
Although both leaders were criticised tonight for not giving enough detail about their policies, both would probably be reasonably happy with their performances.
Both managed to avoid embarrassing mistakes.
And both stuck to carefully considered strategies.
Mr Turnbull sought to re-assure those who share his philosophies and to convince doubters that voting for a reckless spending Labor government on July 2 would be just too risky.
And Mr Shorten, who realises that he is less well known than his rival, took care to present himself as a moderate responsible leader, who will advance thoroughly thought out policies, in this campaign which still has five weeks to run.
by Alan Thornhill
Falling prices have allowed the Reserve Bank to shave interest rates.
But how well with this fit, with the Federal government’s economic policies?
We don’t know yet, because at the time of writing the Treasurer, Scott Morrison, still had not delivered his budget speech, in which he is expected to spell out those aims, in detail.
But we can say, safely, that the patience of Australian investors will be tested, in the months and years ahead.
The Reserve Bank’s decision today, to lower its cash rate from 2 to 1.75 per cent, is of historic significance, in the management of the nation’s finances.
The bank’s Governor, Glenn Stevens, was frank about the bank’s assessment of the circumstances in which it was made.
He said:” This follows information showing inflationary pressures are lower than expected.
“The global economy is continuing to grow, though at a slightly lower pace than earlier expected, with forecasts having been revised down a little further recently.
” While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies.”
That’s not what investors are looking for, when they decide where to put their money.
Low risk and the prospect of reliable returns are more attractive, or even just acceptable prospects.
Will Mr Morrison’s budget help to produce happier circumstances of that kind?
Well, Australia is, once again, going through a time of quite basic adjustment.
The minerals boom is over.
Investors must look for fresh opportunities, in this time of adjustment.
They will be available.
But will tonight’s budget be compatible with them?
Perhaps that’s the real question.
by Alan Thornhill
The number of home building approvals rose by 0.6 per cent in March, on trend figures the Bureau of Statistics published today.
This was the fourth consecutive monthly rise on this measure.
The ACT was the stand-out performer, with an 18.9 per cent rise in approvals for the month.
But there was also a 1.1 per cent rise in WA, a 0.8 per cent rise in Queensland and a 0.2 per cent rise in Victoria, on trend figures.
However there were falls of 18.1 per cent in the Northern Territory, 1.5 per cent in Tasmania, 0.3 per cent in NSW and 0.1 per cent in South Australia.
by Alan Thornhill
Malcolm Turnbull might well find it hard to sell the budget strategy his government will introduce into parliament on Tuesday.
Not that there is anything particularly striking about it.
Indeed early indications that the Treasurer, Scott Morrison, gave in a television interview on Sunday, suggest that his first budget is likely to be a timid document.
The most attractive thing the Turnbull government is offering is an extra $1.2 billion for Australia’s schools, if they agree to meet new minimum standards of literacy and numeracy.
The Labor government, of Julia Gillard, tried that.
It didn’t work, then, and is difficult to believe that it will work in future.
That’s largely because our politicians, not our educators would, once again, be setting those standards.
Labor learnt from its mistake and has advanced some thoughtful ideas, under its Gonski proposals.
The Prime Minister has also ceded some ground to Labor, with his less that adroit handling of the election, itself.
He might well have allowed the current session of Federal parliament to run its full term.
That would have meant a full parliamentary election about September, or perhaps even a little later.
But he was not satisfied with that.
So he threatened to call an early election, if the Senate would not agree to his plan to revive the Australian Building and Construction Commission.
The Senate called his bluff.
That has left Mr Turnbull facing an unusually long election campaign, with little to say.
Yes, there will be some tax cuts, for people earning more than $80,000 a year, some tightening of the superannuation tax rules, for what Mr Morrison calls people on “very high” incomes, and tobacco taxes will be increased.
But negative gearing and the GST will both be left alone.
And, yes, our new submarines will be built in Australia.
But this still looks more like nervous politicians’ strategy, drawn up to win the next election, than the bold reforming approach, the country may actually need.
And John Howard’s former chief of staff, Peta Credlin, might well have a point.
She was quoted, in the Murdoch press, at the weekend, saying the Opposition Leader, Bill Shorten, is the man to watch now, as he has been busily working away at policies, while all this has been going on.
by Alan Thornhill
The Federal government has threatened to keep Parliament sitting until Easter if necessary to get controversial legislation, which would affect the way Senators are appointed passed.
The threat was made by a senior West Australian Liberal, Matthias Cormann, during debate on a bill containing this proposal.
Labor Senators responded angrily, saying they were prepared to sit until the middle of the year, to protect voters’ rights, to choose Senators from small parties or those who stand as independents.
So the Senate, unable to resolve its differences, sat past midnight, and was still sitting at 6am today.
All this has left the Prime Minister, Malcolm Turnbull, with very little time to call the double dissolution he is expected to hold on July 2.
by Alan Thornhill
Barnaby Joyce’s imminent rise, to the post of Australia’s Deputy Prime Minister, is producing some apprehension in the nation’s capital, Canberra.
Not least on the issue of decentralisation.
Mr Joyce’s promotion became inevitable last week, when his National Party colleagues chose him to succeed the party’s previous leader, Warren Truss, who is retiring.
The National Party, now the junior partner in Malcolm Turnbull’s coalition government, was once called the Country Party.
And Mr Joyce retains its strong rural and regional focus.
That is reflected in his attitudes to decentralisation.
So no-one in Canberra was particularly surprised when plans to decentralise government scientific and other work to the Great Southern region, near Albany in Western Australia’s Great Southern region, Northam in that State’s Wheatbelt, or even to Tasmania, seemed to take on new life, with the announcement of Mr Joyce’s new job.
He doesn’t actually become Deputy Prime Minister, of course, until he takes the oath of office.
That is scheduled for Thursday this week,at Government House in Canberra.
Those looking for differences between Mr Joyce and Mr Turnbull, won’t have too much trouble finding them.
Mr Turnbull is, after all, a free-trader, right to the soles of his highly polished shoes.
There is something of a protectionist about Mr Joyce.
He would not shrink from a direct intervention in a market, if he believed that to be valuable.
All this is illustrated, clearly enough, in his attitude towards decentralization.
But he is clever about it.
Earlier this month, while announcing the relocation of three research organisations from Canberra to regional Australia, he said:”I have accepted proposals from three Canberra-based research and development corporations to increase their regional presence, which will boost jobs and growth in Dubbo, Wagga Wagga, Toowoomba and other areas.
“As well as being home to vibrant farming communities, these regions also have some of the best agricultural universities and research facilities in the country.
“It is logical that strong links should exist between the RDCs, universities and farmers on the ground in each industry.
“Being geographically closer to the industries they serve will strengthen their relationships and help the RDCs better understand their individual industry’s needs.”
There are limits to this kind of thing, of course.
Valuable knowledge, built up over years, in a sophisticated city like Canberra, which offers a wide range of educational and medical services, can be lost if a key scientist, chooses to leave a particular project, rather than accept a particular transfer.
And that whole process can become economically expensive, if adopted for political, rather than industrial reasons.
There are some fine questions of balance, here.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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