Sunday, May 18, 2014

Abbott's debt tax may hinge on fight within the Greens

The survival of Tony Abbott's controversial "deficit tax" hangs on a fight building within the Greens. Its leader Christine Milne is facing a revolt over her opposition to raising taxes on high-income earners.

With Labor determined to oppose the Prime Minister's "broken promise", Senator Milne has angered colleagues by saying she, too, would oppose the policy.

Her position undermines a core belief of the Greens, which is to redistribute income from the wealthy to the poor. The federal Greens are set to debate the issue early this week.

If Labor and the Greens block the deficit tax, Mr Abbott would fail to get the legislation through either the current or the new Senate, which will be dominated by Clive Palmer's senators, who are likely to oppose any tax increases.

Mr Abbott's deficit tax appeared destined to fail earlier this week when Senator Milne said: "This is totally the wrong way to go and it's no wonder the Liberal cabinet is in chaos with Tony's tax."

But a Greens source said Senator Milne had angered colleagues by shunning Mr Abbott's unlikely embrace of progressive taxation. Another senior Greens source acknowledged that constituents had been complaining about the party leader's position.

"Senator Milne's been out since day one saying she doesn't support [the tax], despite the fact it is Greens party policy," a source said.

"Her response hasn't gone down well with a number of key people in the party and the membership.

"She's now trying to work out what to do as she is set to be rolled in party room on it."

Asked about the internal anger, Greens senator Lee Rhiannon replied: “While I support robust debate in the party room, I don’t support leaking internal policy debates to the media and having the debate in public.”

Leaked emails reveal Greens voters have been complaining to Senator Milne's office, suggesting she was betraying her constituents by opposing tax increases on wealthy people.

One frustrated voter asked Senator Milne: "How can the Greens leadership/parliamentarians oppose a 1 per cent levy on people earning $150k per annum?

"I am extremely doubtful that your grass roots members, like me, would oppose such a levy."

The constituent's claim is supported by polling data – a Fairfax Media-ReachTEL poll of 3241 people taken last week showed more than half of Greens voters supported Mr Abbott's debt tax.

Senator Milne's adviser told the constituent that while Greens MPs supported the "general proposition" of progressive taxation, they would not support Mr Abbott's debt tax because it did not "constitute tax reform".

Senator Milne was on personal leave when contacted, but on Saturday acting Greens leader Adam Bandt used noticeably softer rhetoric, suggesting the party may support Mr Abbott's debt tax after all.

“The Greens don't accept Joe Hockey's confected 'budget emergency' argument, which he is tying this mooted temporary deficit levy to," Mr Bandt said.

"Equally, we have long argued for a more progressive taxation system and more permanent tax reform in Australia.

"There have now been so many rumours about what the government intends to do that we will wait and see what emerges on budget night before deciding on a final position.”


UPDATE:  It appears that Shorty has now backtracked and the ALP will support the levy

Green fantasy would drive us all to red ruin

Piers Akerman

THE reaction to the federal Budget from both Labor and the Greens would indicate they want to ensure Australia becomes a nation of innumerate bludgers.

More taxes, not less; more handouts, not fewer.

There is no budget crisis, the left-wing parties shrill.

But the nation is clearly on a debt-and-disaster trajectory unless tough measures are taken now, and most Australians recognise the need to tighten the belt before the unsustainable cost of the Labor-Green profligacy totally destroys the future.

“Well, there isn’t a budget emergency,” Greens leader Christine Milne shrieked about the figures on Wednesday.

“There is not an emergency in terms of debt. There is a failure to raise revenue. And this whole budget discussion is completely insulating the revenue side.”

When pressed about the third of the population, some seven million, receiving Centrelink payments, Milne switched to the Greens’ default position: “What I think is we have to raise more money, look at what we’re spending, see what we can service in terms of debt.”

She wants to squeeze more money out of those already doing the heavy lifting to pay for Labor-Green supporters who don’t want to work and don’t want to move from their leafy retreats to areas where the jobs are.

Making it harder for young people to go from school to a life on the dole is a no-brainer.

It is not an attack on young people, as Opposition Leader Bill Shorten claims. It is an attack on the welfare mindset that encourages the slothful institutionalisation of benefits.

It is about preventing young people from sliding into indolence and encouraging them to learn skills, through apprenticeships, at TAFEs or universities, so they can become productive contributors to their nation.

Treasurer Joe Hockey has demanded Shorten explain how he would pay for all of his hopeless predecessors’ big-ticket promises — things like the Gonski program, the NDIS and the ongoing cost of the dysfunctional NBN.

Shorten has had nearly nine months now to develop a strategy to deal with the budget holes left by former prime ministers Kevin Rudd and Julia Gillard, but so far he has only called for greater spending rather than restraint.

He has been so obstructive that he has had to renege on his own party’s promise to scrap its ill-conceived and abysmally executed carbon tax when its abolition would save pensioners and low-income earners more than enough to meet the small increases in the cost of visits to doctors.

Hockey put the $7 co-payment charge in context when he compared it to a packet of cigarettes, which costs around $22.

“That gives you three visits to the doctor,” he said.

“You can spend just over $3 on a middy of beer, so that’s two middies of beer to go to the doctor.”

The grandstanding by Labor and the Greens has given the Abbott government the opportunity to highlight the reluctance of the state governments to take responsibility for raising the money they wish to spend.

That’s why the state premiers are squealing. It’s far easier for them to portray themselves as victims of a harsh, penny-pinching federal government than to step up and raise their own revenues for their programs.

As Abbott has pointed out, there is a tax reform white paper due and there is a white paper on federation in the next 18 months.

He says the states and territories are perfectly entitled to argue for change, if that’s what they want, but each level of government should be sovereign in its own sphere. States run public hospitals. States run public schools and, over time, should bear a larger share of funding them.

The national electorate finally woke to Labor’s scam last September, but many still fail to understand how seriously the Rudd and Gillard governments, with their Green and Independent hangers-on, damaged the fabric of the Australian economy.

It must be repaired in a timely fashion and Tuesday’s Budget goes some way to addressing the problems before the nation follows those across Europe which have suffered from the borrow-and-spend economics beloved of socialist states.

Abbott has raised the possibility of a double dissolution should his measures be blocked by hostile Senators although it seems unlikely that will be necessary, despite the bluster of Queensland windbag Clive Palmer and his PUP senators.

Former Labor treasurer Wayne Swan never delivered a surplus and he never told the truth about the state of the economy.

Hockey and Abbott are being upfront about the bad numbers and are honestly trying to wrestle the nation back on track.

They have both taken responsibility for the tough measures they believe are necessary — something Labor still refuses to do.

They are not running for office. They are not running in a popularity contest. They are trying to stop the country being run into the ground under the weight of the Labor-Green debt burden.


Uber drivers hit with fines for ridesharing
Australian State Government authorities have cracked down on Uber's ridesharing service, issuing "infringement notices" to drivers offering lifts to passengers in Melbourne.

The move comes after the company quietly launched ridesharing to selected Uber 'members' in recent weeks, before commencing a full-scale Australian launch of the service across Sydney, Melbourne and Brisbane.

Both the Victorian and New South Wales State Governments have come out against the ridesharing service, known as UberX, saying it does not comply with State transport legislation covering the provision of taxi and private hire car services.

Fairfax Media has since reported that the Victorian Taxi Services Commission has been issuing $1,700 fines to drivers found providing UberX rides to passengers in Melbourne. Melbourne's Herald Sun newspaper reported that roughly 50 drivers have been caught by the crackdown.

In a statement to CNET, the Victorian TSC said it had issued infringement notices to what it calls "illegal hire cars" found operating in the State.

"In response to intelligence, the TSC recently conducted an investigation to detect illegal hire cars operating in Victoria," a TSC spokesperson told CNET.

"As part of this operation, infringement notices have been issued for vehicles found to be providing a commercial passenger service without the appropriate licence and for drivers who are not accredited.

"The TSC is keen to work with the industry to facilitate new entrants into the market, however this must be done within the framework of the law to ensure the safety of passengers and drivers."

CNET contacted Uber Melbourne for comment on the matter, specifically on whether it planned to continue the UberX service in Melbourne and other Australian cities, what was being done with UberX drivers who were fined and whether the company felt it had any responsibilities to its UberX drivers.

Uber did not respond to these questions, but issued a statement saying "we applaud the Victorian government's efforts and appreciate their support for innovation and competition".

However, the statement added: "Riders and drivers are flocking to the Uber platform precisely because we are solving a problem that has stood for decades in Melbourne -- the inability to get a safe, affordable, reliable ride when and where needed."

Uber said it looked forward to "continuing the ongoing conversation" it had been having with the Victorian Government since last year.

Melbourne is not the only city where Uber has come up against opposition to its ridesharing services. Earlier this year, taxi drivers in Paris brought roads to a standstill to protest the rise of car services including Uber, while one passenger reported being in an Uber car that came under attack from one of the city's cab drivers who slashed tires and smashed windows.

In the US, Uber has faced a number of legal challenges while Seattle's City Council recently revised regulations governing ridesharing in that city, limiting the number of drivers who could offer the service on any given day.


More aid bang with fewer taxpayers' bucks?

Predictably, the aid community has savaged the Abbott government's decision to cap Australia's overseas development assistance (ODA) at $5 billion per annum for the next two financial years.

World Vision Australia chief executive Tim Costello called the move 'devastating,' while UNICEF Australia spokesperson Tim O'Connor claimed that it was tantamount to a 'broken promise to the world's poorest.'

These assessments are inaccurate and unfair.

Although Australia's aid spending is now stagnant, it remains substantial and can produce large development dividends at its current level.

Australia's ODA as a percentage of Gross National Income (GNI) is likely to fall slightly while aid spending is kept at $5 billion per annum, and is expected to stabilise once the aid budget is pegged to the consumer price index in 2016-17.

However, at roughly 0.34% of GNI, Australia's aid spending compares well to the 0.3% of GNI that the OECD's 28 leading bilateral aid donors collectively spend on ODA.

Moreover, Australia is the tenth largest aid donor in dollar terms among the world's wealthy industrialised nations, while the majority of the countries that give more than Australia have far larger tax bases and GDPs.

Criticisms of the government's decision to scale back ODA also overlook the crucial question of the effectiveness of aid spending.

Big aid budgets make countries look charitable, but they reveal little about the real contribution made to poverty alleviation and economic development.

The government was therefore wise to launch a consultation process earlier this year to develop performance benchmarks to improve the effectiveness of Australia's ODA.

Using ODA to assist aid-recipient countries implement necessary domestic policy reforms would be a particularly effective means of improving the return that developing nations and Australian taxpayers alike receive from overseas aid.

As the experiences of India, China and other emerging economies illustrate, and as AusAID acknowledged in 2012, aid is much less important for development than a country's domestic policies.

Consider, for example, how collective land ownership in Papua New Guinea, the Solomon Islands, and other Pacific nations stifles economic growth by sapping individual incentives to efficiently use land.

By subjecting ODA to performance benchmarks that prioritise necessary domestic policy reforms in aid-recipient nations, Australia may well be able to do much more for the world's poor for much less.


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