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Monday, 7 July 2014

Axing the taxes equates to self harm - - The Australian Independent Media Network

Axing the taxes equates to self harm - - The Australian Independent Media Network

Axing the taxes equates to self harm

I am trying to understand why we are repealing the carbon and mining taxes.

“The carbon tax is a $7.6 billion dollar hit on the
economy. As you (the Minerals Council of Australia) noted in your
submission to the Emissions Reduction Fund Green Paper, the burden on
the minerals sector alone is estimated to be $2.6 billion by 30 June

There is no reason for the repeal to be delayed – the carbon tax is
hurting Australian families and businesses and from 1 July is estimated
to cost them $21 million per day.”

This is the spin from Greg Hunt
They just love to say this is costing “a big scary number”.  When he
says the carbon tax is a hit on the economy, he means it is a hit on
polluters.  They are the ones who pay the carbon tax.  The fact that
they passed on any imposte to the consumer is a failing in the
legislation if you ask me.

And excuse me if I don’t think $2.6 billion very relevant in
comparison to the superprofits that mining companies are making digging
up OUR resources.

Why we are protecting profitable mining companies at the expense of
families and small business is beyond me and seems contrary to the
Coalition rhetoric.

The tax free threshold was set to increase to $19,400.  For low
income earners, that would save $228 per year and it would mean those
who earn between $18,200 and $19,400 would no longer have to fill in a
tax return.  The repeal of the carbon tax will scrap this.

Low income earners will also lose the low income superannuation
contribution scheme, which pays $500 to low-income individuals to boost
inadequate retirement savings.

A family with three children, one at primary school and two in high
school, and where both adults earn just above the minimum wage of
$37,000, would lose $2050 from the abolition of the Schoolkids Bonus,
according to the Australian Institute.

It is questionable as to whether this was even attached to the
mining tax as it was actually introduced to replace a previous payment
that was being underutilised –  the Education Tax Refund.

The government will also delay (scrap?) the move of the
Superannuation Guarantee to 12%.  This will affect the retirement
savings of all employees which, with the proposed increase in the
retirement age to 70, and the lowering of indexation to pensions, seems a
counterproductive move.

They are also scrapping the Income Support Bonus, which includes
payments to the children of veterans and is a lump-sum supplementary
payment made twice a year to people on certain income support payments.

They are hurting small business by unwinding the instant asset
write-off. This policy allowed small businesses to write off
depreciating assets costing less than $6,500, and the first $5,000 was
offset against the mining tax.

They are also discontinuing the company loss carry-back, a benefit
for small businesses, and dismantling the accelerated depreciation for
motor vehicles.

And of course, we have to attack renewable energy.  Existing income
tax law provides an immediate tax deduction for expenditure incurred
when exploring or prospecting for minerals, petroleum or quarry
minerals.  In 2012 this was extended to geothermal exploration.  They
are cutting the deduction for geothermal but not for the hydrocarbons.

Add to all these cutbacks the cost of Direct Action should it pass
the Senate.  I was going to work out the individual cost but Hockey’s
budget says one thing in the text and another in the figures as pointed
out in Business Spectator.

“The budget text states that the government will provide
an “initial” $2.55 billion to establish the Emissions Reduction Fund,
which is consistent with what the Coalition had promised prior to the
election over the first four years of the scheme.

Yet the table which accompanies this text listing the hard dollars
provides a contradictory and highly confusing story. It outlines a total
funding allocation over the next four years of just under $1.15

So who can tell?  I think we all are coming to realise this will never happen at any meaningful level.

As for the mining tax, that is also very confusing with the Coalition
arguing so many different views depending on what we are talking about.

They say the mining tax has hurt investment while boasting “As
Minister for the Environment, I have approved more than $500 billion
worth of new projects in the mining and resources sector.”

They say the mining tax has cost jobs but everyone agrees that we are
moving from an investment phase to a less labour-intensive production
phase.  This shift is causing a loss of jobs but it would see an
increase in revenue.

So what do we do?  Accept the inevitable job losses and forego
between $3.4 billion (budget) and $4.4 billion (PEFO) projected revenue
over the forward estimates.  We also increase the 457 visa intake and
decrease the oversight of it so mining companies can have a fluid
malleable workforce.

I cannot understand why anyone other than high polluting miners and
their high falutin’ sidekicks would think that axing these two taxes is
in anyway good for the country.

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