Today was an odd one of the election. There were a couple new policies released, but it wasn’t much of a big deal.
It was such a bit of a nothing day that ABC’s 7:30 Report didn’t even get round to recapping the day’s events till after its expose on the Cronulla Sharks.
It was a day that reinforced that there’s not a lot of money going around. The old days of needing a policy in the billions to get the wow factor are gone. And so today we had Tony Abbott on the Great Ocean Road looking at potholes.
He was there to hand out $25 million over 5 years to help repair the road on the ocean that is so great.
Cripes. Back in 2004 or 2007 such a thing would have been lucky to make it onto a media release.
But when the budget is in an “emergency” you can’t very well go spending hand over fist.
Of course however the Liberal Party is handing out a a fair bit of money for one policy – it’s PPL. And for the third day is was the most talked about policy. And not in a :gee this thing is a great vote winner way.
Robert Gottliebsen picked up on the fact that for the Libs policy to be fully paid for by hitting not businesses, but shareholders. And not indirectly – but directly:
But then comes Tony and Joe’s sleight of hand attack on retirees. Many big corporate taxpayers, like banks, pay around three quarters of their profits out in dividends and there is constant pressure from retirees for companies to payout more, especially now interest rates on bank deposits have been reduced. Most dividends (but not all) are fully franked because they come out of tax paid profits.
So a superannuation fund obtains a franking credit equal to the tax paid by the company. Those franking credits are currently calculated at a tax rate of 30 cents in the dollar. When the Abbott-Hockey plan is introduced the franking credits will be calculated on the basis of 28.5 cent in the dollar. They are worth less and so the retirees and those saving to pay for retirement cop the bill because Abbott and Hockey have simply swapped a tax for a levy aiming to lower the franking credit.
In other words, while big businesses will end up paying an effective 30% tax rate, what is happening is they first get the cut to 28.5% then they get the levy to go back to 30%. But the franking credit will be calculated on the 28.5% rate not the 30%. And thus it is worth less.
Sweet eh?
The Liberal Party, who so loudly and boldly defend self-funded retirees, is now getting them to help pay for a paid parental leave scheme which they won’t get any possible benefit from and which is also a dud of a scheme because it won’t deliver the productivity benefits Abbott and Hockey claim it will.
Wow that’s great policy and outstanding politics!
Lenore Taylor in Guardian Australia went back to the Parliamentary Budget Office’s costings of the Greens’ PPL scheme. The Greens’ scheme cuts out at $100,000 rather than $150,00 but otherwise is much the same.
As Taylor writes:
The costings show that the Coalition’s decision not to allow shareholders to claim franking credits, which reduce their income tax bill, on the 1.5% levy reduces the cost of the scheme to the government by $3.2bn over the first four years. The saving amounts to about $1.6bn per year once the scheme is fully up and running.
Now back in May when the PBO’s costing of the Libs scheme were apparently leaked to the AFR the Lib’s rejected both the leaked costings and those by the Australia Institute
Senator Cormann also rejected calculations by The Australia Institute that suggest a Coalition government would have to double its planned levy on business from 1.5 per cent to 3 per cent to adequately fund the scheme, because 46 per cent of the extra company tax raised under the scheme as proposed would be lost in franking credits returned to shareholders.
It seems the reason why it might not be losing the franking credit is because they’re not going to be returned to shareholders.
Perhaps the best response the ALP can have is that of Joe Hockey back when interest rates were cut in May:
We express concerns for those people that rely on income from savings accounts. Let’s think about all of those people for the moment who are facing lower income from their savings – particularly self-funded retirees.
Today Tony Abbott, was shall we say, a tad effusive on the figures of how it was all going to be paid. Yesterday Joe Hockey in an interview with Neil Mitchell put the amount that the levy would cover from 50% to 60% to 70%. Today a journalist in the press gallery tried to get something a bit more narrow out of Tony Abbott:
QUESTION: Joe Hockey did have a stab yesterday at putting a figure on a share of the PPL would be covered by the levy. It ranged between 50 per cent and 70 per cent, but he did have a go at it. Can you have a go at it and tell us what the figure is and how concerned should you be that your Treasury spokesman can’t put a figure on it within a 20 per cent point range?
TONY ABBOTT: Well I saw the debate, or aspects of the debate last night, between Joe Hockey and the Treasurer and I think anyone watching the debate on Q&A last night would say that the stewardship of our nation’s finances will be in much better shape under Joe Hockey than under the Treasurer. Now, the fact is it’s been fully costed by the Parliamentary Budget Office. It is fully funded. It’s fully funded by the company levy, the levy on large companies, the discontinuation of the existing scheme and by ending double dipping. Now it is fully funded, fully costed, it’s a very important economic advance.
This was a whole day after Hockey’s flub. You would think they could come up with a better answer than that!
Do they care that they’re being hounded about the costing? It seems not at this point.
My feeling however – and it is mostly based on the attitude of the QANA audience last night to both Hockey and Bowen – is that people are getting tired of the ”in good time” line.
This is Tony Abbott’s “signature policy”. This is the one he has had hanging around his neck the longest. It is his baby and he is either too embarrassed to explain how it is paid for, or he is too ignorant of the details. Take you pick. It ain’t good for him
In an election where big numbers are thin on the ground and the details of this policy are coming apart bit by bit, I expect to see this once again be a topic for questions tomorrow. Especially as state governments are involved so there’s plenty of places to get quotes of Premiers saying they’re not sure about it.
Importantly tomorrow night Rudd and Abbott are having their “people forum” debate in Brisbane. If Abbott hasn’t announced all the costings for it by then, expect Rudd to go in very hard. And given last night on QANDA the audience was frequently yelling out to both sides for “the numbers”, saying “It’s fully funded” won’t be enough, no matter how often he says it.
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Kevin Rudd’s day started at a school in the electorate of Graeme Perrett (he who once vowed to resign if Rudd came back). He was fired up, but as Katharine Murhpy noted, it did remind one a bit of John Hewson in 1993. Passion is great, but you don’t want to be seen shouting and leading a chorus too much; it starts to look desperate.
His big policy today was $250 million for medical research – $125m from the govt, $125m from the private sector.
He announced:
The Government will contribute $125 million to be matched at least dollar for dollar by private sector investors, generating a total investment of $250 million, a major injection of investment capital into our emerging biotechnology sector.
In addition, Labor will implement around $70 million of investments and reforms as part of its initial response to the 2013 McKeon Review of Health and Medical Research.
This includes delivering $47.5 million in funding for 19 Centres for Research Excellence to encourage research in fields identified as national priorities.
This also includes establishing four new Centres that will focus on Indigenous health, national clinical trials, international health and genomics.
It comes off the back of the Strategic Review of Health and Medical Research, and geez policy is so much better when it actually comes after some actual research into what should be done. And because the $125m is an equity based investment – ie not a grant – it is in effect “off budget” – because there are expected returns from the investment.
Sound policy based on a report, coupled with $70m in announcement of things already funded by the government. That’s who you do policy during an election campaign when you;re the government.
The Libs have also used the so-called McKeon Review to come up with e medical research policy. Their policy is about streamlining funding grant processes, rather than giving more money. So it will be interesting to see if Peter Dutton pops up his head to respond in any meaningful way.
Thus far all I’ve seen is a comment. I wonder if he’ll ever get to stand next to Abbott in a press conference and answer some questions?
We wait.. and wait.. and wait… (ok let’s be honest, no one would ever really wait to hear Peter Dutton speak)
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Today Tony Abbott also announced he would change the name of Disability Care back to the National Disability Insurance Scheme. Now I know some have suggest the current name is a bit demeaning, but I’ve never been too hung up about it.
But it is interesting that Kevin Rudd hasn’t campaigned on the NDIS at all. It has received a bit of a mention, but only in a list of things the ALP has done.
It is clearly Julia Gillard’s policy, but Rudd should be able to swallow the pride and run hard on it.
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Bill Shorten turned up at the National Press Club for a debate on education. Only problem is Chris Pyne was a no show. Not a shock. But it was a blessing for anyone who had tuned in to watch.
I know Shorten gets some grief, and he was full of passion today (perhaps too full of passion) but I think when he leaves the factional argy bargy alone and talks policy he speaks well.l I still recall the speech he gave at the ALP National Conference in support on the NDIS that was as good as you’ll see in Australian politics.
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A Liberal Party candidate in Greg Combet’s old seat was dumped after reports came out that he had run a web forum for of all things Mini Coopers, which had a lot of sexist, racist, jokes on it.
I realise because he ran it he has extra responsibility but I’m predicting this will not be the last time a candidate will be kicked off because of something he (it’ll most likely be a he) said on the internet. As Barrack Obama said to a of school kid who asked him what he could do to become President one day:
“I want everybody here to be careful about what you post on Facebook, because in the YouTube age whatever you do, it will be pulled up again later somewhere in your life. That’s number one.”
Yep.
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