Tony Abbott has spoken-out against Treasury Secretary, Martin Parkinson’s, claim last night that the Government had failed to sell the case for tax reform, noting instead the following:
“I’ve been saying on many occasions that tax reform starts with scrapping the carbon tax and scrapping the mining tax. It certainly doesn’t end there and that’s why we’ve got a white paper on tax that we will be publishing towards the end of next year.”
No, Prime Minister. Tax reform involves broadening the tax base and replacing inefficient taxes with more efficient ones. The scrapping of the carbon and mining taxes do neither and will push the tax burden further onto Australia’s diminishing pool of workers – hardly a sensible approach given the ageing of the population (not to mention adverse impacts on the environment).
On the mining tax, here is the chart of taxes plus royalties versus profits from the Henry Tax Review, which acknowledged that “current charging arrangements distort investment and production decisions….. they fail to collect a sufficient return for the community because they are unresponsive to changes in profits”:
And here is another chart from the Henry Tax Review showing that resource rent taxes (shown as “PRRT”) are amongst the least distorting taxes around, in contrast to taxes on labour and corporate profits:
As noted earlier this week by Houses & Holes:
…how did we ever contrive to not apply a giant and workable rent tax? When you consider the extent of the Budget shortfall and wrangle today, managed by the same Government that did everything it could to destroy a rent tax in opposition and then repealed what was left of it in power to ensure no take on any future boom, the betrayal of the Australian people is extraordinary (notwithstanding the same from the Gillard government).
Ditto the repeal of the carbon tax and replacement with the Coalition’s Direct Action policy , which is forecast to slash Budget revenue by up to $7.6 billion per year.
Idiots…
