By Andrew Bolt ~
Australian Treasurer Scott Morrison was right and Prime Minister Malcolm Turnbull wrong, giving the Australian Labor Party another massive free kick. This sloppiness bodes very ill for the Liberals’ election campaign:
Malcolm Turnbull had barely revealed his grand plan for tax reform yesterday before he was at odds with Scott Morrison over how it would work.
The Prime Minister and Treasurer … made contradictory claims over … whether the states would increase taxes on workers after gaining a share of income tax revenue.
Turnbull admitted the tax increase might happen over time but made it clear it would be up to each state.
“If we need more money … then the state would go to their parliament, raise the money, go to the people and persuade them of the merits of it,” Turnbull said on this central question.
For good measure, Turnbull said it again: “But in future, of course, on the longer term, a state should be free to lower that amount or indeed raise it and then they are accountable to their own voters.”
Morrison then denied the Prime Minister had said any such thing. “The Prime Minister, I don’t think, has gone that far ultimately,” he told Sky News Business when asked if states could raise their taxes.
The Treasurer does not want to be seen as supporting any tax increases. Fair enough. Yet there is no escaping the logic of the Prime Minister’s proposal.
As I said, this plan is eight times stupid. Terry McCrann on 2GB last night told me of a ninth folly I’d overlooked: the Liberals should talking of only one planned tax rise – Labor’s new carbon tax.
It looked even worse on TV: 7.30:
MALCOLM TURNBULL: If we need more money, then they go, the state would go to their parliament, raise the money, go to the people and persuade them of the merits of it.
MATT WORDSWORTH: Not according to the Treasurer.
SCOTT MORRISON, TREASURER: The Prime Minister made it pretty clear today also that we have no appetite for states to be able to increase taxes.
SKY NEWS JOURNALIST: The Prime Minister did say today that in the future states would be free to increase their income tax rates, which would in fact increase the overall tax burden.
SCOTT MORRISON: Well, the Prime Minister has – I don’t think has gone that far, ultimately.
MATT WORDSWORTH [REPORTER]: It’s another example of a communication breakdown between the PM and his Treasurer after the Budget was brought forward by a week.
Notice how Turnbull, stung by the accusation that he’s simply campaigning on Abbott’s (good) policies, is proposing policies of his own that stink?
Here we go again. The latest “big idea” from the federal government will now dominate national political conversation for a few days. The concept of states raising their own income taxes may seem useful as a temporary distraction…
But the proposal will progress little beyond that. Nor does it deserve to – certainly not in the haphazard way in which it has been presented by the Prime Minister and the Treasurer.
It is not just the Tax Institute calling this “a retrograde and flawed concept” that would add to red tape and be likely to increase the tax burden on already stressed taxpayers. The business community, in what is developing into a regular pattern, has been completely side-swiped by Turnbull’s unexpected decision to … [add] yet another layer of complexity and costs for them…
Turnbull’s … promise of a more coherent and persuasive economic narrative has hardly gone according to plan – assuming there actually was such a plan.
We will politely pass over the fiasco of the GST rise that wasn’t – very suddenly and very obviously to the Treasurer’s surprise. Similarly, the rhetorical zigzags that continue over the virtue of company tax cuts and personal income tax cuts and bracket creep. The early indications are this big idea will follow a similar trajectory of burning brightly and them imploding.
Whatever financial discipline there was is vanishing.
Bit by bit, the fiscal responsibility for which Budget 2014 should be remembered for is being dismantled by the party that gave birth to it. To head off an election scare campaign, Malcolm Turnbull and Scott Morrison appear willing to reinstate some of Labor’s unfunded largesse for state hospitals…
Only months into the job, new Treasurer Morrison allowed the budget surplus target to slip into the 2020s.
Turnbull today is having another terrible press conference. He can’t say if he will fight for his plan at an election. He struggles to answer how poorer states such as South Australia will handle a scheme like this. He makes vague and frankly implausible claims that giving the states a fixed share of tax will somehow make them more financially responsible than giving them grants. He again fails to rule out tax rises. He ums, ahs, stumbles and fumbles. He even admits this bright new tax scheme would be an “experiment” that might not work. Nowhere does he explain exactly and convincingly how taxpayers would gain.
Those 54 Liberal MPs who voted for him must now wonder what the hell they did. How did they convince themselves he had communication skills?
Did Turnbull just rush out this unformed thought before checking with the people who’d need to OK it?:
A proposal to allow the states to share income tax with the federal government has been received cautiously, but the idea of the states being able to levy different rates of tax has far less support.
NSW Premier Mike Baird, who first proposed the states share income-tax revenue, cautiously welcomed the proposal, although he did not want to increase the income-tax burden on Australians…
South Australian Premier Jay Weatherill … said a proposal to levy a slice of income tax was a “back to the future” policy…
Victorian Premier Daniel Andrews ridiculed the announcement as a “thought bubble”…
Queensland Premier Annastacia Palaszczuk attacked Prime Minister Malcolm Turnbull’s income-tax plan as detail-free…
West Australian Premier Colin Barnett welcomed Mr Turnbull’s plan to allow states to raise tax…
Tasmania Premier Will Hodgman expressed concern that Tasmania would be at a disadvantage to the big states.”…
Northern Territory Chief Minister Adam Giles expressed scepticism about the income-tax plan, questioning its value if the same amount of tax would be paid…
ACT Chief Minister Andrew Barr responded cautiously.
Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book Still Not Sorry remains very widely read.