Posted on July 22, 2016 by I am Spartacus
It is a few days old, but Janet Albrechtsen wrote a scathing review of the Government on its superannuation policy development process in the Australian.
She was very even handed. She ripped into both Abbott and Turnbull. In both cases, justifiably IMO.
I am not one who is impacted directly or am likely to be impacted by the proposed superannuation changes, but that does not mean I am not offended. Grossly offended. Never let it be said ….
- First they came for the people with large super balances, and I did not speak out— Because I did not have a large super balance.
- Then they came for the negative gearers, and I did not speak out—Because I was not a negative gearer.
- Then they came for the ultra high earners, and I did not speak out— Because I was not an ultra high earner.
- Then they came for me—and there was no one left to speak for me.
This policy seems a product of laziness by the ERC – looking for money, but not wanting to do the work to think about the consequences. It smacks of Rudd-Swan mining tax from top to bottom.
- a “bright” idea from the bowels of treasury to increase revenue.
- a play into the inherent biases of Treasury officials – tax early, tax often, tax everything.
- calculate the revenue on the back of a napkin and ignore behavioural effects.
- don’t consult with anyone, because any negative feedback must come from self interest.
- sell it to a desperate Minister desperate for money to spend on boondoggles.
A gift that keeps on giving.
This loonie policy also likely a byproduct of the disgraceful Tax Expenditures Statement produced annually by Treasury. The basic premise of this statement is that all taxes should be at the highest rate and anything that is charged less than the maximum is a loss to the budget. It does not adjust for behavioral impacts of higher taxes. The entire intellectual foundation of this statement is nonsense.
But it serves a purpose. It creates this false belief in the corners of government, bureaucracy and the intelligentsia that there is money there, ripe for the picking, available to fund any hair brain government scheme or action.
Football stadium? Sure. Netball courts? Why not. Paid parental leave? Bring it on. Make everyone in the LNP a member of cabinet with a department and a salary bump? Hey – why not.
There is never a spending problem when there is a revenues solution presented in this report. The money is clearly there. Treasury says so.
The problem is that the money is not there. Unless you believe that everything owned and produced in Australia belongs to the government and the it is only a matter if time before the government takes it back. You may laugh, but there are people out there, in pubs, clubs, parties and parliaments who believe this. They may not say the words, but the actions speak sufficiently.
The Tax Expenditure Statement for 2015 (released in Jan 2016) suggested that there is approximately $100 billion, hanging there on the money tree, waiting for the government to pick.
Interestingly, the huge benefit of RETROSPECTIVELY converting public servant and politician superannuation from defined benefit to defined contribution is not there. I wonder why. Would be a big benefit to the budget.
If you want a hint as to the benefit of retrospectively making this change, you may recall that the Future Fund was set up to meet the unfunded balance of these.
The balance of the Future Fund was approx $120 billion at end FY15. And that won’t be enough.