Posted by I understand that the Labor party and the unions have a close relationship but who exactly is the “we” in this statement form Paul Howes:
“I thought we were actually attacking these guys at the moment,” Mr Howes said.
“Whose side are we on? This is a big win for Gina Rinehart, it’s a big win for Clive Palmer and it’s a big win for Twiggy Forrest.”
It would be much healthier for our democracy, and for the Labor party, if there were more distance between organised labour and the ALP. Trade unions have their place but they are a vested interest. As such, they should at arms-length from government decisions and strategy.
The government should represent all Australians not the 18-odd per cent in a union.
ricardian ambivalence 
I agree. Exactly my thoughts when first heard Howes. And entirely ignored by the media generally. Howes has effectively admitted that Labor and the ACTU have orchestrated a campaign attacking Australian miners.
I agree. Exactly my thoughts when I first heard Howes. And generally ignored by the Media – which must be blind to its implications. Howes has effectively admitted that Labor and the ACTU have conspired to orchestrate a campaign of attack against Australian Miners.
I see nothing wrong with what the unions and the govt are doing. Oz is facing a future of delcining tax revenues so why not target the one area of he economy that CAN afford it. What would you prefer, revenues to continue to decline and we all wake up after the mining boom is over to discover we live in an 1970’s Argentinan style country with an eroded tax base and nothing to show for the boom?
Good grief. Firstly, is it the place of a government or union to attack any legally operating business. Secondly, the resources sector has cushioned the nation from the full effects of the GFC, (think, in the main, resource based economies have travelled best post GFC. Thirdly, the union is attacking a sector that employs (under excellent conditions) its own fee-paying members! Back to point 1. What is going on. Howes’ “we”. Is this a government and a union that want a viable resources sector? Well, I think we can see from the fallout, some in government do.
You seem to be saying ” attack and tax ” the sector doing well (self-defeating???) and all else will fall into place. It won’t.
Paul Howes blustering aside, I’d hardly call what the govt has been doing ie mining tax etc as “attacking”. They’re just trying to keep a reasonble tax base. What’s your alternative to keep a reasonable base.
Unlike those on the “Howard-conservative ” side of politics this government has been trying to address the irresponsible increase in structural debt coming out of the good ol years. Combine this with the fact that tax revenues haven’t rebounded since the GFC and I see nothing wrong with a strong part of the economy payin a bit more.
Before you wheel out the whole disincentive line take a look at the amount of investment thats in the pipeline.
So rather than whinge and sook about “attacks” why don’t you and conservatives like you come up with ideas that might address some of the issues his country faces, because I haven’t heard any for some time. No, isn’t an idea!
The ‘structural deficit’ was caused by irresponsible spending during the GFC. Basically, you are arguing that the mining industry should be punished for mistakes made by the govt.
All the Govt needs to do is freeze spending in real terms for a few years. If it wants to generate more revenue from economic growth, how about cutting corporate tax and working with the states to abolish payroll tax.
Two taxes that are ultimately paid by workers
So basically your saying that all that middle class welfare started during the Howard years which is continuing now has contributed nought to the structural deficit. How did stimulatory spending contribute to structural debt? Yes it contributed to debt but it’s not structural.
By definition stimulatory spending is not ongoing and is therefore not structural. Middle calss welfare on the otherhand is ongoing and is therefore by definition structural. So I disagree with your assesment about GFC spending being structural.
I’d also like to know what mistakes are you referring too? The fact we didn’t slip into recession and we got off relatively lightly.
Freezing spending, yes well isn’t that whats happening. Company tax rates and those other ideas would be nice, but if you have a Fed Lib party who is only interested in blocking, plus Lib State premiers who aren’t really interested in being constructive well you have zero chance don’t you.
Lastly why is it viewed as punishment to pay more tax on large profits. The tax isn’t stopping companies investing is it. So I don’t understand the poor bugger me complex. If an industry can afford it without adversly impacting on investment whats the problem? After all once it comes out of the ground its gone forever.
If capital flows fairly freely, company taxes are ultimately paid by workers – as you get a lower equilirbium capital to labour ratio, and therefore lower real wages. I think this is a fairly uncontroversial statement.
By the way, this is my primary objection to the carbon tax. It will lower real wages by about 10% by 2050, relative to the baseline. There has never been an economic reform where modeling suggested gains of that magnitude!
While I agree the CarbonTax (currently) is not good policy, I don’t think that was the argument being put forward by Ed or 3d1k, Ricardo. Somehow it was suggested that Govt spending during the GFC contributed to structural debt…which I think you would agree (whether u agree with stimlus spending or not) does not and has not contributed to structural debt.
The other point I was trying to make was that if one sector can pay more without damaging investment then whats the problem.
Yes I agree that lower company tax would be great, but how does that happen? Tony Abbott wont let it happen…even the proposed token cut wasn’t supported. This is my prolem with the current debate it has become hyper partisan and good policy becomes a secondary concern especially for the Libs.
Even Joe Hockey has acknowledged that welfare in Western countries has become a problem. The problem is that noone on the conservativ side is putting forward any ideas or even properly acknowledging that we have to do something about middle class handouts and therefore reducing the size of the structural debt.
What happens when commodity prices fall and we can longer afford to let the middle class pay no tax. Argentina of the 70’s comes to mind. This welfare was put in place during the boom times to win votes, with no thought to the long term impact on revenues.
The tax on miners is not a long term solution but its a way to address revenue short falls now. Furthermore, as long as the conservatives are not willing to support the abolition of their own ill-considered policies they will continue to fuel the sense of entitlement that will ultimately cause more problems for future goverments than the impact on wages that you pointed out.
I think you make the right points. I suppose i was being a little over-eager to flog the carbon tax.
You are the second person today to point out to me the LATAM experience in the 1970s and the parallels with Australia just now…. Scary
It seems that Rudd was right and wrong – the crisis killed the light-regulation of banks, but it also killed the welfare state.
The politics of plenty are easy – the politics of privation are another matter.
Click to access After%20the%20Party_Final4.pdf
The above paper was featured at Macrobusiness and is worth a look. It may be that all that have spoken here are in essence addressing the same issue, from different perspectives. A number of journals in recent times have had articles on the future of welfare and the traditional ideals of social democracy. End game is either we all pay more tax to support entitlements in place (and ever-increasing demands for additional provisions); or we retain the status quo (or even reduce taxation) and accept commensurate reduction in societal entitlements. Something has to give, the current situation not sustainable and an undue burden on future generations/taxpayers.
A mining tax is not the solution.
as it is, the mining tax won’t raise any money anyways. that’s what you should expect when you ask the mining Co’s to design a tax that they pay.
If thats the case Ricardo then we are both wrong. I’m wrong because the tax as it stands doesn’t contribute to revenue and Ed and 3d1k is wrong because mining companies have nothing to whinge about because their not really anymore tax.
In either case I agree its not a long term solution. Like u I’m very worried about post boom Oz. Added to this is talk about setting up more long term structural debt, NDIS and dental schemes. Noble ideas as they are we have to work out how they will be paid for beyond any boom period.
i think the mining companies are now managing Sov risk. my understanding is that the NPV of the tax fell from ~80bn to ~18bn after the mining Cos ‘fixed’ it.