Friday, May 16, 2008

Nelson's Budget howlers!

Spare us

It is difficult to work out whether Brendan Nelson was paying attention during his decade in government.

And just as difficult to work out whether he was paying attention during Tuesday's night's budget.

Here are some howlers from his speech last night replying to the Budget:

“We do not support higher taxes and higher spending.”

Excuse me, but that's exactly what the Coalition did support in each of its last ten budgets.

And some of the increases were massive. Tuesday night's budget slowed them down.

"Devastatingly for carers, there is no commitment in the budget papers to pay the Carers Bonus in future years."

The same as in each of the Coalition budgets that paid the Carers Bonus.

“How can any government boast of a budget that proposes to put 134,000 Australians out of work?”

Wayne Swan's budget doesn't propose to do that and doesn't even forecast it. In fact it forecasts an increase in employment in the year ahead. The increase won't be big enough to absorb all of the new job entrants, but that isn't the same as saying that existing Australian workers will lose their jobs.

“Health insurance premiums will increase with measures that will see a so far confirmed figure of half a million mainly young people, drop out.”

Why will that happen Dr Nelson?

And what exactly are the measures that you won't describe?

They are measures to reduce the health costs faced by some one million Australians.

Dr Nelson says he will oppose the measure. Good luck to him. He will be opposing a tax cut.

He will also be opposing the increased tax on 'alco-pops'. He says it's a “$3.1 billion tax on one alcohol product”, which makes it sound unfair.

But did he notice that all it does is tax premixed spirit drinks on the same basis as unmixed spirits, which doesn't sound at all unfair.

“As incomes rise over time and workers move into higher tax brackets, the value of today’s income tax cuts will be eroded in the future. Economists call this bracket creep. We call it tax increases on the sly.”

“There must be a commitment to future relief.”


The fact is that the budget does contain a commitment to future tax relief. It spells it out on page 10 of statement one and backs it up with an allocation of $6 billion for 2011-12 which is outlined on page 15 of the revenue estimates.

If the Coalition wanted to index tax rates in order to abolish bracket creep, it had twelve budgets in which to do it.

It didn't.

It says it will next time.


PAGE ONE:

The Opposition Leader Brendan Nelson last night committed the Coalition to using its Senate majority to block the budget increase in the duty on pre-mixed drinks and to block the tax break for Australians at present punished for not joining a private health fund.

The decisions, announced in the Budget in Reply speech, will see the Coalition oppose a measure widely popular amongst the medical profession and also oppose a tax cut potentially available to one million Australians.

In addition Dr Nelson put forward a proposal to cut the price of petrol by cutting the petrol excise by 5 cents a litre.

He said the cut would actually save motorists 5.5 cents a litre because they would also escape some GST.

It would cost $1.8 billion per year.

“Ninety per cent of Australian households have a car,” the Opposition leader declared.

“Right now they all need some help. Real Help.”

He stopped short of committing the Opposition to introducing the measure into the Senate, which it will control until the end of June.

But he did say that the Opposition would use its numbers in the Senate to attempt to block the alcopops measure, the private health insurance measure and the budget's changes to income test for the Commonwealth Seniors Health Card.

“For all his talk of slaying some dragon, the Treasurer has breathed new life into inflation with a budget that delivers something Australians have not known in Commonwealth budgets for some time – tax increases,” Dr Nelson said.

“The price of alcohol is up. The price of cars is up. The price of groceries will be pressured in part from higher taxes on trucks. Taxes on computer software are up and workers are about to have the Treasurer bite into their hard earned money with a tax on canteen meal cards.”

Describing the increase in tax on premixed drinks as a “$1 slug on responsible Australians who happen to enjoy a pre-mixed Bundy and Coke or Scotch and Dry” Dr Nelson said the measure would not improve health and questioned whether binge drinking was a growing problem.

“The Government’s own National Drug Strategy Household Survey confirms binge drinking by young women has actually declined since 2001 and alcohol abstinence in this age group has increased.”

“Any parent, let alone a health economist, will confirm that if you jack up one price in isolation from other measures, kids will simply move to another alcohol product or to a drug.”

“This is nothing more than a tax binge falsely presented to Australians as a health measure. We will oppose it.”

Earlier in the day Health Minister Nicola Roxon tabled Treasury modeling that showed the excise increase would cut consumption of pre-mixed drinks by 43 million bottles in 2008-09, which was equivalent to about 800,000 litres of alcohol.

“We want to know whether the Opposition Leader has got the guts to support our measure,’’ Ms Roxon said.

The Opposition's health spokesman Joe Hockey came into question time armed with two bottles of drink – a 200ml bottle of champagne and a 275ml alcopop that each cost $4.50.

The champagne contained twice as much alcohol as the alcopop and attracted only half the tax.

“It just shows this is a tax grabbing con,’’ Mr Hockey said.

The Prime Minister Kevin Rudd replied that the Opposition Leader had supported the measure when it was first announced.

ABC television last night aired film taken in 1996 of Dr Nelson arguing that pre-mixed drinks did encouraged excessive drinking among young people.

In the Budget in Reply speech Dr Nelson promised to convene a national forum of “alcohol specialists, educators, police, parents and people with expertise in this and related fields to develop a truly integrated approach to what is an undeniable problem”.

He said the budget, like the Government, had put “media spin ahead of substance, bureaucratic doublespeak ahead of people and more than 100 reviews, inquiries and committees ahead of decisions.”



6 comments:

Anonymous said...

how about the 5cent reduction in fuel prices, cost "only" 1.8 billion. Now thats responsible. The only thing sillier than that would be abolishing tax indexation on fuel.....

WT said...

Just as the Labor pollies must now learn to govern rather than oppose, so too do the Coalition pollies need to learn how to oppose sensibly.

Dr Nelson has shown his party to be inept at it so far, you don't oppose just for the sake of opposing.

Apocalypse Lao said...

The proposal to remove the 5c fuel excise is worst of the lot. Peter, do you think there's an article waiting to be written on how economically stupid this idea is? I pray Labor don't try to policy match here to win the popularity contest.

McCain and Clinton have proposed something almost identical and coped a universal lashing from American economists:
http://freakonomics.blogs.nytimes.com/2008/05/05/gas-tax-redux/

Anonymous said...

The reply put some perspective to most of the Budget criticism - overcooked. Hey, the Budget wasn't an economist's wet dream, but it was fairly good on the whole.

Meanwhile, ol' Brendan says 'Enough summits... except for my alco-pop one. Global warming will kill us all! ...so here's a tax reduction on petrol.'

Kymbos.

Anonymous said...

Got love his "Tarago Tax" line. There are 5 models of Tarago for sale, only the top model is above $57000. Its sales figures are reported as being around 250 a year.

Anonymous said...

Firstly, the planned Medicare changes are expected to result in a siginificant number of people to leave private health insurance and rely solely on the public system.
Whilst I don't have a problem with that ideologically, I think it is a bad policy decision at this time.

Public hospitals are already stretched to their limits. If they want to make this change, they should increase the capacity of the public hospitals first.

I hope the Coalition does oppose this policy.

On Alcopops and Petrol Tax Cut - Nelson must be taking the piss. I find his positions on those two policies ridiculous.

Al

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