Monday, June 27, 2011

Costings offer. Swan to Hockey, Hockey's response:

Who's serious?

Dear Mr Hockey

I write to formalise the offer made by the Prime Minister yesterday, to make available the full resources of the Commonwealth Treasury to provide an accurate costing of the Coalition’s current fiscal position combining any already-announced positions and opposition to key savings before the Parliament with the impact of any so-called ‘direct action’ climate change policies to reach the bipartisan emissions reduction targets, and the income tax cuts Mr Abbott promised on Saturday.

Given the Opposition Leader’s speech on Saturday indicated the only thing stopping the Coalition from costing tax cuts was a lack of access to resources, we are happy to remove that obstacle. The Prime Minister and I believe this is the best way to ensure this important debate is conducted in a way that allows the Australian people to compare the relative impacts on the budget of our alternative approaches to tax reform and climate change action.

The Government has been clear about how our tax cuts Will be funded — with revenue raised by charging Australia’s biggest polluters for the pollution they currently emit free of charge, but at great cost to the environment. Australians are entitled to know what the cost of the Coalition’s tax policy will be, and where the money is coming from.

If the Coalition is serious about providing income tax cuts, and if you genuinely intend to fund a regulatory approach to combating climate change instead of harnessing the market, you will accept this assistance. If you fail to do so, Australians would be entitled to View Mr Abbott’s tax announcement as a stunt, or something that would inflict serious budget damage, or both.

I would expect Treasury assistance would take the form of an initial meeting with relevant officials followed by the provision of a detailed tax plan for Treasury to analyse and cost. Your can contact my Chief of Staff on 02 6277 7340 to make the necessary arrangements with Treasury. To assist the debate I will release this correspondence into the public domain.


“The Treasurer should spend more time learning how to run the economy and less time worrying about the Coalition’s plan to give tax relief to Australians. The Coalition has a track record of delivering lower taxes, while Labor specialises in higher taxes and higher government spending. Our tax cuts will be delivered without a carbon tax and will be funded through prudent cuts to government spending and productivity improvements.”

Joe Hockey, Shadow Treasurer

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Anonymous said...

Hockey makes Swan look like a genius.

It's hard to see at least two more years of this shallow pseudo-election campaign producing many more gains than it already has.

But I think everyone has missed the point. Abbott's enjoying a Government really lacking in basic political skills, especially communication. Ironically Abbott is the reason the coalition is not further ahead. He's not the best opposition leader and if the Government ever get's it act together he'll be in trouble.

I'd argue you could have most anyone (save Julie Bishop) and you'd arguably have better polling for the coalition.

Anonymous said...

Baillieu failed to take up a similar offer from John Brumby regarding bushfire royal commission costings.

Now Baillieu's in power his bushfire costs are up in the air and will potentially cost taxpayers billions in unexpected costs.

Beware anyone who doesnt take up this kind of offer....

justmeint said...

Can't Trust Julia... she has said 100% of money raised by her carbon Tax will be used to help Australia: We as a nation are one of highest taxed in the world – but wait – there is more to come! The Australian Government has committed us to paying a ten percent additional levy /tithe to the United Nations. This is a self serving un-elected unofficial quasi Governmental Body, who have written their own charter and draw their finances from the nations around the world who have ‘signed on’. Now Australia is about to collect another new tax, of which 10% has been formally promised to the United Nations Green Fund.

Victoria said...

Hockey also blustered that he wouldn't submit the Coalition's plans until there was a Parliamentary Budget Office, which received funding in the Budget from July 1 and should be up and running by December, all things being equal.
Tick, tick, tick, Mr Hockey.

Farmer said...

Is this the same Mr Swan who was investigated after Opposition finance proposals were leaked to the media when they were submitted to Treasury for costing?
Did that investigation find that the leak had been authorised by Swan or a senior memboer of his staff?
I can understand why Hockey might be a bit reluctant to have anything costed by Swan's Department.

Alister said...

Justmeint, both your supposed facts are untrue. Australia is not one of the highest taxed countries in the world. 10% of the money raised by pricing carbon has not been formally promised to the UN.

The real issue is that the Abbott/Hockey plan is magic pudding economics, and they've been called on it.

Peter Martin said...

Some points of correction Farmer.

That particular Opposition finance proposal was not leaked to the media. It was announced to the media, by the Opposition.

What was leaked were Treasury calculations about it.

Oh, and it had not been submitted to the Treasury for costing. The Treasury based its calculations on the Coalition announcement.

Apart from that you are right. It is the same Mr Swan. And he did leak the calculations.

Ackers said...

'We as a nation are one of highest taxed in the world'

Complete bullsh*t Justmeint.
If you want to be taken seriously here you'll need to try harder.

Not difficult to educate yourself.

Anonymous said...


Firstly, by world standards Australia is highly taxed.

Yes, in the OECD it is not the most highly taxed - but the difference is not that much in absolute terms for households.

Secondly, why should the level of taxation in other countries be a primary determinant in a debate of whether Australian households should be subject to more tax?

Can you 'educate' the rest of us?

Peter Martin said...

Australia is highly taxed?

Shit. You better tell the boffins who researched this for the Henry Review - they got it wrong.

The graph you linked to shows Australia the sixth-lowest taxed of the countries graphed.

Anonymous said...

Peter, I assume by your choice of words that you think the total taxes paid by an average Australian household that amount to almost 40% of gross income (Income Tax + GST + Fuel Excise + Property Taxes + Double Taxation + Superannuation tax etc) are low. It’s good to see you being open about this. However, I will have to disagree – just because other countries in the world like to impose a even higher burden of taxes on their citizens is not a justification to me.

Peter Martin said...

Mate, Commonwealth tax receipts are 23% of GDP.

Anonymous said...

I am not an expert on the split between state and commonwealth tax receipts, but I think the total figure (state + cw) is more closer to around 30%. Also the figure understates the impact on households because it only includes taxes and not duties, levies etc that are also passed on to households. More significantly, the percentage of govt tax receipts accruing directly from the household sector in Australia is significantly higher than other countries.

It is hard to argue that Australian workers are not highly taxed (for e.g. stamp duties on residential purchases - not counted as a tax)

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