It is now more than a week since the Government issued its tax package. In that time several matters have emerged that are of as great concern as the implications of the package itself.
The first is the nature of the debate that has flowed since the launch. Much, indeed nearly all, of it has been couched in terms of what’s in it for me, or my pressure group. Or worse, someone or some group has got more than me even though I will be no worse off.
It seems the tax package has lowered the level of political debate to the mere mercenary. There was no room in this debate for John Kennedy’s exhortation to ask what you can do for your country, rather than what your country can do for you. One of the most significant reasons for that was not so much that the Australian people automatically saw the debate in monetary terms. Rather they saw it that way because that was the way it was pitched in the first place. Virtually all the literature that came from the Government explaining the package was dressed up with examples from all economic levels and family permutations “”proving” that each person or group would be better off under the new package.
The appeal to base money made more base by the fact that the Government has chosen to make tax the single most important element of its appeal to the electorate at the next election. It takes the mercenary evil that John Kennedy was objecting to one level lower. John Kennedy was urging the people not to be mercenary. Now it seems some have to exhort the Government not to ask the electorate to ask what the Government can do for them.
Even when Prime Minister John Howard talked of efficiency in the tax system, he mostly related it to a dividend for voters, rather than as a dividend which could be reinvested in schools and universities or medical research.
All of the advertising was pitched in a mercenary way, too.
And the advertising has been another disquieting element to this tax package. This tax program has not been legislated. It does not have the force of law. So it is not a “”government program”. Rather it is part of the policy of the Coalition parties which they will take to the next election. They should not be using tax-payers money to explain the policy. Government money can and should be used to explain new laws and new legislative programs, but if not new laws have been passed it is a misuse of taxpayers money and a misuse of public servants’ position to ask them to prosletyse the Coalition policy. The Auditor-General and the Public Service Commissioner should look at the matter and give an opinion.
The disquieting thing is that it is likely this conduct will be repeated by this Government or another Government now the ugly precedent has been set.
The third cause for concern is the evident lack of trust people have in government. It is not surprising. The starting point for the Government’s selling of the package has been that no one will be worse off, that everyone will be better off. It beggars belief. Is there a magic pudding in the Treasury? There may be an efficiency dividend in this significant change to the tax system, but surely in such a complex economy with such a complex tax system, it is impossible for that dividend to be neatly sprinkled across Australia’s 18 million people so that all are better off.
The lack of trust spreads to the commercial sector. People simply do not believe that every business will diligently pass on all of any tax benefits to consumers, no matter what fine threatened by the Australian Competition and Consumer Commission. When costs fall, the difference usually ends up in profit.
The reaction to the tax package reveals that we have come too far down the road of vote buying. Few voters believe the advertisements.
It is a sad result. Australia’s tax system is in desperate need of reform. A significant change away from taxing income towards taxing consumption will have economic benefits. Federal-state financial relations are also in need for reform. Moreover, this tax package goes a long way to achieving those ends.
The trouble is that this Government and its leader have used up too much of their credibility breaking non-core promises, twisting the meaning of never-ever and breaking codes of ministerial conduct, engaging in economic reform for ideology and their own mates irrespective of the unnecessary pain on some sections of the community, that when a real need for reform is needed they have nothing left to draw upon.
It is their own fault.