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Friday, March 23, 2012

Nothing super about this catastrophic mining tax

A post from The Telegraph blog of Piers Akerman - original at this link

The Telegraph
Nothing super about this catastrophic mining tax

Piers Akerman The Daily Telegraph March 23 2012 (12:00am)

AUSTRALIANS are being conned big time on the mining tax.

Government figures from Prime Minister Julia Gillard to Treasurer Wayne Swan, to Assistant Treasurer and Workplace Relations Minister Bill Shorten and down the line have been queuing to make claims about the benefits that will flow to all Australians from this big new tax on the healthiest sector of our economy.

Their propaganda relies on three principal strands - that Australians hate rich, enterprising individuals who get off their bums, create jobs and make a profit; that Australians have been denied a slice of the benefits of mining; and that the new tax on the mining boom will fund a three per cent increase in superannuation.

All three premises are false.

Most of us don't have huge chips on our shoulders, class envy belongs to cloth-cap troglodytes and Australians have not been denied access to mining profits.

All miners pay royalties to the states in which they operate. What we're now seeing is a bankrupt and economically-catastrophic over-borrowed federal government trying to muscle in on state government territory in a desperate endeavour to find new revenue streams to meet its promise of a Budget surplus.

As for the mining boom funding the superannuation increase, forget it. Employers pay superannuation, not the federal government.

The three per cent increase will have to come from the pockets of the nation's bosses and, if you hadn't noticed, they are doing it tough at the moment and it's about to get even worse when the iniquitous carbon dioxide tax whacks them from July.

This thoroughly incompetent Labor-Green-independent minority government has ignored one of the most significant milestones in contemporary Labor history in its attempt to sell its current shameful tax regime.

Not content with lying to the public before the last election about its intention to introduce a carbon dioxide tax, Gillard and her acolytes have wiped the successful government-union accord from the history books.

The compulsory superannuation arrangement which now applies was introduced in 1992 by the Keating government but had its origin in the accord negotiated between the Hawke government and the ACTU in 1983.The union movement at that time agreed to accept three per cent superannuation as a partial trade-off for its wage demands, along with productivity increases.

Superannuation is now at nine per cent and will rise to 12 per cent under the Gillard-Swan plan but there has been no deal done with the ACTU about the effect this increase will have on future wage demands or on productivity.

Gillard, the great negotiator, who gave away the nation's greatest natural advantage of cheap energy to pander to the Greens' lunatic economically-suicidal global warming ideology, has slugged the nation's employers with a new hit to their already distressed bottom lines without getting a single concession from the trade union movement.

Worse, incoming ACTU president Dave Oliver has vigorously rejected the suggestion that the union movement should suppress future wage claims to pay for the superannuation increase.

"We have never viewed this as a salary sacrifice scheme," Oliver said this week.

The federal government giveaway of other people's money has left its own ministers unable to coherently justify their constant claim that the mining tax is paying for the superannuation increase.

The business sector says employers will be forced to find about $20 billion to pay for this extravaganza.

The ACTU can afford to laugh, it doesn't have to negotiate anything because the government has already locked-in the superannuation increase.

Last November, 26 representatives of the nation's leading employer bodies meeting as the General Council of the Australian Chamber of Commerce and Industry, took the extraordinary step of signing a resolution of protest at the government's plan to increase superannuation under the cover of its mining tax legislation.

"In hiding this levy inside the mining tax Bills, the government denied employers due process and the Greens and Independents have been complicit in that breach," ACCI chief executive Peter Anderson said.

The government is trying to claim that its business tax cut will meet the cost but that is another untruth - as small businesses will readily agree.

Take just two examples, a building supply company and a motor mechanic shop (neither wished to be identified because of the fear of retribution from this vindictive government).

The supply company has a payroll of $570,000 with a taxable income of $40,000.

It will get a $400 tax cut but a potential $17,100 hit in additional superannuation liabilities.

In the second case, the mechanic has a $500,000 payroll and a taxable income of $75,000.

It will receive a $750 cut in company tax and an additional $15,000 in additional superannuation liabilities. Just to break even it would need to increase profits by 700 per cent.

The introduction of the super levy with no offsets was a terrible political decision.

That's why it was hidden in the mining tax Bill, and marketed with spin about sharing mining resources.

The government thinks business can win no matter how much lead is put in its saddle bags but this horse is clearly stressed and the extra weight will prove lethal to struggling enterprises across the country.