Phony Tony’s money schemes pose a risk we can’t afford

Posted on August 2, 2010


Craig Emerson The Australian

AUSTRALIA has never had in the post-war era a more economically incompetent candidate for the prime ministership than Tony Abbott.

You are entitled to consider this a partisan comment, coming as it does from a Labor minister. But consider, too, the objective evidence laid out on the policy front during the election campaign.

Last Wednesday, Abbott announced, simultaneously, an increase and a reduction in the company tax rate. Now that takes some beating. In a Donald Rumsfeld analytic framework of knowing what you know, knowing what you don’t know and not knowing what you don’t know, Abbott takes the cake. He neither knows what he doesn’t know, nor cares.

Abbott, as prime minister, would both increase the company tax rate for medium and large companies to 31.7 per cent to fund his paid parental leave scheme and reduce it at the same time to 28.5 per cent. Do these companies get to choose their tax rate? My guess is that most will go for the lower rate, but in Abbott’s intellectual framework I’m probably wrong. After all, it was Abbott who said that big companies such as Coles and Woolies, the big four banks and the oil majors would consider his company tax hike as “something that ought to be bearable in the national interest”.

Why on earth would these big companies resist the demands of their shareholders that they pass on the tax hike in higher prices to consumers and small businesses?

Now Abbott is claiming that the net increase in his company tax of 0.2 per cent will “deliver lower prices for consumers”. Go figure.

This is the same Abbott who said less than a month ago that “no one much is going to notice a 2 per cent cut in company tax”. Not knowing what he doesn’t know, Abbott believes no one will notice a 2 per cent cut in the company tax rate but everyone will notice a 1 per cent cut while ignoring his 1.7 per cent increase.

As the Demtel Man said: “But wait, there’s more.”

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