Ideas@TheCentre – The Centre for Independent Studies


Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Tax cuts: hamburger, milkshake or three course meal?

Robert Carling

15 June 2018 | Ideas@TheCentre

Anyone following the entrails of the post-budget income tax cut debate would be aware that the government has steadfastly refused to release estimates of annual revenue impacts beyond the forward estimates period (that is, when the largest cuts are due to take effect), preferring to state that the sum of the annual impacts over 10 years is $144 billion.

This sounds like a massive amount and, as such, serves both the government’s claim to generosity and its opponents’ charge of fiscal recklessness.

Thanks to costings by the Parliamentary Budget Office requested by one of the parties, we now have annual figures all the way to 2028-29, which put the tax cuts into a much more meaningful perspective and show they are neither generous nor reckless.

The PBO’s estimate is that the cuts in the first year of full implementation (2024-25) would be roughly $18 billion. Based on a conservative projection of GDP, that would be about 0.7% of GDP.

In historical perspective, this makes the cuts of medium size. They are more than ‘hamburger and milkshake’ cuts, but much smaller than those associated with implementation of the GST in 2000, which were more than twice as large.

As Matthew O’Donnell and I outline in a paper released this week, Too Little; Too Late: Personal Income Tax Reform in Australia, if only the first round of cuts (that is, excluding the 2022 and 2024 instalments) is passed, the annual impact is only $4.5 billion. If that happens, forget about the hamburger — it becomes a milkshake tax cut.

Even if fully implemented as planned, the cuts will not stop revenue from growing — but merely clip its rate of growth for a few years. Nor will they fully hand back the proceeds of bracket creep — for that, they would need to be much larger. Nor will they stop the overall average tax rate from grinding higher into record territory — but merely slow its rate of increase.

Religion is far from finished

Peter Kurti

15 June 2018 | Ideas@TheCentre

Opposition to religion is often based on claims that it no longer matters in today’s society. It’s true that the percentage of Australians reporting ‘No religion’ went up from over 25% to more than 30% in the 2016 census. The verdict of the critics? Religion in Australia is finished.

But this is based on a decline in demand for religion. In A Shy Hope in the Mind: Secularisation and the Diversity of Australia’s Religious Economy, I query what would happen if we looked instead at overall levels of supply in what might be called the ‘religious market’? Different structures of religious markets can stimulate or stifle demand — and that affects levels of religious participation.

Think of religious believers as consumers. They make rational, informed choices about how to participate in religion and which religious ‘product’ they will opt for. Then it’s up to religious organisations — or ‘suppliers’ — to serve the market and meet consumer demand.

And the greater the competition between religious suppliers, the higher the levels of religious ‘consumption’, the healthier the market, the more ‘religious’ a society is likely to be. Suppliers ditch unpopular ‘products’ in favour of those that have greater appeal.

What does Australia’s religious market look like? At first glance, believers appear to be losing out to non-believers. Opponents of religion use this as a pretext for trying to restrict the market by means of public policy and regulation — such as anti-discrimination laws to restrict religious freedom.

But a closer look at the figures tells that over levels of religion in Australia are growing — 70 per cent of us claim a religious affiliation. The fastest growing religious group are Sikhs who have grown by 74 per cent since 2011. The 2016 census showed religion in Australia to be more complex and diverse than critics allow.

More supply-side analysis of religion in Australia is needed. But it is likely to show that far from diminishing in importance, religions has always been — and continues to be — a major part of our society. And because of its significance, defending religious freedom is more important than ever.

Indigenous child welfare double standards will perpetuate gap

Jeremy Sammut

15 June 2018 | Ideas@TheCentre

Bill Shorten has been rightly criticised for his comments suggesting ‘culture’ take priority over the welfare of Indigenous children — and for suggesting that only ‘whitefellas’ say otherwise.

But it’s really Indigenous politics that Shorten is talking about taking precedence over children’s best interests.

The Indigenous industry is pushing hard to stop child removals. If removals continue at present rates, the future of the rural and remote ‘homelands’ will be jeopardised and so will  the taxpayer funding received by the plethora of Indigenous organisations that provide services to these communities.

The industry says that the way to stop child removals and fix the underlying social problems and dysfunction is to ‘empower’ Indigenous-controlled organisations and communities to implement the solutions they claim to know work on the ground.

This approach was not successful during the era of ATISC (Aboriginal and Torres Strait Islander Commission) which was abolished after presiding over corruption, failure, and an ever-widening gap in social outcomes between the most disadvantaged Indigenous people and all other Australians.

We are now being told that it will be different this time because Indigenous-controlled services will be properly evaluated for their effectiveness and held accountable for the outcomes they do — or do not — achieve.

This is not before time because Indigenous child protection poses the most complex and intractable social problem in the nation.

To ensure children can remain safely at home and close (allegedly) to culture, the array of social problems (from welfare dependence to drug and alcohol abuse to family violence) that plague and are entrenched in Indigenous families and communities — and which are intergenerational in nature and decades in the making — have to resolved within a short, child-centred timeframe to ensure that children are properly cared for and parented.

What this means is that child protection – that is, welfare-based decisions about whether children need to be removed from their own safety and well-being — is the ultimate accountability, and the ultimate measure, of whether services are actually effective at promoting the welfare of the most vulnerable members of Indigenous community.

Creating the kind of double-standard and different treatment of Indigenous and non-Indigenous children proposed by the Opposition Leader, at the behest of the indigenous industry, would therefore clearly be a retrograde step in indigenous affairs.

This is not the way to ‘close the gap’. It is nothing short of a recipe for perpetuating and exacerbating ‘gaps’ by leaving Indigenous children in harm’s way.