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.

The year of dumb tax ideas

Robert Carling

16 December 2016 | Ideas@TheCentre

RC taxes three stoogesThere have always been dumb tax ideas, but 2016 has been a standout year for them.
Governments and tax advocates seem more eager than ever to reach for the tax lever. Put it down to revenue hunger and an eagerness to meddle.
If we were handing out awards, a good place to start would be the huge extra tax on Pilbara iron ore production proposed by Western Australia’s National Party leader Grylls. A political stunt if ever there was one, if ever implemented it would inflict great economic harm.
We have also seen in Australia a proposal to tax the sugar content of soft drinks, which would penalise the great majority who consume such drinks in moderation and do very little to achieve its stated objective of reducing obesity.
The backpacker tax at least had a logical basis, but the ‘spin the wheel’ process of arriving at a figure was farcical. And Scott Morrison’s decision to fund his retreat from 32.5% by jacking up the quaintly named Passenger Movement Charge (aka the Sneaky Departure Tax) made no sense at all.
One of the dumbest tax ideas was imported. The government of British Columbia in Canada imposed an extra 15% transfer tax on residential properties in Vancouver sold to foreigners. In Australia, the state governments of New South Wales, Victoria and Queensland quickly followed, figuring there is no tax increase better than one whose targets can’t vote against you.
What is it about Vancouver? Now, the city’s government has followed up with an extra annual tax on residential properties deemed, under a mind-numbingly complex set of rules, to be ’empty’. This idea may yet be copied down under.
But the prize for the dumbest tax idea of 2016 must surely go to the American city of Portland, Oregon. (Bear in mind that in the US local government can tax business income, which is pretty silly in itself.) The Portland city government has imposed a tax surcharge on any business operating in Portland if their CEO is paid above a threshold multiple of their lowest paid workers.
Thomas Piketty — the inequality guru — has predictably given it his seal of approval, while noting that the threshold is set too high! The only other likely achievement of Portland’s empty gesture is the impoverishment of its citizens as business moves elsewhere.
Any of the above may be considered smart politics in the age of populism, but they’re dumb policies. Expect more in 2017.

Stop begging, Queensland

Rebecca Weisser

16 December 2016 | Ideas@TheCentre

RW begging 1Queensland Premier Annastacia Palaszczuk had her begging bowl out at COAG last week, panhandling for billions from federal taxpayers to kickstart the Queensland economy.
Palaszczuk’s pockets are empty because she ruled out asset sales at the last state election.
Queensland’s LNP government wanted to raise $37 billion through the lease of assets to pay down $25 billion of state debt and finance roads, hospitals, schools and public transport. Instead, Palaszczuk promised to hold onto assets and cross her fingers that 32,000 new jobs would somehow materialise.
Unfortunately, employment growth has been dismal except in the public service, where 6,600 full-time equivalent staff were added in the last six months –, a further burden to state debt already projected to peak at $77 billion. That gives Queensland the dubious honour of the highest debt to GSP ratio in Australia, even after Treasurer Curtis Pitt dumped billions of dollars of debt on government-owned corporations and raided the state’s superannuation funds.
Compare this with NSW, where the Baird government will raise more than $30 billion from the lease of its poles and wires. It is now debt free and investing the funds in its $20 billion Rebuilding NSW plan. WA’s Liberal Government has also seen the light and is selling Western Power to generate $11 billion. Even Victoria’s Labor government is leasing the Port of Melbourne to raise $9.7 billion.
Perhaps if Palaszczuk were not so busy discouraging investment by introducing legislation to ban 100 percent fly-in, fly-out mines, restore objection rights, create chain of environmental responsibility laws, and funding nearly a dozen green groups to oppose the Adani coal mine, the private sector could generate jobs without taxpayers being forced to put state spending on the national credit card.  Luckily, despite the best efforts of activists, the $21 billion Carmichael mine should go ahead — and Palaszczuk should stop begging.


Holiday reading...

16 December 2016 | Ideas@TheCentre

holiday readingWhen you need a reason to escape the annual family dramas, over-egged nog and that last slice of trifle: CIS to the rescue with some great holiday reading suggestions. Tell Auntie Beryl we said it’s mandatory…

Ed Hirsch: Why Knowledge Matters: Rescuing Our Children from Failed Educational Theories. Hirsch rails against the generic skills, post-truth mantra, arguing that the imparting of knowledge is the core work of schools. Knowledge defines the educated person, and is the key to social mobility.  Jennifer Buckingham

Bernice Barry: Georgiana Molloy — The Mind that Shines. Beautifully crafted, meticulously researched biography of one of Australia’s first female botanists is a wonderful account of the hardships of life in the colonies and the unstructured, independent nature of scientific inquiry of the time. History intertwined with fascinating snippets of the author’s own adventures researching Molloy over a decade. Meegan Cornforth

J.D. Vance: Hillbilly Elegy. Billed as ‘a memoir of a family and culture in crisis’, it should be called ‘Trump voters: crib notes’. A valuable guide to the fall of the white working class. Simon Cowan

Amos Oz: A Tale of Love and Darkness. Israel’s best-known novelist entwines the unhappy story of his immigrant family with the larger historical story of a people’s frantic search for refuge and Israel’s complicated birth. Anastasia Glushko

Karen Joy Fowler: We are All Completely Beside Ourselves. A story of an unusual family told through the eyes of the only remaining child. Starting in the middle of the tale, with a surprising twist, this book keeps the reader intrigued. Sara Hudson

J Dionne: Why the Right Went Wrong — Conservatism from Goldwater to the Tea Party and Beyond. Argues American conservatism has been a disappointment because conservative politicians made promises they could not keep. Dionne holds that the country needs a return to the conservatism of Eisenhower, charting a moderate course between prudence and dogmatic rigidity. Peter Kurti

Guilera Enders: Gut — The inside story of our body’s most underrated organ. An amazing journey through our digestive system that was surprisingly full of humour and read like an adventure story. Jenny Lindsay

Anthony Doerr: All the Light We Cannot See. A hauntingly beautiful story about a blind French girl and a German boy during WW2. Intricate and moving. It is a cliche but it is one that stays with you after you close the book. Jenny Lindsay

Ivan Rendall: Splash One. A fascinating dive into the history of jet fighter technology, set against the background of world war and cold war defence policy. Karla Pincott

Michael A Vanns: Signalling in the Age of Steam. Belies the trainspotter title with an engrossing account of rail signalling as the new transport spread across Britain, changing society in its wake. Karla Pincott

Niki Savva: The road to ruin — How Tony Abbott and Peta Credlin destroyed their own government. A sensationalist history of the Abbott government, supposedly revealing problems caused when unelected staffers have too much power. Most is reported on record, but look elsewhere for completeness. Michael Potter

 Stan Grant: Talking to My Country and The Australian Dream: Blood, History and Becoming. Talking to My Country is listed elsewhere as required reading for the Prime Minister. But the book teaches the wrong lessons about the alleged causes of Indigenous disadvantage: it’s not ‘history’ (colonialism and dispossession) that keeps the minority of Aborigines down, but bad (‘separatist’) policy — a truth that even Grant now accepts in his later Quarterly Essay.  Jeremy Sammut

David Pryce-Jones: Fault Lines. Explores in his family circle fracture a Who’s Who of Europe in the late 19th and 20th centuries — from Arafat to Zuckerman, Wodehouse to Woolf, Garbo to Gaddhafi.  As the Old World stumbles towards yet another terrifying precipice, this magnificent literary memoir provides an elegiac reflection on the last time the lamps went out. Rebecca Weisser

William Coleman: Only In Australia. In the age of globalisation, Coleman and eminent scholars examine whether Australian exceptionalism amounts to dangerous complacency in a nation which habitually outsources political decision-making to self-important bureaucrats. Rebecca Weisser

 Dr Tanveer Ahmed: Fragile Nation. Dubbed Australia’s Theodore Dalrymple, Ahmed writes about his patients living amidst the Mujahedeen and McMansions of western Sydney. But Ahmed has a positive message; when they reject victim-hood, they rediscover resilience. Rebecca Weisser