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.

Avoiding the carbon tax compensation nightmare

07 June 2013

PsaundersOne underreported outcome from Tony Abbott’s budget reply speech was the Coalition’s backflip on its promise to abolish the carbon tax compensation package.

Prior to the announcement, the Coalition’s policy had been to abolish the carbon tax and the compensation that came with it. After all, ‘once the carbon tax has gone, there’s no need for compensation’.

The compensation package has two major components: The first is an increase in the tax free threshold from $6,000 to $18,000, and the second is the introduction of the Clean Energy Supplement which provides a financial increase to pensioners of up to $336 per year.

Until the backflip, the Coalition was effectively going into an election campaign with a policy commitment to increase effective marginal tax rates on low income earners (by scrapping the income tax threshold increase) and making 3.5 million pensioners worse off (by scrapping the carbon tax compensation payments).

The Coalition – facing a carbon tax compensation nightmare – has now taken action to neutralise the issue by stating unequivocally that they will scrap the carbon tax but keep the compensation package.

This decision has both good and bad elements to it. Maintaining the higher tax free threshold is a good thing which will help reduce poverty and increase the financial returns for people on low incomes who work additional hours. However, compensating pensioners for something that will no longer exist is poor policy and a waste of taxpayer money.

It is worth keeping in mind that in addition to the carbon tax compensation, Australia’s pensioners received a $30 a week increase this year in the base rate of the pension, something the government called ‘the biggest increase to the pension in more than a century’.

With Australia’s ageing population and our unsustainable spending on the welfare state, future governments will need to reform our system of retirement savings to ensure that more people spend more of their own money on their retirement, rather than rely on the pension.

Andrew Baker is a Research Fellow at The Centre for Independent Studies.

Gender quotas un-egalitarian

07 June 2013

PsaundersFollowing Martin Ferguson’s decision to retire from politics at the next election, prominent Labor women have argued that a female candidate must get the nod to run in the safe seat of Batman in Melbourne’s northern suburbs and that failure to do so will be a betrayal of the principles of the Labor Party.

Labor’s affirmative action rules require female candidates to be preselected in 40% of winnable electorates. The feminist rationale for this and similar kinds of gender-based policies is that patriarchal institutions and attitudes are so entrenched throughout society that some form of social engineering is essential to tilt the playing field in women’s favour.

These rules have been operating for almost 20 years. Currently, 26 members of the federal Labor caucus are members of Emily’s List – the networking organisation dedicated to helping women get elected to parliament and achieve Labor’s affirmative action targets.

Due to serial maladministration and ineptitude, the federal Labor government is overwhelmingly discredited with both commentators and the public. If the polls are right, Labor faces an almost unprecedented electoral catastrophe in September.

For the last three years, the government has been led by an Emily’s Lister, Prime Minister Julia Gillard. Some have attributed the government’s problems to the PM having a ‘tin ear’, politically speaking.

Though likely to attract the routine charge of misogyny, it is legitimate to question the role affirmative action may have played in the government’s fate. If a person does not have the political skills to get preselected and elected on their merits, will they have the political skills to contribute to a successful government?

There is now a push (backed by the Australian Human Rights Commission) to introduce gender quotas into corporate Australia and require company boards to reserve seats exclusively for women.

This is unnecessary given today’s commercial and workplace realities. Good managers these days are rewarded for their talent management – for finding the right employees, helping develop their skills, and maximising their contribution to an organisation.

Developing this kind of organisational culture is the key to business success – and to ensuring women progress through the corporate ranks. Any board of directors that allows gender to trump merit with regards to the appointment of talented women is not acting in the best interests of its shareholders – as any corporate trainer will tell you.

This is the message that should be promoted to aid the advancement of women.

Women and men should have equal opportunity to rise to whatever tier on the corporate ladder their skills and abilities allow because this is in business’ best interests.

Quotas, however, are fundamentally un-egalitarian. And business has an easy riposte to demands they be imposed – how’s that worked out for the Labor Party?

Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies.

Dumping on free trade

13 June 2013 | ON LINE Opinion