Rebekha Sharkie is right. We simply cannot afford to give away $37 billion in tax cuts to big business when we have record levels of budget debt and deficit, when essential services in health and education are barely staying afloat.
Health in South Australia is one clear example where funding is sorely needed, highlighted by the Oakden Oversight Committee’s call for 200 additional beds for dementia patients across the state.
As Sharkie told ABC Radio National this week, there is no evidence that the Turnbull government’s company tax cuts will lead to jobs growth.
More than that, as she noted, the government is unable to give Senate crossbenchers a guarantee that prospective cuts to big business would not result in reductions in spending on essential services, especially in health and education.
“Class warfare” shouts the government, but it is actually about fairness when company profits are recovering while wage growth is stagnant, under-employment is rising and many families are dipping into their savings to pay for essentials, notably the power they use to keep them warm and cook their food.
Voters in South Australia, Queensland, Tasmania and Western Australia all made it clear that they believe the government should focus on providing the services all Australians expect rather than on company tax cuts which the evidence shows have had and will have little impact on employment, wages and growth.
Sharkie’s victory in Mayo is categorical vindication of the decision of those crossbenchers, myself included, who rejected any further extension of the tax cut program.
The Mayo result is also a reminder of the benefits to Australian democracy of having crossbenchers scrutinising legislation on the basis of the evidence and on the merits rather than as a result of side deals and horsetrading.
There is a possible solution and it comes from across the Tasman.
South Australians have a proud tradition at both the state and federal level, going back at least 40 years to Steele Hall in the 1970s, of ignoring the siren songs of the major parties to elect individuals of right, left and centre who have improved legislation for the benefit taxpayers by resisting the efforts of governments to steamroll parliament.
The results of the Super Saturday by-elections show that support for candidates beyond the major parties is here to stay. It is a development that deserves to be encouraged.
Tax cuts for bigger companies are unaffordable when the budget is struggling to return to surplus and the current is weighed down with record levels of net and gross debt.
It is irresponsible for any government to handcuff future parliaments to massive spending commitments two and three elections away.
The government is mulling over trying to convince the Senate, if it won’t agree to the full suite of tax cuts, to accelerate the cuts already in place for smaller enterprises.
The government will no doubt produce modelling designed to show the economic benefits, but we now have real data to assess the impact of the cut already in place from 30 to 28.5 per cent for companies with a turnover of less than two million dollars – a reduction benefitting 90 per cent of incorporated businesses.
The factual evidence comes from analysis of actual data by economic researchers AlphaBeta Advisers. They sampled the accounts, taxes and invoices of businesses with a turnover under the threshold.
What they found is that the cuts have done little to improve wages and produced a very small effect on jobs and investment.
All the evidence is that if wages, jobs and growth are the goal there would be much greater and more immediate impact with scrupulously tested spending on the nation’s physical and intellectual infrastructure, rather than on tax cuts where the significant benefits would flow to overseas investors.
The Mayo result, in particular, but the other by-elections as well, show that disaffection with the major parties is here to stay. That has immediate implications for the quality of parliamentary decision-making and the need to more restore the confidence of voters by better reflecting their voting intentions.
There is also urgent need if independents are to continue to hold the balance of power that the system stop rewarding crossbenchers whose demands in negotiations with the government bear little or no relationship to the legislation in question.
It is currently a case of “all care, no responsibility” – a consequence that further undermines public confidence in politics.
There is a possible solution and it comes from across the Tasman. South Australia and New Zealand have something of a shared history not just in the person of George Grey who was governor of both colonies in the 19th century, but in the similar origins of their European settlements.
New Zealand has now had more than two decades of successful temperate government, including two standout and long term Prime Ministers, Sir John Key and Helen Clark, most of the time with coalition administrations.
Significant initiatives on tax and climate change have been managed without the decade of rancour and opportunism we have seen on this side of the Tasman. New Zealand’s voting system, known as MMP, is a sophisticated mix of electorate and proportional representation.
Introduced here it would certainly mean more coalitions, but it would force crossbenchers to own the decisions of a government of which they were a part. It might even increase public confidence in Australian democracy because it would more accurately mirror their voting intention.
Anything that responsible government and renewed voter respect for the political system is to be encouraged.
Tim Storer is an independent Senator for South Australia
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