By Mungo MacCallum Wednesday 22 July 2015
Photo: We are stuck with a mixture of pig-headedness and apathy pretty much across the board. (AAP: Dean Lewins)
Treasurer Joe Hockey said there couldn't be any changes to the GST without unanimous support from the states. And with Victoria refusing to budge, it seems hope for reform is dead, writes Mungo MacCallum.
The so-called economic summit convened by the combined forces of News Corp and Fairfax is to take place next month, with much ballyhoo and very little prospect of actually getting anything done.
Sure, there will be lots of good ideas, many of them eminently suited to the much-needed process of genuine reform of a clearly moribund system. But the problem is that the politicians who would need to implement them will not be present.
And this is entirely intentional; they will be snubbed. The whole rationale of the summit is that the participants have despaired of Tony Abbott, Bill Shorten, Joe Hockey and Chris Bowen (just to mention the most prominent and noisy) ever coming to the point of even discussing proposals, let alone agreeing to them.
So the forum is to be thrown over to the people - well, some of them. In fact, a select group of the most powerful institutions and organisations are to get together for a talkfest, after which they will go back to their real concerns while the politicians chorus, singly or in unison, "Nope, nope, nope."
Abbott's last chance of providing leadership is his assembly of recalcitrant premiers this week: on the evidence to date, his aptly-named "retreat" is more likely to end up in an undignified rout. He is happy to listen, but he remains committed to consensus, which can only happen with a lot of time and effort, neither of which he has ever been prepared to give.
It is not as if some of the politicians do not have ideas of their own. Hockey's first budget, for instance, was a mass - or mess - of drastic measures which were scuttled by the Opposition, the crossbenches and, largely, the general public on the grounds not that they were ineffective, but that they were unfair.
Shorten and his colleagues have suggested changes to superannuation and negative gearing as ideas worth considering, but these were derided by Abbott as robbing piggy banks and fiddling. Even when Glenn Stevens, the governor of the Reserve Bank, attempted to reprise the possibility of revisiting negative gearing and capital gains tax, Abbott was unmoved: he was against taxes, the Labor Party was in favour of them, and that was all that needed to be said on that subject - or on just about any other subject for that matter.
So we are stuck with a mixture of pig-headedness and apathy pretty much across the board.
But no example is more depressing than the sheer gormlessness and gutlessness of the rejection of any thought of dealing with the GST. This is not an easy impost: because it is inherently regressive (all flat taxes necessarily hurt the poor more than the rich) the Left instinctively recoils from it. Nonetheless, Paul Keating was prepared to prosecute it vigorously for months before Bob Hawke and the unions eventually torpedoed it in 1985.
John Hewson revived it as part of his epic Fightback! manifesto, a document so elaborate that not even he could master all the details. Keating campaigned ferociously against his own former policy and when he won the 1993 election that was thought to have settled the issue, at least for the foreseeable future.
Indeed, when he became Liberal leader John Howard said of the GST "never ever"; but it turned out that he really meant "not yet". Howard had always been attracted the idea, and once again resurrected it after becoming Prime Minister.
But this time he tweaked it a bit: all the proceeds were to go to the states, whose premiers Keating had notoriously declared so desperate for revenue that the most dangerous place in the world was to stand between them and a bucket of money. Even so, many were reluctant to take the loot, but in the end they agreed, with a raft of conditions.
However the federal Labor Party was still opposed, which made it as vigorous and ruthless a battle of ideas as any since Gough Whitlam devised Medibank back in 1969. Howard ran on the slogan "Not a new tax - a new tax system"; he foreshadowed compensation measures to protect low-income earners and a series of state taxes which were to be abolished if the GST got up.
He also broke convention by unveiling a massive advertising campaign funded by the taxpayers. In the past the practice had always been that such advertising only occurred once legislation had been enacted and it could be justified on the basis of familiarising the voters with what was, inevitably, coming. In 1998, the legislation had not even been drafted, let alone debated and passed, and indeed there was considerable doubt that the Senate, then as now composed of a majority of non-Coalition members, would let it through.
In fact, when Howard squeaked through the election with a minority of the popular vote, the Senate seemed destined to block the GST forever. But the Democrats, under Meg Lees with considerable resistance from their members, secured a raft of exemptions and qualifications, which effectively destroyed the real purpose of the exercise, which was its universality and simplicity, and so the bastardised GST was born.
It had been a long and bruising struggle but in the end Howard's determination and persistence prevailed. Compare and contrast the pusillanimity of Abbott and Hockey; at the first sign of dissent, they ran out of the white flag and threw in the towel. It was all too hard, what was the point of spending all that effort - all that political capital? It is presumably to be hoarded for slogans and abuse.
Hockey capitulated without a whimper the moment the current Victorian premier, Daniel Andrews, said no. No matter that most of the other premiers were at least open to discuss broadening the scope of the GST, and Mike Baird in New South Wales even wants to raise the rate; if Hockey could not have unanimity, total submission at the first hurdle, he preferred abject surrender.
And Abbott, in spite of all his talk about serious discussion, has consistently avoided any as soon as it emerged that there was any real opposition from opponents; he has simply dismissed them and moved on. So much for being the love child of John Howard and Bronwyn Bishop; Abbott might be a flailing fighter in the boxing ring, but he has no stomach for any serious contest of ideas, or even debate about them.
And that being the case, the non-political economic summit will be an ineffective series of thought bubbles; a feel good party for the participants with no hope of actually reforming the country. Why do they bother, and for that matter, why do we?
Mungo MacCallum is a political journalist and commentator.
