Gillard’s canny cabinet

The “Carbon Tax” is not about the environment. It’s about politicians locking-in political supporters by funnelling tax revenues into the pockets of welfare beneficiaries and expanding the culture of dependence upon government.

By Gary Scarrabelotti

There is no doubt about it. The Gillard government knows full well that the proposed “Carbon Tax” will not decrease by one iota global emissions of CO2.

There is not one minister in the cabinet who does not understand that the effect of the tax will be to outsource the production of our carbon dioxide to China and India. Every member of the government understands perfectly that a tax on CO2 emissions will lead to an increase in unemployment, especially in the manufacturing sector of our economy. To say otherwise would be to suggest that our federal government is populated with credulous, seriously dim people.

It is not common for thoroughly unintelligent types to progress in politics from obscure party activist, to back bench MP, and from thence into the cabinet. And it is even less common for a whole government to made up of such folk – people who, on account of their lack of smarts, could never ordinarily expect to hold a ministerial portfolio. On the contrary, keen intelligence seems to be the hallmark of the Gillard team. OK, then. So what gives? What’s this tax on CO2 all about?

Well, this week a little bird told me that the government is not in the least bothered by the rising chorus of complaints from all sorts of groups within the community about the impact on them of the proposed “Carbon Tax”.

From what I was told, from the Government’s perspective, the more complaints made to it now, from as many interest groups as possible, the better.

So, if your job is to represent professionally the interests, say, of the chronically ill, the old, or the disabled, if you are a carer, or just a concerned relative, roll up, roll up, roll up now. The government is only too ready to make this promise: to over-compensate for the “Carbon Tax” every conceivable person who could possibly be defined as “in need”.

Big hearted? Of course not.

Stitching us up

It’s all about identifying interest groups and stitching them together into a network of voters “prepped” to support the re-election of Gillard Labor in 2013. It’s just the latest cycle in the decline of freedom in a democratic society as politicians lock-in political supporters by funnelling tax revenues into the pockets of welfare beneficiaries and expanding the culture of dependence upon government.

In other words, the “Carbon Tax”, whatever might have been its original inspiration, has long ceased to be about the environment. The wildly misconceived idea of a “Carbon Tax” being a pro-market way of cleansing the atmosphere is dead. All that is left is just another tax churn devised by a government to keep itself and its adherents in power.

Now we are not talking here about some species of wickedness peculiar to the Australian Labor Party in government. It is an art form developed by generations of Australian governments and perhaps its greatest exponent was former Prime Minister, John Howard.

The introduction of the Goods & Services Tax (GST), which took place on 1 July 2000, presented the Howard government with an opportunity to overhaul the system of family benefit payments and several different kinds were amalgamated into Family Tax Benefit Part A (FTB-A).

The measure seemed necessary because families with children would be hardest hit by the GST. What looked, at the time, like sound pro-family policy pure and simple, proved with hindsight as much about wooing and winning a sub-set of the electorate as it was about high principle. With the launching of FTB-A, the Howard government set a course that it was to keep until its defeat in 2007.

With almost every budget from 2000 onward, there were new measures directed at families (such as extending the value and reach of FTB-A) – or at pensioners, or at carers, or at blue collar workers.

Whatever the social good these various payments aimed to support – and this writer unashamedly favours encouraging families to form and give birth to children – there was always an insistent, underlying imperative: to fortify the coalition of Howard voters. As budget superseded budget, the political rationale became shamelessly explicit with the government resorting to some outlandish one-off giveaways like the 2004 promise of an $800 tool kit for apprentices.

To give Howard his due, he backed Peter Costello’s systematic reform of the Income Tax marginal rates. But, clearly, both Howard and Costello rejected the opportunity to use tax reform as the main way of delivering family benefits.

They had two options. They could have followed the French “quotient” model, where income tax reduces according to a formula which captures the number of dependents in a household. Or they could have developed our existing tax-free threshold by lifting it in line with the number of people dependent on a family’s income.

Tax ‘n’ churn

But the temptation of being able to dispense largesse at budget time proved too great. Instead of abolishing family tax benefits and the like, and adjusting the tax rate downwards to suit family needs and responsibilities, the Howard government stuck to the administratively inefficient tax churn method. It’s a way of redistributing our taxes, deeply imbedded in government practice, which is both politically and socially corrupting.

This is what the Gillard government is up to with its “Carbon Tax”. But, unlike the introduction of the GST, for which an argument about tax efficiency could be mounted, and unlike the creation of the FTB-A, for which the need to support families could be adduced, there is no justification at all for a CO2 Tax.

There are no efficiencies to be gained. There are no reductions in world CO2 emissions to be had. There will be no abatement – marginal or otherwise – of “global warming” or “climate change”. There will only be less tradeable Australia goods and services and more unemployment.

So what’s left? Payola. Nothing more.

It’s the biggest scam in Australian political history.

(This article was published originally published on HenryThornton.com on 8 July 2011.)

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