From Domainfax:
Little-known tensions between Malcolm Turnbull and Treasurer Scott Morrison prompted the Prime Minister to push previously secret Treasury modelling into the public on Friday – earlier than originally planned.
Sources say relations between Mr Turnbull and Mr Morrison have become tense over the extent of tax reform policy, with the Treasurer keen to see larger-scale, more ambitious reform including significant income tax cuts paid for by a politically unpopular 50 per cent hike to the GST.
It is understood there are also differences between them over the future of Human Services Minister Stuart Robert, with Mr Morrison urging the Prime Minister not to buckle to opposition and public pressure by sacking the embattled Queensland conservative.
Mr Turnbull however has formed a different view. Mr Robert will be axed ahead of a wider reshuffle, which is most likely set for Sunday. An announcement on Mr Robert’s future is expected Friday.
Fairfax Media understands the Prime Minister was concerned that Mr Morrison would commit the government to a more difficult path on tax reform than was politically tenable when he makes his first appearance at the National Press Club as Treasurer, on Tuesday.
It was for that reason that a decision was taken to release the modelling this weekend. However, even that timetable was altered on Thursday to ensure Mr Morrison’s hardline approach did not become policy through other comments made by the Treasurer in media interviews.
Why is Morrison so determined to push politically destructive and ill-timed GST-reform when the politically easier and economically superior path of attacking tax concessions like negative gearing is on offer? One answer may be this, from Leith:
Last week, the Property Council of Australia (PCA) took rent-seeking to another level, threatening MPs with electoral carnage if they dare tinker with Australia’s negative gearing laws. The PCA also repeated the oft-told myths that negative gearing “keeps a lid on rental costs and house prices” and is utilised primarily by “ordinary workers”.
The PCA’s lobbying seems to already have paid dividends, with Treasurer Scott Morrison yesterday all-but ruling-out negative gearing reform, arguing that it is a “real opportunity for middle income earning Australians” to get ahead:
Negative gearing has been and continues to be a real opportunity for middle income earning Australians. Nurses and doctors and whether it is a policeman or others, these are people working every day and trying to get ahead, they’re not the problem. We need to look at all aspects of how our tax system works but what we are not about, we are not about taxing and spending. That’s not what we are about. We are not about raising taxes to support higher spending. That’s Labor’s approach. That’s Labor’s approach – it’s not ours.
Treasurer Scott Morrison’s ongoing defence of negative gearing is not surprising. After all, between 1989 and 1995 he was the National Manager, Policy and Research, at the PCA. So understandably he has fallen into line.
We also know that the PM is concerned about tax concessions:
“Looking at Australia’s tax regime you would say that it is too tough on people earning income… but is incredibly concessional to older people who have made their money…
All of these areas are very hard to deal with because any change invariably… [leads them]… to become very angry. That’s why reform is very difficult…”
The Property Council mindset appears to be undermining the PM/Treasurer relationship.
