Another non-core promise disintegrates today from the Opposition leader. From the AFR:
Many big businesses will benefit from a small increase in company tax under a Coalition government because they will be able to abandon their own in-house paid parental leave schemes, federal Opposition Leader Tony Abbott says.
All but confirming the Coalition would impose a tax increase on the nation’s 3200 largest companies to fund his scheme, Mr Abbott also urged business to consider the broader economic argument.
“This is not just a family policy, this is an economic policy, this is a productivity policy, this is a participation policy,’’ he said.
As revealed last week by The Australian Financial Review, Mr Abbott intends to go ahead with a promised 1.5 percentage point increase to company tax for the largest 3200 companies, as judged by their taxable income, to fund his scheme, estimated to cost $3.3 billion a year. But, simultaneously, the Coalition has shelved a pledge made at the last election to cut company tax by 1.5 points for all companies.
…“We are committed to a modest reduction in company tax. The precise quantum and the precise timing will be revealed close to the election,’’ Mr Abbott said on Monday.
So, the company tax cut is jettisoned along with the abolition of the mining tax and the surplus in first year of office, not to mention the pledge that Australians will never have to endure another lie from its politicians.
Meanwhile, Prime Minister Julia Gillard is busy unloading her own toxic crop-duster. From BS:
“We are not, indeed we have never been, simply a quarry or a beach; ours is a diverse and sophisticated economy and a valued trading partner of the biggest global economies,” she said in a speech to the Australian Davos Connection Future Summit in Melbourne on Monday.
…Ms Gillard said the commitment to an annual leaders’ dialogue between the Australian prime minister and the Chinese premier, along with annual talks on economic, foreign and strategic matters with the appropriate ministers, was a “landmark” in relations between the two nations.
…These talks would help Australian service-based companies in urban planning and construction, along with expertise in carbon market design, retirement income systems, and health and welfare services to gain a foothold in China as demand for middle class activities expands in the world’s most populous nation.
I’m sure some industrious Australian firms will make it over to China. But if the PM’s hand full of services champions strikes you as a bit light-on then inhale deeply on the burning air. First, you can’t export services for the most part. They are an investment play. That’s why, in general terms, Gillard’s list is hopelessly wrong, with non-tourism services constituting a champion busting 5% of total Australian exports (mines and beaches constitute 80%):
But hopeless becomes hilarious when we narrow in on China:
Australian exports to the Middle Kingdom are 85% primary products. Only 7% is services and given the dominance of tourism in that category, two-thirds for all counties, the PM is using an infinitesimal 2% plus figure to sell us the line Australian trade with China is something other than a lot of holes with the odd beach tossed in.
And let us not forget that the PM came to power by carpet bombing the mining tax, the only real policy that had any hope of helping broaden Australian trade with China over time.
I love the smell of election napalm in the morning.
