Tony Abbott continues to do his best to white-ant Malcolm Turnbull’s efforts on tax policy, yesterday attacking Labor’s proposals to raise taxes on tobacco and superannuation. From The AFR:
Mr Abbott… attacked Labor’s policy to hike tobacco taxes and make changes to super, which some within the Coalition fear works to narrow Mr Turnbull’s tax options for their statement within the budget.
“[A double dissolution election will be all about] a government that wants to create jobs versus a Labor Party which is all about clobbering our economy with five new or increased taxes.”
“Whether it’s the increased tax on negative gearing, the increases to capital gains tax, the increased superannuation tax, the increased tax on workers having a smoke-o or, of course, the carbon tax that’s being brought back,” he said.
Abbott’s opposition to superannuation reform is particularly galling.
When Tony Abbott first ruled-out superannuation reform, he claimed that “We respect people’s savings. We don’t think that superannuation is government money. It’s your money”. He also argued that “there is a world of difference between taxpayer-funded benefits and people’s own savings.”
In maintaining this line of reasoning, Abbott continues to take ideological spin to a whole new level.
There is no difference in the Government giving someone $1,000 in cash or giving them an extra $1,000 via a tax concession. And yet, here we have Tony Abbott attempting to argue that it is somehow virtuous to allow wealthy, older Australians with huge superannuation balances to pay less tax (or zero tax in the case of those aged over-60).
Tony Abbott seems to honestly believe that tax loopholes are good and virtuous, whereas direct transfers are not. Of course, it is no coincidence that those benefiting the most from superannuation concessions are also high income earners (see next chart).
Instead of undertaking genuine tax reform – by reforming superannuation, negative gearing, and capital gains tax concessions in exchange for lower income taxes – the Coalition has basically chosen to maintain the status quo, continuing the “age of entitlement” for its wealthy constituents.
The biggest mistake that Malcolm Turnbull has made is extending an olive branch to Tony Abbott and his party room supporters. By letting Abbott effectively set the agenda, Turnbull now finds himself with limited options for tax reform and no significant tax policy.
