Friday 15 August 2014

Joe Hockey: Give the man a cigar

Joe Hockey: Give the man a cigar

Joe Hockey: Give the man a cigar




Date







<i>Illustration: Glen Le Lievre</i>
Illustration: Glen Le Lievre







Why are people so unkind to Joe Hockey? It’s not like he was
trying to be mean when he said poor people don’t have cars. He said
cars, people. Cars. Plural. Come on. Joe knows poor people don’t have
lots of cars. Unless they’re up on cinder blocks in the front yard. Not
like Joe, who has a Canberra car and a Sydney car and Commonwealth car
which comes with its very own driver. A quick shout out to Twitter (the
omnipresent surveillance state you have when you’re not an omnipresent
surveillance state) delivered up multiple happy snaps of Joe in multiple
cars, including a late model Commodore, some sort of Toorak tractor,
possibly a black Range Rover, and a bright yellow Mini that the rock
steady crew at All Aussie Hiphop’s Twitter feed unkindly compared to a
giant cheeseburger. I really don’t think it’s fair to crucify Joe for
that. Driving a giant cheeseburger around just goes to show how hard Joe
works to stay in touch with the common man. And he has to work damned
hard. Notwithstanding Joe’s Herculean efforts to bring an end to the Age
of Entitlement, the Finance Department says he is of course entitled to
the Commonwealth’s limo service but also to a free ride of his own
choosing. It’s possibly another reason those poor people who do somehow
get behind the wheel of some old clunker don’t actually drive very far.
The roads are already gridlocked with Joe Hockey’s personal fleet.




Perhaps if poor people just drove better cars, they
wouldn’t be so poor. No raking the bottom of the cup holder for coins
when Jeff McCloy rolls into the drive-though. The property developer,
mayor of Newcastle and proud owner of a magnificent Bentley, seems to
drop wads of the folding stuff like dog hair in summer. Mostly he drops
it into the pockets of Liberal Party politicians but there appear to be
so many hundred dollar notes floating freely around the former steel
town that maybe if you lazy poor people just leaned up against
Hizzoner’s Bentley some would rub off on you too.





Of course, you may have to drop your metaphorical pants rather quickly.



“What? No foreplay?” quipped Geoffrey Watson, SC, counsel
assisting the Independent Commission Against Corruption this week, when
former Liberal MP Tim Owen testified McCloy wordlessly handed him a
''thin envelope'' containing $100 bills in Hunter Street, Newcastle.




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“I took it at the time,” said Owen, “and I must admit I thought ‘Hmm, what do I do with this'?”



Hmm. Well, Tim, it’s not rocket science, you could say: “No, thanks.” Or you could trouser the lot.



Although Tim probably meant to testify under oath that he
took the trouser option, what came out, under oath, was a story about
returning the ''thin envelope'' with not very many hundred dollar bills
in it and a note which amounted to: “No thanks, Jeff.”




Fair enough. We’ve all had that awkward moment when a
property developer hands us a thin envelope with not very many hundred
dollar notes in it. It’s a situation almost guaranteed to cause
confusion. Is Jeff handing me this thin envelope in his capacity as lord
mayor of Newcastle, because he wants me to be the local Liberal member
which is understandable, because we’re both smashing fellows? Or is Jeff
handing me this thin envelope – See how thin it is? I really must
emphasise the thinness here – because he’s a property developer, and
they do that sort of thing even though it’s illegal, in which case I
should probably give it back. The thin envelope, that is. See? Very very
thin.




Yeah. No. Not so thin, as it turned out. The $2000 Tim first
admitted to returning because, gosh, it wasn’t a very good look was it,
turned out to be $10,000, and he didn’t so much return it, as, well,
trousered it.




In Tim’s defence, he would have been in heaps of trouble with
his wife if he admitted to taking the ten grand after she’d told all
her Facebook friends that he didn’t –how embarrassing!– and at least he
did spend his dirty money on the purpose for which it was intended;
funding his re-election campaign. His colleague Andrew Cornwell could
not even do that. By one report he spent McCloy’s hard-earned on paying
off his tax bill. The scoundrel. No wonder the Libs wanted to expel him.




It seems if a fellow is going to pocket a bribe he should really spend the money on whatever the bribe was pocketed for.



On a sojourn from the far northern suburbs, I took an
hour before lunch to wander around The Rocks and Millers Point, a fine
walk most any time, but purely sublime on that diamond of a mid-winter’s
day. There are so many ghosts of the old city still floating around
those streets but being Sydney ghosts, they’re mostly kicking back,
catching the rays. 




Best soak them up while they can. The state’s scrapping of
heritage rules, the eviction of hundreds of public housing tenants, the
sell-off and the inevitable redevelopment of those properties by the
sort of spivs and chancers who keep ICAC in business will finish off
even the hardiest spirits. It’s a pity. So much of the city’s story is
written in the line of those streets. When the First Fleet arrived the
officers grabbed all the best real estate for themselves, laying claim
to the greener, pleasant lands of the Eora people, east of the Cove.
They took one look at the unappealing, rocky wastes on the other side
and packed the convicts off over there. Sydney’s east-west class divide
was born on that first day. Hundreds of years later, the descendants of
the first jailers and the Rum Corps have decided the lower orders can
bugger off out of Millers Point too. It was ever thus in this city. It
will ever be.




Twitter: @JohnBirmingham







Thursday 14 August 2014

Tone-deaf Treasurer: Joe Hockey the budget's worst enemy

Tone-deaf Treasurer: Joe Hockey the budget's worst enemy

Tone-deaf Treasurer: Joe Hockey the budget's worst enemy




Date

John Hewson










"The government has now burnt a lot of its political capital for little gain in "fixing" the budget."
"The government has now burnt a lot of its political capital for little gain in "fixing" the budget." Photo: Alex Ellinghausen







Treasurer Joe Hockey made a meal of his first budget and is making an even bigger meal of settling and selling it.



He was clearly "best on field" in the run up to the budget
but has been near to the worst since, with some now wanting his contract
reviewed. They certainly don't see him as "foreman material".





Hockey (and Prime Minister Tony Abbott) seemed genuinely
surprised that the budget was criticised and rejected so widely. Yet
Hockey waited some 10 weeks before attempting to woo the essential
crossbench senators and was AWOL in the media much of that time, except
for the serious distraction created by the release of his ill-conceived
biography, Hockey: Not Your Average Joe. This only served to further undermine the budget's integrity and to raise questions about his judgment.




This week, he again made himself the issue with his remarks
that "the poorest people either don't have cars or actually don't drive
very far in many cases", in some bizarre attempt to defend his fuel
excise decision. Another dumb error of judgment, especially given the
obvious inequity of his budget, whereby the disposable income of
lower-income earners was cut by some 12 per cent to 15 per cent, while
the income of those at the top was cut by less than 1 per cent.





Don't get me wrong, it is unnervingly easy to make dumb
statements in politics. Often attempts to make points with the best of
intentions fail to strike the desired chord – indeed, they can easily
offend.




One of my classics was to suggest that "you can always tell
the rented house on the street", made towards the end of a very long
speech to the Housing Industry Association in 1992. The line, originally
written by my then press secretary, Tony Abbott, was moved in and out
of the speech by various advisers before being finally reinstated and
was only noticed by one journalist at the time. But that was enough. The
media bushfire was ignited. I was very soon flat out back-pedalling.




In my experience, the best response to such acts of stupidity
is to immediately and openly admit the mistake and set about rectifying
it. To try to defend the indefensible breaches the first "law of
digging holes" – namely, once you reach the bottom, you should stop
digging.




Even though Hockey can find statistics to "prove" that the
rich pay more fuel excise than the poor, it's still making the hole
deeper. To those on low incomes, any additional impost, or benefit cut,
eats into their capacity to survive. They don’t have the luxury of
"choice" as to how to respond.




Behind all this, the Abbott government has shifted its
position on how to deal with the budget's weaknesses and criticism.
Initially, as expounded by Abbott himself, they were simply going to
"tough it out", with even a hint of a potential double dissolution.
Emerging in the aftermath of its successful handling of the MH17
tragedy, the view of the government shifted, sending messages far and
wide that it "would deal" and was capable of doing so. Obviously this
was an attempt to defuse criticism, to get "a" rather than "the" budget
through the Parliament and to reassert some control of the political
agenda.




For example, Health Minister Peter Dutton initiated
discussions with the Australian Medical Association, seemingly
entertaining some possible limiting of the GP co-payment. Similarly,
Education Minister Christopher Pyne seemed willing to contemplate a deal
that would reverse some of the proposed changes to HECS, in order to
preserve the proposed "deregulation of universities".




Selling these health and education decisions were a "big ask"
from the very start, as they were announced without an overarching
health and education policy framework. They appeared as simply
mechanisms to improve the budget bottom line, not as essential elements
of a broader policy in each area.




Much of the inequity of the budget could have been avoided with a full, integrated policy in key areas.



For example, focusing on pensions, just proposing to tighten
income and asset tests, and to lift the retirement age, is an obvious,
inequitable response.




However, if the government also proposed to significantly
increase the pension benefit that, on some measures, is below the
poverty line, and to reduce the near obscene skewing of superannuation
concessions in favour of the wealthy, it would have been seen to have
produced a more comprehensive and equitable overall response to the
budgetary consequences of our ageing population. However, this hasn't
happened and Hockey's misguided comments have only worked to distract
and further compound the difficulties of the budget-selling task.




The government has now burnt a lot of its political capital
for little gain in "fixing" the budget, especially recognising the
massive expenditure commitments still to be addressed.




If growth and budget revenue turn out to be weaker than
forecast, how will the government be able to go back again for another
round of cuts and initiatives?




I recall my time in the Fraser government, when treasurer
Phil Lynch was pilloried for his initial "razor gang" expenditure cuts,
only to see the Fraser cabinet still having to struggle, in every other
year of the government, to "fix" the budget.




Hockey still has it all to do.



Businessman John Hewson was federal leader of the Liberal Party of Australia from 1990 to 1994.







Wednesday 13 August 2014

Joe Hockey gets outnumbered in the battle of the stats

Joe Hockey gets outnumbered in the battle of the stats









Joe Hockey gets outnumbered in the battle of the stats

Article by MICHELLE GRATTAN 







Treasurer Joe Hockey has been in begging mode, flying around the country to meet crossbenchers.
AAP/Paul Miller



When a government has to negotiate with crossbenchers there is often
an element of humiliation involved, especially if that government
suffers from a touch of “born to rule”.




Governments think of themselves as having the right to get on with
what they want to do, only to often find they need to kowtow to those
who received just a fraction of the vote.




With so much of this year’s budget up for grabs and the Senate
crossbench packed with players enjoying both profile and power, the
wheeling and dealing is a circus for the public and a high wire act for
Treasurer Joe Hockey.




How ministers must (in private) curse having to go as supplicants to
Clive Palmer. Hockey turned up for dinner with the PUP leader on
Tuesday. Education Minister Christopher Pyne had lunch on Wednesday.
Health Minister Peter Dutton will see him on Thursday.





Education Minister Christopher Pyne spent his birthday lunching with PUP leader Clive Palmer.
Twitter

Click to enlarge


Is progress being made? Reading the Palmer signals doesn’t get any
easier over time. He seemed to be hinting at some flexibility over the
Medicare co-payment plan on Wednesday; on other occasions he’d said the
Palmer United Party senators would not vote for it under any
circumstances.




Hockey – coming to the task late and figuratively speaking holding
his nose much of the time – has, in begging mode, done his rounds of the
crossbenchers, travelling the length and breadth of the country.
There’ll be more work ahead. In a few weeks, the results can be audited.




But on Wednesday the Treasurer was in trouble with a clanger as he
tried to mount an argument for the proposed restoration of the
indexation of fuel excise in equity terms.




“The people that actually pay the most are higher income people,” he
said. “Yet the Labor Party and the Greens are opposing it. They say
you’ve got to have wealthier people or middle-income people pay more.
Well, change to the fuel excise does exactly that. The poorest people
either don’t have cars or actually don’t drive very far in many cases.
But they are opposing what is meant to be, according to the Treasury, a
progressive tax.”




This was dismissive politics; an inaccurate description of the tax; and a use of numbers that doesn’t reflect the full picture.



After howls of outrage Hockey put out a note to back his argument. It
showed average weekly household expenditure on petrol in absolute terms
increasing with household income thus: lowest quintile, $16.36; second
$27.60; third $38.55; fourth $47, and highest $53.87.




“Based on census data, households in relatively disadvantaged areas
are less likely to own motor vehicles than those in relatively
advantaged areas. Where motor vehicles are owned, households in
relatively disadvantaged areas are most likely to own only one car
whereas households in relatively advantaged areas are more likely to
have two or more motor vehicles,” the note said.




But these figures don’t tell us the relative burden of petrol costs,
and Hockey was quickly challenged on Twitter by more relevant figures.




News Corp’s national economics editor Jessica Irvine tweeted
the numbers for spending on petrol as a percentage of household income,
by quintile, showing that poor households spent more of their income on
it than those better off: Q1- 4.5%; Q2-3.5%; Q3-2.9%; Q4-2.3%; Q5-1.3%.




Greg Jericho, who writes for Guardian Australia, tweeted a graph
showing the percentage of annual household expenditure spent on petrol:
it was higher for the poor than for the top income bracket. Also, and
significantly, the second lowest income quintile (that is, relatively
modest earners) had the highest percentage.




In its submission to the Senate inquiry on the legislation the
Australian Automobile Association said: “Research indicates that the
people who use their cars most frequently are in the outer metropolitan
areas and rural and regional areas where there are lower incomes, less
jobs, and little or no access to public transport.




“The AAA is concerned that individuals in these areas will bear the highest cost increases of indexation changes.”



There are sound arguments for restoring the indexation of fuel
excise, not least environmental ones, as well as the need for a source
of revenue that grows. Also, the slugs to households will be small,
although mounting up over time.




It will be unfortunate if the Senate refuses to pass the measure.
Indexation was only abolished because John Howard was politically
embattled in 2001.




For all that, there is no getting away from the fact that it is a
regressive tax, and Hockey’s blunt-edged defence was just another
misstep in a budget sales job that has been full of them.







Monday 11 August 2014

Joe Hockey fights to claw back a little for the overburdened wealthy - » The Australian Independent Media Network

Joe Hockey fights to claw back a little for the overburdened wealthy - » The Australian Independent Media Network



Joe Hockey fights to claw back a little for the overburdened wealthy














If Joe Hockey’s first budget
wasn’t enough to convince people that the government was going into bat
for the nation’s wealthy, then Joe himself has surely confirmed this
with his recent suggestions that the rich have already done their share
of heavy lifting. But as Warwick Smith reports, Mr Hockey certainly
isn’t playing with a straight bat.



Recent reports
show that the government knew beforehand that the federal budget would
hit lowest income earners hardest. Treasury modelling predicted that low
income earners would lose $844 and high income earners lose $517 per
year. Treasurer Joe Hockey’s response demonstrates that he thinks the
rich are doing too much of the heavy lifting and are unfairly burdened
by the tax and transfer system.



Hockey has criticised the Fairfax reporting and claimed that the
figures from the Treasury modelling don’t give a complete picture. Here
is a breakdown of some of his statements in support of that claim:



“It doesn’t take into account the fact that higher income households pay half their income in tax.”

For a start, the factual basis of Hockey’s statement is false. If
you’re on $180,000 per year (often cited as the threshold to be
considered high income) and you make no deduction claims you pay less than one third
of your income in tax. Now, if your taxable income is $20 million per
year, you do in fact pay close to half your income in tax. The reality
though is that people who earn that much use complicated financial and
accounting arrangements which result in them paying much less than the
marginal tax rate of 47%. The genuinely wealthy don’t pay much income
tax, that’s largely reserved for wage earners.



So, factually what Joe says here is just plain wrong. Make no
mistake, he knows it’s not true. He may not be the best Treasurer we’ve
ever had but I’m fairly confident he knows the difference between
marginal tax rates and average tax rates. Now, onto the relevance of the
remark for the point he’s trying to make. The assertion is that the
budget measures hit low income earners hardest. The response is that
high income earners pay lots of tax and low income earners pay little.
The Treasurer’s response has no bearing whatsoever on the assertion he
is trying to refute.



I think we should make logic classes mandatory for politicians. See,
what Hockey says can be true (though the specifics are certainly false) and
the reported Treasury modelling figures and Fairfax’s comments about
them can be true. This means that what Hockey has said is not a
refutation of the figures, it’s just an unrelated assertion.



OK, Hockey’s refutation of the Fairfax story continues:


“Every dollar that lower income households receive comes from higher income households”.

I don’t want to spend too long repeating myself but, once again, what
Hockey says here is both factually incorrect and irrelevant to the
question at hand. Welfare payments and funding for concessions come from
consolidated revenue, of which a bit less than half comes
from individual income tax. So, only every second dollar comes from
higher income households. Again, Hockey knows that but he’s not one to
let facts get in the way of a good argument – or, in this case, a bad
argument. Does the fact that high income earners support low income
earners refute the validity of the claim that low income earners suffer
more under the budget measures? No, of course not. Again, it’s just
another unrelated assertion meant to serve as distraction.



I could go on citing and refuting Hockey’s statements but I think the point has been made.


Hockey failed to meaningfully respond to the Treasury modelling. What
he does say though is very revealing. His response is a continuation of
his “lifters and leaners” narrative of the budget. He’s effectively
saying that low income earners deserve to suffer more than high income
earners because the high income earners are already suffering so much.
Their suffering is caused by the tax office taking from them to give
handouts to the bludgers at the bottom of the social pile. This is the
only possible interpretation of Hockey’s words that I can come up with.
He’s saying that the budget measures are not unfair, they’re just
correcting a little bit of the unfair burden that the rich already bear.



I think it’s important that we see these statements for what they
really are. Joe Hockey wants the poor to be largely left to fend for
themselves so as not to be a burden on his wealthy mates and campaign
contributors. He either doesn’t understand or doesn’t care about the
mountain of evidence that shows that the country as a whole will be much
worse off if we allow wealth and income inequality to grow.



Warwick Smith is a research economist and social commentator. He blogs at reconstructingeconomics.com and tweets @RecoEco.





Monday 4 August 2014

Treasury modelling shows less-wealthy were hardest-hit by budget

Treasury modelling shows less-wealthy were hardest-hit by budget

Treasury modelling shows less-wealthy were hardest-hit by budget




Date
  • 9 reading now

Gareth Hutchens and Tom Allard


<p>








The Abbott government is refusing to release more detailed
modelling prepared by Treasury in the lead-up to the budget that shows
the likely impact of the planned budget measures on different household
types.




Documents released under Freedom of Information to Fairfax
Media show the federal government delivered its May budget fully aware
its spending cuts would hit poorer households much harder than wealthier
ones.




But two larger documents were withheld from the FOI request, a
56-page document and a 21-page document, and it is understood they
starkly show how less-wealthy households suffer far bigger falls in
disposable income than richer ones, especially for families with
children aged between six and 16.




A spokeswoman for Treasurer Joe Hockey said the documents
would not be released because they were prepared for cabinet and were
therefore protected in the FOI process.




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''Every government receives a range of advice and analysis during the budget preparation process,'' the spokeswoman said.



''[And] the Abbott government clearly shows what the welfare
changes would mean, with 10 pages of material contained in the budget
papers. This is significantly more than has been included in most
previous budgets.''




Mr Hockey slammed Fairfax's report of the Treasury analysis on Monday, saying the figures did not tell the complete story.



He also denied the data indicated the government knew its
budget would hit the poor the hardest. He noted it ''fails to take into
account the massive number of concessional payments such as discounted
pharmaceuticals, discounted transport, discounted child care that goes
to lower-income households.''




However, all of these payments had been cut in the federal budget in one way or another.



Subsidies to pharmaceuticals have been reduced, federal
funding for transport discounts are being withdrawn, and there are
tougher conditions to get childcare benefits.




In an effort to rein in PBS costs, and save $1.3 billion over
four years from January, the government wants to increase co-payments
for scripts by $5 for general patients, to $42.70, and by 80¢ for
concessional patients, to $6.90.




All of these changes will result in lower income earners being worse off.



But shadow treasurer Chris Bowen slammed Mr Hockey on Monday
for attacking the media for ''daring'' to report on the data, saying the
Treasurer ought to be ''acknowledging [the] Treasury figures show the
fundamental unfairness of the budget''.




''These are Treasury figures. These aren't Sydney Morning Herald's
figures, not the Labor Party's figures - these are Treasury figures,
which have been released under FOI,'' Mr Bowen told ABC Radio.




He said Mr Hockey had a "glass jaw", was "in denial" and
attacking the media instead of acknowledging his budget's impacts on the
poor.




A former Treasury official, who did not want to be named,
said he had ''no reason to expect Treasury's figures are wrong''. ''And I
have no reason to expect these figures will go away, either,'' he said.




Stephen Koukoulas of Market Economics said the government
would have known that its budget was going to affect lower-income
households hardest.




''The way that all these policies are actually costed and analysed, there is almost always an income distribution effect.''