WITH the Senate set to vote the mining tax into law today, the Coalition has rejected claims that Tony Abbott's promise to abolish the tax and other programs would help blow a $9 billion hole in the budget.
Finance Minister Penny Wong released a glossy, campaign-style brochure yesterday that claimed the Coalition was $9 billion short on its key promises.
These included its vows to scrap the mining and carbon taxes, reinstate the full 30 per cent health insurance rebate and the Nauru immigration centre, and pay for variations on its election commitments from 2010.
The claims came as shadow treasurer Joe Hockey refused to directly rule out an effective tax increase for big business under an Abbott government. Asked on Network Ten whether a planned 1.5 per cent levy on big business to pay for a parental leave scheme would be fully offset by a corporate tax cut, Mr Hockey promised only a "modest reduction" in company tax and more detail before the next election.
"We don't know what the state of the budget will be that we have to inherit until just before the election and that's the time when we will finalise all of our numbers and give you all the details on our plans for Australia," he said.
Opposition finance spokesman Andrew Robb said it was ridiculous that the Coalition was being expected to reveal its budget numbers so far out from an election.
"Penny Wong is stamping her foot, 18 months before the next scheduled election, demanding that the Coalition responds to some shonky and fictional analysis of her version of some of our policies," Mr Robb said.
He also attacked the use of Senator Wong's time and resources on efforts to undermine the Coalition's numbers. The brochure detailing the claimed budget black hole was paid for and authorised by the Labor Party but contained work done by Senator Wong's office.
The stoush came on the eve of the expected passing of the mining tax in the Senate today, imposing a 30 per cent tax on resources companies' profits above $75 million.
Treasurer Wayne Swan, in his weekly economic note, sought to head off claims that the mineral resources rent tax would dent investment, saying mining companies were "continuing to ramp up production in the full knowledge that the MRRT will apply from July 1".
New investment in the resources sector had risen from $47 billion in 2010-11 to $95 billion this year, and was projected to rise to $120 billion in 2012-13.
The Senate today is also expected to vote in favour of changes to superannuation, which will lift the compulsory contribution by employers from 9 per cent of workers' salaries to 12 per cent in stages over the next eight years.
A survey by Essential Media, on behalf of the Australian Institute of Superannuation Trustees, found that three out of four Australians backed the change.
A row has erupted over the granting of a "pair" for Labor MP Craig Thomson, who suffered abdominal pains last week.
Pairing is the convention by which a major party may agree to one of its MPs abstaining from voting if a member of the opposing party is unable to vote.
The opposition is demanding a second medical opinion if Mr Thomson needs a pair beyond today. The government says this is outrageous.
Frequently Asked Questions about this Article…
What is the mining tax (MRRT) the Senate was set to vote on and who pays it?
The article describes the Mineral Resources Rent Tax (MRRT) as a 30% tax on resources companies’ profits above $75 million. It was scheduled to apply from July 1 and was before the Senate for a vote.
Will the MRRT (mining tax) reduce new investment in the resources sector?
According to Treasurer Wayne Swan quoted in the article, mining companies were continuing to ramp up production despite the MRRT and new investment in the resources sector had risen from $47 billion in 2010–11 to $95 billion, with a projection of $120 billion for 2012–13, suggesting the government did not expect the tax to dent investment.
How could the proposed mining tax affect everyday investors in mining companies?
The article notes the MRRT targets profits above $75 million at a 30% rate and the government stated it did not expect investment to fall. Everyday investors should be aware that the tax applies at company profit thresholds and that official commentary at the time suggested continued production and rising investment in the sector.
What was the $9 billion budget row between Labor and the Coalition about?
Finance Minister Penny Wong released a brochure claiming the Coalition would be $9 billion short if it followed through on promises such as scrapping the mining and carbon taxes, restoring the full 30% private health insurance rebate and reinstating the Nauru immigration centre. The Coalition rejected those claims and criticised the timing and method of the analysis.
Is there uncertainty about corporate tax cuts and a parental leave levy under the Coalition’s plans?
Yes. Shadow treasurer Joe Hockey refused to rule out an effective tax increase on big business, saying a planned 1.5% levy on big business to fund a parental leave scheme might be paired with only a 'modest reduction' in company tax and that more detail would be provided closer to the election.
What superannuation changes were the Senate expected to vote on and how popular were they?
The Senate was expected to vote on changes that would lift the compulsory employer superannuation contribution from 9% to 12% of workers’ salaries in stages over eight years. A survey by Essential Media for the Australian Institute of Superannuation Trustees found three out of four Australians supported the change.
How did political tactics and campaign materials figure in the budget debate?
The article highlights political sparring: Labor authorised and paid for a brochure outlining the claimed budget shortfall (with work done by Senator Penny Wong’s office), while Coalition figures called the analysis 'shonky' and criticised the use of ministerial resources on partisan material.
What parliamentary controversy related to voting was mentioned during the budget debate?
A row erupted over the granting of a 'pair' for Labor MP Craig Thomson, who had abdominal pains. Opponents demanded a second medical opinion if a pair was needed beyond the day in question. The dispute related to the convention of pairing, where a member abstains from voting if an opposing member cannot vote.
Call 1300 880 160
Start a chat
Schedule a call
