Coalition rejects claims that abolishing the minig tax will blow a $9 billion hole in the budget.
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.
With MICHELLE GRATTAN
Frequently Asked Questions about this Article…
What is the mining tax (MRRT) described in the article and when does it start?
The article explains the mineral resources rent tax (MRRT) as a 30% tax on resources companies' profits above $75 million. The government said the MRRT will apply from July 1, according to the Treasurer's statement.
Will abolishing the mining tax blow a $9 billion hole in the federal budget?
That claim is politically disputed in the article. Finance Minister Penny Wong released a brochure saying the Coalition's promises (including scrapping the mining and carbon taxes) left it $9 billion short, while Coalition figures rejected that analysis. The article shows this is a contested budget claim rather than settled fact.
How did the government say the mining tax would affect investment in the resources sector?
Treasurer Wayne Swan argued the MRRT would not dent investment, noting mining companies were 'ramping up production' with full knowledge the tax would apply. The article cites new resources investment rising from $47 billion in 2010–11 to $95 billion that year and projected to reach $120 billion in 2012–13.
Could an Abbott government introduce a levy on big business to pay for policies like parental leave?
The article reports shadow treasurer Joe Hockey would not clearly rule out an effective tax increase on big business. He discussed a planned 1.5% levy on big business to fund parental leave and promised only a 'modest reduction' in company tax, saying more detail would come closer to the election.
What superannuation changes were expected and what do they mean for everyday investors?
The Senate was expected to vote on raising the compulsory employer superannuation contribution from 9% to 12% in stages over the next eight years. For everyday investors, that means higher mandatory employer contributions into retirement accounts over time, a change the article says is supported by about three-quarters of Australians in a cited survey.
Who produced the brochure claiming a $9 billion shortfall and what policies did it include?
The brochure claiming the $9 billion shortfall was paid for and authorised by the Labor Party and contained work done by Senator Penny Wong's office. It listed Coalition promises such as scrapping the mining and carbon taxes, reinstating the full 30% private health insurance rebate, reopening the Nauru immigration centre, and funding other election commitments.
What is 'pairing' in parliament and why did it create a row in the article?
Pairing is a parliamentary convention where one party agrees to abstain from a vote if an opposing member cannot vote. The article describes a dispute after a 'pair' was granted for Labor MP Craig Thomson, who had abdominal pains; the opposition demanded a second medical opinion if a pair was needed beyond that day, and the government called that demand outrageous.
How might the political debate over the mining tax and budget promises affect investor sentiment?
The article shows the mining tax and related budget claims are highly political, with both sides disputing numbers and policy details. For investors, that political uncertainty can influence market sentiment and policy expectations; the piece notes the Coalition said it would finalise numbers nearer the election, while the Senate vote on the MRRT was imminent, so watchers should monitor policy announcements and Senate outcomes.
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