THE DISTILLERY: Arbib's tax legacy

Outgoing Arbib leaves the government a last minute tax gift, while a jotter argues Australia should pay more attention to Brazil.

We should be less interested in the real reason why Mark Arbib has called time on his career as a senator – he has after all disputed the conspiracy theories – and more interested in his final gesture as assistant treasurer. The Age’s Adele Ferguson finds Arbib causally sending out a press release on his last day in political office heralding a change in anti-tax avoidance. Granted, that’s all history now. This week we’ll see three blockbuster economics announcements and The Australian’s Judith Sloan and David Uren get us ready for it.

The Age’s Adele Ferguson tries to make sense of Senator Mark Arbib’s last gesture as assistant treasurer before stepping down – the release of a press release warning of immediate changes to anti-tax avoidance law. The conclusion is pretty simple; Labor needs to raise money in the lead up to an election year.

"While it has long been known that the government's chief revenue collector, the Tax Office, was concerned about the anti-tax-avoidance laws after losing a string of cases over the past couple of years that blew a $1 billion-plus hole in its budget, the rush to get these laws through without proper consultation speaks volumes about its motives. In the case of the anti-tax-avoidance legislation, Arbib released the plan in one of his final acts as assistant treasurer, despite saying two weeks earlier: ‘This is a complex issue and the government will consider today's judgment and its implication for the tax system.’ His comments came after the ATO lost a $350 million case against James Hardie Industries.”

The Australian’s Judith Sloan foresees an amazing week of economic events – an interest rate decision, the December national accounts and the unemployment numbers. Meanwhile, her colleague David Uren says there’s a compelling argument that the Reserve Bank of Australia should hold its interest rate decision on the second Tuesday of every month, not the first, because four times a year the national accounts fall the day beforehand.

"…The national accounts contain a rich mine of information about the health of the economy besides the bottom-line growth figure, while the monthly labour report is often a pivotal indicator for monetary policy. Neither this week's national accounts nor the labour force survey are likely to give the bank second thoughts about the wisdom of what is universally expected to be a decision to keep rates steady tomorrow. However, a strong December quarter and a further month of rapid employment growth would raise questions about whether the two rate cuts late last year were really necessary and remove entirely what many in the market still believe is a bias to rate easing.”

The Sydney Morning Herald’s Michael Pascoe laments the fact that we spend so much more time talking about the declining economies in Europe that offer us no practical lessons – other than to try not to take on that much public debt – when we’d find something more revealing across the Pacific, in Brazil.

"Depending on how you measure it, Brazil was the world's seventh or eighth-largest economy in 2011. The way Europe is going, Brazil is probably now in the top six and rising, yet we barely acknowledge its existence. It is bigger than the rest of South America combined, fuelled by natural resources, a workforce of 104 million and more than a decade of rational and economically responsible democratic government. And, like parts of the Australian economy, Brazil is suffering from success. Contrary to the impression given by some corporate types and unionists in the front line of our great restructuring, we are not alone in having a strong and strengthening currency – the world's forex speculators, investors and central banks are not just picking on little ol' Australia. Nations as diverse as Switzerland and Brazil, Sweden and Uruguay also are dealing with the impact of foreigners bidding up the franc, real, krona and peso.”

Sticking with international economic issues for the rest of this morning’s commentaries, The Australian’s Paul Garvey says World Bank President Robert Zoellick found a much harder time extolling the virtues of free-market economies to an audience in Beijing that his colleague Hans Timmer did to a crowd in Hong Kong.

Closer to home, The Sydney Morning Herald’s Ross Gittins revisits his point about the Australian dollar not destroying jobs, but "displacing" them, thanks to some objections from a reader. The Sydney Morning Herald’s Ian Verrender tries to add up how much it might cost to keep the Australian car industry alive. The Sydney Morning Herald’s Jessica Irvine braces her readers for another increase in petrol prices, while the Herald Sun’s Terry McCrann continues to highlight the domestic retail sector as a source of concern.

In company news, The Age’s Michael West raises an eyebrow at what James Packer will need to do to fulfil his vision for a Sydney hotel-casino, though his colleague Adele Ferguson explains that it is achievable. The Sydney Morning Herald’s Malcolm Maiden chows down on the latest set of Woolworths results and finds some worrying ingredients, while The Australian’s John Durie says Toll is looking for a bigger slice of the internet delivery business, currently dominated by Australia Post. The Australian Financial Review’s Chanticleer columnist Tony Boyd examines the never ending merry-go-round that is the second Sydney airport debate.

And finally, The Australian’s Robin Bromby notices that just as Western Australia gives the green light for shale gas fracking drills, Bulgaria is slamming that door shut.

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