We’re going backwards together under Gillard


Rudd previously had toppled Kim Beazley after Victorian senator Kim Carr brokered a Labor leadership ticket with his fellow left-winger Gillard.

As Lenore Taylor and David Uren detail in their book Shitstorm, Rudd used his first press conference as Labor leader to spell out his protectionist understanding with Gillard and Carr.

The understanding coincided not only with the interests of Carr’s factional union support base, the Australian Manufacturing Workers Union, but also with the bosses of Ford, Holden and Toyota whom Rudd invited to dinner at the Lodge.

The bill to taxpayers was the $6.2 billion motor vehicle industry subsidy announced by Rudd and industry minister Carr in November 2008 after bypassing the Productivity Commission. It included $1.3bn for a green car fund that appears to have stalled according to the low sales of Toyota’s hybrid Camry reported in The Weekend Australian.

A year later, a publishing industry campaign persuaded Labor to reject the Productivity Commission’s call to remove protectionist copyright restrictions on cheaper imported books.

The industry was advised by Labor lobbyists Hawker Britton and supported by celebrity authors and the printing union covering workers at a single factory in country Victoria. Gillard is said to have backed the cultural protectionists. Rudd essentially opted out of the cabinet decision.

“This is a popular consumer issue and they can’t get it through,” Allan Fels, the Labor-appointed former head of the Australian Competition and Consumer Commission, said at the time. “What will happen with harder issues?”

What happened is the miners took their cues from Labor, the car industry and the unions. BHP Billiton chief executive Marius Kloppers even described himself as the shop steward in charge of the miners’ revolt against the resource super-profits tax.

In principle, a profits-based resource rent tax is a good idea supported by most economists. In practice, it looked too much like a revenue grab against an industry Labor has had in its sights since the days of Rex Connor.

The suspicions were inflamed when the RSPT was cherry-picked from Ken Henry’s far-ranging tax review and sprung on the industry on May 2. As Ross Garnaut has understated, “the manner of public disclosure of such a new, large and complex policy was not world’s best practice”.

Nor was Labor’s failure to properly document its claim that the miners were not paying their way, as measured by the supposed fall in royalty and other resource charges as a share of mining super profits. And this is now mirrored by the suspiciously small revenue fall from replacing the proposed industry-wide 40 per cent RSPT with the new 30 per cent mining resource rent tax, limited to iron ore and coal, and the extension of the 40 per cent offshore petroleum resource rent tax to onshore coal seam gas.

For such a radical and contentious new tax, it was always poor form for Treasurer Wayne Swan only to release RSPT revenue forecasts for two years: $3bn in 2012-13 and $9bn in the first full year of 2013-14.

Yet the truce announced by Gillard and Swan on July 2 only modestly reduced this forecast two-year tax take from $12bn to $10.5bn, despite its much narrower tax base. It only added up days later when Henry confirmed that the July 2 estimates were based on higher – but secret – forecasts for commodity prices than those included in the budget less than two months before.

This rubbery figures exercise only makes the government look more untrustworthy and the Treasury less credible. Swan

claimed the MRRT was a “better tax”. But Henry insisted his RSPT remained the appropriate “benchmark” for taxing resource rents.

In her previous super-ministry extending from education to the workplace, Gillard portrayed herself as the minister for productivity. And setting out her personal philosophy yesterday, she spoke of the virtues of hard work, the Australian larrikin embrace of informality, and the need to move forward rather than defend the way things have been in the past.

But how does this square with moves by her Fair Work Australia to make it illegal to hire teenagers to work for a couple of hours after school serving behind the shop counter or collecting supermarket trolleys? That’s previously been allowed in Victoria, South Australia and Western Australia but has now been banned under the three-hour minimum in the new “modernised” national retail award.

On Friday, FWA vice-president Graeme Watson conceded that the new three-hour minimum had “led to less employment of school students after school” because they often were available to work for only two hours before closing time, say, from 4pm to 6pm.

The three-hour minimum particularly had reduced job opportunities for youth in regional areas. And it had reduced work flexibility, perhaps by preventing students from filling in for parents who wanted to leave early to care for younger children after school.

Yet Watson sided with the shop assistants’ union and the “interests of fairness to employees generally”. The retailers had not demonstrated that permitting students to work a couple of hours after school was necessary to achieve Gillard’s “modern awards objective”. This is not “moving forward together”. It’s going backwards.

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