Liberal MP warns debt tax will hit government’s credibility

Liberal backbencher Warren Entsch believes the release of the commission of audit report was mishandled. AAP/Alan Porritt

Senior Liberal backbencher Warren Entsch says the Commission of Audit has “frightened the bejeezus” out of old people and warned that the government’s proposed deficit tax levy will hit the government’s credibility.

He also said the focus on knighthoods and changes to the Racial Discrimination Act had already “squandered a lot of credibility”. “What are they going to do for the economy?”

Entsch, who holds the north Queensland seat of Leichhardt and was chief whip in opposition, said the release of the audit report – prepared by a panel chaired by business chief Tony Shepherd and put out by the government last Thursday - had been mishandled. It should have been made public two months ago or held over.

He was concerned at the fear it had brought, especially among the elderly, about things that were not going to happen. “It’s been very poorly managed [by the government]. It’s created the opportunity for political opportunism. My mother’s 83 and on the pension. She was packing death,” Entsch told The Conversation.

When it came out so close to the budget it was assumed it was a softening up project. His office had received “heart wrenching” communications from worried people.

“There should have been more time focusing on this than on lords and ladies and 18C. They could have got the message out properly.”

Prime Minister Tony Abbott announced the reintroduction of knights and dames when new Governor-General Peter Cosgrove was about to assume his office.

The planned changes to the Racial Discrimination Act – now out for consultation – have brought a strong backlash from ethnic communities.

Entsch dismissed any suggestion that the expected tax rise could be passed off as other than what it was. “It’s a tax – it’s not a levy.”

He recalled that before the 1996 election, John Howard had had candidates, including him, sign a pledge that there would be no tax increase. Then treasurer Costello had the introduced a superannuation surcharge on higher income earners, to which Entsch had been “vehemently opposed”. “When is a surcharge not a tax?”

He said he had “very major issues” with the tax rise planned for this budget, which breaks Abbott promise that tax would not be increased. He had expressed his concern in the one phone call that had been made to him about the matter. He declined to say who had called.

His reservations were more about credibility than anything else, Entsch said.

Asked about the deficit tax on the Nine Network today, Abbott said: “I’m not going to deny for a second that there will be people who are disappointed.”

He said no one liked difficult decisions. “Governments don’t like taking difficult decisions, voters don’t like the consequences of difficult decisions. But you’ve just got to make hard decisions at a time like this, otherwise our country is doomed to years of economic stagnation and I think in the long run, the voters will thank us for doing what is absolutely necessary if Labor’s debt and deficit disaster is to be tackled.”

A Galaxy poll published at the weekend found more than seven in ten people thought the deficit levy would be a broken promise.

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