View from The Hill

Mining tax deal ticks off a commitment in time for the birthday

Clive Palmer has made a deal with the government to allow them to get their mining tax repeal through the senate. AAP/Alan Porritt

With its first anniversary on Sunday, the Abbott government wants to trumpet achievements.

Ministers have been asked to put forward what they’ve done in their portfolios for airing in question time this week. But beyond that, given all the budget pain, a substantial victory was needed on a signature issue.

After holding out for quite a while, Clive Palmer eventually played ball, though at a price – about A$6.6 billion over the forward estimates, to be precise.

Palmer delivered the repeal of the mining tax but the schoolkids bonus and a couple of other measures stay until after the next election.

As part of the effort to get longer-term savings, the government is also delaying raising (in stages) the compulsory superannuation rate to 12%, which now won’t be reached until 2025.

At a news conference, Treasurer Joe Hockey and Finance Minister Mathias Cormann admitted it wasn’t budget plan A. But it was the best that could be obtained, they said. Like everything, it was Bill Shorten’s fault – Labor hadn’t been willing to come on side so they’d had to extract what they could from the Palmer United Party.

It’s not clear how the delay in boosting the compulsory super rate will go down with voters. People these days are increasingly aware of nest egg retirement savings.

Labor was quick to produce cameos, estimating for example that a 35-year old earning $75,000 (close to the average wage) would have $12,977 less in their retirement savings by 2025 as a result of the changes.

Tony Abbott’s reply is that the compulsory super takes dollars out of workers’ pockets (though the increase was okay in the longer run).

It’s hard to think ordinary voters will see the repeal of the mining tax, which raises very little, as vital; many would believe we should have such a tax, albeit better designed than Labor’s one.

For Abbott it’s the undertaking as well as the issue itself. He said last night that “our challenge is to implement our commitments” and this was “one of the most fundamental committments of all”.

Cormann had plenty to volunteer at the news conference (as he always does at these joint appearances), but Hockey seemed to just want to end it.

The Treasurer had had a difficult day. During the Coalition parties meeting he had a big spray at the Western Australian government after backbencher Christian Porter, a former WA treasurer, spoke out in support of Premier Colin Barnett’s calls for the state to get a bigger share of the GST.

Porter, talking on behalf of members from the west, indicated the WA federal MPs were planning to make a submission to the government’s tax white paper – something Tony Abbott told the meeting would not be a good idea.

Hockey was scathing of the state Liberal government, accusing it of being slow to privatise and other sins. Significantly, his cabinet colleague Julie Bishop, who is from WA, urged him to steady on.

The WA backbench push was just a reminder that when it comes to difficult issues, the worst could be yet to come for the government. Handling taxation, on which the government has said reforms would be put to the next election, could turn into a nightmare.

On a more immediate front, a couple of MPs in the party room warned that the government needed to tread carefully as it considers the Warburton report, released last week, which recommends taking an axe to the renewable energy target. People quite liked solar, the MPs said.

Indeed they do. Tuesday’s Essential poll has some strong findings on the matter. Voters were asked whether Australia should put more/less/about the same emphasis as now on producing domestic energy from various power sources. The results for “more emphasis” were: solar 70%, wind 60%, hydro 46%, gas 23%, nuclear 18% and coal 9% (53% said less emphasis should be put on coal).

People were also asked which energy source, renewables like solar and wind or fossil fuels like coal and gas, was better for the environment, the economy, jobs and electricity costs. Again, renewables came out on top: on the environment 77%–5%; economy 39%-29%, jobs 36%-25% and electricity costs 45%-19%.

Going down the ideological path on RET will just bring more grief for the government.

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