Meet David – he donates to The Australia Institute. He’s a psychologist and economist from Melbourne, and he particularly likes our work on equity.
We love David because not only does he believe in progressive ideas; he’s also willing to fund them.
David wants to post us a cheque for $10,000 as his End of Financial Year contribution to the Institute. But he’s set us a challenge before he mails it. David has asked us to come up with 10 reasons why we’ve earned his $10,000 donation, and use those reasons to convince you to help us raise $10,000 to match it – before the end of June!
In other words, for every $1 we raise, we’ll receive $2 – that’s $20,000 that can be put towards being a progressive voice on your behalf.
So, here goes – if our 10 reasons persuade you, please DONATE HERE:
We audited the auditors, setting the agenda for how the National Commission of Audit was reported on, and ensuring its unfair agenda was made clear.
We busted the myth of Hockey’s budget emergency, detailing just how well Australia is doing financially, and how we can afford to support vulnerable people rather than penalise them.
We finally convinced powerful people, such as highly respected financial journalist and commentator Michael Pascoe, chief executive of the $60 billion AustralianSuper fund Ian Silk, Magellan Financial Group chief executive Hamish Douglass, and even fellow think tank the Grattan Institute that superannuation tax concessions are inequitable and need to be reined in.
We took on the economic modelling of Big Coal and won – and now the NSW government will require independent economic modelling before approving new developments, a big win for communities and the environment.
We showed Tasmanians in the lead up to the State election that their economy does not rely on forestry.
We called “balderdash” on the gas crisis – our research shows it’s a furphy pedalled by the industry to try and increase their profits.
We identified ways you can make your money fossil fuel free
We showed what the gender pay gap is costing women in retirement
Last but not least, we irritated former IPA spokesperson Tim Wilson who “scoffed at using The Australia Institute as some authoritative source” when he appeared on The Drum recently.
DONATE HERE — every $1 you donate is worth $2 to us.
- Building a super highway to equality
- Keeping the coal barons honest
- Advancing a Fair Australia
- Failing the fairness test
- Recent submissions
- TAI in the media
Building a super highway to equality
Tax concessions on superannuation contributions that are overwhelmingly benefitting richer, older Australians are once again in the news. The Australia Institute has played a key role in pressing this important policy issue – or failure – to the fore, and it is not just concessions. The Institute was examining superannuation policy in Australia long before it became a news story. Our super research, amongst other things, includes how unengaged people are when it comes to super.
A lack of engagement by Australians with their own superannuation meant government policy had gone largely unnoticed. This disengagement continues to see retail superannuation funds make large profits by charging higher fees than member owned super funds. The Australia Institute pointed out in 2008 that a lack of engagement was costing Australians millions of dollars.
The next year the Institute published three more papers that looked at the issue of excessive fees and the need for a universal default superannuation fund. The third report raised the issue of superannuation tax concessions.
That’s right, 2008! For six years The Australia Institute has been showing the inadequacy of superannuation policy in Australia and suggesting reforms to improve the system.
The Cooper Review picked up on the Australia Institute’s proposal for a low-fee ‘default fund’. The government subsequently established MySuper: ‘a new, simple and cost-effective super account’ for all Australians. The benefits of MySuper began on 1 January 2014.
That’s right, 2014! Changing government policy takes sustained effort. The type of sustained effort The Australia Institute has a record of maintaining (ie Super rort for wealthy and Super subsidies: a budget spending secret) with two further papers in 2013 (Time to get engaged with super? and Super for some.
This persistent effort resulted in Executive Director Dr Richard Denniss being invited to the National Press Club to debate superannuation policy with industry lobbyist John Brogden. As superannuation again became a hot political issue Dr Denniss called for transparency asking Treasury to release its super modelling.
But the previous government squibbed the opportunity to tackle the issue. Minimal changes to tax concessions were made despite this single expense representing the fastest growing expense in the Commonwealth budget. The Abbott government has ruled out any significant changes to superannuation policy in this first term of government.
More effort is required if the inequality of super tax concessions is to be overturned in a second term or by a new government. There is growing pressure, for example the Grattan Institute recently joined the effort addressing the same issues the Institute has been researching since 2009.
Meanwhile, we have again expanded the agenda with a well-received proposal for a universal pension policy.
The Australia Institute still leads the way on superannuation policy reform, but we can’t maintain the effort without support. It is time to get engaged with the super debate and to support the Institute so we can maintain the effort until superannuation policy is more equal.
Keeping big coal honest
The Australia Institute has finally debunked the dodgy economic modelling of mining companies, with decision makers in NSW this week slamming the economic claims of the Wallarah 2 coal project as “staggering” and “not credible”, in a huge win for communities, land, water and other industries impacted by coal mining.
Australia Institute researcher Roderick Campbell made two submissions on the controversial project which seeks to mine the drinking water catchment of the NSW Central Coast. This project played a role in the downfall of former NSW premier, Barry O’Farrell, who had infamously sported a “Water-not-Coal” t-shirt when campaigning in the area pre-election. Post election his government allowed assessment of the proposal.
The submission showed a difference of $1 billion in benefits claimed by the project between the first and second iterations of the project. This had a strong influence on the NSW Planning and Assessment Commission’s review of the project:
The unreliability of the Proponent’s estimates of project benefits is succinctly summarized by Campbell referring to the claims made for the project’s predecessor against the claims made for the current project. Even allowing for the [changed mine plan], the difference of over $1 billion in claimed benefits is staggering.
The commission slammed the NSW Department of Planning for its uncritical acceptance of the miner’s benefit claims. In response, new Planning Minister Pru Goward committed the department to commission “separate economic analysis” for future mining proposals.
The Institute will be closely watching these reforms to economic assessment of major projects.
The controversy around the Wallarah 2 project sparked this reform, but it comes after several years of work from the Institute on these issues. While Wallarah 2 grabbed headlines, these reforms came in on the heels of an equally scathing Planning and Assessment Commission decision on the Stratford coal project in the Gloucester Valley.
Both these decisions refer back to earlier court cases that the Institute has been involved in against the Ashton and Warkworth coal mines in the Hunter Valley.
Fittingly, the Wallarah 2 decision made the news as the Institute launched our new report on coal in the Hunter economy. Download the full report here: Seeing through the dust: Coal in the Hunter Valley economy.
Advancing a fair Australia
The May Budget was almost universally seen as unfair, making it hugely unpopular in the community. It could hurt low income earners, leaving high income earners and the corporate sector untouched. It attempts to seriously erode the universality of our health and education systems. It has raised serious concerns about increasing the gap between rich and poor. Joe Hockey’s statement that ‘the age of entitlement is over’ featured in his Budget speech. The head of the IMF, Christine Lagrange, tried to gently correct this view by pointing out that health and education are not entitlements.
Two influential reports by Australia21 in partnership with The Institute, and Oxfam have just been released. Both reports highlight not just existing inequality, but the fact that inequality is worsening. The titles of those reports make important statements; Advance Australia fair? What to do about growing inequality in Australia and Still the lucky country? The growing gap between rich and poor is a gaping hole in the G20 agenda. The Australian ethos emphasises fairness and egalitarianism. It is hard to continue thinking of ourselves as fair and equal when Gina Rinehart and nine other individuals have more wealth than 20 per cent of Australian households.
The government sector is the critical factor in ensuring everything is fair and that we all share in Australia’s prosperity. The tax and transfer system redistributes cash income from those who can afford it to people such as age pensioners and the unemployed. Government services redistribute income in-kind. Polls in the US and soon to be released in Australia show people support a strong government sector and the services it provides much more than is reflected in the policies of their elected members.
While the Budget was assaulting our notions of fairness the rest of the world was reading Piketty’s new book on inequality; Capital in the twenty-first century. Australians are anticipating the arrival of Nobel prize winning economist Joe Stiglitz, who has also written extensively on inequality and debunked many of the arguments used by the wealthy and the corporate sector to justify further inequality. Joe Stiglitz will be hosted by The Australia Institute.
Failing the fairness test
In a recent speech to the Sydney Institute Joe Hockey announced that “it is the responsibility of the government to provide equality of opportunity”. While this is a nice sentiment it does not necessarily translate into action. The Australia Institute released an infographic (see below) that graded the Treasurer’s first Budget on the opportunities it has provided to young Australians. We found a few serious errors:
Let universities increase fees
The recent Budget has deregulated universities which will allow them to set their own fees. While it is difficult to tell exactly what the new fees will be most predictions are that they will rise. A number of websites have been created, including one by academics at the ANU, which offer predictions of how much university degrees will cost, and the debt burden this will place on university students. With two-thirds of university students already living in poverty, we need to seriously ask the question of how much student debt is too much.
Cut $900 million from apprentices tool allowance
In his Budget speech, Mr Hockey announced the introduction of concessional Trade Support Loans for apprentices, saying “it is only right that those completing a trade qualification get… a fair go”. However, these loans will replace the current ‘tools for your trade’ payment. This means that instead of getting a payment to buy tools, apprentices will now have to get a loan. At the same time the Budget is geared to wiping government debt, it is imposing debt on young apprentices.
Cut $3.8 billion out of education
All the combined changes to education have delivered a $3.8 billion cut over four years. Major changes include reducing the income threshold for repaying university HELP debt and increasing the interest charged on HELP.
Make young people wait up to six months to get Newstart
The government announced in the Budget that people under 30 will have to wait up to six months to receive Newstart payments. When asked how young people would be able to afford basics such as the GP co-payment Mr Hockey replied “I would expect you’d be in a job”. This is despite the fact that there has never been 100 per cent employment in Australia and youth unemployment is consistently higher than for other age groups. In fact the Budget papers reveal that the government does not expect an increase in jobs but instead predicts a rise in unemployment from 5.6 per cent in 2012-13 to 6.25 per cent in 2015-16.
The government recognizes that many young people will be forced into poverty, allocating $230 million in the Budget for emergency relief to the young unemployed. It begs the question of why, when young people are the most likely to be unemployed, can they not access income support?
Limit Family Tax Benefit B to children under 6
The changes to the Family Tax Benefit are a mixed bag. While some changes target those who are better off, many hit low income households. Limiting Family Tax Benefit B to children under six will impact on sole parents and single-income families. This will inevitably disadvantage those who may already be struggling.
TAI in the Media
The key points of this submission are that: Economic assessment of the projects does not comply with Director General’s Requirements (DGRs); That the justification of the project is based on incorrect information about the Australian East Coast gas market, and that the Department’s EAR is incorrect in relation to the implications of the project for greenhouse gas emissions. Read more
The Renewable Energy Target (RET) has been a very successful policy at reducing Australia’s greenhouse gas emissions by increasing renewable energy generation. This submission from The Australia Institute recommends that the RET be strengthened to take advantage of the imminent retirement of gas fired electricity generation from the NEM. This submission will focus on three main areas. Read More
The Australia Institute made a submission to the Senate Economics Legislation Committee on the Tax Laws Amendment (Temporary Budget Repair Levy) Bill 2014 and related bills. This levy has the effect of increasing the marginal tax rate from 45 to 47 per cent on incomes over $180,000. Inclusive of the Medicare Levy and the DisabilityCare Australia levy the marginal rate increases from 47 to 49 per cent. Read More