Public Interest Sold Out for Private Profit | Between the Lines

The Wrap with Richard Denniss

It’s not true that increasing government spending will make inflation worse. It’s also no accident that those opposed to small increases in unemployment benefits, arguing it will cause inflation and worsen the cost of living, have been strategically silent about the impact of spending $268-368 billion on the AUKUS submarines.

Does anyone really believe that spending money on the poor will harm us and spending money on the rich will help us? Welcome to the topsy-turvy world of Australian economic debate.

For the last 12 months the Australia Institute has been arguing that targeting government spending on bigger subsidies for medicines, doctors’ visits and childcare would lower prices, and in turn, lower inflation. So, it was good to see the budget contain new measures that addressed the price of medicine, GP visits and energy, and even better to have the Treasurer echo our argument in his Budget speech.

This Budget is carefully calibrated to alleviate inflationary pressures, not add to them.

Our policies to ease the pressure on households will take three-quarters of a percentage point off inflation in 2023–24.”

And while Australia still needs to make childcare free, abolish the Coalition’s university fee increases, increase benefit payments and radically reform the Stage 3 tax cuts, the Government’s shift is good. The fact the Treasury, and the Treasurer, now accept that well targeted increases in government spending can directly help individuals while helping fight inflation, creates enormous opportunities for those pushing for progressive reforms.

Speaking of progressive reforms, it’s becoming clear how many reforms are needed if Australia is to confront the legacy of the Morrison Government. The scandal over PwC selling public secrets for private profits highlights how broken and unsustainable the Government’s reliance on outsourcing has become.

While this year’s Budget contained some minor tweaks to the Petroleum Resource Rent Tax (PRRT) the Institute’s analysis shows that the changes to the tobacco excise will deliver far more revenue than the changes to the gas tax.

Then there’s fossil fuel subsidies and the Albanese Government’s commitment to an enormous increase in Australia’s fossil fuel expansion. This week we saw the spectacle of the Commonwealth Resources Minister Madeleine King expressing sympathy for the long suffering gas industry, the same industry that made $40 billion in windfall profits thanks to Russia’s invasion of the Ukraine. All while the Commonwealth is putting an extra $1.9 billion into a gas processing plant in Darwin Harbour.

Australia is one of the richest countries in the world and we can afford to tackle climate change, increase unemployment benefits and provide free childcare if we want to. What the Australia Institute’s research shows is that if we simply scrapped $12 billion per year we spend in fossil fuel subsidies, abandoned the $300 billion AUKUS commitment and radically reshaped the Stage 3 tax cuts we could have lower emissions, lower inflation and lessen inequality. All we need is a government willing to introduce a Budget to deliver such nice things.

— Richard Denniss, Executive Director of the Australia Institute

The Big Stories

The Budget Wrap

We have arrived on the other side of the Budget, where the announcements are over and the analysis is in full swing. As always, there were highs and there were lows.

The Budget brought in a 15% pay rise for aged care workers, a significant pay rise for an important industry that has suffered years of neglect. There was also more money for bulk billing, energy efficient homes, small increases in the rates of rent assistance, and expanded eligibility for the Parenting Payment for single parents.

Neglecting to scrap the enormously expensive and unfair Stage 3 tax cuts for high income earners was a huge missed opportunity, as well as ending fossil fuel subsidies. Other underwhelming announcements were the meagre alteration to the Petroleum Resources Rent Tax, and the modest increase to welfare payments, both falling short of what is needed.

If there was one takeaway from the night, it was that the 2023-24 Budget confirms that change is going to be incremental and slow.

For a complete Budget analysis check out our Budget Wrap:

Or, watch our Unpacking the Budget webinar.

Qatar Collects 20 Times More Tax on Gas Than Australia

Australia is the biggest exporter of gas in the world, but we collect so little tax on those exports. Tobacco excise generates more revenue than the Petroleum Resource Rent Tax.

While the Australian Petroleum Production and Exploration Association (APPEA) argues that taxing gas heavily makes Australia an unattractive place to do business, they only need to look to Qatar to see that isn’t so.

We export more gas than Qatar, but they collect 20 times more tax on gas than us.

If we amended the Petroleum Resource Rent Tax to collect the same gas revenue as Qatar we could afford to fund increasing JobSeeker to above the poverty line.

But as it stands, these giant multinational gas corporations are recording enormous profits, while everyday Australians pay the price through higher gas bills.

Our Budget analysis revealed that the beer excise will generate more revenue for the Government than the PRRT in 2024-25.

Ban Consulting Firms Who Breach Public Trust

The Government relies heavily on consulting firms to perform core government work, which can undermine the capability of the public service and interfere with the integrity of government decision making. As the PwC scandal has so clearly highlighted, it can also lead to highly confidential information being leaked for financial gain.

Bill Browne, Director of the Australia Institute’s Democracy & Accountability Program explains why our Government’s dependence on consultancies is wasteful and dangerous.

Our petition calls for the Government to cut ties with consulting firms who leak information and breach trust, and ban them from landing further government contracts.

Add your name to the petition.

You can also follow the Australia Institute’s coverage of the story on the Follow the Money podcast.

Tanya Plibersek Ticks Four New Coal Mines

Environment Minister Tanya Plibersek has given a boost to four new coal mines and mine expansions, three in New South Wales and one in Queensland. The Minister rejected calls to cancel the Mt Pleasant, Narrabri Underground and Ensham mines due to their climate impacts and approved the new Isaac River mine. In total, these mines could cause 1,257 million tonnes of greenhouse gas emissions over their lifetimes.

The big wins for the mines came just days after Minister Plibersek rejected two ‘long-stalled’ coal mines that had failed to keep up communications with the government about their environmental impacts.

The Australia Institute’s Rod Campbell asked whether the Minister would be “willing to cancel a project due to climate impacts, not just overdue paperwork” — the response the next week was a solid ‘no’.

The International Energy Agency is adamant there can be no new fossil fuel projects opened if we want to cap global warming under 1.5 degrees, and yet four mines made major progress in just two days. Australia cannot continue to open coal mines if we are to mitigate this climate change threat.

Add your name to our open letter calling on the federal Environment Minister Tanya Plibersek to stop approving new coal mines

You can also follow the progress of the 26 proposed coal projects across Australia via our Coal Mine Tracker.

Open Letter: We Need a Parliamentary Inquiry in the AUKUS Nuclear Submarine Deal

A range of high-profile politicians, former military leaders and academic experts have signed an open letter calling for a Parliamentary Inquiry into the AUKUS nuclear-powered submarine deal, appearing in full-page ads in the Australian Financial Review.

The Australian Government has announced a four-decades long deal to acquire American and British nuclear-powered submarines, at an indicative cost of $268 billion to $368 billion.

This is one of the most expensive spending commitments ever made, with huge implications for our sovereignty that rightly require appropriate Parliamentary oversight.

Australia does not currently have the design, construction or complex management skills to produce nuclear-powered submarines.

There are also questions surrounding Australia’s long term ownership of the submarines, and how we manage our responsibility for the disposal of the highly enriched uranium (HEU) used by the machines.

This acquisition deal has serious deficiencies that should be addressed, which is why we published an open letter calling for a parliamentary inquiry into the AUKUS deal.

Stage 3 will Cost $313 Billion Over 10 Years

New costings show the Stage 3 tax cuts will cost $313 billion over 10 years, permanently damaging Australia’s revenue base.

The Stage 3 tax cuts are massively unfair and massively expensive.

Check out our TV ad that brings home the clear message: Stage 3 tax cuts are unfair and overwhelmingly benefit the rich.

Join our petition calling for the scrapping of the Stage 3 tax cuts.

The Spin Bin

Recently the Northern Territory Government gave a green light to fracking in the Beetaloo Basin.

In a press conference filled with spin and outdated fossil fuel industry talking points, the Chief Minister and Deputy Chief Minister described gas as ‘safe and sustainable’, claimed that the decision was based on scientific evidence, and when asked about our open letter signed by nearly 100 scientists and experts calling for an end to fracking, urged the scientists to “be a bit more practical and level-headed.”

It has to be seen to be believed. Join Richard and Polly as they wade through the spin and explain what’s really going on.

The Quote

“The Stage 3 tax cuts are the Voldemort of the Budget.”

– Samantha Maiden, Political Editor at referring to the absence of the Stage 3 tax cuts during the government’s Budget speech. 

The Win

Opposition Leader Peter Dutton has joined the Greens and cross-bench independents on calling for an end to gambling advertising during broadcasted sports games.

Australia Institute research shows seven in 10 Australians (71%) agree that gambling ads on TV should be banned.

After many years of cross-bench support the issue has found its way into Peter Dutton’s Budget reply speech. The PM later also agreed he found the ads ‘personally annoying.’

We look forward to reform now that banning gambling is enjoying so much support from all sides of politics.

The Bin

In an interview with the Australian Financial Review last month, Prime Minister Anthony Albanese responded to the idea the Stage 3 tax cuts were designed for the wealthy.

“Those measures begin at $45,000. If you’re on $45,000 you don’t regard yourself as being wealthy”.

Treasurer Chalmers and Albanese have both sought to rebuff the critique of the cuts with this approach since the Budget announcement, but it doesn’t quite add up.

Greg Jericho’s graph shows where the real ‘kick in’ begins.

Get Involved

End Fracking in the Northern Territory

The Northern Territory is particularly vulnerable to climate impacts, yet the NT Government continues to pursue fracking in the Beetaloo Basin, approving the project on 3 May.

96 scientists and experts have signed an open letter calling on the Northern Territory Government to stop fracking and protect our climate.

The letter was raised during a press conference announcing the approval, where Deputy Chief Minister Nicole Manison was asked what she thought of it.

She replied, “I would ask those people…to perhaps be a bit more practical and level-headed.”

The science has not changed, there remains a clear connection between fossil fuel expansion and climate change.

You can help by adding your name to the open letter, backing the scientists and experts calling for an end to fracking in the Northern Territory. 

What’s On

Politics in the Pub | State Budget Wrap 2023

Join the Australia Institute’s Senior Economist Matt Grudnoff and Australia Institute Tasmania’s Director Eloise Carr as they unpack the 2023 Tasmanian Budget. It’s everything you need to know.

7pm AEST, Thursday 25 May. Free, registration essential.

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