The Wrap with Ebony Bennett

The public support for the Albanese government’s bold decision to redesign the Stage 3 tax cuts has shown us that Australians are up for a conversation about tax – and that we understand that policies need to change as our circumstances change.

Our research found that Australians’ appetite for tax reform doesn’t end there: a majority of voters support a tax on fossil fuel exports.

And during his National Press Club address, Richard caught national attention when he highlighted the extent of the problem. Our main tax on the gas industry, the Petroleum Resource Rent Tax, raises less money than the Australian Government collects from HECS.

Increasing the PRRT could raise much-needed revenue to fund essential public services and help Australia deal with the impacts of the climate crisis. If you haven’t already, add your name to our petition. It will help demonstrate to the Parliament that the Australian people want gas taxed fairly.

Veteran economists Rod Sims and Ross Garnaut made a significant intervention at their address to the National Press Club on Wednesday, arguing that a tax on fossil fuel production could help fund Australia’s transition to becoming a carbon-free energy giant, lower the cost of living and assist the world to cut greenhouse emissions. It is a no-brainer.

Time will tell if the government can learn from its sensible and successful policy rethink on the Stage 3 tax cuts and be bold enough to make the fossil fuel industry pay it’s fair share.

Meanwhile in Tasmania, Australia’s only Liberal Premier Jeremy Rockcliff has called a much-anticipated early election, sending Tasmanians to the polls on March 23.

It’ll be another election without truth in political advertising laws, putting integrity in politics at the centre of the election campaign, alongside ending native forest logging and taking the environmentally destructive salmon industry out of Macquarie Harbour.

With several independents looking to displace major party candidates, it will be one to watch.

Stay tuned for our analysis; as always, we’ll give you the facts to help you cut through the spin in these critical couple of months!

— Ebony Bennett, Deputy Director of the Australia Institute

The Big Stories

It is Time to Increase the Petroleum Resource Rent Tax

The PRRT is our main tax on the gas industry, and is so inadequate that it raises less money than the government collects through HECS, even in a year of soaring gas prices.

As Greg Jericho breaks it down in Off The Charts, there are big problems with the PRRT’s design.

The changes to the PRRT currently before parliament would limit the extent to which gas companies can reduce their liabilities, but they are so incremental that they were actually welcomed by the industry when they were announced.

You can help by adding your name to our new petition, calling on the government to increase the Petroleum Resource Rent Tax.

Increase the PRRT

Here’s Richard explaining the massive opportunity that is before us.

Please sign our petition and share it with your networks! It’s time to make gas companies pay their fair share of tax.

The Monthly: Australia’s bureaucracy continues to facilitate a fossil fuel agenda

“The 2022 election result was a vote for climate action and integrity. After the hottest year on record, we are now closer to the next election than the last, and the public is still waiting to get what it voted for,” writes Polly Hemming in February’s edition of The Monthly.

“History will not look kindly on those complicit in facilitating a fossil fuel agenda, even if they haven’t technically broken any laws. Lives and species will be lost as a result of the actions of Australian governments and the bureaucracy. At some point they must be called out.”

We Knew | Judy Horacek

Who here knew that native forests are best left un-logged?

All cartoons © Judy Horacek

Australians Want Stage 3 Better

Recent Australia Institute analysis shows broad support for the Albanese government’s changes to the Stage 3 tax cuts, with the vast majority of Australians receiving a higher tax cut than under the Morrison-era plan.

Voters in National seats are among those who benefit most, while voters in Independent seats are supportive of the changes, despite being more likely to reduced tax cut.

Of Australia’s 151 electorates, 127 will receive additional benefits under the restructured cuts, showing just how damaging the Coalition’s original Stage 3 cuts were to Australia’s social and economic fabric.

Those in National electorates will receive a cumulative $451 million in additional tax cuts ($326 per taxpayer) next financial year, while the Liberal Party’s 41 seats will be better off to the tune of $913 million ($226 per taxpayer).

Additional research has also found overwhelming support for the changes in Dunkley, which faces a byelection on March 2, with 2 in 3 voters supporting the restructure.

The Stage 3 legislation is progressing through parliament, and the Australia Institute will continue its analysis of these important changes.

Negative Gearing Is Not Helping the Housing Crisis

The soaring price of housing is going to be one of the key issues of the year, with the highly divisive issue of negative gearing at the forefront, bolstered by the Australian Greens’ push to scrap the scheme.

But what is negative gearing, and how does it work? Greg Jericho joined The Project to explain:

“It is a tax minimisation scheme disguised as a housing policy, most of the benefits go to the wealthiest and it massively distorts housing prices.”

2024: The Year of Global Elections

Wednesday’s Indonesian general election saw Defence Minister Prabowo Subianto declare victory – but official results are unlikely to be known for a number of days or weeks. Regardless of the result, this next presidency will take Indonesia in a new direction.

As Allan Behm, Director of the Australia Institute’s International & Security Affairs Program, wrote in the leadup to the poll: “a popular and successful President will be succeeded by one of three candidates, none of whom is especially popular or generates much enthusiasm among voters.” What are the implications for Australia?

Read Valentine’s Day, Indonesia style now.

Indonesia is just one of several nations facing general elections this year. Dr Emma Shortis will have a rolling update of elections taking place in 2024 and most recently joined ABC TV to discuss events in the United States.

In light of the United States, it is important to not take our democratic processes for granted.

Dr @EmmaShortis, Senior Researcher at the Aus Institute, explains how to strengthen democracies, and what the world can learn from Australia, on ABC News. #auspol pic.twitter.com/dPDUJg5XKk

— Australia Institute (@TheAusInstitute) February 9, 2024

Fels’ Blasts Price Gouging

Prof Allan Fels, delivered a searing address to the National Press Club last week, heavily criticising the supermarkets for their involvement in unchecked price gouging that saw consumers pay unfairly high prices in the name of company profits.

The Australia Institute and its Centre for Future Work were among the first to identify the role of record-high corporate profits in driving the acceleration of inflation after the COVID lockdowns, facing backlash as we consistently challenged the lingering consensus on profits and inflation.

A 2023 Centre for Future Work report showed that over two-thirds of excess economy-wide inflation from the end of 2019 through to the September quarter of 2022 was attributable to higher unit corporate profits, with Dr Jim Stanford and Greg Jericho made a major submission to the Fels inquiry and appeared before its public hearing in September 2023.

In the words of Greg Jericho, “Professor Fels’ careful review confirms that price-setting strategies by corporations, including many unfair and exploitative practices, have contributed significantly to the cost-of-living crisis afflicting Australian households.”

Closing Loopholes Bill

The Closing Loopholes Bill Part 2 passed the Senate last week, making significant reforms to Australia’s Fair Work legislation.

As Dr Fiona Macdonald summarises, the new Closing Loopholes bill will:

• Enact a new definition of casual employment in the Fair Work Act, making it harder for employers to classify their employees as casual when they are working more than casual hours
• Establish new pathways for casuals to become permanent
• Address poor pay and working conditions for gig workers
• Introduce a right to disconnect where employees will have a right to refuse to respond to contact from their employers outside their scheduled hours if the contact is unreasonable

The success is a culmination of the Centre for Future Work’s Go Home on Time Day.

Read more: In the New Daily, Dr Jim Stanford debunks Opposition Leader Peter Dutton’s claim that protecting workers’ personal time would undermine productivity.

Podcasts

Follow the Money

Every year, the Commonwealth collects more revenue from HECS than it gets from the Petroleum Resource Rent Tax. The PRRT is so weak that gas companies love it!

This week on Follow the Money, Mark Ogge explains the government’s proposed changes, and how we can fix it to tax our gas companies fairly.

Listen now: The Great Gas Rort: Fixing the Petroleum Resources Rent Tax

Dollars & Sense

With Michele Bullock at the helm of the RBA, there’s change in the air. But do the changes extend below surface level? Where do they think inflation is going, and what about those pesky interest rates? Join us as we dive into the latest monetary news.

Listen now: New Look RBA, New Direction?

The Quote

“The implementation of the [carbon levy] is not as impossible as living with our failure to play our full part in the global effort to stop the bushfires and cyclones and denudation of our beaches getting worse. It is not as impossible as being unable to pay for our ageing population, and unable to pay for our submarines.”

Professor Ross Garnaut addressing the National Press Club

The Win

Queensland Commits to a 75% Emissions Reduction Target

Queensland Premier Stephen Miles has used his first sitting week in parliament to introduce legislation to commit the state to a 75% reduction in carbon emissions below 2005 levels to be achieved in the next 11 years.

This announcement is the latest rollout of Labor’s $62 billion energy plan designed to oversee the phase out of coal power and the introduction of more renewables to the state energy grid.

Mr Miles has framed the target as an opportunity to unite the state, citing the benefits to both rural and urban voters who have been affected by natural disasters and those who want stronger action on climate change.

The Premier was adamant that his government alone, if successful in another four-year term, would herald the state’s transition away from coal-fired power, stating, “you won’t be able to turn it around, we will get to 75 per cent…but…should those laws be torn up then we won’t be on the pathway in 2028 and we will never meet the 2035 target.”

The Bin

Winchester South Coal Mine Approved

Excitement at the Queensland Government’s commitment to a 75% reduction in carbon emissions has been somewhat tempered by the approval of another coal mine in the state.

Whitehaven Coal’s Winchester South coal mine has been given the green light to extract up to 17 million tonnes of coal a year for approximately 30 years, contributing 631 million tonnes of emissions over its lifetime.

The government defended its decision on the basis the mine would extract coal used for steel, providing infrastructure for its renewables transition.

However, as Rod Campbell explains, not only is the environmental damage the same regardless, Australia supplies 61% of traded metallurgical coal, and Queensland has huge reserves for the future – undermining the argument for opening new mines.

In fact, BHP claims its mines will operate for decades — Saraji has approval to 2044, Caval Ridge to 2056 and Peak Downs is currently applying to extend until 2119.

You can check out our coal mine tracker to better understand the impact this mine will have and get a better idea of the scope of the potential mine approvals on the table.

Coal Mine Tracker

Read more: You must be coking! Are new coalmines OK if they help make steel? 

What’s On

Politics in the Pub: Stage 3 & Fairer Tax Reform | 6:30pm Wednesday 28 February 2024

Australia’s Biggest Book Club: Chanel Contos | Webinar: 11am Thursday 29 February 2024

Adelaide Writers’ Week: Technofeudalism – Yanis Varoufakis with Barbara Pocock | 1:15pm Saturday 2 March

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