Inside the system

Abbott and Hockey enjoy luxury while serving up cuts

Abbott and Hockey are telling us we all have to share the burden of budget cuts. But behind this façade they continue to live in the lap of luxury.

Hockey organised and enjoyed a $50,000 dinner for just 60 financial ministers and central bank governors recently at the G20 in Washington. Hockey’s spokesperson described the April dinner as “great value for money”.

The menu included Victorian Wagyu beef, Western Australian truffles, barramundi and “eucalyptus ice” dressed with Tasmanian leatherwood honey. The food was prepared by Australian TV chef Shane Delia, who was jetted over business class courtesy of the taxpayer. Hockey’s department also paid to air-lift the truffles directly from Australia to Washington.

Abbott is no stranger to expensive meals either. In April an email from Liberal Party federal director Brian Loughnane offered “business observers” breakfast with the PM and access to his chiefs of staff for $11,000 per head.

Conveniently, the price was just below the $12,000 threshold which would require the money to be registered as a donation with the Australian Electoral Commission. After what we’ve learnt recently about dodgy donations and influence peddling amongst the NSW Liberals, it’s obvious the business figures weren’t really paying for the meal.

No ‘heavy lifting’ for millionaires

Tax figures show that 75 Australians who made a million dollars or more in the 2011-12 year managed to pay no tax at all. On average they made $2.6 million each that year from investments and wages.

These mountainous incomes were reduced to mole-hills by tax experts. On average the 75 claimed $1.4 million each for the “cost of managing their tax affairs”.

That is they spent big to game the system. This enabled them to shrink their taxable incomes down to a truly farcical average of $1.10 each.

None of them paid a cent of income tax and nothing to the Medicare levy or the Medicare surcharge.

This bunch will not be affected in any way whatsoever by Hockey’s deficit levy, despite the fact what they spend on “tax advice” alone meets the $180,000 threshold many times over.

If these are the “lifters” Joe Hockey was talking about in his budget speech, the only thing they are lifting is money from the Tax Office.

Even the debt levy leaves blatant loop-holes for those adept at cheating the system.

There will be a nine month lag between the 2 per cent rise in income tax coming into force and a corresponding increase in fringe benefits tax.

This will allow big earners plenty of time to salary-package; arranging to be paid in shares or a new car instead of cash and so dodge the levy.

Palmer policy is pay cuts for his workers

Clive Palmer has positioned himself as a champion for ordinary people, promising to oppose proposed pension cuts, the Medicare co-payment, the fuel excise rise and welfare cuts. But the millionaire’s own business practices paint a quite different picture to the “champion of the people” image he presents in parliament.

Palmer’s nickel company Queensland Nickel (QN) has set up its own stevedoring company and is attempting to undermine waterfront conditions by forcing workers to accept a 0 per cent pay increase.

Interestingly, many of the Palmer United Party’s local candidates are in fact bosses in Palmer companies. Ian Ferguson, who stood for the Palmer Party in the electorate of Dawson in Queensland is Managing Director of Operations at QN. Clive’s populism may see him oppose austerity in Canberra, but when it comes to his own workers, it seems he is singing a different tune.

Winning Lotto makes people more right-wing

A joint Australian and British study has found that winning the lotto makes you more right-wing.

The study looked at 4000 British citizens who won up to $360,000. Despite the fact many people only won tiny sums, 18 per cent of winners immediately switched from supporting Labor to the Tories after claiming their prize. Of those who won over $900, 45 per cent went on to support right-wing parties compared to 38 per cent of the general population.

This trend became stronger the more people won. Co-author Nattavudh Powdthavee from the University of Melbourne said that almost instantly after a win, “You are more likely to favor right-wing ideas, such as lower taxation, and are less favorable to redistributive policies.”

It shouldn’t really be a surprise that those who have wealth come their way suddenly come to support policies to keep it off others.

If being born rich is like a lottery then the study goes a long way to explaining the Liberal budget.

Stop whinging Pyne, we’re the ones being assaulted

Christopher Pyne’s ridiculous claim that students “assaulted” Liberal front-bencher Julie Bishop at an angry post-budget protest at Sydney University captured the essence of why people despise this government.

Their budget put forward plans to gut universal healthcare, rip away the welfare safety net and allow a tripling of university fees. This will force under 30s to scrounge and beg while looking for a job, force struggling families to choose between bread and milk and GP visits and make access to some universities dependent more on your parents credit card than your marks.

But when one of their own experiences some slight discomfort and jostling at a protest they scream about “assault”. The fact that they set the bar for their own wellbeing so unbelievably high, and the bar for ours so unbelievably low is precisely why people are up in arms. If the Liberals think we’re going to roll out the red carpet for them whenever they grace us with their presence they need to think again.

Things they say

Sometimes the fire brigade knocks over a few fences in order to put out the fire
Tony Abbott compares his budget to firefighting. Except we are the fences.

You don’t play first grade football all your life, I don’t expect you’ll be a bricklayer or a plumber all your life until you’re 65 or 70. There will be multiple careers that people have.
Joe Hockey is out of touch about the impact of raising the retirement age

I think it’s a sad day for Australian democracy that the Prime Minister can’t attend important events in our country because of the threatening behaviours of a small minority.
Denis Napthine, Victorian Premier, tries to rationalise Tony Abbott’s refusal to attend a scheduled event at Deakin Uni.

It would not be levy. It would be a temporary change in the tax threshold.
A senior government source on Abbott’s deficit tax, er levy, er temporary change.

There are really good structural measures here
Treasury Secretary Martin Parkinson on the budget.

I hear you on IR. There are only so many mountains you can climb at one moment.
Joe Hockey responds to demands for cuts to award wages and penalty rates at an Australia Israel Chamber of Commerce lunch just before the budget.

I didn’t set out to achieve much and in the end I don’t think I did achieve much
The late Neville Wran in 2005 interview—the man hailed by Bob Carr as a model for Labor right around Australia.

Look everyone does cocaine
A high-placed PR executive on the Geoff Huegill and Sara Hill arrests.

Who is ICAC?
Near bankrupt coal baron Nathan Tinkler in an email to a colleague after investigations about his efforts to buy influence started.

I’m such a great guy
Tinkler’s explanation for a $53,000 donation to Liberal Party slush fund the Free Enterprise Foundation


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