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The mining tax has been abolished after a deal with the Palmer United party (PUP) in which the government delayed the abolition of the schoolkids bonus and other savings and deferred already-legislated increases to workers’ compulsory superannuation for seven years.
The prime minister was jubilant after the shock deal was revealed, claiming it rendered the Labor party irrelevant and proved the government – approaching the first anniversary of its election – was “getting on with the job.”
After secret negotiations with PUP, the government revealed a deal with the crossbench senators to finally abolish the mining tax – as it had so often promised – if it retained three programs until after the next election, instead of abolishing them straight away.
In changes that will cost the budget bottom line $6.5bn over the next four years but leave it no worse off in the long term, the government has agreed to keep the schoolkids bonus, the low income superannuation contribution and the income support bonus until 2016 or 2017.
But it will also freeze the amount employers are compelled to put into all workers superannuation accounts. It is currently legislated to increase to 10% in 2015-16 and then by 0.5% each year to reach 12% in 2019-20. After this deal goes through it will be frozen at 9.5% and won’t reach 10% until 2021, rising by 0.5% a year after that.
Well by my reckoning that is another victory for the Coalition government in their campaign to undo the follies of Labor, which means that we will no longer have a tax that costs more to administer than it collects which makes us a laughing stock to the world. Further the suspension of increases in superannuation will be greeted with great joy but those in our economy who provide the employment, it will mean that the cost of hiring someone will be less over time which should help business to employ more people. Personally as I have two children in school the continuation of the school kids bonus will come in handy but I very much doubt that it has ever been a game changer to parents in this age of voter cynicism. As Tony Abbott said yesterday in the Parliament this is not everything the government wanted but it will do.
What this means is that the government has actually achieved the three planks of its election campaign, the Carbon Tax has gone, the Mining Tax has gone and the Boats have been stopped, more importantly though this demonstrates that for all of his bluff and bluster in the media Palmer can be dealt with and the government can bring about the reforms that it was elected to do.