The Coalition already have a $70 billion black hole in their finances and with their latest policy back flip on superannuation they are now digging an even deeper hole.
This morning on Sky News Agenda Opposition frontbencher Barnaby Joyce confirmed that while they remained opposed to the Minerals Resource Rent Tax they would, if in government, allow superannuation increases to stand.
This morning Senator Joyce said:
"We will be voting against the mining tax in its entirety, that includes the superannuation increase... once the superannuation increase is in place it becomes very hard to go out to the community and say we're going to take that away from you, we understand that and therefore you can't."
This despite the fact that on in Parliament on 21 September Shadow Treasurer Joe Hockey said:
"The Coalition is opposed to the mining tax. We can't make promises that can't be paid for. We will rescind this tax in government and we will unwind the expenditure linked to it. This is fiscally prudent. It would be irresponsible to keep the expenditure without the supporting revenue."
The critical question for Tony Abbott and his colleagues now is: if you won't be rescinding what the MRRT pays for - how do you intend to pay for the cost to budget of the concessional tax rate (15 percent) that accompanies the additional three percent increase in the Superannuation Guarantee?
The incremental increase in the Superannuation Guarantee rate is projected to cost $740 million over the forward estimates. If the Opposition's policy is to rescind the mining tax – how are they going to pay for the increase in compulsory superannuation?
Currently, when you turn 70 your employer is no longer required to pay compulsory superannuation. The Government will abolish the age limit on superannuation guarantee contributions. This will benefit 51,000 Australians aged 70 and over. Will the Coalition support this additional reform?
In addition to the SG increase, the Government introduced legislation that will ensure 3.6 million Australians on incomes of $37,000 or less effectively won't pay any tax on their superannuation contributions. Will the Coalition claw-back this tax if they are in Government?
If the Opposition's policy is to rescind the mining tax – how are they going to pay for the increase in compulsory superannuation and the associated concessional rate of tax on these saved wages?
The past few days have seen an extraordinary display of policy and budgetary ineptitude in this important policy area by Tony Abbott and the Opposition.
On Friday we saw remarkable front page headlines about the Coalition's intention to claw back increases in compulsory superannuation. The Sydney Morning Herald reported:
"Super will increase to 9.25 per cent in 2013-14 at a cost of $240 million but SenatorCormann told the Herald that would be abolished if the Coalition were in power by then."
By Sunday we saw a 180 degree back flip.
Yesterday the Sunday Age reported:
The Coalition will not roll back superannuation increases for workers which Labor has tied to the mining tax. The Sunday Age can reveal the Coalition has dumped its plan to rescind the superannuation boost from 9 percent to 12 percent by 2020, after a meeting of senior leadership figures on Friday. Instead it will keep the laws if it wins office. ''Essentially this is a fight we don't want to pick,'' a source said.
And the Sunday Telegraph reported:
Despite reports the Coalition pledged to roll back the policy if elected to force bosses to pay more super, Liberal frontbenchers have confirmed it wouldn't happen. But the Coalition denied yesterday this was a backflip on a policy touted 24 hours earlier.
"We are not going to roll it back. If we win the next election we will not be rescinding the increase in compulsory super," shadow superannuation minister Senator Mathias Cormann said.
And then today we have Senator Joyce confirming on morning television the superannuation increase won't be rescinded but at the same time refusing to explain how the superannuation increase would be accounted for in the Opposition's finances.
Senator Joyce said:
"We are not going to announce our policies and financial position at this point in time because it is incumbent upon the Government to try and tell us exactly where we are going to end up."
I now issue a challenge to Tony Abbott, Senator Joyce and the Coalition.
The Treasurer will be releasing the Mid Year Economic Fiscal Outlook by Christmas. Will the Coalition therefore provide proper details of how they intend to pay for their policy promises, including the cost of increasing superannuation, within 2 months of the release of MYEFO?
Let me also be clear that Senator Joyce's claims that superannuation is paid for by business are plain wrong. Indeed as former Prime Minister Paul Keating has pointed out:
"When you hear conservatives these days speak of superannuation as a tax on employers they are either ill-informed or they are lying. The fall in unit labour costs and the upward shift in the profit share during the period of the Superannuation Guarantee Charge is simply a matter of statistical record. It is not a matter of argument."
So enough with all the ineptitude and persistent fact avoidance being put forward by the Abbott Coalition in what has thus far been a pathetic excuse for a public policy prosecution about the mining tax and increasing retirement savings.
One simple question: How will they pay for increasing superannuation given the concessional rate of tax?
Spreading the prosperity of the mining boom and increasing the retirement savings of 8 million Australians isn't a peripheral political issue.
These questions deserve proper answers from the supposed alternative Government.