GRACosway Weekly Wrap Up: Tax Turns Tide for Government

In the polls 

Income tax cuts dominated the political agenda in what was a busy penultimate parliamentary sitting week before the winter break. The latest Newspoll reveals a boost to Prime Minister Malcolm Turnbull’s satisfaction rating, which has reached 40 per cent for the first time since June 2016. According to the poll, Labor maintains its lead over the Coalition, 52 to 48 per cent in two-party preferred terms. The two major parties share a primary vote of 38 per cent, while One Nation has suffered a two-point drop in its primary vote following the public disagreement between Leader Pauline Hanson and Senator Brian Burston.

Income tax cuts pass the Parliament 

The Turnbull Government has secured a significant victory this week with the passage of its $144 billion income tax cut package. Initially announced in the May Budget, the legislation will gradually reduce income tax over the next seven years, beginning with a $530 tax offset for workers earning up to $125,000. Labor successfully amended the Bill in the Senate on Wednesday to remove the third stage of the package, which targets high-income earners. After the Opposition’s amendments were rejected by the Lower House on Thursday morning, the Bill was returned to the Senate and ultimately passed in its original form. Independent senator Tim Storer was the only crossbencher to vote against the package, siding with Labor and the Greens. Labor has pledged to repeal the second and third stages of the package, positioning income tax as a key issue ahead of the next federal election.

Musical chairs continues in the Senate 

Senator Brian Burston has announced he will join Clive Palmer’s rebranded United Australia Party. Senator Burston resigned from One Nation last week, following ongoing public conflict with party leader Pauline Hanson over the Government’s company tax cuts. Mr Palmer – the former member for Fairfax – has flagged a potential political comeback, attracting criticism from Labor’s Cathy O’Toole, whose seat of Herbert is home to Mr Palmer’s collapsed company, Queensland Nickel. On Mr Palmer’s plans, Treasurer Scott Morrison commented that “the circus doesn’t need another sideshow”.

New ALP president 

Former deputy prime minister Wayne Swan has been elected the new national president of the ALP, securing 46.94% of the vote to defeat incumbent Labor frontbencher Mark Butler. Mr Swan said he will focus Labor towards “creating a better, more democratic and more equal society”.

Privatisation push

Liberal Party members called on the Turnbull Government to privatise the ABC (with the exception of regional services) at the Party’s annual federal council in Sydney at the weekend. Communications Minister Mitch Fifield has since dismissed the idea, despite the 2:1 vote in favour of the motion. While council motions are not binding, they provide insight into the opinions of rank-and-file members. The council also endorsed a motion to move Australia’s embassy from Tel Aviv to Jerusalem.

International relationships 

Australia-EU free trade negotiations began this week, with a visit by the EU trade commissioner Cecilia Malmstrom. Mr Turnbull stated that a trade agreement will “open the door to a market of half a billion consumers and a GDP of US$17.3 trillion – making it one of Australia’s biggest trade agreements once concluded.”

NSW Budget handed down

NSW Treasurer Dominic Perrottet handed down his second budget this week, announcing a projected surplus of $3.9 billion in 2018-19 and continuing surpluses over the forward estimates on the back of unprecedented growth in the State’s economy. Under a theme of ‘Building for Tomorrow, Delivering for Today’, the Budget featured several measures to reduce the cost of living, and initiatives to improve social services and community infrastructure. For further analysis, please see GRACosway’s summary of the NSW Budget.

Looking ahead 

The Federal, WA and Tasmanian parliaments will sit next week. Budget Estimates will be held in the ACT and Tasmania.