Tagged: Mining Tax

Pokies: rent-seekers win again

The gnashing of teeth over Julia Gillard’s betrayal of Andrew Wilkie over pokies reform has been entirely predictable. Is this some kind of political masterstroke? Is it just another demonstration of Gillard’s fundamental untrustworthiness? It’s all as telegraphed as an old boxer’s jab, and irrevocably lashed to the 24-hour news cycle. About the furthest anyone’s looking into this situation is the polls, and what it does to Gillard’s chances of re-election.

The far more important point about what Gillard’s backdown says about Australia’s rotten political culture has been almost entirely overlooked. And that is that the rent-seekers have won again.

They won in 2010, when some of the world’s largest and richest mining companies saw off the Resources Super Profits Tax with a $22 million advertising campaign that, in the end, helped kill off a popularly elected Prime Minister (not that Kevin 07, perhaps soon be be known as Kevin 12, was exactly blameless in his demise, but that’s another story).

That occasion saw the likes of Gina Rinehart, Twiggy Forrest and Clive Palmer marching in the streets and carrying on like they’d all be rooned, I tells ya. The sight of Australia’s richest men and women playing the victim card – Rinehart (wealthiest of the lot) leading the chant of “Axe the tax!” – was so galling in its cheek that it’s a wonder the #Occupy movement didn’t start in Perth 2010, instead of New York 2011. Haven’t we heard all this somewhere before?

Let me digress for a minute longer before I get back to the pokies debacle. As reported yesterday, Rinehart’s wealth practically doubled last week by a cool $10 billion. She is so stupidly rich (it helps that she’s the dual beneficiary of her father Lang Hancock’s estate, and the longest resources boom in the country’s history) and her fortune growing so fast that, according to the revealing profile by Jane Cadzow that accompanied yesterday’s story, “it’s difficult for financial analysts to keep track of it”.

These days, when she’s not digging stuff up and squabbling with her children over control of her empire, she lends her considerable financial influence to matters of public policy. And it’s not just the millions she and her buddies poured into the anti-RSPT campaign. It’s the $165 million she sunk into buying a 10 percent stake of Channel 10, money seen as crucial to arch-brute Andrew Bolt getting a TV pulpit to add to his print and radio platforms. Then there’s the $120 million that’s bought her about four percent of Fairfax.

There’s also the money she’s used to fund the tours of fellow climate change sceptics like Christopher Monckton and lunches with Ian Plimer last year, as she railed against the introduction of the carbon tax.

Had the RSPT been introduced, according to 2010 Treasury modelling, the average worker would have been $450 a year better off. Gross Domestic Product would have increased by 0.7 percent; investment would have increased by 2.1 percent and prices on food, clothing, housing and transport were all expected to fall. This was meant to be the cure to our current two-speed economy, where mining of finite resources is galloping ahead of a field otherwise stuck in the starting blocks.

In an excellent op-ed late last year, Sydney Morning Herald economics writer Jessica Irvine wrote┬áthat rent-seeking used to be carried out away from the public eye, through political donations and long lunches. Now, with well-meaning laws aimed at circumventing such bribery, it’s done in public, through advertising campaigns.

Which brings me, finally, to Clubs Australia’s expensive and very successful “Won’t work, will hurt” campaign, despite polling showing overall support for the introduction of mandatory pre-commitment technology to poker machines running as high as 62 percent – but perhaps not in the marginal seats where the organisation is targeting its campaign.

Like Big Tobacco’s absurd astroturf-fronted putsch against plain packaging of cigarettes (which, in the interests of balance, I should mention that the government has so far stared down), “Won’t work, will hurt” is based on a logical contradiction: that a measure aimed at restricting the amount a person is able to gamble, via mandatory pre-commitment, can be completely ineffective – according to Clubs Australia boss Anthony Ball, it “won’t help a single problem gambler” – while at the same time killing off businesses, jobs and entire communities.

It’s an argument so inherently rhetorically unstable that it totters before you even need to produce figures to blow the whole teetering edifice over, starting with the fact that, according to the Australia Institute, Clubs Australia has overestimated the cost of implementing the technology by a factor of 10. Add to this deception the leaked industry document which revealed that the estimated drop in gaming revenues through the pre-commitment scheme would be 10-20 percent – half of that publicly estimated by Clubs Australia.

While not as obscenely cashed up as the mining industry, Clubs Australia hasn’t minded splashing the dough around in protecting its interests – around $3 million for its public campaign so far (remember “It’s UnAustralian“?), with plenty more in the bank. That’s not including the $200,000 it poured into the New South Wales Liberal and National Parties last year, according to The Power Index. Forty percent of the nation’s pokies are in New South Wales. In the lead-up to the NSW election last month, Liberal leader Barry O’Farrell signed a memorandum with Clubs Australia giving them $300 million of tax breaks on pokie revenues.

As Bernard Keane pointed out in Crikey yesterday, we shouldn’t be too surprised that Gillard has bailed on Wilkie as soon as it was practical to do so (ooh, about as long as it took for Peter Slipper to get comfy in the Speaker’s chair). Taking on the the clubs lobby in search of a meaningful solution to problem gambling was never Labor’s idea of a good time.

But as Irvine wrote back in October, we need to work out that we’re the ones ultimately being played for mugs by an advertising industry that’s helping to convince the public that what’s good for business is good for the country and good for you, too.

Because, well, they would say that. Wouldn’t they?

Has Julia got her mojo back?

At the moment, it’s only a whisper, and it may be well past too late. But there’s more than a hint in the last few weeks that Julia Gillard’s government may just have turned the corner.

Yes, there is the continuing political and humanitarian debacle over asylum seekers, but that is a failure of imagination, goodwill and commonsense that besmirches both sides of politics. Otherwise, Gillard’s had the best few weeks of her turbulent Prime Ministership. First she managed to secure the carbon tax’s passage through the Lower House. When Alan Joyce decided to play hardball with the unions by grounding his Qantas fleet, Julia (via Fair Work Australia) sent them post-haste back to the negotiating table, for once looking surefooted in what was, for her, familiar territory.

Then came the carbon tax again as it sailed comfortably through the Senate. Tony Abbott, who had all but pledged to nail himself to a cross to fight its introduction, chose this moment to attend a conservative leader’s forum in London. I wonder whether David Cameron took the opportunity to avail Tony of his views on climate change. The Tory British PM is an ardent supporter of a price on carbon. Just today, by the way, the Chief Economist of the International Energy Agency warned that the world had possibly as little as five years to clean up its act before the tipping point of irreversible and dangerous climate change was reached.

It’s true, of course, that the introduction of a carbon price has done more than anything else to cruel Gillard’s Prime Ministership. This despite it being bipartisan political policy not much more than two years ago. And it’s also true that steps Australia makes to mitigate our carbon emissions won’t do much to stop the rest of the world from hurtling over the edge of that dangerous threshold, other than hopefully set an example for others. But those are arguments for another day. Right now, it’s Julia who’s got the initiative and Abbott who’s starting to look a little shaky as the political ground begins to shift beneath his feet.

Suddenly it’s looking like Julia who’s sniffed the breeze. Labor’s been chasing it’s tail for two years, but lately there are signs it might have rediscovered its sense of purpose. The clearest indication was Julia’s announcement today that her government would be phasing in significant pay increases to low-paid workers in the social and community sectors: up to 20 percent over the next six years. In particular, it’s a move that will reward women, who predominate in the community workforce but are paid abysmally for doing often difficult and demanding jobs.

Might it just be possible that Julia has looked past the headlines of the tabloids (and, of course, The Australian) and realised that the #Occupy/99 percent movement represents a cause that is tailor-made for her party? This is heartland stuff for Labor. At a time when our economy is charging ahead at warp speed thanks to the mining boom, yet the gap between rich and poor is wider than ever – and resentment at that fact is at an all-time high – it’s a good moment to be reaching back to pull those in danger of falling behind (not least with their rent or mortgage repayments) back into the fold.

As for Abbott, he suddenly has some real issues to worry about, and he’s started to come under some genuine scrutiny. As I’ve noted previously, he can’t say no forever. He’s made a series of clumsy public statements: not only his pledge in blood to repeal the carbon tax, but a less certain (non-core) promise to do the same with pokies legislation. On top of those were his muddled statements regarding Qantas, then he got a savaging for blowing the coalition’s economic management credentials regarding the mining tax and IMF.

So far, he’s been pretty mute on the prospect of a pay rise for some of our lowest-paid workers. He’s on dangerous ground now and he knows it. Julia’s finally forcing him to fight on her turf.