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The Forum > Article Comments > The legacy of Rudd Labor - and the challenge confronting Julia Gillard > Comments

The legacy of Rudd Labor - and the challenge confronting Julia Gillard : Comments

By Tristan Ewins, published 30/6/2010

Despite recent setbacks, we should not resign ourselves to the notion that this is the end for reformist Labor governments.

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The author hasn't mentioned the reform of "Work Choices".

Under these reforms, Rudd should not have lost his job.

Or maybe Gillard's reforms did not include the job of Prime Minister.
Posted by vanna, Wednesday, 30 June 2010 7:09:17 PM
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The author claims of the mining tax:

"“Kicking in” only at profits of 12 per cent or higher, this truly was to be a tax of “super-profits” in a meaningful sense of the word."

In actual fact, the tax would kick in at the Treasury bond rate - at about 6%. Therefore, this was not "a tax of “super-profits” in a meaningful sense of the word".

The author makes other mistakes as well, such as not considering the negative economic impacts of slugging the rich with tax and promoting green policies.
Posted by AJFA, Wednesday, 30 June 2010 7:42:28 PM
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When I say the tax only ‘kicks in’ at 12 per cent, I mean that more tax will only be paid at the point of 12 per cent and above. Here I refer to Fairfax journalist John Kehoe, quoted by blogger John Passant (writing for ‘The Age’):

Hence:

“It's not till the returns hit 12 per cent that more tax will be paid. As Kehoe explains it: "Projects with a return of less than about 12 per cent will pay less tax because state taxes will be refunded and the company tax rate cut."

See URL: http://www.theage.com.au/opinion/politics/mining-tax-will-cost-jobs-and-other-lies-20100611-y1hf.html?comments=27
Posted by Tristan Ewins, Wednesday, 30 June 2010 8:16:25 PM
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The author apparently absorbs himself in the sporting pages of newspapers and rarely reads national news articles. How else could he have missed the Govt's grossly excessive expenditure on the BER? How else could he have missed the Govt's extremely poor performance on the indigenous housing program?
On health reform, the Govt has been long on promises but short on remedies. By completely ignoring more funding for mental illness care, it signalled that the mentally ill, who account for about half the total number of homeless people, should continue to live on the streets.
The author then shows his climate change gullibility, by believing that the Govt can control climate, whereas it is a natural process. It is ironic that Kevin Rudd got caned for suspending CPRS action until at least 2013, as history will reveal that this was one of his best decisions.
The author's praise of the RSPT proposal is consistent with his Left wing way of thinking. He cherry-picked 2008-09 mining industry profits to justify the RSPT. This can only lead to bad policy, given that mining's long-term rates of return have been strikingly low. Since 1987, the nominal before-tax rate of return on capital in the mining sector has averaged 12.5 per cent, close to (or even below) the risk-adjusted cost of capital.
It is ironic that Hawke and Keating legislated to dismantle the telecommunications monopoly, but that the Govt's NBN proposal would restore a Govt-controlled national network monopoly. This would result in steep price increases in telecommunications, particularly with the telecoms unions holding the Govt to ransom. The non-tabling of a rigorous cost-benefit analysis virtually guarantees that the NBN project will be uneconomic.
Posted by Raycom, Thursday, 1 July 2010 12:30:15 AM
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re: the National Broadband Network (NBN)

If anything the case of Telstra shows that some infrastructure should be kept in public hands as a natural monopoly.

For a long time Telstra was holding up work on a NBN because modernisation was against their commercial interests. (ie: it would make the infrastructure they already owned redundant) And as a private company they were able to use their market power to hold the government and the public to ransom. (ie: not giving the NBN access to existing infrastructure) As I understand it, it took a great deal of compromise to break this deadlock.

The other alternative: of competing infrastructure networks - also doesn't make sense because the costs of duplication of cost structures are also then passed on to the consumer.

I believe in a mixed economy - but while there are many areas in which significant private sector involvement and competition make sense - communications infrastructure is not one of them.

And in fact that raises the issue of whether or not the NBN should be kept in public ownership once completed. And indeed it should.
Posted by Tristan Ewins, Thursday, 1 July 2010 11:22:46 AM
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Raycom: You are certainly right that mental health deserves greater attention. And in some ways Tony Abbott's recent talk of boosting funding is welcome. My hope it that it will force the government to commit more funds also.

But as I understand it, Abbott's proposal depends on reallocating funding from elsewhere. (ie: from the proposed 'super clinics')

If both proposals are crucial - then certainly they should both receive funding.

Some people in Labor are talking about a 'National Disability Insurance Scheme'. Were this comprehensive enough, it could cover mental health as well as other areas.

But as I've said elsewhere - when there are crucial areas of health and aged care; and also welfare (considering a rising cost of living) - then we cannot address these issues without growing public expenditure, and reform of taxation. The ageing population is also crucial to these arguments.

I have suggested tax reform to fund a 1%-1.5% expansion in public expenditure for the next term as a proportion of GDP. Such a proposal would be modest and incremental - but could be a first step to addressing areas of aged care, mental health, welfare - on the basis of need - rather than simply prioritising depending on the perceived electoral impact.

If both Abbott and Gillard could agree upon this it really would make a difference for the most vulnernable Australians.
Posted by Tristan Ewins, Thursday, 1 July 2010 11:31:07 AM
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