The pity is that as John Hewson has got more left-wing over the years he's forgotten how good he once was and he's mis-remembered what he tried to do.
On these pages last week Hewson wrote how "Turnbull can succeed where I failed" (AFR, November 5). But what Hewson tried to do, and what Malcolm Turnbull and Scott Morrison will likely do, are two entirely different things. Hewson tried to cut tax and the size of government. That's not what Turnbull and Morrison have they said they want to do.
On the first page of his economic policy package Fightback! dated November 21, 1991, Hewson's goal was clear: "It is vital to reduce tax and simplify the tax system if the energies, talent and initiative of the Australian people are to be encouraged and fulfilled." On the second page it says, "The size and cost of government in Australia are excessive. Under a Coalition government both will be reduced." And so it goes on — for another 343 pages.
Twenty-four years later Hewson has repudiated most of what he once stood for, which is a shame because Australia needs the 1990s version of John Hewson more than ever. Measured by the tax it collects, the federal government is now 10 per cent bigger than it was at the time of Fightback! Sadly, now Hewson talks of things like increasing taxes on superannuation and raising the GST.
It's not just John Hewson who's changed.
In recent weeks the Prime Minister and the Treasurer have made a number of substantial speeches on tax reform. Not once did either mention the need to reduce the overall tax burden.
'DEFEAT FOR THE RIGHT'
Worried Liberal MPs aren't the only ones noticing what's happening. Some are delighted by the turn of events. Ben Oquist, former chief of staff to Greens leaders Bob Brown, now executive director of the centre-left Australia Institute, said something perceptive a few days ago.
"Swapping a progressive tax on income for regressive tax on consumption would itself lead to unfairness — unless the overall compensation package and, more importantly, an increased spending package joined it.
"Importantly though, the new PM is not arguing for the traditional conservative position for a decrease in the overall tax take. In fact, no one is. This is a significant defeat for the right in Australia. Sure, there is pressure from many not to increase overall taxes but no one is credibly arguing for a decrease. That debate has been won."
Oquist is half right. Yes, the voices wanting higher taxes and bigger government are winning. But they haven't won yet. And anyway, not many debates are ever permanently won or permanently lost.
A few people are in fact arguing for tax cuts — but they can be counted on the fingers of one hand. I have explained in detail how to reduce taxes, cut the size of government and promote economic growth.
It's fallen to free market think tanks and a handful of independent economists and commentators to argue for lower taxes. That's partly because they're not in thrall to government or government funding. Practically every other voice in the public debate is. Those who once would have brought a degree of disinterested analytical rigour to such a debate have become barrackers for bigger government. Until John Fraser arrived as its new boss, the Treasury Department was among the loudest spruikers for higher taxes.
The discussion paper Treasury issued in March started this tax debate on entirely the wrong basis, which perhaps explains why it is going so wrong. The paper claimed "Australia's overall tax burden is relatively low compared to other developed countries." That is precisely what everyone who wants higher taxes would have the public believe.
Maybe the junior Treasury bureaucrat who wrote that line was engaging in wishful thinking. The trouble is the line is wrong. As the Productivity Commission has acknowledged, on a like-for-like basis Australia's tax burden is actually now higher than the average of other developed countries. Once, John Hewson and the Coalition thought prosperity was achieved by reducing taxes and letting people keep more of their own money. Hewson doesn't believe that now. What the Coalition believes, we'll discover in the months ahead.
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