The Opposition has attacked the Government’s new mining tax deal after Treasury Secretary Ken Henry admitted the Federal Government had assumed a significant rise in commodity prices to justify its claim that the new watered-down tax deal would only result in a $1.5 billion reduction in revenue from the original plan.
The Coalition’s small business spokesman, Bruce Billson has also attacked Resources Minister Martin Ferguson for saying the mining tax deal will help the Government proceed with its plans to increase the superannuation guarantee from 9% to 12%, with Billson saying it will be employers and not the Government that will be left holding the bill for increased super payments.
When the Government announced its original Resources Super Profits Tax in early May, the tax was supposed to bring in $12 billion of revenue over the four years from 2012.
Under the new mining tax deal announced last week, the Government said the tax would still bring in $10.5 billion.
However, Henry admitted to a Senate committee hearing that the Government had changed the basis of its assumptions in the intervening two months. The first revenue estimate was based on five-year commodity price forecasts from the Government’s forecasting agency ABARE, while forecast from last year’s deal was based on much higher commodity price assumptions from Treasury.
The admission has led the Opposition to accuse Treasurer Wayne Swan of “monumental deceit” because he didn’t explain the change in assumptions when announcing the new tax deal last week.
“The credibility of the budget numbers has been blown out of the water,” Shadow Treasurer Joe Hockey said last night.
He argues the Government has “locked in” growing spending against a revenue stream that is volatile, and has been forecast when prices are at an all time high.
Greens leader Bob Brown has also expressed disappointment at the deal and will press for greater transparency around the Government forecasts.
The Opposition has also taken aim at mining minister Martin Ferguson who said on the ABC’s Insiders program on Sunday that the mining tax deal would allow the Government to proceed with its plan to increase the superannuation guarantee from 9% to 12%.
“Yes, $10.5 billion maintains an opportunity to do a whole variety of good things for small business in Australia, invest in infrastructure and also put in place a long-term benefit to Australia – superannuation to actually get that to 12% takes pressure off the Australian community in the future in terms of having to pay for retirement,” Ferguson said.
Shadow small business spokesman Bruce Billson was quick to attack the links between the mining tax and the super payments.
“Senior Labor Ministers are continuing the old Labor lie that the 3% increase in the superannuation guarantee will somehow be paid for by its new bad tax on mining.”
“The simple fact is that increases in employer funded superannuation contributions are paid for by employers.”
Billson claims the 3% increase in superannuation contributions will be between $20 billion and $23.6 billion to labour costs as the superannuation guarantee rises from 9% to 12% incrementally between 2013 and 2019.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
