No one is happy with the reaction to the government’s mining super profits tax. The mining companies don’t want to pay more tax. The government isn’t happy with the scare campaigns in the media, and the voters aren’t happy to see public money spent on advertising designed to counter the campaigns driven by the resources sector.
When the supposed truth is delivered to us through advertising, it becomes virtually impossible to decipher the real facts. Populist media seem to be decrying it as a bad thing. Alan Jones on Sydney’s 2GB said it’s “an embarrassment to all Australian people not just the government”. Terry McCrann wrote in The Australian that it is “an exquisitely dreadful policy idea”.
So why is there such strong negative reaction to an idea that was aimed at going some way to resolving the issue of Australia’s two speed economy? It’s hard to find media comment in favour of it.
Yet most economists seem to support the approach, which emanated from the Treasury as part of the Henry Tax Review. Professor Allan Fells was one of twenty academics and economists who issued a statement last week supporting the government’s approach.
So what are the key elements of the issue? To help explain what it’s all about I talk to Professor John Quiggin from the University of Queensland, another of the signatories of the statement.