Brown Study

Brown study

26 January 2019

9:00 AM

26 January 2019

9:00 AM

This column has now embarked on a series of articles to prepare you for the coming election season. Our policy during this exercise will be to support those in politics who are in favour of small government, the constitution, conservative values and strengthening the rights and duties of individuals.

So, here are three points to start with. The first is my prediction for the year. My guess is that the Labor party will moderate its policy on abolishing the cash refund you receive if your imputed credit on share dividends exceeds the tax you owe. You should continue to receive it anyway, because the tax on the dividend has already been paid once, by the company. But the Australian Labor Party wants to stop you receiving the refund, which has aggravated a lot of people, especially the retired and small investors and it seems like suicide to persist with such a policy that must lose votes. They have already changed it once, to exempt pensioners, so they are sensitive about its electoral danger. My prediction is that Shorten will do exactly what he has done with abolishing negative gearing – and ‘grandfather’ the abolition of the refund. The negative gearing change that Shorten proposes will now take away negative gearing deductions only for new buildings, not if you are doing it with your present property. My guess is that Shorten will say, ‘OK, abolishing cash refunds on shares will now apply only if the shares are bought or acquired after 1 July 2019’. He will call it ‘tweaking’ but everyone will see it is a backdown to win votes. As my prediction might be correct, the Liberals should be prepared with another policy in the same field and aimed at the same market. I would go for the nuclear option of abolishing all capital gains tax on deceased estates. That camouflaged death duty aggravates just about everyone; its abolition, apart from sending the Labor party into an apoplectic rage, will give people some incentive to acquire wealth to look after their families – and to vote for it.


Secondly, here is an issue on foreign affairs. A few days ago, Abu Bakar Bashir, the mastermind behind the Bali bombing and a lot of other terrorist outrages, was pardoned and is due to be released on parole by the Indonesian president. He had been given 15 years at his trial, which seemed mild to me, but the president has reduced it to the 9 years already served. Australians are offended by this as they should be, as 88 innocent Australians died in Bali through a monstrous act of terrorism and the other events were equally outrageous. Releasing anyone associated with those acts shows that the Indonesians think a hostile act like the Bali bombing, directed at us and our people, can be expiated, or that the horror can just fade away. Worse, the fact that pardoning Bashir was done as a discretionary act of the executive government which the president could have prevented, means that Indonesia was prepared to offend the feelings of Australians and their grieving families simply because it would appeal to Muslim voters in the current Indonesian election. But what really aggravates me is that, only a few months ago, we had an issue with Indonesia that was used to tell us unequivocally that we must be sensitive to the Indonesians’ feelings and never do anything that might upset them. Prime Minister Scott Morrison had the idea that we should look at moving our embassy in Israel to Jerusalem. I disagreed with this, as I thought we should not just look at it but we should do it. Israel is an ally of ours and it is common decency to have the embassy in its capital. Indonesia opposed this because keeping embassies out of Jerusalem is an article of faith for the extremist anti-Israel movement, also taken up to please Muslim voters. We deferred the decision because the experts told us we should not do anything that is insensitive to the Indonesians. So how about suggesting to Indonesia, in the light of the proposed release of Bashir, that they should be equally sensitive to our feelings before they start offending our people and the memory of our dead? Although Mr Morrison has made some noises on the issue, he should make some stronger ones at the highest level to show we are serious. It might show him to be resolute and single-minded, qualities that he needs to demonstrate.

Thirdly, the big issue in the economy should be industrial relations. There is no doubt that working men and women are having trouble making ends meet and real wages are stagnant. This is because the Coalition ruined the early experiment with free bargaining between employer and employee, and we are now left with enterprise agreements and awards that do not allow for flexibility at the shop floor level; there is so much variety of work in many enterprises that it cannot be catered for by such wide agreements. As a result, the worker is not being paid a fair value for his work, which can only occur with free bargaining. The unions now want to make this situation worse, by going back to the pre-Hawke days of industry-wide claims and arbitration. The inevitable will happen; workers who are small cogs in an enterprise agreement will become even smaller cogs in an industry-wide agreement or award. It will all be very good for union bosses and friendly companies. It will do nothing to help workers get a fair price for their labour and it will be impossible for any tribunal to assess the needs and interest of individual workers. That can only be achieved if the parties can negotiate and agree freely between themselves. The government cannot resurrect WorkChoices. But it can do a lot to introduce flexibility and personal agreements that give individuals a greater opportunity to be paid the real value of their work.

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