Home' Policy Magazine : Policy Vol 32 - No 3 Contents The Centre for Independent Studies (CIS) is Australia’s
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Editorial Advisory Council
Professor James Allan, Professor Ray Ball,
Professor Jeff Bennett, Professor Geoffrey Brennan,
Professor Lauchlan Chipman, Professor Kenneth
Clements, Professor Sinclair Davidson, Professor David
Emanuel, Professor Ian Harper, Professor Wolfgang
Kasper, Professor Chandran Kukathas, Professor Tony
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Professor Steven Schwartz, Professor Judith Sloan,
Professor Peter Swan, Professor Geoffrey de Q. Walker.
Policy is a quarterly publication of The Centre for
Independent Studies in Australia and New Zealand. Views
expressed are those of the authors and do not necessarily reflect
the views of the Centre’s staff, advisers, directors, or officers.
ncreasing super tax is among the most complex, sensitive and difficult policy
adjustments in a democracy.’ So writes former Treasury official Terrence O’Brien
in the first of four major articles on superannuation in this issue of Policy.
How has the government handled this complexity and sensitivity? The close election
outcome is a telling answer. Polls show proposed changes to super from both sides of
politics ranked high among Labor and Liberal voters, young and old. The message is
clear: People will lose trust in the system if the rules keep changing.
Trust could be restored by grandfathering any adverse changes to ensure they affect
those near or in retirement only prospectively. Yet as O’Brien shows, neither political party
seems to have considered this approach, even though both have used grandfathering
in the past.
Robert Carling goes back to tax policy principles to answer the critics who say super
tax concessions cost too much and only benefit the rich. He explains the bias against
long-term saving in the benchmark income tax treatment of it and the attempt to correct
for this bias through concessional taxes on super.
Both O’Brien and Carling note that without the persistent budget deficit, proposals to
restrict super and raise more revenue would not have gathered so much steam. Both
also point out that the deficit arguably stems from too much spending, not too little
revenue. No wonder the perception persists that the proposed changes are a tax grab
by a government unwilling to make hard choices by cutting wasteful expenditure.
Meanwhile Simon Cowan argues that the focus on lost tax revenue and budget
shortfalls ignores the far greater problem with super: ‘it is not relieving pressure on
the age pension—the largest single federal government payment and the only viable
reason for a compulsory super system to exist in the first place.’ Reform must therefore
be directed at age pension savings. He calls for shift in focus on incomes to a focus
on super balances and outlines a new model with three balance thresholds subject to
differential tax rates.
The failure of super to make much of a dent in age pension costs argues against not
only the current system but also proposed increases in the mandatory superannuation
guarantee (SG). In the final instalment of our special feature on super, Michael Potter
mounts a comprehensive case against the SG increases and suggests some less costly
ways to improve retirement incomes.
Also in this issue, Wolfgang Kasper revisits the idea of state income tax and competitive
federalism, while Sara Hudson returns to the original meaning of resilience in exploring
how people overcome adversity. Elsewhere, Muhamed Rumman explains how the
growing number of Muslims who are attempting to reform their faith are hurt most by
limits on free speech and the reluctance to debate uncomfortable issues. Section 18C
is the most visible sign of this reluctance. Joshua Forrester, Lorraine Finlay and
Augusto Zimmerman assess the prospects for repealing it and whether it should be
up to parliament or the courts.
Last but by no means least, this issue of Policy tries to join the dots between the Brexit
vote in the UK, the rise of Trump in the US and the growth of right-wing populist parties
in Europe. PJ O’Rourke tells Tom Switzer that there’s more going on than a backlash
against the elites and the economic stagnation they’ve presided over. Jonathan Haidt
picks up on this point in our main feature essay, explaining that socio-economic factors—
the ‘left behind’ thesis, as he dubs it—only take us part of the way toward understanding,
let alone addressing, what has become a major political phenomenon: the resurgence of
nationalism in Western democracies in the face of massive global migration.
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