Finally the Federal Government has formally responded to the Henry Tax Review. Surprisingly, of the 140 recommendations in the Review, few will see the light of day in the near future.
This is a missed opportunity, but reflects a 'small target approach' in the lead up to an election which will almost certainly occur this year. We can expect many recommendations to be dribbled out over the next five years, not only by Labor, but by any future Coalition Government.
The headline reforms are increasing the super levy from 9% to 12% over the next ten years, funded in part by a big slug on the mining industry. Regardless of one's view, this represents smart politics - give something to ordinary wage and salary earners while taxing an industry that is fairly remote from the everyday lives of many Australians. We all know that the mining industry has almost single-handedly propped up the Australian economy over the last twenty years but in reality, unless you live near or are employed by a coal mine in the Hunter Valley, few of us come face-to-face with the resources sector.
Naturally the mining industry is predicting doom and gloom. It is easy to dismiss such self-pleading, especially when looking at the Gorgon Project off Australia's NW coast, which will yield a projected $64bn to GDP over its life. These are large numbers. But many projects are small and involve high-risk investment and exploration before yielding a profit.
This is not an argument against a resources tax, but rather highlights that such a tax has its own complexities which will affect the sector. Whether much of it will find its way into superannuation accounts is also debatable. There will be much lobbying in Canberra before the final form of the impost is settled.
Overall, it is hard to develop a Christian response to these measures against the fine print of scripture. There is no mention of a resources tax or superannuation in the Bible. But there is mention of justice, fairness and looking after the poor, widows and the needy. We are exhorted to pay our taxes by giving to Caesar what is Caesar's. How well the Rudd Government achieves these goals of spreading the tax burden through the community and ensuring that everyone pays their fair share, is a political judgment based on godly wisdom.