Government timing tricks hide the real budget story



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Timing tricks help politicians avoid dealing with the substance of their policies. That isn’t going to change any time soon.
Cindy Zhi, CC BY-ND

Richard Holden, UNSW

This year’s budget may not have had a whole lot of surprises, but it was chock full of crafty timing tricks. The government’s new personal income tax plan is implemented over seven years, the much-vaunted return to surplus begins in 2019-20, and support for the “smart economy” involves $2.4 billion over, wait for it, 12 years.

In fact, it seems that timing tricks are now a thing in Australian politics. Revenues are brought forward and spending pushed back for cosmetic effect.

The Coalition’s company tax cuts are scheduled to be implemented over a full decade, Labor’s plan to cut back on negative gearing has modest short-term impact on the budget but ramps up over time, and on and on.




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This gradual, glide-path approach to fiscal policy is sometimes good, sometimes not so much.

Labor’s negative gearing plan is an example of where the long timeframe is both sensible and appropriate. By grandfathering in existing negatively geared properties the Labor plan ensures that folks who relied on existing tax arrangements when making investment plans are not punished. Similarly, current Coalition policy regarding raising the retirement age for the pension is not retrospective.

Protecting reliance interests in this way is important for both fairness and certainty. The principle applies equally to potential changes in superannuation taxation, indexation of the aged pension, and other budget measures past, present and future.

Having said that, both sides of politics could do a better job of protecting Australians who have relied on existing policy settings when making big decisions. The government’s changes to superannuation taxation last year clearly violated the principle, and Labor’s plan to curtail the use of franking credits also runs afoul of it.

But many of these timing tricks are just that—tricks. Take the company tax cut. It is clearly structured to make sure the big revenue hits happen in years eight to 10.

The hope seems to be that voters don’t focus on things that far into the future, but companies possibly do. Add to that the fact that the federal budget is heavily focused on a four-year horizon — the so-called “forward estimates period”.

Four years is a completely arbitrary time frame with no real economic basis. The idea is that it is far enough into the future to be meaningful, but close enough to the present to be predictable. In reality it is neither meaningful nor predictable.

Treasury forecasts are almost always overly optimistic. In the last 20 years of budgets, from both sides of politics, they are almost always wrong.

From Wayne Swan’s “the four years of surpluses I announce tonight” to Joe Hockey’s hockey-stick GDP growth numbers and Scott Morrison’s fantastic forecasts, the federal budget makes Disney movies look pessimistic.

Yet this forward-estimate timing window, a media that goes along with it, and a public that is starved for time, mean that politicians can get away with pulling good news forward and pushing bad news back; gaming the system.

Indeed, since future parliaments are not bound by today’s legislation, I wonder whether there is any use at all for a government to announce what they plan to do 10 years hence. If history is any judge, then the political party in question probably won’t be in office. Prime ministers and treasurers have a tough enough time surviving to the next election, let alone making it through a decade.




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But there is a purpose to this long-term planning with legislative force. It creates a default that a future government needs to reverse. And we know from the Nobel-prize-winning work of Danny Kahneman and Dick Thaler that defaults can have a powerful psychological and behavioural effect — it can change the choices people make, and how they feel about those choices.

Speaking of defaults and timing, perhaps the most natural thing that could be done with regard to the federal budget would be to index tax brackets to wages growth. This would instantly do away with “bracket creep”, where wages growth and fixed tax thresholds lead middle Australia to pay an ever-increasing average tax rate. Governments of all stripes hate this because it forces them to actually raise taxes rather than get a free kick every year which folks tend not to notice very much. In fact, 80% of deficit reduction in recent years has come from such bracket creep.

Timing is likely to be a constant theme in the run-up to the next federal election. We can expect Labor to emphasise their $200 billion “war chest” that they plan to spend over the next decade. Equally, the government looks set to keep pushing the line that the big banks are paying more tax now and won’t get a tax cut until close to 2030.

The ConversationTiming tricks help politicians avoid dealing with the substance of their policies. That isn’t going to change any time soon.

Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW

This article was originally published on The Conversation. Read the original article.

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IRAN: MANDATORY DEATH PENALTY FOR ‘APOSTATES’ SCRAPPED


Proposed amendment reportedly shot down after international outcry.

LOS ANGELES, June 29 (Compass Direct News) – A member of Iran’s Parliament reportedly revealed last week that the country’s Parliamentary Committee has stricken the mandatory death penalty for those who leave Islam from proposals for an amended penal code.

Citing a BBC Persian news service report on Tuesday (June 23), United Kingdom-based Christian Solidarity Worldwide (CSW) announced on Friday (June 26) that a member of Iran’s Legal and Judicial Committee of Parliament, Ali Shahrokhi, had told the Iranian state news agency (IRNA) of the decision to eliminate the mandatory death penalty amendment, which had drawn international protests.

The Parliamentary Committee had come under intense international pressure to drop clauses from the Islamic Penal Code Bill that allowed stoning and made death the mandatory punishment for apostates.

The new penal code was originally approved in September 2008 by a preliminary parliamentary vote of 196-7.

In Friday’s statement, CSW said that the bill must now pass through a final parliamentary vote before being sent to Iran’s most influential body, the Guardian Council, which will rule on it.

The council is made up of six conservative theologians appointed by Iran’s Supreme Leader and six jurists nominated by the judiciary and approved by Parliament. This body has the power to veto any bill it deems inconsistent with the constitution and Islamic law.

The Christian and Baha’i communities of Iran are most likely to be affected by this decision. Iran has been criticized for its treatment of Baha’is, Zoroastrians and Christians, who have all suffered under the current regime.

Joseph Grieboski, president of the Institute on Religion and Public Policy, said the timing of the announcement of the decision during protests over contested elections might not be coincidental.

“Were the regime to maintain [Iranian President Mahmoud] Ahmadinejad’s presidency then pass and enforce a restrictive penal code, the international pressure on Iran would be unbearable for the regime,” said Grieboski. “I do not consider it a sign of opening up. Instead, I see it as a sign of self-preservation.”

Security Backlash

Huge protests over the election results demonstrated considerable opposition to the Iranian government’s heavy-handed tactics, and although the official churches have taken no official stance, many Christians have supported the opposition, according to sources connected to social networking sites.

In the face of the massive protests, a spokesman for the foreign ministry, Hassan Qashqavi, released a statement condemning Western involvement in Iranian affairs and accusing the BBC and Voice of America networks of spreading “anarchy and vandalism.”

This passing of blame bodes ill for minorities in the country, including Christians, whom the Iranian government sees as pawns of the West; they could expect even harsher treatment in a feared post-election clamp-down.

“Since minorities, especially Baha’is and Christians, are often seen as fronts for the West, we can expect that they will feel the greatest backlash by the regime during the protests, and I would argue an even worse crackdown on them if Ahmadinejad and [Supreme Leader Ayatollah Ali] Khamenei come out of this,” said Grieboski.

An Iranian Christian who requested anonymity told Compass that both Christians and Iranians as a whole were tired of the dictatorial regime and asked for prayers for relief.

“The people are really tired, they have no hope, mentally, financially, spiritually, it is really difficult to live in Iran,” the source said. “You can’t have a private life, you can’t make a decision about what you believe, women can’t even decide what to wear. We just pray for the whole nation.”

The Iranian source was reticent to predict how the government might react to Christians following the elections but said that if there were a reaction, they could be among the first victims.

“So what the reaction of the government will be we can’t be 100 percent sure,” the source said, “but they could have a very radical reaction.”

Iranian Christians Maryam Rostampour, 27, and Marzieh Amirizadeh Esmaeilabad, 30, who were arrested on March 5 for their Christian activities, are still held in the notorious Evin Prison. The facility has drawn criticism for its human rights violations and executions in recent years.

Compass has learned that the women have been placed in solitary confinement.

Report from Compass Direct News

EGYPT: TWO COPTS WRONGLY DETAINED, TORTURED


Government uses brothers as scapegoat in murder; officials claim violence not sectarian.

ISTANBUL, December 1 (Compass Direct News) – Two Coptic Christians wrongfully arrested for killing a Muslim during the May 31 attack on Abu Fana monastery in Egypt have been tortured and sent to a detention camp so authorities could try to extract a false confession, their lawyer said.

Egyptian authorities sent brothers Refaat and Ibrahim Fawzy Abdo to El Wadi El Gadid Detention Camp near the Egypt-Sudan border on Nov. 22. A week earlier they were bailed out pending their court case – but never released – and held in a Mallawi police station until their transfer to the camp.

The brothers’ attorney, Zakary Kamal, said the timing of the murder at the monastery rules out any possibility of the two Copts having committed it.

Monks at Abu Fana say the Fawazy Abdo brothers were far from the monastery at the time of the May 31 attacks, which began at roughly 4 p.m. and continued until police arrived four hours later.

Security forces are detaining the brothers to blackmail the Coptic Church into testifying that the attack against Abu Fana monastery in Mallawi, Upper Egypt, was not religiously motivated, Kamal said.

“They want the whole issue to be seen by the public as if it were an exchange of gunfire and a criminal case that had nothing to do with persecution of Christians,” he told Compass.

At the beginning of Refaat and Ibrahim Fawzy Abdo’s captivity in June, police subjected the two men to electric shocks eight hours a day for three days to try to force them to testify that the Abu Fana monks were armed during the attack, sources said.

Kamal said those guilty in the attack knew the brothers were innocent but attempted to extort 5 million Egyptian pounds (US$920,000) from the Coptic church in exchange for testimony in support of the brothers during informal “reconciliation meetings.”

Such meetings are somewhat customary in Egypt, in which different parties come together to settle legal matters out of court. Egyptian parliamentarians attended the first meetings, but the parties did not reach a settlement.

Kamal said he worries that police and parliamentarians are using the meetings to pressure the Coptic Church to agree to their terms and take the focus of the case off of rising sectarian violence within Egypt.

Reconciliation meetings are part of a larger trend in Egypt of the government framing such clashes as cases of simple land disputes with no sectarian overtimes, the attorney claimed, and so far he has refused to pay money in exchange for a testimony.

“I completely refused any agreements of reconciliation, because if we accept those terms, that means we admitted [the brothers] killed someone,” he said.

The two men worked as building contractors on the walls of Abu Fana monastery when nearly 60 armed Muslim residents attacked it on May 31. The attack left one Muslim dead, four Christians injured, and three monks briefly kidnapped.

Ibrahim Tiqi Riad, the brother of resident monk Father Mina, was also kidnapped and remains missing. A Coptic priest who preferred to remain anonymous told Compass that they believe he may have been forcibly converted to Islam.

In the course of the violence, attackers tied two of the kidnapped monks to a palm tree, whipped and beat them, and forced them to spit on a cross and give the confession of Islam, according to a report by the Coptic Assembly of America.

Five days after the attacks, security forces arrested the Fawazy Abdo brothers, charging them with murder. Their case is pending.

The families of the two men are suffering in their absence as they were the sole breadwinners. The electricity in their families’ houses has been shut off since they can’t pay their bills, Kamal said.

The reasons behind the death of the Muslim at Abu Fana monastery remains a mystery. Police did not record the details of the killing in the investigation report of the monastery attack.

Bishop Demetrios Avanmina, head of the Mallawi diocese and abbot of Abu Fana monastery, is working to resolve the matter with local politicians and security forces.

Avanmina declined to comment to Compass on the brothers’ captivity, saying only that he and others were working with the police and the state to resolve the matter.

 

Government Spin

The nature of the May attacks against the monastery, located 200 kilometers (124 miles) south of Cairo, is in dispute. Coptic advocacy groups claim the attacks were motivated by growing hostility against Egypt’s Christian community.

But local Muslims say monastery leaders were illegally taking possession of land and attempting to frame the attacks in the form of religious persecution in order to gain sympathy for their cause.

Gov. Ahmed Dia el-Din said police reports have documented disputes over the land going back several years, and that Abu Fana obtained portions of its land from informal contracts, resulting in the governor’s rejection of the monastery’s claim of possessing valid land titles, according to Egyptian weekly Al-Maydan.

Following the attacks, hundreds of Coptic Christians took to the streets of Mallawi to demonstrate against the violence. They chanted, “With our blood and soul, we will defend the cross.”

The monastery has seen violent episodes in the past with its neighbors, typically over issues relating to land.

In January another group of a dozen men armed with automatic weapons burned the monastery’s library and destroyed many monastic cells, according to the Coptic Assembly advocacy group.

The Coptic Church makes up at least 10 percent of the Muslim-majority country’s population of 80 million. Its church dates back to the early centuries of Christianity.  

Report from Compass Direct News

IRAN: ‘APOSTASY’ BILL APPEARS LIKELY TO BECOME LAW


International pressure sought against mandatory death penalty for ‘apostates.’

LOS ANGELES, September 23 (Compass Direct News) – Without international pressure there is little to stop the Iranian government from ratifying a bill that will make “apostasy,” or leaving Islam, a capital crime, say human rights groups and experts.

On Sept. 9 the Iranian parliament approved a new penal code by a vote of 196-7 calling for a mandatory death sentence for apostates, or those who leave Islam. The Christian and Baha’i communities of Iran are most likely to be affected by this decision.

“Unless there is a coordinated and very strong effort from the international community to place pressure on Iran for this, I don’t think there will be anything stopping the Iranian government from passing this legislation,” Joseph Grieboski, founder of the Institute on Religion and Public Policy, told Compass.

The bill still has to make its way through Iran’s policy-making process before it becomes law. Parliament is reviewing it article by article, after which it will be sent to Iran’s most influential body, the Guardian Council, which will rule on it.

The council is made up of six conservative theologians appointed by Iran’s Supreme Leader and six jurists nominated by the judiciary and approved by parliament. This body has the power to veto any bill it deems inconsistent with the constitution and Islamic law.

In the case of the new penal code, however, which appears to be a return to a strict adherence of sharia (Islamic law), sources said they do not expect the Guardian Council to reject the penal code.

The timing of the debate on the penal code is not coincidental, said Grieboski. While the international community is focused on Iran’s nuclear activities, he said, the Iranian government appears to be taunting the West with deliberate human rights violations.

“Because of the nuclear issues, ones like these get put on the backburner, which means that the regime can move with great liberty to install legislation like this with impunity, because the nuclear issue gives them cover,” said Grieboski.

Iran has been criticized for its treatment of Baha’is, Zoroastrians and Christians, who have all suffered under the current regime.

“The Baha’is and the Christians are the ones being used as pawns by the regime in its dance with the West,” said Grieboski. “Iran is a human rights black hole in the middle of the world.”

A source told Compass that when he discussed the apostasy article in the penal code with some of the reformists in Iran’s parliament, they responded by saying they were not aware of the apostasy bill. The source argued that the Iranian government was trying to bury the apostasy article in the 113-page penal code.

“I am not sure there is an adequate means of underscoring how serious this law is in terms of violation of international law and a violation of the fundamental freedom of religion or belief,” said Kit Bigelow of the National Spiritual Assembly of the Baha’is of the United States.

She urged people to write their representatives in their respective governments.

International pressure is crucial if the apostasy bill is to be countered, agreed a Christian source. He recalled how in 2005 Christian convert Hamid Pourmand was acquitted of apostasy as a direct result of international pressure.

“I don’t know who you are, but apparently the rest of the world does,” the presiding judge had told Pourmand, according to media sources. “You must be an important person, because many people from government have called me, saying to cancel your case.”

The news of parliament approving the bill comes on the heels of two Christians being officially charged with apostasy this summer. Mahmood Matin Azad, 52, and Arash Basirat, 44, have been in prison since May 15 and now await their court date.

Although their future and that of other non-Muslims looks grim, some believe this bill is the act of a government desperately trying to hang onto power.

“I have to say the Iranian regime is tightening severely its control over as many aspects of the lives of Iranian people as they possibly can,” said Grieboski. “And that, I think, is the sign of a weakening regime.”

The original penal code was passed into law in 1991 and last amended in 1996.

Report from Compass Direct News