Malcolm and the economy

The way to achieve growth is to encourage the private sector: lower taxes, less regulation and a cut to spending. Three stories, each highlighting how bizarre economic policy now is. First this: Budget cash to back innovation push.

Malcolm Turnbull’s sweeping innov­ation strategy will hit the budget bottom line as the package of more than 30 reforms, including new spending measures, will not be matched with savings.

The Prime Minister, who has told Industry Minister Christopher Pyne to “release his inner revolutionary” in setting the new innovation agenda, is understood to have ordered Treasury officials to prepare “second-round effects” modelling to demonstrate the long-term benefits of the reform package, despite the anticipated short-term hit to the budget.

And then on the matter of savings, we have this: Cutbacks eyed for superannuation tax breaks.

Tax breaks on superannuation could be scaled back to help fund income tax cuts for workers, under ideas Scott Morrison will air today in a bid to ignite a debate over the best way to use concessions worth billions of dollars.

The Treasurer will also raise the prospect of easing some of the rules that prevent people from building up their nest eggs, acknowledging that caps on their contributions can make it impossible to save all they need for a comfortable old age.

But Mr Morrison will use a major speech today to warn that super must not be turned into ­“estate-planning vehicles” for the wealthy to exploit the tax-free ­nature of the funds in retirement.

The suggestions widen the tax reform debate, as the government examines options that range from an increase in the GST to a “progressive” scale of super tax rates that could recoup as much as $6 billion a year in revenue.

And we should not neglect this either: Turnbull’s NBN deficiencies exposed by $800 million Optus debacle.

Leaked documents, which show that the company building the government’s national broadband network could be up for $375 million in repairs and upgrades of a key part of its multi-technology-mix (MTM) pose serious questions about the wisdom of the government in tearing up Labor’s fibre to the premise plans.

The stories are each part of Malcolm’s visionless approach to policy. He thinks government spending is good, private investment irrelevant, and national saving not central to his plans. We are dealing with a Labor government that is only being constrained by the conservatives in its ranks, the ones Malcolm is trying to rid the party of.

Everyone is perfectly aware that Albanese will lead the ALP at the next election. If Malcolm loses the unloseable, he will have to emigrate with the other millions heading to Europe.

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