The 'Clive Palmer pattern' repeats, and it's proving costlier than ever
Backroom deals excluding stakeholders are Clive Palmer’s way of doing deals – but they don’t make for good policy
Clive Palmer outside Parliament House in Canberra.
Photograph: LUKAS COCH/AAPIMAGE
Tony Abbott was jubilant after his government persuaded the party of
a mining magnate to repeal a mining tax. The deal – while “imperfect” –
proved Labor was irrelevant and the Coalition was getting on with the
job, he said.
It also proved, once again, that Palmer is an easy touch in
behind-closed-doors negotiations, and that neither Palmer, nor the
government, are all that keen on Australia’s world-leading system of
retirement savings through compulsory superannuation.
Which is strange since the Coalition is so keen on reducing
government spending. Compulsory superannuation means more people can
finance their own retirement and fewer will need the aged pension.
The millionaire Palmer United party leader had presented himself as
the protector of the little man – determined to keep three of the
programs that had been “paid for” from the mining tax and that the
government had promised to axe along with it.
He said he would never agree to the axing of the low income
superannuation contribution – $500 a year paid by the government into
the super accounts of people earning less than $37,000 a year – or the
schoolkids bonus – a means-tested payment of $420 for every primary
school child and $840 for high school students – or the income support
bonus – a $200-a-year supplement to help pensioners get by.
But in fact he did agree to their abolition, just delayed by three
years. And the trade-off was that he also agreed to freeze for seven
years the superannuation contribution paid by all employers to all
employees.
That was also another big broken promise for a government that had
pledged “no further adverse changes” to superannuation – although the
prime minister (who takes a black is white approach to these questions)
insisted it wasn’t a broken promise at all because he had promised a
two-year freeze and a seven-year freeze was pretty much the same thing.
Not really, according to examples provided by Labor. A seven-year
freeze would mean a 25 year old earning $55,000 will have $9,215 less in
retirement savings by 2025 and a 35 year old earning $75,000 will have
$12,977 less.
And as for that hero of the little guy, Palmer, he saved the
$500-a-year low-income super payment for someone on $37,000 a year for
the next three years, but cost them so much in superannuation payments
that in the long term that they’ll be $10,000 worse off by 2025. Great
deal, Clive.
Perhaps it’s because, like some in the government, Palmer is not so keen on compulsory superannuation in the first place.
Abbott once described compulsory super as “one of the biggest con jobs ever foisted by government on the Australian people”.
Palmer said on Tuesday it was “just the way to allow merchant banks
to make large fees out of the Australian population, or many union
movements that manage their own super to have a good time.”
And they both made the point that superannuation increases come at
the expense of wage rises – meaning families have less disposable income
now in order to have more money for their retirement later. Abbott said
this proved superannuation was not a “nirvana” – whatever that might
mean. Palmer suggested it showed super was in fact a bad thing because
lots of people would be dead before they ever received it.
At the end of the last chaotic session of parliament I wrote that a “Palmer pattern” was emerging
– cause maximum disruption and then support the government after
extracting cobbled-together concessions during chaotic backroom meetings
from which all stakeholders are excluded.
This time it is worse – far-reaching changes to a crucial economic
policy in a last-minute deal without any scrutiny. Yes, the government
has abolished the flawed mining tax, as it promised, and just in time to
tick the box for its first year anniversary. And yes, it had no choice
but to deal with Palmer. But it came at a very high price for public
policy.
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