News Magician Scott Morrison’s smoke-and-mirrors act on tax cuts

Magician Scott Morrison’s smoke-and-mirrors act on tax cuts

scott morrison tax cuts
Prime Minister Scott Morrison has not been clear about the expected passage of tax cuts promised during the election. Photo: AAP
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Watching the Prime Minister casually drop his little $1080 delayed tax surprise into an interview on Monday night was instructive.

It was like watching a magician make an object disappear during a circus act and then pretend nothing had happened. How good is that?

Ever since the day after the budget, the Prime Minister has been telling porkies that the Australian Tax Office could pay a $1080 tax cut from July 1, without legislation.

It started on April 3, the day after the budget, during an interview with the Today Show’s Deb Knight.

“Well it won’t make a difference whether it’s introduced this week or not,” Mr Morrison said.

“The Tax Office – if the Labor Party says they support our tax cuts, then the Tax Office can administer it on that basis.”

It sounded so good. Except a week later the ATO told The New Daily it could not deliver the tax cuts from July 1 unless they had passed Parliament.

No matter, the Prime Minister continued to insist they could.

When the pre-election fiscal outlook came out on April 17 during the election, it also warned the tax cuts could not be delivered administratively as the PM had claimed the day after the budget.

Mr Morrison was at it again insisting they could be.

“What happens traditionally with the Tax Office, is where there is a bipartisan commitment to matters, they can often go ahead and administer the tax arrangements on that basis,” Mr Morrison said on April 17.

“But it’s certainly our intention to legislate them, mate,” the PM added.

He was then asked if he would legislate the tax cuts before July 1.

The answer was peak Scott Morrison. He did not answer the question and instead said he would legislate the tax cuts “as soon as possible”.

Now the problem with that answer is that it implies that the Prime Minister knew all along that the timeline for bringing back Parliament was too tight.

And if he did know that he should have just been honest about it with voters from the start. Sure, the tax cuts will be paid at some point as soon as they pass but why get all tricky about it?

Why does this matter?

It matters because on Monday night the Prime Minister finally admitted he can’t legislate the tax cuts in time and they won’t be paid until the laws pass.

But the Prime Minister’s magic act was so impressive that the dead cat he dropped in the interview wasn’t actually spotted until an ABC journalist went through the tape the next morning.

“Yeah just; ‘Go and do your jobs. We’re going to go and do ours’. That’s exactly what I’m going to do,” the Prime Minister told Sky News.

“There’s a lot of work to do and we’re getting about it straight away. We hope to convene the Parliament again as soon as we can. We obviously have to wait for the writs to be returned and there’s a formal process for that at the moment.

“That’s not looking until very late into the back end of June. So that really does make very narrow that opportunity to do it before the 30th of June. I think that’s very unlikely, with the advice I’ve received. But on top of that, there’s a minister to swear in ….”

Did you see what he just did there? The Prime Minister just dropped in that he can’t bring Parliament back before July 1 into a blizzard of words and then glides on as if nothing happened.

It had actually. Because the $1080 tax cuts are a refund to be paid for the current 2018-19 financial year not the next financial year.

The ABC then wrote a story that was wrong, assuming the tax cuts could be delayed for a year.

In fact, as The New Daily reported during the election, the Australian Tax Office planned to pay the tax cut in two installments if necessary through an amended tax return.

In response to the ABC story the Prime Minister’s Office put out a statement confirming two installment payments were one option.

“Tax relief will be delivered in 2019-20 as promised,” a spokeswoman for the Prime Minister said. “And will not be delayed by a year by the parliament not sitting in June as speculated in the media today.”

Bizarrely, this potential delay was then reported as “good news” for taxpayers and the tax cuts being delivered “on time”.

Some also suggested that if Labor agreed to the changes before Parliament returns, then the ATO could reflect the cuts in people’s tax home pay immediately.

This is also wrong. It’s too late to change the withholding schedules for this year and that’s exactly what the ATO told Senate estimates last month. You can’t pay a lump sum offset that way anyway.

Honestly, you could not make this stuff up.

But wait, there’s more.

Just hours after Scott Morrison admitted the delays to the tax cuts, up popped treasury spokesman Chris Bowen.

But instead of ripping into the government for a broken promise, he was standing outside his childhood home delivering a monologue on why he should lead the Labor Party and why only he could deliver an economic message to Western Sydney.

Sadly, the election result doesn’t exactly back up his sales pitch.

It took hundreds of words for him to get to “Scott Morrison’s broken promise”.

With the Labor Party preparing to spend the next month downing tools to run a leadership parade there is every chance the Prime Minister will get away with it.