Grattan on Friday: Tim Storer – the $35 billion dollar man
Put yourself in the shoes of Tim Storer. The accidental senator from South Australia has one hell of a decision to make shortly after the May budget, when the government plans to bring back its legislation to give tax cuts to big business.
A week ago the Coalition’s fairly confident hopes rested on Storer ticking its A$35.6 billion package. A deal with Victorian crossbencher Derryn Hinch, whose vote also had to be secured, was seen as doable. Then Storer baulked, and the legislation’s future has again become anybody’s guess.
Think of the situation from Storer’s perspective. He has literally just arrived in the Senate, elected to replace a Nick Xenophon Team victim of the citizenship crisis but sitting as an independent because of a stoush with his former party.
It’s amazing he’s there at all, and he’s not likely to be there long – one can’t see him re-elected next year. Now he has life-or-death sway over a key measure the government took to the 2016 poll. He has to ask himself whether he should use the extraordinary power that bizarre circumstances have given him to frustrate legislation on which the Coalition can argue it has a mandate.
On the other hand, as he said in his Wednesday Senate statement outlining his doubts about the bill, he is concerned about whether the budget can afford the cuts. And then, he noted, there’s the question of whether the money could be better spent on other things – infrastructure and the like.
When he was sworn in last week, Storer was escorted by the government and opposition Senate leaders, Mathias Cormann and Penny Wong. He chose his escorts. It was to signal his independence, and perhaps to flag that he saw himself as an active player.
He brings to the huge decision before him training in economics, and experience of business, especially in Asia. That presumably helps with evaluating the argument the government makes about the competitive importance of these cuts.
He also comes from a state with a history of federal politicians who focus locally when there are Commonwealth dollars to be had. Nick Xenophon once held up the Rudd government’s $42 billion economic stimulus package while he extracted water concessions that would benefit SA.
While Storer has been willing to engage with the government, and will continue to do so, if he eventually voted no, he’d be in line with his former party. The two NXT senators are opposed, despite the government trying to lure them. Labor, fighting the tax cuts, also observes Storer’s past ALP membership, as a sign of his general political orientation and thus perhaps a clue to his final decision.
But the government hopes more talking, more incentives, and perhaps the content of the budget might be enough to persuade him.
Parliament is off until the May 8 budget, when attention will turn from company tax to the government’s income tax plans – crucial, as it tries to improve the community mood for the election due before mid next year.
Politically, the budget will be preceded by a media feeding-frenzy around the next Newspoll that – barring a miracle for Malcolm Turnbull – will be the 30th in which the Coalition trails Labor.
This will be a diversion, as attention harks back to Turnbull’s invoking 30 Newspolls against Tony Abbott. But with no challenger in sight, it won’t be a decisive moment – just another bout of bad publicity to be endured.
Abbott no doubt will make the most of it. But the more time that passes, the less relevance the former prime minister seems to have, despite a speculative story this week that he might he positioning for a tilt at the opposition leadership if Turnbull loses the election.
Abbott’s decision to launch Pauline Hanson’s book of speeches this week was eccentric and ill-judged. Can anyone forget his toxic view of her two decades ago, when he established a fund to facilitate legal actions against One Nation and she ultimately ended up in jail? Now he is saying that “if over the last two decades we had been more ready to heed the message of people like Pauline Hanson and less quick to shoot the messenger, I think we would be a better country today.” The bitter enemies have turned into kissing cousins.
Hanson might have mellowed slightly second time around, and she is certainly helping the government in the Senate. But her politics should still be condemned by Liberals, certainly not given the sort of qualified endorsement Abbott extended.
Abbott said the only way the Coalition could win the election was if it could harvest One Nation’s preferences, and “if I can make that more likely, that is a very positive contribution that I can make to the prospects of the Turnbull government.”
His remarks at the book launch suggested a mix of conviction and expediency – regardless, they further fuel cynicism about our politicians.
Speaking of cynicism, one couldn’t miss how quickly some observers segued from the cricket scandal to political behaviour. But as they (rightly) criticise the errant Australian players, politicians would prefer to overlook awkward parallels with conduct in politics – for instance the endemic tampering with the ball of truth.
On Tuesday a fired-up Turnbull told a news conference: “I think there has to be the strongest action taken against this practice of sledging. It has got right out of control, it should have no place … on a cricket field.”
Absolutely. And also it has got out of control on the political field. But when a journalist interjected, “doesn’t it happen in parliament”. Turnbull chose to let that pass without response.
Storer studied economics at the University of Adelaide, and was dux of his cohort in the Master of Business Administration at the Australian National University. He has been active in state branches of the Australia China Business Council and the Australian Republic Movement. A fluent speaker of Mandarin Chinese, Storer ran a sole proprietorship helping South Australian businesses with Asian trade and investment, having spent twenty years working in China, Hong Kong, and Vietnam.
He was the Nick Xenophon Team’s fourth and final Senate candidate in South Australia at the 2016 election, which saw the three NXT candidates above Storer elected, two of whom resigned in late 2017. When party leader Nick Xenophon resigned in October 2017, intending to appoint staffer Rex Patrick as his successor, Storer wrote to the Parliament of South Australia claiming he held the right to fill the casual vacancy. One week later, Storer withdrew the challenge and resigned from the party.
NXT Senator Skye Kakoschke-Moore resigned in November 2017 after confirming that she held British citizenship, becoming a casualty of the dual citizenship crisis. The High Court of Australia held that she was invalidly elected, but was delayed in announcing her successor since the only other candidate on the party list, Storer, had left the party.
In February 2018, following a challenge by Kakoschke-Moore to reclaim her seat having renounced her foreign citizenship, the High Court appointed Storer as a senator.
Storer did not support the Coalition’s proposed corporate tax cut, later saying that one of his key goals was to increase the Newstart Allowance.
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The government’s company tax cut for big business has received a further blow, with key crossbencher Tim Storer in a statement to the Senate questioning whether a reduction for all companies is fiscally prudent.
On Tuesday, the government was forced to defer its legislation when it failed to secure deals with Storer, an independent from South Australia, and Victorian senator Derryn Hinch – the final two votes it needed to pass the upper house.
It seems Hinch, who was negotiating on a range of trade-offs and issues, could have reached a deal that allowed a vote this week, the last sitting before the budget. But negotiations stalled when the government realised it could not win Storer in time. He is expressing fundamental doubts about the legislation, and it is unclear how future discussions with him will go.
Storer was elected to the Senate as a replacement for the Nick Xenophon Team’s (NXT) Skye Kakoschke-Moore, who quit in the citizenship crisis. But by then he had resigned from the party after a falling out, and sits in the Senate as an independent.
The two NXT senators are opposing the cuts. The government has been making some overtures to them but their position seems solid.
Storer has an education in economics, including an MBA from the Australian National University. He speaks Mandarin, worked in Asia, and has run a business helping companies with trade and investment there.
He will be subjected to intense lobbying between now and budget week, when the government hopes to put the legislation to a vote.
The A$35 billion cut, the second tranche in the government’s ten-year tax plan, covers companies with annual turnovers of more than $50 million. Legislation has already been passed to reduce tax for small- and medium-sized companies.
In his Wednesday statement, Storer said: “I have doubts that the decision to reduce company tax for all companies is prudent to undertake in the face of Australia’s budget deficit and debt. Even without this tax cut, I doubt our present tax system is sufficiently robust to support a medium-term fiscal strategy of budget surpluses, on average, over the course of the economic cycle.
Finance Minister Mathias Cormann, speaking on Sky, emphasised that the company tax cuts were paid for – “they are reflected in our budget bottom line”. He again warned that without the cut, Australian’s economy would be harmed, especially given the reduction in US company tax.
“Importantly, I see the strength and timing of the effect of this proposed tax cut to be modest relative to its cost. With one of the highest rates of population growth in the developed world, I am mindful of other uses of government revenue that can generate prosperity and enhance fairness for the Australian people,” he said.
These included “well-targeted social and economic programs aimed at supporting businesses with R&D, innovation and industrial transformation; funding of world-class education and health systems; harnessing the contribution potential of our youth and ageing populations; reducing inequality, and investing in public infrastructure”.
Storer said he remained “to be convinced that I should support this bill in its current form, in isolation from a broader discussion and initiatives on enhancing the overall sustainability of our taxation system, and with alternative uses of government revenue that can generate prosperity and enhance fairness for the Australian people”.
He said the government had made a lot of progress in the last fortnight, moving from 33 locked-in Senate votes to 37. But it would have liked to have passed the legislation this week and had “worked pretty hard at it”, he said.
Both he and Prime Minister Malcolm Turnbull reaffirmed the government would take the company tax cuts to the election if it can’t get the legislation through.