Saturday salon 23/6

1. Taxing times

The Turnbull Government was mightily pleased when the Senate voted for tax cuts worth $144 billion over the next seven years. Here’s how they voted:

Labor, the Greens and independent Tim Storer voted against the tax package. Storer called the third phase cuts, where the 32.5% rate is extended to $200,000, reckless.

The swing voters in the end were Centre Alliance senators from SA (ex-X) Stirling Griff and Rex Patrick who

    both voted for the plan despite saying they disagree with the third stage which delivers a tax cut of $7,225 a year for a person on $200,000 from 2024-25 while someone on $30,000 would get a tax cut of $200 a year.

    Senator Griff said he and Senator Patrick would be “more than happy to support any moves” Labor made to unravel the third stage if it won the next election.

These dipsticks really did come down in the last shower. If you can stand it, listen to Griff explaining himself to Patricia Karvelas. They really believed the Government when they said they would under no circumstances split the bill. They are assuming that a future government, even a LNP government, would act sensibly and reverse the Stage 3 cuts rather than cut expenditure if the economy did not perform as brilliantly as the budget predictions.

Leyonhjelm would always support lower taxes, no matter what, but I thought Hinch had some brains.

Here’s Storer’s media release before the vote, but after “Senators Patrick and Griff voted to guillotine debate barely thirty minutes into examining amendments to the biggest tax cuts in Australia’s history.”

Nick Xenophon would never have voted to guillotine a debate in that way.

2. Is it fair?

“Thoroughly fair”, according to Turnbull. They are pitching to “middle Australia”.

    “We want you to realise your dreams,” Mr Turnbull told a press conference after the vote.

Here is what happened, from the AFR:

    The cuts will cost $144 billion over a decade. Stage one, costing $22 billion, begins on July 1 and is worth up to $540 a year for people earning up to $90,0000. Stage two kicks in on July 1, 2022, which will be towards the end of the next term of Parliament.

    It will take the $90,000 threshold under which the 37 per cent tax rate applies to $120,000, meaning everyone under that income will pay a maximum 32.5¢ in the dollar.

    Stage three begins on July 1, 2024. It will abolish the 37 per cent bracket and apply 32.5 per cent to all earnings between $41,000 and $200,000, covering 94 per cent of workers.

Labor opposed stages two and three which combined would cost $120 billion.

The Coalition has billed the cuts as supporting ‘middle Australia’, meaning those earning $80,000 plus. Jacob Greber in Tax cuts are awful for middle Australia. To pretend otherwise is misleading points out that median earnings are only $52,988, or $46,800 if you are a woman:

This NATSEM graph from Peter Martin shows where the savings go in relation to the quintiles, and how the quintiles divide:

For those who say the poor pay no tax, look again:

Turnbull is saying that Shorten wants to take more of your money away, and tax more. However, Labor proposes to implement $73 billion worth of tax relief. According to this article:


    Labor plans to keep the shape of the Low and Middle Income Offset. It will still phase in from the point where workers start to pay tax, run at full throttle for the 4 million taxpayers earning between $48,000 and $90,000, and taper off so it phases out at about $125,000.

    But Labor is offering a maximum tax cut of $928 a year for middle-income earners – the Coalition’s $530 plus an additional $398 promised by Labor. And for the 2.4 million low-income earners promised $200 a year by the Coalition, Labor will give them an extra $150 for a total $350.

    Everyone who earns less than $125,000 a year – that is, most Australians – will get a bigger tax cut under Labor.

The AFR on page 4 had this table with an article ‘Realise your dreams’:

Update: This image from The Conversation shows the initial and final effect of the LNP’s tax policy:

It shows the LNP government initially targeting mainly those in the $50 to $100K incomes with some crumbs, and then later favouring later those above $90K.

This table from the AFR shows the step changes in the rates:

This one shows the difference in tax paid between now and 2024-25:

Update 2: From an AFR article Voters back debt reduction over tax cuts in May, looking at what voters want from the Budget:

Hospitals, Medicare, education, schools and infrastructure come out way ahead of personal and business tax cuts, which is Labor’s point. However, economic growth and employment is right up there. Turnbull is linking tax cuts, especially now for business, with economic growth and employment.

Wayne links Labor’s priorities with economic growth also, but the case is harder to make. We may find out to our sorrow if the economy goes pear-shaped and Turnbull’s promise that tax cuts would not be restored and ScoMo’s promise of limiting revenue to 23.9% of GDP remain in place.

3. Welcome to a police state?

Andrew Wilkie says that had the Espionage and Foreign Interference Bill been in place in 2003 when he alerted the Australian people that our government’s reasons for going to war in Iraq War were based on a lie, he would have faced 25 years in prison. When these laws pass, as they will with Labor’s support, protesting against the Adani mine could be deemed sabotage.

Wilkie says the problem is that “national security” and “foreign interference” are so broadly defined they could mean almost anything.

Lenore Taylor agrees, and worries that journalists will feel intimidated, and hence self censor. Labor has had a ‘public interest’ defence included, but you need deep pockets for that to be any use.

Taylor says:

    Five years ago I was one of the authors of a story revealing Australian intelligence agencies had spied on the Indonesian president Susilo Bambang Yudhoyono and his wife. The story was embarrassing for the Australian government and caused a short-term crisis in bilateral relations, but I firmly believe it was also in the public interest. Under these laws we would have been similarly exposed to criminal prosecution under the harsher laws.

Similar, that is, to Fairfax and the ABC reporting on alleged misbehaviour by special forces in Afghanistan.

We are meant to understand that the government will act with sensible restraint.

4. Indigenous treaty

Possibly the most important event of the past week was Victoria passing historic law to create Indigenous treaty framework.

Also the Melbourne electorate of Batman was renamed after the Indigenous activist William Cooper following a public campaign to rid it of its ties to a man accused of involvement in the massacre of Aboriginal people.

Radio National’s excellent Rear Vision program broadcast the first of three In the shadow of Terra Nullius: Part 1 invisibility to survival.

It explains how at the time of Federation the Indigenous population had sunk to about 100,000. They were viewed as an inferior race, as were all ‘primitive’ people, who would fade away, not fit for purpose in a civilised world.

Would that the founding fathers could listen to Megan Davis, Pro Vice-Chancellor Indigenous and Professor of Law at the University of New South Wales, talking with Tracey Holmes on The Uluru Statement one year on.

Davis was involved with organising the production of the Uluru statement. Totally impressive. They will prevail.

77 thoughts on “Saturday salon 23/6”

  1. Police State
    Anrew Wilkie is right, ” …. the problem is that “national security” and “foreign interference” are so broadly defined they could mean almost anything.”

    It reminded me immediately of one of the fifty or so offences in the old Australian Military Regulations & Orders 203:
    Conduct to the prejudice of good order and military discipline
    This was sometimes used with care by a Regimental Sergeant Major and a Commanding Officer – but was, more often, pure bullying, personal dislike and a lack of leadership ; best expressed in the notorious phrase, “RSM, March the guilty bastard in”. Now the government wants to inflict the same stupidity on all of us.

    We do need effective and enforceable – and enforced – laws to protect us from foreign interference in our internal affairs and our institutions; we also need protection against treason and against corruption, (both of which have now become so prevalent that they can be considered the lifestyle choices of some Australian decision makers and influencers).

    We do not need pretend laws, ones which have loopholes galore for scoundrels and evil-doers but which attack all sorts of our personal liberties. Wonder if foreign agents drew up this law to suit their own needs; that would be easy enough in today’s climate. Wonder, too, how we go about sacking the Governor-General and stripping him of his knighthood if he is foolish enough to sign these scams into law.

    In my opinion, the reports about incidents in Afghanistan in 2012 might be marginal to our discussion of attacks on freedom of information. Whether these incidents happened in the way described needs to be investigated without any pre-scripted findings; however, these reports seem to have their origin in factional brawls among some officers of the ADF, and also in a possible attempt to disband Australian special forces so as to sell the services of private contractors to an ideology-driven government. (My own wild guess is that soldiers themselves might have been ordered to act or to fail to act in certain ways by senior officers who then, much later, squibbed out on their decision because it would all harm their own careers. No evidence, of course, but my own feeling that that’s what could have happened).

    Treaty now
    What we could have right now, (well, as soon as a referendum can be organized; probably by late September or early October), is the creation of a new, full state-equivalent Aboriginal element in The Senate. ( Aboriginal NOT “indigenous” – let’s get rid of that land re-stealer weasel-word immediately). There are lots of practical ideas around already on how to elect Aborigines to dedicated seats in the Senate, let’s use them; selection of the best ideas should take no longer than a single weekend. As for the Holy Nexus, members of the House Of Representatives can’t represent us properly because there are so few of them so enlarging Reps would be a real blessing for everyone – and to blazes with the “no more politicians” bunch. And if the government persists in getting in our way, sack them.

    Let’s get rid of the word Treaty. There are a lot if synonyms for Treaty that are far more appropriate for the unique Australian context. Besides, the word Treaty has become too emotion-laden to be useful in advancing the interests of all Australians and especially those of Aborigines.

    Let’s stop misusing the word Nation while we are on the job. It might be appropriate a North American context but its use here in Australia is only doing harm . Aborigines came to Australia many tens-of-thousands of years BEFORE bows-and-arrows were invented, before wild animals were ever domesticated, (the dingo is a fairly recent import on that timescale) and a long way before the concept of nation was ever thought of. Let us, instead, use Aboriginal words to describe Aboriginal concepts of social organization – and if the rest of the world doesn’t understand their meaning, well, bad luck.

    The longer we delay the inevitable, the longer we have to get by without the benefits of the lived experience of Aborigines in the making of our laws

  2. Yes Graham, on your last point.
    On ABC radio yesterday I heard Australian Aboriginals referred to as “First Nations people” and almost gagged. I think it was merely lazy journalism.

    Have heard several ABC political or current affairs types talk about pollies in our major Parlt parties cooperating “across the aisle” as if they were Congresspeople. Also, occasionally, references to us common folk outside Canberra, living “beyond the Beltway”.

    We don’t have a Beltway.
    These journos are not living in a TV show called The West Wing but apparently, deep down, some wish they were.

    Reserved Seats.
    Strangely, our little NZ cousins from whom we can learn nothing, have had reserved Maori Seats in their Parlt for many decades. And maintained those when they changed the voting system to include an element of party-list, proportional representation.

    But Australia is the USA to their tiny Canada, so why notice any ideas they have? Just bowl under arm; she’ll be right, mate.

  3. $144bn over 10 years sounds like a lot of money but where will most of that money be spent ?
    I’m guessing in the Australian economy.

    I believe just the interest payments on only Federal Debt will exceed $200bn over 10 years.
    The majority of which will leave our economy.

    I know which is more counterproductive and it’s not the one Keynesian ‘ journalists ‘ are bleating most loudly about.

  4. And this,

    And for the 2.4 million low-income earners promised $200 a year by the Coalition, Labor will give them an extra $150 for a total $350.

    As soon as I hear someone summarising a reduction in tax as giving, they immediately paint themselves as dishonest or stupid. I’ve listened to a little bit of the Parliamentary “ debate “ on this and there’s a lot of both on display.

  5. A proportion of Federal Debt is raised within Australia Mr J.

    You will have heard of Government Bonds, no doubt.

    If you claim that most of the interest paid on Federal Debt flows overseas, it would be helpful for your readers if you could prove that contention.

    Certainly some Aussie banks raise funds (borrow) overseas to cover mortgage loans to Aussie customers, because they squeal like piglets when overseas interest rates rise.

    BTW, how’s the Trade War going? Are we winning?

  6. Something I noticed in the Parlt debates* is the tendency to quote a $ figure without saying “weekly”, “annually”, “from July next year”, “seven years from now”, ……
    . you know, for a bit of, oh, I dunno, …precision??
    Difficult to compare a weekly apple with an annual orange.

    *Mr J and I belong to that 0.003% who don’t lurch to the dial as soon as Parlt begins, to switch stations.

  7. I find it a bit hard to swallow a voter bribe event that gives nothing to some poor sod who has a taxable income of $20,000 p.a while giving $10 per week (or $20 for the Labor bribe.) I am still old enough to think “fair go” is important.
    Ditto parties that want to spend $144 billion on bribes while saying “can’t afford to do our job properly.”
    If they insist on going ahead with a bribe it would be fairer if the bribe came in the form of a small, simple UBI that might vary with age but would not vary with income or assets.
    Even better they could return the money in the form of a negative taxation system where the tax dept actually pays money to people who earn less that some negative tax threshold. (In the simplest system, negative tax payment to adults would depend on the extent to which taxable income is below the negative tax threshold.

  8. Arguing from authority (because I am not an expert) I quote Prof Quiggin who punctures Mr J’s favourite ballon by writing

    I won’t discuss Venezuela in detail. But despite the rhetoric of the Chavez-Maduro government, it’s no more socialist than lots of other places. There’s no real central planning and nothing like comprehensive nationalization. As Forbes magazine (not a friendly source) points out, Venezuela’s problems are typical of developing countries subject to the “resource curse“.

    No correspondence will be entered into.

  9. Dear Conributor,

    Malaysia has had a resource curse too, see Pertamina; see “disappearance” of a cool $1 billion from a Govt ‘development fund’.

    Meanwhile, Singapore regularly has to put up with smoke drifting across from forest removal fires in a neighbouring nation.

    Yours Sincerely
    Prof Pnin

    {The above is not correspondence because I declare it not to be.}

    Was Australia “socialist” under the Liberal Party/Country Party governments from 1949 to 1972?

    I seem to recall someone saying ‘Australian farmers capitalise their profits, and socialise their losses.’
    – sounds like a nifty little procedure.

  10. Ambi:

    Something I noticed in the Parlt debates* is the tendency to quote a $ figure without saying “weekly”, “annually”, “from July next year”, “seven years from now”, ……
    . you know, for a bit of, oh, I dunno, …precision??

    Difficult to compare a weekly apple with an annual orange.

    It’s been giving me the irrits too. Often now it’s 10 years, but they say.

  11. I’ve had plenty to distract me this weekend

    There are certain sporting events that are compulsory, like the women’s RL state of origin on Friday. Then on Saturday I went to help Denise (you might remember her about feeding the homeless in Spring Hill) with her yard.

    Today we went to a club choir performance at the Qld German Club. Liedertafel & Liederkranz with ‘songs from the heart’.

    Wunderbar!

    Tonight is men’s RL state of origin game 2.

    I’ll be astonished if we win. Too big, strong, fast and skilful. Coach Brad Fittler says they need to go up a gear. That would be amazing.

    I must say it puts a spring in the step if we win. But some NSW idiot has just said the only way NSW will lose if they beat themselves!

    That is disrespectful, and I’m sure does not come from anywhere near the team.

  12. John
    The word “ bribe “ would suggest giving, taking less is not giving.
    It’s like some folk already think Australia is at the stage where all profit belongs to the state like Venezuela.

    Brian

    17 v 17 Mate, remember Fatties Neville’s!!

  13. You’d be too young to remember, but Mr Fraser used ads showing “a fistful of dollars” representing promised tax cuts, in a Federal election in the 1970s, Mr J.

    That was widely considered to be crass and effective.
    The word “bribe” was heard then, also.

  14. Ben Hunt, Qld halfback, effortlessly knocks over big bopper Boyd Cordner.

    The difference on the scoreboard was two goal kicks from the sideline by James Maloney, one of the best in the NRL, whereas we had a third-string kicker in Valentine Holmes.

    NSW had the rub of the green in both matches. Qld did have a few brain explosions in kicking over the dead ball line and other stuff.

  15. Mr J: The money you make depends on things like:
    The roads governments have built
    Educated employees whose education was at least partly paid by the government
    The government financed armed forces that helped avoid us becoming Japanese slaves.
    Government financed police and criminal justice system that protects you and your property
    And……..
    The taxes you pay are part repayment for all the things governments do for you. We are all a bit inclined to be want to capitalize our gains and socialize our losses.
    If you are paying the top marginal tax rate you should be thankful you are earning enough to get you up to the top marginal tax rate. Stop your whingeing and be thankful that you are not trying to live on $20,000 p.a. with no assets.

  16. Graham, I’ve edited your italics to what I think you meant. Please say so if I’m wrong.

    A fair point about ‘First Nations’ people. The usage is becoming common.

    $144bn over 10 years sounds like a lot of money but where will most of that money be spent ?
    I’m guessing in the Australian economy.

    Jump, I think you will find that rich people spend a lot more off-shore than low income earners.

  17. And for the 2.4 million low-income earners promised $200 a year by the Coalition, Labor will give them an extra $150 for a total $350.

    That was the language used by Caitlin Fitzsimmons in the SMH. It may be wrong wrong, but not dishonest or stupid, just sloppy. It’s actually taken out of pay packets and then returned to tax payers at the end of the year as a rebate in this case.

  18. I’ve added some graphs as an update.

    This image from The Conversation shows the initial and final effect of the LNP’s tax policy:

    It shows the LNP government initially targeting mainly those in the $50 to $100K incomes with some crumbs, and then later favouring later those above $90K.

    This table from the AFR shows the step changes in the rates:

    This one shows the difference in tax paid between now and 2024-25:

    I think the LNP strategy is basically political rather than economic. Step 1 according to Cormann will magically make the economy more profitable so that the later cuts can be afforded.

    To them Labor nearly doubling step 1 is irresponsible and does not have the same effect.

  19. Brian: I think the whole tax cut exercise is irresponsible given all the things that our government’s are not doing properly at the moment because of claimed “un-affordability.” Then there is the deficit.

  20. Brian: There are many good reasons for putting most taxpayers on a flat tax. It makes things simpler and gets rid of most of the injustices to families with the existing system (that arise because of differences in partner income and fluctuations in annual income.)
    I have no problem with flattening tax as long as the poor don’t end up worse off and the rich don’t end up better off.
    You could go close to achieving the above by putting the very rich in a higher tax bracket and used a ubi set to give an overall combined tax+ubi system that is about as progressive as the existing system.

  21. Brian:
    Thanks for the changed italics.

    Don’t like “bread-&-circuses” football at all but did watch the women’s state of origin out of curiosity. Very good – and fast too. Thought the brawl-tackles were probably commanded by the owners rather than needed by the players.

    Jump:
    It’s OUR money in the first place. How dare the dodgy stewards, on both sides of politics, pretend to give us a present of what is our own money!
    They should use that money wisely, prudently, fairly, effectively for the benefit all of us, not for giving handouts to offshore corporations, not for saving foreign governments having to tax their own people for running their wars and their blunders and certainly not for offering us bribes.

    John Davidson:
    You are right to use the word, Bribes.
    I’m beginning to think of the 1949 federal election as the Menzies Revolution. Although politicians had always offered inducements for electors to vote for them – but it was Menzies who turned that into an art form and made bribes to voters , not the fight against Communism, the cornerstone of his regime’s power. So, instead of becoming an economic powerhouse and becoming a member of, what?, the G8 or G9, Australia became a dumping ground for the products of our friends-and-allies (despite high tariffs and imitation protections) and a debtor nation. I have no doubt that the present “tax-cuts” will only worsen our present sorry re-colonialized status

  22. On “bribes” and “vote buying”,

    Fairfax online has a headline referring to their Ipsos opinion poll.

    How many votes can you buy with $144b? None

    It may be, that after many elections featuring ‘tax cuts’ as carrots, most Australian donkeys have become smarter….? And here’s an optimistic possibility: resent being treated as donkeys??

    ***

    Not relevant to taxation, but a little ditty for a Monday

    You can never bribe or twist
    -Thank God – the honest British journalist!
    But when you think what he will do, unbribed,
    There’s no occasion to.

    Cheers

  23. Ambigulous:
    Software problems . Whenever I try to comment on Beltway Boofheads harming Aborigines, I lose the lot. Here goes ….

  24. Ambigulous:
    That went through. Like your poem about Bri=tish journaklists.

    The Beltway Boofheads try to shove down our throats that there are only two ways of looking relations between those who have Aboriginal heritage and those who are not so fortunate: Assimilation or Apartheid. Their view is that Apartheid in South Africa was baaad but Apartheid in Australia is reeely truuuly goood – the corollary of which is that if you don’t flop down and worship their narrow, cruel, destructive opinion, without question, you must be a Racist and thoroughly Evil.

    Let’s give these Beltway Boofheads the flick. I suggest finding a better starting point for more involvement of Aborigines in all aspects of government and society and for having more say in what happens in their own lives. Instead of being lazy and merely retelling all the terrible injustices and devastations of the Past, let us, instead, take up the challenge of seeking out all the beneficial and even happy things in how those of Aboriginal and Non-Aboriginal background interacted. Hatreds and resentments alone make very poor foundations for building a better, more prosperous and fulfilling Future.

    If you want to see the Do-Badders – and the Beltway Boofheads – really squirm, do as I have done quite a few times: suggest the Constitution be amended so that the Governor-General (or President) shall always be someone with at least one ancestor born in Australia prior to 1788. Suggesting that always brings those hypocrites out in their true colours. 🙂

  25. Alas, Graham, I am not the author. But the pome has a certain zing.

    I hear that at the local level, in many rural towns and regions, local Aboriginals and Settler descendants have arranged to discuss past history and to reconcile in a symbolic way. A positive and forward-looking experience, I hear.

    But I have no direct knowledge of such. Also I’m not surprised if metropolitan newspapers (for example) haven’t reported that very much.

    More drama in a demo, especially if the PM loses her shoe!! The importance of being well shod. She lost her shoe in the rush… OMG!!!

    You can not, sober or pissed
    Outdo the Aussie journalist
    For getting something really wrong
    Then lining up for a Walkley gong.

  26. Brian: I think the whole tax cut exercise is irresponsible given all the things that our government’s are not doing properly at the moment because of claimed “un-affordability.” Then there is the deficit.

    Exactly right, John.

    In their tax plan they’ve prioritised tax cuts, mainly to those who don’t need them, over proper funding of NDIS, schools, universities, TAFE, hospitals, foreign aid etc.

    Turnbull was asked last night whether he would rescind the stage 2 and 3 cuts if the economy didn’t perform as specified so we can afford them. He said that was the last thing he’d do if the economy dipped.

  27. GB: I sometimes think that Aborigines have been conned into believing that their problems can only be solved by a “SUMWUN” other than themselves or their community. A disempowering idea excuses people from looking for ways of fixing problems that they, and only they have the power to fix.
    My observation is that Aborigines do have the power to get educated, give up drinking, eat a more healthy diet and go to the hospital when they or their kids are and…
    We outsiders and the media could help this process by applauding Aboriginal achievement and spending less space reporting the failures.
    A young Aborigine reading the papers and watching TV the message needs to become one that says “you can do it” Certainly not that things can only be done by the Magic SUMWUNS.
    This doesn’t mean that governments shouldn’t be doing things to remove barriers to Aboriginal advancement and provide the same quality of education etc. that the rest of us enjoy.

  28. Yes John

    Plenty of role models: Charlie Perkins, Evonne Goolagong, countless football players, Pastor Doug Nicholls, world renowned artists, Marcia Langton, Members of HR, Senators, dozens of ground breaking and effective people.

    The “victim mentality” is a slippery slope.

  29. John D. : That Sumwan has probably killed off as many good Blackfellas as were killed off by land-grabbers. I’ve always called it the superman curse, the one that says that you are too stupid, ignorant and helpless to help yourself so only our [TM] superrman can save you. It is indeed very disempowering, and, I suspect, in many cases deliberately so.

    We do need plenty of good news stories about Aborigines worth emulating, by Aborigines and Non-Aborigines alike. But if such stories are restricted to NITV, they would do more harm than good.

    Ambigulous: Your short poem has won Poetry Section of the Walkley Awards – though a lynch-mob of scribblers is lurking in yonder laneway, waiting for you to saunter by.
    Sorry, liked only half on your list – the other half were scoundrels.

  30. Jumpy: Maybe you would be happy in the NOWUN land you always seem to crave until you realize how much you rely on SUMWUNS. You wouldn’t even be able to complain on this blogg if there were no SUMWUNS to keep the internet going.

  31. The Cult of Sumwun.

    Well done, John, Graham.

    And many years ago it was common in the Land of Oz, to poke fun at dimwitted, ignorant, adult islanders who believed in a Cargo Cult. Mysterious flying vehicles would arrive, bringing magical devices and endless food supplies. How ridiculous! (Though based on empirical observations….. somewhat misinterpreted.)

    Sounds very like the Sumwun Cult.

    (Older persons may remember Afferbeck Lauder, whose compendium of Strine included aorta. “Aorta do something about it!”)

    But the really difficult process, is to rescue people from the Sumwun Delusion.

  32. I’m disgusted with Australian Conservatives.

    The sum total of these tax changes will be that they serve to maintain the increase in property prices to levels that permanently lock out property ownership to 50% of single income families and individuals. It does not mean that there will be more properties built, only that those a;ready built will cost more as higher incomes in the top 20% of income earners extend their dominance of the property market.

    It does not mean new investment in industry as the Coalition touted. Australia is universally seen by industry as a lost cause for industrial entrepreneurship. There is still industrial growth in some niche areas in Australia, but overall no-one will launch significant new industries from Australia other than from the small business sector where failure rates are high. The extra money that those in the 20% income group will receive will be stored in real estate where the price increases that this new money will fuel provides “evidence” that this is the best investment strategy, particularly when leveraged with additionally borrowed money which appreciates at a rate many times higher than its cost.

    The whole cynical purpose of the seven year implementation is to provide a smooth rate of growth of the real estate market.

    TurnBull, just another conservative lying cheating A hole. This is the baby boomer generation extracting every last ounce of blood out of their grand children.

    If you doubt this assessment, try doing a forward projection of what property values have to grow to in order to give the Millennials the same asset growth rate that their parents and grand parents have enjoyed for the last……………only 20 years.

    Among the many problems that this greed driven property overvaluation produces is, apart from the unaffordability of housing for the greater body of the population, is the knock on effect to commercial and industrial property. The consequence of this is that in order to operate a business the owner must pay an ever increasing property rent and that totally non productive cost must be extracted from both higher service and product prices, and in the case of the types of businesses that employ young people in numbers, lower wages ie ever more pressure to eliminate penalty rates to zero and benefits. The knock on effect of this is guaranteed to be a higher need fro social assistance to a growing underclass which then must be funded from a weaker taxation structure.

    So what will be the next feavered demand from the lazy coalition??? higher GST, which falls heavily on the low income earners.

    LABOUR MUST REVERSE THESE TAX CHANGES WHEN IN GOVERNMENT SOON.

  33. Re: property price inflation.

    On the other hand we might get the long-heralded price slump….. or a * crash *.

    But the poor and homeless don’t do well during one of those, either.

    (Another bubble just waiting to burst is the economy in China.
    Too big to fail? Who is in a position to prop that one up??)

    BTW Mr J, how’s the Trade War going?
    Are we winning??

  34. BTW Mr J, how’s the Trade War going?
    Are we winning??

    Terrible, as they all are, for economies ( therefore the people in them )
    Subsidies are just as bad.

    I still can’t find a decent list of tariffs and subsidies the EU and China use as weapons in the almost constant trade war against the US to see if Trump is just rising reciprocating in retaliation or escalating.

    In any event, I’m totally against subsidies and tariffs as we all know.
    Best off asking John Davidson, he likes both.

  35. That’s a reasonable point to make, Mr J.

    Consider all the existing tariffs and quotas, not only the recent, new ones of the last month or so.

    If tariffs and quotas are economic war, then “We have always been at war with East Asia.”

  36. American farm subsidies are egregiously expensive, harvesting $20 billion a year from taxpayers’ pockets. Most of the money goes to big, rich farmers producing staple commodities such as corn and soyabeans in states such as Iowa.

    Source.
    I must have missed the news of Trump ending this particular rort.

  37. I don’t like tariffs Jumpy particular when they are used in conjunction with floating currencies. Don’t like the use of subsidies when they are used as weapons in trade wars.
    On the other hand I do like more directly controlled trade with overall quotas moving in the direction that will push things towards balanced trade. ( l like the use of an import licence market as a means of slowly pushing imports in areas where we are the least competition.) Will do a post on it one day.

  38. John
    Only individual consumers decide collectively the balance of trade on certain lines of products.
    No politician can decided that effectively in any positive way.
    Only reducing impediments to a market can alleviate lack of competition in it.

    You gotta drop this asinine idea that a central controller can override individual consumers for their own good.
    The examples of negative outcomes of this are all around you.

  39. We need to be a bit more sophisticated in our discussion of SUMWUNS.
    Firstly there is the problem of people who want SUMWUN to fix things that the complainer has the skills, time and resources to fix. Particularly when the only one with the real power to fix is the person demanding help from SUMWUN.
    Then there are problems with SUMWUN. In some cases they will misjudge the level and nature of the help that is really needed. In other cases the SUMWUN may be driven by needs of their own such as an addiction to helping or the sense of power that can come from helping those who lack the skills to help themselves.
    The problems in deciding what help is truly helpful becomes more difficult when dealing with people like the Aborigines the Davidson’s dealt with who are so incredibly foreign and have the same problem with us.

  40. Jumpy: I compare the free trade world we live in now with the controlled trade world when i left school. I prefer the world where I knew no-one who didn’t get a job or go to tertiary education when they left school.

  41. It’s true, John. We grew up in the best of times, apart from the threat of Mutually Assured Destruction.

  42. The examples of negative outcomes of this are all around you.

    Yet you have never provided an example of any positive outcome from a “free” market. In fact, I don’t remember you providing an example of such a market existing anywhere in the developed world.

  43. BilB:
    I share your disgust or alarm. The real estate scandal will be the second major cause of an inevitable destructive upheaval in Australia: the first being gig employment and the crash in living standards that go with it. I realize the government was powerless to stop it (even if they wanted to) but having the TV boast about Chinese immigrants holding an Australian housing sell-off in Guangzhou won’t go over well with young couples living in horribly expensive flats with beautifully-crafted but unstable leases, (“Don’t like what we are doing? Get out by Thursday or hire a lawyer!”).

    Locals who invest in local industry are punished. However, if the same people squander their wealth on gambling and luxuries they are rewarded – and they call this The Lucky Country?

    John D.:
    The SUMWUN disorder is a devilish problem, mainly, IMHO, because it is the people who want SUMWUN’s intervention who have the ability themselves – but not necessarily the basic training – to improve their lives or to alleviate their suffering.

    This attitude is encouraged by governments, by major corporations, by religious or political bodies as a means of grasping and holding power. For example: owner-builders of dwellings are well-and-truly hated by these organizations.

    The only example of officially-approved self-sufficiency I can think of at the moment is the resilience and recovery training some of us were lucky to have after the 2012 floods.

    Sorry, John, I don’t have any practical solutions to the SUMWUN curse at present – but it is a problem that really deserves a lot of thought and experiment

    Zoot:

    Spot on. The INVISIBLE HAND is SUMWUN’s elder brother.

    Ambigulous:
    Hey, don’t knock the Cargo Cult of Vanu Atu. It had its origins in observable phenomena and logical deductions from those observations. Alright, they didn’t realize their data was incomplete – but it was a heck of a lot more respectable than a lot of religions, belief-systems or later economic cargo cults.

  44. From an AFR article Voters back debt reduction over tax cuts in May, looking at what voters want from the Budget:

    Hospitals, Medicare, education, schools and infrastructure come out way ahead of personal and business tax cuts, which is Labor’s point. However, economic growth and employment is right up there. Turnbull is linking tax cuts, especially now for business, with economic growth and employment.

    Wayne links Labor’s priorities with economic growth also, but the case is harder to make. We may find out to our sorrow if the economy goes pear-shaped and Turnbull’s promise that tax cuts would not be restored and ScoMo’s promise of limiting revenue to 23.9% of GDP remain in place.

  45. John,

    I compare the free trade world we live in now with the controlled trade world when i left school.

    And what year would that have been ?

  46. Graham

    The INVISIBLE HAND is SUMWUN’s elder brother.

    Ok then, we all know brothers that are totally the opposite of each other, I agree.

  47. Brian
    It is a constant annoyance to me that people can’t tell the difference between State and Federal responsibilities.
    Would it be too much to ask that State Government schools teach our kids about a little thing called The Constitution of Australia ?

  48. Yes, there are different constitutional responsibilities, but the Federal Govt has slowly, over many decades, become more involved. Example: education is based in States, but if a Federal Govt dangles some tax $ in front of State Education Ministers, with strings attached, what is a State Minister to do??

  49. And those $ are from income tax that were collected by the States to spend on schools, hospitals, Law enforcement ( the main things most care about ) till the Feds took temporary control over under a War footing and refuse to give them back after.

    There are a few things I dislike in our Constitution and hard boundaries of responsibility is just one.

  50. You dislike hard boundaries?

    So it’s OK for the Federal Govt to get involved in Primary, Secondary, kindergarten education; overlapping with activity undertaken by States and Local Govt?

    Just seeking clarity.

  51. Does anyone else have the impression that Mr Shorten is undermining himself, while Mr Albanese lurks in the wings, ready to spring forward and grab the Oppo Leader pozzie?

    In short, will Shorten short out??
    Zinger? Fizzer?

    (Tanya Plibersek is impressive.)

  52. Jump, it’s not just the difference between State and Federal responsibilities. Throw in local too. My wife did some phoning in a state campaign. A lot of people are in a complete muddle and don’t want to be corrected either.

    I’d be astonished if the Constitution or the structure of government in Oz wasn’t covered in the compulsory curriculum. Most kids find it boring at that time of life, so the chances of them retaining anything are low.

  53. Ambi, I think Bill’s blown it. The press won’t let it go now. A conjunction of things including a seriously bad Labor Party advertisement personalising Malcolm’s links with the top end of town, and a Whitlam Oration by Albo which would be harmless by itself.

  54. Mr A, I wasn’t clear, the lack of hard boundaries was what I meant to say.

    Brian, I would be stunned if more than 1% of 18 -25 year olds have read the Constitution.
    Then we ask them about Constitutional change when they have no idea what it contains right now.

    I’d be surprised if any more than 5% of the Australian population have read the Constitution even once.

  55. It is a constant annoyance to me that people can’t tell the difference between State and Federal responsibilities.
    Would it be too much to ask that State Government schools teach our kids about a little thing called The Constitution of Australia ?

    From his subsequent remarks I take it that Jump has read the Constitution at least once. (I admit that when I tried I gave up about half way through.)
    So I’m requesting Jump’s help.
    Dear Mr J, which section of the Constitution makes Education a responsibility of the States?
    Many thanks in advance.

  56. I think schools teach about our system of government. Can’t recall The Constitution being parsed at school.

    It seems to be discussed in public only when, for example, a Regerendum is proposed, or a Member resigns over their grandparent’s birthplace, or a Member is alleged to have held a position of profit under the Crown…yawn….. no wonder you fell asleep, …. yawn…… zoot.

    Probably OK if reading The Constitution is left as a task for political scientists, Press Gallery journalists, and Law students.

  57. Hardly anyone under fifty seems to have been in the vicinity of a copy of our Constitution, let alone read it. Worse yet, anyone who has mentioned a Constitution in my hearing, spoke about the Bill Of Rights and the Right To Bear Arms. Yeah? How did I miss the Referendum?

    Zoot: Even I have read the Constitution a few times and – I think – understood much of it. I don’t like our Constitution as it stands but what is the alternative?

    Brian: Your wife is right about confusion over the powers of different levels of government; “A lot of people are in a complete muddle and don’t want to be corrected either. .“.

  58. zoot, I took a look at it and thought it would be more profitable for me to read what constitutional lawyers have to say about it.

    Just to let y’all know that Climate Plus email has been inaccessible to me since Tuesday.

    Mainly it just gives me this weird stuff about Twitter. Last batch included tweets from Bill Shorten, Joe Hockey and Andrew Bartlett plus other persons unknown to me, no-one saying anything worth noting.

    It’s a sub-account of my personal account, which is a Telstra desktop product, made infinitely worse with the upgrade a couple of years ago. I’ll probably spend a couple of hours on the phone, which is precious time down the sh*tter.

  59. Anyone think Albo will call a spill if the bi-elections go bad for ALP ?

    I only just today learned that Shorten was ALP right* and Albanese was ALP left* . Amazing, I thought it appeared the other way around.
    ( * given that ALP is a socialist party and their maker for center from their perspective is to the left of the actual center in the broad political spectrum)

  60. given that ALP is a socialist party …

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA …
    Oh wait, you’re serious?

    … and their maker for center from their perspective is to the left of the actual center in the broad political spectrum

    and way to the right of Malcolm Fraser.

  61. Mr J

    The study of factions in the ALP, their history, and the ever-changing patterns of alliances, comes under the category
    *arcana*
    by which I mean arcane, mysterious, ephemeral and almost mystical.

    Steer well clear.
    The Sirens of Factionalia are potentially dangerous to a young mind.

  62. Brian at 9.07pm on 27th June.

    It seems that Bill Shorten has recanted.
    Whether that will save his job is another matter.

  63. The one thing Shorten has avoided, until now, is the dreaded ‘ leadership speculation’.
    It’s been as solid as “ I didn’t hear what she said but I agree with it.
    Now Albo made a concrete move and Bill blinked.

    Opposition leader is a tough gig.

  64. Naughty of Bill to upset a group of people who are most unlikely to vote Labor!!!!
    Good to see he is capable of listening and changing his mind

  65. First he upset the self-funded retirees, but I wasn’t one, and they don’t vote Labor.

    Then he upset the people who wanted to buy an investment property, ditto, and they wouldn’t vote Labor.

    Then he upset a whole lot of small and family business operators, but that wasn’t me, and they’re not going to vote Labor.

    Then he belittled the Big End of Town, until they didn’t feel big any more, but that wasn’t me either.

    By the time he upset me, not many were voting Labor any more in any case, and hurt feelings weren’t important.

  66. Tony Wright is at his cruel best in Fairfax.
    Let’s be very, very clear: Bill Shorten is very, very sincere.”

  67. Ambi, it was an interesting article, and I thank you for bringing it to my attention. However Tony Wright is wrong when he says:

    Without a word to his shadow cabinet or his caucus, he unilaterally declared Labor’s position was to repeal tax cuts already delivered to small and medium businesses…

    It wasn’t unilateral. I’ve explained more in new Saturday salon.

  68. Fair enough.

    Not unilateral, it came from a small committee; sounding a bit like PM Rudd’s ‘kitchen cabinet’ of Gillard, Swan, that Victorian Minister who resigned on the very day Ms Gillard became PM,..

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