1. War gaming Brexit – seven scenarios
A House of Commons vote on Theresa May’s Brexit plan is due on Tuesday, 11 December, if she doesn’t postpone it.
Katy Balls at The Spectator has delineated seven scenarios as to how the Brexit saga will play out. Rule out the first, I think:
- Theresa May squeaks over the line after convincing Brexiteers that it was her deal or no Brexit — and Remainers that it was her deal or a no-deal Brexit.
There would be consequences:
- The DUP then rains on May’s parade. Seething over the backstop, it declares that the confidence and supply agreement is over for good.
Jeremy Corbyn says he will not allow a ‘no deal’ Brexit.
Of the remaining five, I would I would put a bit of money, but not much, on May calling a second referendum. Other than that, a vote of no confidence and an election seems possible.
Project Syndicate offers a variety of perspectives. Harold James thinks the Brits have embarked on a revolution which will change Britain forever. The best analogy is the Tudors and Henry VIII giving the papacy the finger.
He warns that those who start revolutions are usually devoured by them.
Mohamed A. El-Erian points out that behind the messy politics of Brexit are deeper issues that all countries will have to confront sooner or later.
- Political and economic systems are undergoing far-reaching structural changes, many of them driven by technology, trade, climate change, high inequality, and mounting political anger.
Amidst all this he says experts and pundits:
- had underappreciated the role of “identity” as a driving force behind the June 2016 referendum. But now, voters’ deeply held ideas about identity, whether real or perceived, can no longer be dismissed. Though today’s disruptive politics are fueled by economic disappointment and frustration, identity is the tip of the spear. It has exposed and deepened political and social divisions that are as uncomfortable as they are intractable.
He also says:
- The question is not whether the UK will face a considerable economic reckoning, but when.
Outside the EU, Britain will have less flexibility, agility and resilience, not more. Firms and jobs are already leaving.
2. Kerryn Phelps and populism
Properly considered Kerryn Phelps is a middle-class populist, according to Osmond Chiu, Secretary of the NSW Fabians.
That looks like it’s pay-walled, so here is his substantial argument:
If we understand populism as centred around representing ‘the people’ against an existing, unrepresentative elite rather than a specific ideology rooted in nationalistic discontent against immigration and globalised trade, it becomes clear.
The election of these independents [Phelps, McGowan etc] is in fact a moral middle-class incarnation of populism. Their anti-political stance arises from a widespread mood where the electorate sees politics as detached from their lives. This populism of the liberal centre taps into public dissatisfaction with politics by rejecting the major parties and their methods of operating. Phelps’ claim in her inaugural speech, that the political system ‘has evolved to turn inwards and primarily serve itself, at times silencing the voices of reason and compassion’, fits into such a populist narrative.
It draws upon a tradition of good citizenship, to act in the interests of the people by being ‘above politics’, seeking a ‘stronger relationship between people and our elected representatives’ through a MP ‘who would put the electorate first’, as Cathy McGowan said. Chisholm MP Julia Banks’ resignation statement from the Liberals, where she spoke of the actions of MPs being ‘undeniably for themselves, for their position in the party, their power, their personal ambition, not for the Australian people’ and that she would be putting first ‘people that the major parties have stopped listening to’ echoes this.
Their election is based on the idea of good citizenship and community representation.
- While these independents may have more progressive views on economic issues, it will not be what defines them or determines why voters support them, it is their civic-minded appeal.
The government will be forced to treat climate change, asylum seekers and public broadcasting not simply as a culture war issue. Its precarious position may mean that the tone of political debate changes and it may be forced to deliver stronger integrity and accountability measures…
Independents of this kind are not in an ideological vacuum. They share the liberalism and/or conservatism of the people who elected them. As such, they are not racist or exclusionary.
Chiu cites the Australian Election Study as to how the electorate has changed:
- The Australian Election Study shows the extent of these changes, with the percentage of voters who have always voted for the same party falling from 72 per cent in 1967 to 40 per cent in 2016. Over that same period, satisfaction with democracy fell to 60 per cent from 77 per cent, and now only 26 per cent believe people in government can be trusted compared to 51 per cent. It is of little surprise that it has manifested in an increase of minor party votes to 23.2 per cent in 2016, up from 9.7 per cent in 1969.
3. Huawei CFO Meng Wanzhou arrested in Canada at US request
Meng Wanzhou, a top Huawei executive and daughter of the founder of the Chinese telecommunications giant, was arrested in Canada at the request of the United States on the same night Xi and Trump had their dinner.
China is outraged and very angry over the arrest. What if China went after US executives in response?
We may be seeing the new normal, where China and the US cooperate and clash at the same time.
- The timing of her arrest is more than an insulting poke in the eye for the Chinese government, particularly after US national security adviser John Bolton confirmed on Thursday that he was aware of the plan to arrest Meng going into the December 1 meeting between Xi and Trump. In the same interview, he also said Huawei, and other Chinese tech giants, would be a “major subject” of discussion between US and Chinese trade negotiators because of their alleged practices of using stolen US technology.
The Trumpistas could be badly mistaken if they think the Chinese will just cop this sweet.
4. Merkel’s successor to provide stability and continuity
Since her election in 2007, Germany’s Angela Merkel has been an anchor of stability within Europe and beyond. Having indicated that she would resign before the next election, she may have become a lame duck if the right-wing and charismatic Friedrich Merz had been elected leader of the CDU and effectively Chancellor in waiting. In particular he questioned whether the right to asylum should remain anchored in the German constitution.
The CDU chose continuity when it voted for Annegret Kramp-Karrenbauer to succeed Merkel as CDU leader, albeit by a smallish margin of 517 to 482.
On the day, Merz’s oratory deserted him. His delivery was technical, defensive and flat.
Merkel did not overtly take sides but looked distinctly displeased as he spoke.
In contrast, Kramp-Karrenbauer defied expectations with a feisty and upbeat speech that called on the party to have the courage to change while remaining anchored in the political center. She listed a range of challenges facing Germany, from “egoists and autocrats” abroad to threats to European unity. But, she said, the CDU could rise to the occasion.
“The answer isn’t in the stars, the answer lies with us,” she said, urging the party to come up with new ideas and embrace innovation.
“If we have the courage, we will take brakes off people who want to do something in this country,” she said. “The natural think tank of politics must be a Volkspartei like the CDU.”
In October Merkel’s CSU had been humiliated in Bavaria, losing more than 10% of their vote to fall below 40% for the first time. However, the left centrist SPD did worse, becoming a minor party, supplanted by the Greens:
Then a few weeks later something similar happened in Hesse:
In neither case did the extreme right anti-immigration party AfD get beyond the low teens. However, the voting patterns are changing.
5. ScoMo stops parliament
Here’s Mark David’s cartoon:
We are going to Bribie Island today to see my wife’s brother and his wife, so I’ll develop this further in a separate post tonight. However, I can’t see ScoMo coming back to parliament. He said he’d do anything to stop the Phelps’ bill on medical evacuations from Nauru passing into law, so he may just have to abandon parliament and go to an election.
63 thoughts on “Weekly salon 9/12”
I’m freezing my bits off in North Carolina right now so I’m spending some time looking on as Trump-related stuff oozes out. It’s getting a bit messy for Trump and his various associates and looks like getting worse.
But looking across the water to Australia, I sense the same disarray and mess that the US is generating for itself. It’s clear that the Australian LNP has lost its way, that it’s internal competing interests have become so toxic that there is no healing tonic that can repair it, other than some time in the wilderness and some mature party governance from yet-to-be-identified persons.
I’m seeing two democracies writhing in political agony. Perhaps the good in it is that in both cases there is hope that there will be a revival of bipartisan national interest as the fog clears. In Oz, it is a great opportunity for Labor the lead this change and become the pre-eminent political force of this critical period in Australian and world politics.
If Labor does not see this opportunity and act, we will probably see a stronger proportion of Independents populating our parliaments. Maybe that could bring in new, previously excluded (by Party politics/rues) thinkers/talent into politics. It might herald real views and policies on fossil fuels and climate change just for starters…
Annegret…… that’s 8 syllables….. how are the non-German folks going to cope???
GH: I think Australia’s political crisis will be solved as soon as a federal election is held. Labor is showing all the signs of of being an effective, professional government.
Hard to say what will happen to the other side. It will depend on the factional balance after the election.
I think Australian political leadership will swing to and fro between both majors with a bit of influence from the minors for the rest of my life.
Individual liberty will continue to be nibbled away no matter the PMs name or party.
If you are suggesting the forecast demise of the Liberal Party is unlikely, I agree.
I remember the headline after Whitlam Labor lost in 1977: Is Labor finished?
No, as it turned out.
PMs Hawke, Keating, Rudd, Gillard. With appearances also by Fraser, Howard, Abbott, Turnbull.
The “political cycle” seems real enough. Ditto the “economic cycle”. If only they were better understood.
JD I do think Labor is the likely next government but also think Independents may tilt the balance of power – well it’s possible. It remains to be seen how many LNP voters opt for independents rather than Labor.
As I said earlier, Labor has a huge opportunity here if they can manage their internal forces, but if the voters get a whiff of internal strife Labor stocks will take a hit.
I guess it’s also a chance for the Greens to rebuild – that would be good.
Jumpy it is true that the government will change from time to time. But we have seen the quality of government decline as bipartisan government declined. After decades of ordinary government, voters become game to take a punt on virtually unknown candidates, trying to break the standard issue government. I suspect this is the population Trump targeted – eschewing Hillary for an idiot. Hillary, by my estimate, was a “more of the same” option and with a bit of help from other areas was not elected.
Ambi I used to cringe at Keating’s clever but vicious barbs. I think it was Keating that did a lot of damage to bipartisan politics. Rudd, if you read David Marrs Quarterly Essay was very much the angry little man inside, not a quality statesman. I don’t know about Gillard, I don’t think she got a fair go. Does Labor have a problem with women like the LNP?
At the moment, the ALP and the Nationals and the Liberals and the Greens all seem to be accused of not treating their non-male members and Parliamentarians fairly, in some instances.
Personally, I don’t buy the story that only the Liberals “have a women problem”.
If the concept of patriarchy has any substance, we could expect every large organisation to show bias against our sisters, si?
Something I dislike, is the “holier than thou” pose adopted by many humans, including political parties.
It’s another factor that works against compromise and bipartisan quests for truth and optimal policies…..
With difficulty, Ambi. I can’t commit her name to memory yet. Perhaps the Germans will come up with a nickname.
Does Labor have a problem with women?
I’m not sure Emma Husar was treated fairly, but I don’t think Labor has a problem as such.
Gillard had problems, mainly Abbott, the press and others, but internally I think it was the way she came to power and KRudd hung around and did what he did.
Those who worked for and with her (Tony Windsor et al) had a lot of respect.
Had an interesting chat with my bro-in-law today. If I’ve got him right he thinks Bill Shorten will wreck the joint, even more than Abbott, Turnbull and ScoMo wrecked the joint.
He thinks we would have done better with Lee Kuan Yew. Democracy isn’t doing it for him.
More generally he thinks we’d be better in the long run if we had a serious pandemic. Homo Sapiens has reached major plague proportions and could benefit from a good cull.
Disagree about Bill, but can’t say he’s wrong about those last two points.
Annegret Kramp- Karrenbauer’s nickname is AKK Annegret is a typical conglomerate German name consisting of Anna and Greta just like Anna Elisabeth makes up “Annelies”.
Wrt 2. Kerryn Phelps and populis, Brian I wonder if you have come across Gabrielle Chan’s Rusted off: the divide between Canberra and the neglected class. She makes some pertinent observations and excellent points. Considering the comment I made over at the climate post, I think rural Queensland is a different kettle of fish. Here we are still too patriarchal to accept an intelligent and independet woman representative. Here a woman representative has to bash Greenies, refugees, people of color and capable of wearing a burqa.
Brian (Re: DECEMBER 9, 2018 AT 10:52 PM)
Be careful what you (i.e. your “bro-in-law”) wish for. You might reap the whirlwind.
Minister Angus Taylor’s barrister wife, Louise Clegg, apparently thinks that the best way to get the lefties to see the light about the error of their ways (i.e. about renewables) is to, well, have the lights go out.
Wishing ill on a group of people that can have an impact on innocent people (what’s the term, ah yes – “collateral damage”) to attempt to win an argument is certainly not good, and is potentially highly dangerous – not thinking through the unintended consequences.
Danke fuer “AKK”.
Why does it remind me of a Russian gun?
Hope she has no connection with 1947.
On “populism “, maybe the voters will keep electing independents in the HoR, until the larger Parties get the message? My only difficulty with that idea is simple: dunno what ‘the message’ is.
Apart from the nature of voter dissatisfaction varying widely from seat to seat, …..
what policies are an answer to disgruntlement and anger?
Funny thing Louise is that the lights won’t go off in houses with solar on the roof and a household battery.
This Minister of whom you write, John, whose wife is a barista : is he a Minister of religion?
Which denomination, pray tell??
Those houses are essentially off grid capable and only stay on grid for the feed in tariffs.
What percentage of intercity green electorate constituents would be off grid capable do ya recon ?
I recon very few, but I don’t know, that why I ask.
I was chatting on the phone just this afternoon to a Rep I became good friends with. She just got sideways promoted to a spot in Brisbane area at her request ( family reasons). Her daily commute in Mackay was 15 mins Max, never less than an hour in Brisbane.
I rarely take on a project more than 40 minutes away.
City working folk must burn up a lot of fuel.
He is the minister of the “God does not believe in climate change” sect. This sect comes with a number of other strange beliefs and practices rites that include kissing lumps of coal.
Today I spent a few hours out at Brookfield watering, went to see the movie Roma (one of the best ever), watched another episode Line of Duty (that’s the 22nd episode we’ve watched with Mark now), and went on the Q&A with Di Natale, Plibersek et al.
I reckon Nyadol Nyuon is a gem and Brendan O’Neill, editor of spiked is an opinionated tosser.
Meanwhile, in the Mother of Parliaments, Mrs (“Maggie”) May has caused an absolute kerfuffle by purporting to delay the Parliamentary vote in the Commons on her “Brexi deal”.
I seem to recall that last week she announced [fanfare, please] there would be about five days of robust debate, and then the vote would be taking place about now.
She opines that she would have lost the vote by “a large margin”. Guardian UK mentions that all senior Ministers have left the chamber. Something cooking in Cabinet? Rivals circling?
Meanwhile Mr Corbyn is being urged to lay down a vote of no confidence in Mrs May.
The MP I have come to admire is the Speaker, Mr Bercow, who barks out rulings and admonishments with vigour. He it was who allowed a motion that a senior Minister was “in contempt of Parliament” when he refused to table the full details of the “deal”.
Mother of All* Parliaments.
Mother of All Messes.
Guardian UK Has rolling coverage online.
* Westminster type
Ambi, they said dhe was a mere 200 votes short. She’ll look for moire concessions from the EU, but their basic position is that any country that leaves the EU will be punished at least to some degree.
Ootz, I hadn’t seen Gabrielle Chan’s piece, which was interesting. I’ve been familiar with the basic issue since 1969, when I started traipsing around the state for a quater of a century. An early experience was a teacher at a barbecue in Townsville during a seminar. He’d had a few and was raving about these southern dickheads telling them what to do. He reckoned the southern suburban sprawl started at Townsville.
I also found the in the north when they looked south they first thing they saw was canberra, not Brisbane.
Remember explaining to my sister-in-law, who lives in Rockhampton, that the Roma Street gardens redevelopment of the old rail yards cost $72 million. Al;so remeber driving the Plenty Highway from Boulia to Alice Springs. Gravel road, which Abbott had promised to fix. We saw 7-10 cars in 500km.
I was happy when the Katters had the balance of power, so the provincial needs got a serious hearing. It’s basically impossible, however, to prioritise one over the other.
Chan is wrong when she says:
They might want it, but delivery is essentially impossible.
We have pretty close to world class health and hospital services in Brisbane. You get pretty good service in Gold Coast, Toowoomba, Rockhampton, Townsville, not sure about Cains, but not everything. Beyond that it’s just impossible, you have to go to where the services are.
But when my nephew’s daughter got stuck in the eye at 4.30pm 45 minutes north of Rockhampton, by 1am she was in the Brisbane Childrens Hospital to be operated on by a world class specialist.
Best that could be done under the circumstances.
Brian (Re: DECEMBER 10, 2018 AT 11:53 PM)
Per the ABC Q&A website for last night’s final show for 2018, it says that:
You may be interested in George Monbiot’s op-ed at The Guardian headlined How US billionaires are fuelling the hard-right cause in Britain, dated Dec 7, that included the sub-headline:
I wonder whether the UK Spiked magazine is related to the one that Brendan O’Neill is editor of?
At one stage we had an influx of north Qld workers to Groote. up to then we hadn’t understood how Joh kept being elected.
There was also a tendency for Nth Qlders to think the further north you lived the better you were. Loved to be able to talk about “Coming south to Cairns for a holiday” just to emphasize our inherent superiority.
Wife was pregnant with our third child on Groote. At that stage there was no Dr (Apart from visiting quarantine Drs) so the Bush nurses would get advice by radio. The rules at that time were that non-aboriginal women and Aborigines with complications had to fly out well before the baby was due. Didn’t always work. One of our friends had her baby at the Groote Airport.
I had my appendix out at Newman Hospital. Interesting to find out how many men came to hospital around midnight due to fights. The old desert man who tried to light a fire next to his bed at night added local failure.
Looks like the Sassanachs are set to drag Scotland and Ireland into a break with the EU that is making less and less sense for all of the UK including England.
Logic says that it is time for an informed referendum with the implications of all the available alternatives clear to see.
Looks like Groote will see it’s first whirligig for the season this week.
With luck Owen will head slowly due south from there.
Been thru two cyclones on Groote and numerous cyclone warnings. Owen sounds as though it might be stronger than any I went through. Wish the residents luck.
On Brexit, my son Mark thinks it’s going to be a “no deal” dropout, the worst possible result.
I would think someone would do something, so favour a referendum, or a vote of no confidence followed by an election.
The referendum would have to be between May’s deal or remain.
On the pandemic, I think my bro-in-law is frustrated with what’s happened to Bribie Island. When they went there, I think early this century, the population was about 5,000. Now it’s 20,000, with still one narrow bridge as access.
The place is fragile, basically scrub on sand, with the water table down about 2 metres. developers are still carving the place up. They clear the scrub and dig a hole, which fills with water, which they then call a lake. The diggings are chucked on top of the existing ground for a bit extra head room against rising seas.
All the houses are the ugly modern mega-mansion type, with basically no backyard and dark rooves which absorb the heat. It’s just awful.
Re-posted at Resilience.org yesterday is an article headlined Brexit: Stage One in Europe’s Slow-Burn Energy Collapse. It begins with:
An explanation for why:
The bottom line:
I think it’s an interesting perspective. The article also looks at declining EROI.
Hmmmm it seems the Mother of Parliaments has at least two diffetent “votes of no confidence” up its capacious and motherly sleeves.
One is the vote demonstrating lack of confidence in the Govt, customarily followed by an immediate General Election.
Another is where sufficient Conservative MPs lodge letters with “The 1922 Committee” (I kid you not), an internal group in the Cons Party. Then a vote on the Party leadership must be held. I understand such a vote will occur tonight, between 6pm and 8pm London time.
Tomorrow morning we may awake to the wake of poor Mrs May, or to her resurgence as a potent force for clarity and national independence = negotiated Brexit on loverly terms.
Please, please not Boris.
Buffoonery stalks the planet. ……..
or “two different votes of no confidence”
Ambi, I think it happens our time at 4am.
Mark tells me that if Conservatives have no confidence in May, then they choose a new leader, and she can’t contest.
If she wins, even by a smidgeon, they have to put the queue in the rack for a year.
I’m thinking she’ll go down.
The Greens’ toxic internal life derives, I think, from the fact that so many of them are refugees from the Communist Party and the various Trotskyist sects, and they have brought their leninist habits of thought and behaviour with them.
Scott is that really how it is today?
You know that right now several States that lost Governorships to the Democrats (North Carolina, Missouri and another,) are trying to limit the powers of the incoming Democratic Governor. Having just won at the election, the Republicans are acting to emasculate the powers of the Governor so that Republicans continue to rule those States. ‘Suggests that Democracy is under threat there. In addition, you see blatant gerrymandering and interference of voting.
papers. And then there is Trump’s clear disrespect of democracy. Perhaps we can cite similar issues in Oz, e.g. Abbott’s disrespect of rules and ethics and more.
So really how great is a democracy? Hopefully, it is still the best but it needs better defense I think.
Geoff, next task for me is to have a bit of a look at the Greens.
May survived 200-117. Can’t see her getting anything different from the EU, though, or getting the Commons to approve the deal.
So the second kind of no confidence motion is a real prospect.
Scott: The National greens are an amalgamation of state Greens parties with very different starting points. For example, both the Tas and Qld Greens started as Greens Green parties that focused on the environment.
On the other hand the NSW greens were a lot pinker at the start. The current spat in NSW seems to be about the Pink faction attacking the green faction.
May soundly won the vote of confidence.
Doesn’t mean that the parliament will support any Brexit plan.
Seems to be time for a better informed Brexit referendum. The polls i have seen suggest that brexit would lose this time around.
My impression so far is that the NSW Greens have been the ‘reddest’, witness the retired Senator who held firm, into the 1970s and 1980s, to the (Stalinist) remnant “the Socialist Party of Australia”** of her communist parents the Browns.
The multitude of Trotskyite grouplets, at times attempting ‘entrism’ into the ALP, and apparently now into the NSW Greens are eccentric too. Hardly ever get mainstream press coverage, but likely best summarised by a few minutes in The Life of Brian when anti-Roman sects are assailing each other. Very likely that was satirising the behaviour of various UK Trot groupings.
Meanwhile, as ‘revolutionary’ and ‘anti-capitalist’ rhetoric is flung around, conventional ‘green’ issues seem relegated to a very distant burner indeed.
[Oh, BTW, I reckon “Momentum” in the UK, leftish ginger group in the Corbyn Labour Party, is most likely heavily influenced by Trot and CPGB persons.]
**the Moscow-line part of the CPA, breaking away after the CPA leadership criticised the fraternal tanks which rolled into Czechoslovakia in ’68, and later took a ‘Eurocommunist’ line; the Peking-line group having earlier split off to form the secretive and eccentric CPA (Marxist-Leninist).
On Brexit, they had a referendum and it got up, they had a general election in which the only party that wants it got up.
I recon the electorate has spoke, twice, and the politicians that work for them should just get on and sort it.
Might be good news for Australian exporters that were EU tarriffed against too.
“just get on and sort it”
Please phone the UK High Commission: they can book your urgent flight to London to clear it all up for the pathetic plodders in Westminster and Whitehall..
There’s no need for me to fly to the UK.
Just let all the pro Brexit folk that won the referendum to form a team to sort it.
All the Remain folk that lost twice can STFU and concentrate on other matters.
Oh, my mistake.
I had imagined that after your careful study of the issues at stake, you would be able to advise the Leave people on how best to handle those foreign johnnies over in Brussels and Strasbourg and Geneva and Berlin and Rome and Paris, on how to fix it.
Best stay here, Jumpy. There’s hundreds of voters in Australia who reject “flat taxes” and your strong efforts will be needed to change their minds. Even with that carrot of $40,000 income tax-free that you’re dangling.
Some voters are very suspicious of goodies dangling.
“Beware of Greeks bearing gifts.”
And I don’t mean Saint Nicholas of Xenophon.
See,this is why I think John D is the most genuine commentor on the blog, he generally speaks for himself, only sarcastic when confronted with sarcasm and doesn’t poo poo ideas with NPC dross or overly flamboyant dross.
He’s more of an Eco-Libertarian I’d say.
Labor represents middle and low-income people in the suburbs and regional centres. It particularly represents low-income people from non-English-speaking backgrounds. It also represents people with progressive views from all classes, but many of them have gone over to the Greens. One of the paradoxes of this is that the growth of the Greens has weakened the ALP left and therefore strengthened the ALP right. The formation of a boutique party of the left by a section of the environment movement was a serious strategic error which has weakened progressive politics as a whole.
Scott: Given that about 85% of Green voters preference Labor and the Greens are currently polling about 10% it is debatable that the Greens are damaging the Labor vote much if at all.
Party members that I know come from a number of sources. Some of them are people like me who were recruited to the Greens by Tony Abbott and had not belonged to any other party before then. Quite a lot are people who switched from the Democrats when the Democrats collapsed. Others were active Labor party members before switching to the Greens.
The Greens tend to attract the educated, progressive middle class.
In Qld our first state member beat a LNP incumbent in an electorate that is mainly leafy suburb. Australia wide the Greens are replacing both Labor and conservative members. Hardly surprising that they beat conservatives given that the Greens are the only true conservative party in Aus. Hardly surprising that hey are beating Labor in seats that used to be hard core working class and have been taken over by the educated middle class.
If it’s non-sarcastic replies you prefer, I can oblige.
I disagree with your suggested flat tax rate.
It is regressive.
So also is the GST, which is why “compensation” for lower income people was included in the scheme initially.
You are correct to say alcohol and tobacco taxes are also regressive. And in those two cases, not just because they are consumption taxes. Their incidence is regressive because, on average (not for every individual), lower income folk in Australia tend to consume more alcohol and smoke more ciggies per capita.
So, for example, a lady who drinks wine pays more alcohol tax than a lady who drinks tap water. And anyone who drinks lots of alcoholic liquids pays more alcohol tax every week than any teetotaller or anyone who drinks only a little.
This is arithmetic.
I am not passing judgement on health outcomes or sheer enjoyment of the good things in life. Or associated social costs. Or associated employment of bar staff, brewery and winery workers, etc.
In vino veritas
May you enjoy a pleasant weekend, Jumpy.
It is regressive.
The Nordic Countries have around double the GST we have with far less exempt items.
GST/VAT is a flat consumption tax and regressive as we agree.
Would they, in your opinion, be a fairer region if they copied our formula ?
I think exemptions are a slippery slope that leave a Govt susceptible to pressure groups, and make the consumption tax more complex to administer and comply with.
Diesel exemptions for farmers?
Essentials of life?
Of Nordic economies I know little.
On income taxes, deductions add complication also.
John D has written here about massive simplifications: job losses in tax departments, and accountancy/ law firms….?
I couldn’t understand why Treasurer Costello granted zero income tax on superannuation pensions after the age of 60.
Pensioners and most superannuants have modest incomes. A small income tax would be fairer, I think, than zero. Many superannuants have other sources of income: casual wages, bank interest, dividends. Income tax should be assessed on total income, I think.
Yes, pensioners pay GST. Don’t we all?
‘Never gonna be fair to everyone. Except used politicians.
Me, I complain because having worked all
My life get no benefits such as a health card, pension or NDIS!
Same here but the more I look the more interesting they get.
There are a lot of folk that just see their high marginal tax rate and welfare but not much else.
Seniors health card is a nifty thing, but it has an assets test and an income test.
(For younger readers, it’s a sort of “concession card for oldies who aren’t on the pension”. Useful discounts on medicines and some procedures/services)
It is as well to look around to other nations, other traditions, and other eras to test whether there’s some idea or method that might be
shamelessly stolenusefully adapted to Australian circumstances.
The UK “poll tax” was even more regressive than a flat rate. No street cred; abandoned.
Recently announced French carbon tax. Noisy streets; postponed.
That’s the thing about a democracy: at some point, the deafest pollies listen. Or at least pretend to. [Sarcasm Alert]
“Carbon tax in France”. There is no such thing as “French carbon”; elements are universal.
Taxes, charges and welfare are neutral if they are the same percentage of everyone’s earnings. (Regressive if the percentage drops with income.)
What really counts is the extent to which the overall tax/welfare system is progressive.
Ideally it is desirable to simplify tax/welfare systems so that money collected/spent is not wasted on administration and is easy for people to understand.
Most people don’t realize that company tax is actually regressive assuming it is simply added to price. It also costs a lot to administer because of all the lurks and perks.
First try on revised tax system:
1. No company tax.
2. Increase and simplify GST to eliminate exceptions including export exceptions.
3. Replace income tax with flat tax for most income earners.
4. Very rich pay an additional income tax based on average earnings over the last 5 years).
5. Get rid of pensions, Newstart allowance and child payments but retain special pensions for people with disabilities.
5. Use an UBI large enough to compensate for loss of pensions etc and to ensure that overall system is more progressive than the current system. (The UBI may change with age but not income or assets. The UBI should be linked to average or medium income.)
Haven’t done the sums to see how practical the whole system would be and whether anyone near the bottom of the pile becomes a loser under these changes.
It would be good if there were a Treasury costing App available for we non elected ideas people 🙂
That said, every tax, charge and regulatory requirement is a disincentive to that activity and every subsidy and hand out incentivises that activity.
Impossible to model those effects on any computers we have today.
For starters removing company tax would mean that any funds accumulated after cost of sales in a public company would be used to buy back shares and quickly produce an oligarch with an ever increasing slush fund. In a private company it would after cost of sales and taxed disbursements to shareholders become a slush fund which would probably be exported for use out of sight of the tax system.
The rest of your items describe an accelerated path to a surfdom and oligarch society. Consider your 5 year average calculation which would be manipulated by minimising income for 5 years then stripping the company slush fund in the sixth year before transferring the real assets to another company and shutting down the original. This would be a CEO’s wet dream.
Sorry, not a fan.
Just to expand on the company tax point, company tax is only applied to undistributed funds, not on the compny’s whole operation. The purpose of it is to ensure that funds are either distributed as income/dividends or are invested in the businesses operation for improvement. If funds are not distributed by either method meaning the funds stay within the entity (book person) then that book entity must pay tax (company tax) the same as any other entity (person) in the community does. It is not hard to calculate. The argument that companies should be exempt from tax because they are too sneaky is wrong on so many levels.
Bilb: Revenue that currently comes from company tax would come from an increase in the GST and the removal of GST exemptions. The added value included as part of the GST calculations includes profits.
You indicated a GST on exports, so a product like mine would incur a local GST of say 15%, plus significant freight costs, plus the destination country duties then the European country VAT of 21%. How long do you think any business exporting to the Northern Hemisphere would maintain production here?
Then there is the issue again of the company profit slush fund that would be exempt from tax, and possibly not be reported. I don’t think that you understand how enthusiastically such a loophole would be exploited.
May I suggest, John, that you do a spreadsheet model of you idea and see if it works. Its not hard. Limit it to 10 businesses with x employees who become your community along with their families. Make it 2 business cycles of 6 months each. Then compare the model with the current parameters and your proposed parameters. You should have a clear idea with about 3 or 4 hours effort.
John and BilB, there was a discussion a few days ago on ABC RN about the idea of a tax on revenue of, say 4 per cent, as being simple and difficult to avoid.
It has some attraction for getting foreign companies to pay tax, and I wonder whether it could be limited to them. Taxing everyone on revenue might send companies starting up or going through a bad patch broke.
You are going to have to be more specific, Brian, that snippet on its own doesn’t mean much.
BilB, it’s frustrating, but I can’t find it. I think Peter Martin was one of the commentators.
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