Category Archives: Social Science and Society

How the 2017 budget was made

There was a story around that Mark Textor had a hand in the creation of the 2017 budget. Joe Aston in the AFR says Forget Mark Textor, JWS’ John Scales was the Treasurer’s budget pollster. Aston says that Scales, who was a protégé of Textor’s did the real work, or at least his company JWS Research.

However, Textor did play an important role. The Daily Telegraph reported back in early April that Textor’s research (for the Liberal Party) “highlighted the critical issue of housing affordability”, following which, ScoMo proposed changes to negative gearing that were shot down immediately by Mathias Cormann and Peter Dutton. Continue reading How the 2017 budget was made

Budget 2017: we live in a Labor world

As I said in the post on infrastructure and debt, Peter Martin heaved a sigh of relief that the Coalition Government finally understood that the services, infrastructure and welfare that we depend on to function have to be paid for, by raising revenue if necessary. Laura Tingle goes further. She says the Coalition has reset the debate on the role of government by moving to:

    a more central position which embraces, and even advocates, a bigger role for government, both in terms of its fiscal position and its interventions in the economy, whether that be by building, owning and running airports or regulating product and labour markets.

She says that the government is actually seeking to own Labor’s modern signature policies – Gonski, the National Disability Insurance Scheme and Medicare. Continue reading Budget 2017: we live in a Labor world

Budget 2017: good debt, bad debt infrastructure con?

Peter Martin states it directly:

    Those sighs of relief are prayers of thanks for a budget that embraced reality: the reality that schools, healthcare, roads, railways, pensions, the National Disability Insurance Scheme and the other things that we want need to be paid for.

Except that almost nothing happens immediately except slugging the big banks. Spending, including infrastructure is weighted to the out-years, even beyond the normal four-year projections. Revenue improvement depends on heroic assumptions – $44 billion from income tax bracket creep from higher wages, when wages have actually been falling, more than 40% increase in company tax even though company tax cuts are assumed, an increase of 60% in capital gains tax receipts by 2021. Continue reading Budget 2017: good debt, bad debt infrastructure con?

University funding: drifting to mediocrity?

Andrew Norton from the Grattan Institute says the modest university ‘reforms’ signalled for the budget will entrench the status quo, and will affect universities more than students.

George Morgan says the universities are drifting to mediocrity, and these cuts will not help.

The headline figure is a saving of $2.8 billion over the forward estimates, and a 7.5% increase in student fees over the period. Total Commonwealth Government payments to universities over the next four years amount to of $74bn, so the impact of this $2.8bn reform package is less than 4% of the revenues to universities from taxpayers and students, according to Simon Birmingham. Continue reading University funding: drifting to mediocrity?

Gonski 2.0: will it help the Turnbull government?

Phillip Adams recently talked to Laura Tingle about her Monthly Essay Wicked Problems: What are the real reasons behind the rise and stall of Malcolm Turnbull? (locked content). Turnbull has aged 10 years in the last 20 months. He feels the weight of the whole government’s fortunes on his shoulders and does not get enough sleep.

He has lost his sharp tongue and tendency to anger, but has become a transactional politician, chair of the committee. He became prime minister and maintains continued support simply because he is not Tony Abbott.

Recently he has resolved a number of issues which have dogged the government since the horror budget of 2014, but will it add up to a narrative that changes his party’s electoral fortunes? In the latest education changes Simon Birmingham may have become the “fixer” Christopher Pyne claimed to be and may have neutralised one of Labor’s strengths, by stealing Gonski. Continue reading Gonski 2.0: will it help the Turnbull government?

Blessed be the poor

Blessed be the poor sounds like a quote from the Bible, but it’s not. I just liked it as a title.

Many say that the old divisions between left and right, and of social class, are no longer valid. These divisions are not as clear-cut as they once were. However, it is undoubtedly true that while some are wealthy enough to go anywhere and do what they please, at the other end of the wealth scale some are stuck in a place and struggle daily with finding the basic needs of shelter and sustenance.

During the first quarter of a century after World War II Western society generally achieved for the first time in history a situation where most households could own a car and take an annual holiday of several weeks on pay. Tony Judt in his Postwar: a History of Europe Since 1945 tells how German per capita GDP from 1950 to 1973 more than tripled in real terms. In France it improved by 150%, while Italy, from a low base, did even better. In Britain in 1957, PM Harold Macmillan told the people:

    “Let us be frank about it: most of our people have never had it so good.”

Continue reading Blessed be the poor

Should We Charge the GST on Exports?

Exporters often seem to be able to pay less tax than other businesses.  One of the key reasons for this is that exporters pay no GST on their exports despite benefiting from government expenditure on things things like education and various forms of assistance to industry including assistance that is specific to export industries.

This post asks whether it is about time to start charging the GST on at least some exports. Continue reading Should We Charge the GST on Exports?

Should We Get Rid of the Company Tax?

The Commonwealth government has just gained support for a tax cut for business’s earning less that $50m per yr. The benefits of this change are debatable. The only things we can be sure of is that badly needed government revenue has been sacrificed and if anything, the administration of this tax will become more complex.

It might be smarter to get rid of this complex and difficult to administer tax altogether and replace the lost revenue by either increasing the take from already existing taxes and/or some new and simpler tax.

This post looks at the implications of getting rid of company tax. Continue reading Should We Get Rid of the Company Tax?

Fake news about company tax cuts

Ross Gittins says we have fake government rather than fake news, but it does appear that the political debate about company tax cuts has been inadequate and misleading, to say the least. In this post I take a look at what decent thinkers like Gittins, Craig Emerson, Ross Garnaut and others have had to say about the corporate tax cuts. Continue reading Fake news about company tax cuts

Class warfare needed to shake lazy neoliberalism

Neoliberalism has run its course, Paul Keating has spoken.

Sally McManus, the new Secretary of the ACTU announced the demise of neoliberalism as a useful economic force in her speech to the National Press Club National Press Club, as well as defending her comments that anti-strike laws were unjust and could be disobeyed, and setting out the union peak body’s case for a $45-a-week increase in the minimum wage.

McManus said that neoliberalism and trickle-down economics had caused inequality to reach a 70-year high in Australia and that “working people and ordinary Australians have been the victims”.

    “The Keating years created vast wealth for Australia, but has not been shared, and too much has ended up in offshore bank accounts or in CEO’s back pockets.

    “Working people are now missing out and this is making them angry.”

Continue reading Class warfare needed to shake lazy neoliberalism

Henry: politicians fail while Australia burns

That was the title of Phillip Coorey’s article in the AFR about Ken Henry’s withering speech to the Committee of Economic Development. For those who came in late, Dr Ken Henry was secretary of treasury from 2001 to 2011, appointed originally by Peter Costello and served during the Rudd/Gillard years. He is now chairman of the NAB board.

I think it was the news story of the week. Continue reading Henry: politicians fail while Australia burns

Teflon-coated politicians – no heart, no brains, no ethics

I must admit I didn’t know in advance that on Tuesday there were rallies all around the country in protest against the overpayment recovery system used by Centrelink which has seen thousands of people wrongfully issued with overpayment notices until I heard the Radio National report in the evening.

Googling, the only other report I’ve found was of the Melbourne rally, which, inter alia, said that over the last five years Centrelink staff have seen 5,000 of their colleagues lose their jobs. Also this item about strike action by staff last December. CPSU National Secretary Nadine Flood said:

    “Medicare, Centrelink and Child Support staff are frustrated and worried by the Turnbull Government’s mean and illogical public sector bargaining policy. These working mums and dads are asking us if they can go on strike again to bring some attention to this unfair situation, as they face their third Christmas without a pay rise.” Continue reading Teflon-coated politicians – no heart, no brains, no ethics