1. The cost of debt
Treasurer Josh Frydenberg and PM Scott Morrison have been telling us that we need to contain debt, and that is why those on JobKeeper must return to poverty. Frydenberg in particular has been praising himself for his fiscal bravery, and the size of his COVID-19 rescue package.
Greg Jericho has identified how much the extra debt has cost. The answer is – nothing. See The government is stuck in the fallacy of debt and deficit while ignoring the climate crisis:
The PBO estimated that in the December quarter last year debt interest repayments were $4.1bn – the same amount it was in December 2016 when total debt was half the current level.
Continue reading Weekly salon 28/2
1. Storms for Hansen’s grandchildren
(From Hurricane Dorian: devastation and destruction in the Bahamas – in pictures)
John Schwartz at the NYT (posted at Lethal Heating) asks How Has Climate Change Affected Hurricane Dorian?
Michael Mann and Andrew E Dessler respond in Global Heating Made Hurricane Dorian Bigger, Wetter – And More Deadly. With warm seas and more moisture in the atmosphere hurricanes can intensify faster, contain more moisture, more wind power and move slower. This means greater flooding and a increased possibility of coinciding with high tides. Continue reading Weekly salon 7/9
1. Fly me to the moon
It’s one small step for man. One giant leap for mankind.
That was Buzz Aldrin [see correction as update below*], and here is the photo taken by Neil Armstrong: Continue reading Weekly salon 22/7
The Coalition government is calling Labor’s proposals to end cash payments by the taxation office for excess share dividend imputation credits a “retiree tax” and an attack on pensioners. In fact:
- No pensioners or part pensioners will be affected at all.
- Exemptions include individuals receiving the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Newstart and Sickness Allowance.
- Self managed super funds (SMSFs) can have up to six members. Where one of a couple is receiving a part pension the exemption will apply to the fund.
- Martin also pointed out that it is possible to receive a part pension with an income of up to $78,000 pa.
- Currently under the existing rules it would be theoretically possible to receive a superannuation income of $80,000 pa, and then in addition receive a cash cheque from the taxation office of about $34,000.
- These benefits flow to one in every 25 Australians, the rest of us in effect pay for them.
- When cash payments were introduced in 2001 the rule change cost the budget $550 million. The current cost is about $5 billion, $8 billion next year. It is simply unsustainable. Peter Martin says the current scheme is as Australian as the echidna. No other country in the world does it.
Continue reading Dividend imputation reform vs a dishonest scare campaign
First up there are all kinds of figures going around. The big one – $9 billion dollars – is over 10 years. So the annual figure of less than a billion is a mere rounding error in a Commonwealth budget of around half a trillion. Nevertheless all dollars are accounted for, so Annastacia Palaszczuk is right to ask where the money is coming from. Continue reading The great GST fix
In his Budget Reply Address to the National Press Club Peter Hartcher in a piece Bowen seizes chance to make history reckons Labor’s plans amount to a trifecta:
- First, it has promised a tax cut almost twice as big as the government’s for lower and middle income earners, $928 a year against the government’s $530.
- Second, Labor has promised to spend more on its “inclusive growth” agenda centred around education, skills training and health care.*
- Third, it has promised to return the budget to a bigger surplus than the government’s planned $2.2 billion for 2019-20, and to press on to a surplus of at least one per cent of GDP.
Continue reading Bowen articulates Labor’s budget plans
The ABC election team on Budget night suggested that the purpose of the 2018 budget was to generate talking points that the government could use in the forthcoming election campaign. It has been going on for a while. Turnbull ScoMo and all reckon they offer “jobs and growth” whereas Shorten is going to hit you up for $200 billion extra in taxes, and simply can’t be trusted to run anything.
Shorten says Labor is going to “bring the fair go back into the heart of the nation.”
To me the nation is at a cross-roads. One way offers a small-government straight jacket with firmly embedded tax provisions that permanently reward success. The other seeks to provide the necessary infrastructure (human, services and physical) for everyone and the nation to become the best they can be, and to take care of those on the fringe. Continue reading Budget 2018 – a fair and decent society vs small government, ideology and sloganeering
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
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
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?
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?
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