Abbott/Liberal Govt Watch

[Jimmy_041]

If we could pay the 11% of GDP debt we would not be borrowing more to fund the interest, nor looking for cuts to reduce the debt?
Do you really believe the Liberals are deliberately running with a high risk of losing the next election for no reason by doing unpopular things now without there being genuine concern? (The issue of whether they are making the right choices to save expenditure is another matter.)

The cynical and politically safe thing to do would be to buy votes with generosity and let the next generations worry about paying for it.

Can you offer links to prove the present debt is a viable level of debt in our present circumstances with falling productivity, falling commodity prices and falling AU$? Most "expert" articles favouring our present debt that I have read seem to be opinion pieces rather than applied accountancy - to be valid they would need to demonstrate how the debt can be repaid in reasonable time rather than become the inheritance of the next several generations.

The Bonds - I said I wouldn't take the risk - others will. I agree Bonds did well before the reversal of productivity and commodity prices. The real test of good judgement is working out when to get out of any one type of investment before it falls over rather than believing that because something has done well in the past it will go on doing so forever.

Taking an extreme example, who would now buy Bonds guaranteed by the Greek government?

In the end I accept we won't agree because our positions are matters of financial philosophy and faith. However, I felt there was a need to point out that your equating an unsecured debt with the secured, by acquired assets, debt that a property mortgage requires was not valid.

Hooray. I cannot believe supposedly sane people say an uncontrolled debt is nothing to worry about.

Ever thought, at some stage, Greece, or whoever, were in exactly our position and said debt isn't something to worry about?
Anyone else live through the GFC?
Just because my neighbour has an uncontrolled debt, doesn't mean its OK for me
Typical socialists: Margaret Thatcher was so right

[Q.]

If you want to make a comparison, Greece did nothing to fix tax evasion.

And neither are we.

[Psyber]

If you want to make a comparison, Greece did nothing to fix tax evasion.

And neither are we.

Tax evasion is not an easy problem to solve. Nor is a fair taxation system easy to develop.

The GST is one that corporations have some difficulty dodging on the revenue side, but independent tradies don't, because they can decide to only work for cash as many up here do. However, an increased GST gets those cash workers when they spend at least, but an increased GST rate would come down more heavily on the everyday person. By contrast, income tax and turnover tax is something corporations can duck by distributing income between their subsidiaries here and overseas and choosing in which section to declare the profits - at their manufacturing site in, say, Thailand, their sales point, say, here , and their shipping line based in, for example, the Caymans or Liberia, but higher income tax levels may hit the middle wage earner harder.

I'd personally favour and income tax with a higher tax free threshold and a steeper rise at the very high end, but that is difficult to balnce correctly too. In principal a super-tax on incomes over $300,000 per annum and a super-super-tax on those on 7 figure salaries and bonuses may look good, but I'm sure there would be holes in any plan to do that too.

We also don't want to tax big businesses so much it encourages them to leave the country entirely.

And I recall the time when Paul Keating had a shot at stopping negative gearing on rental properties and had to back down when a shortage of rental properties developed and rents rose rapidly.

SO were do we go??

Certainly not to spending the money anyway and gambling on it all working out, and/or to relying on finding a magic way to raise more revenue preferably from "them" not "us".

[mighty_tiger_79]

The cabinet re-shuffle has gone down well.

strange that people get demoted when they are doing a good job according to their boss

[bennymacca]

after his massive outpouring of compassion towards asylum seekers, Scott Morrisson now gets to show that same humility and delicate handling of situations in social services.

maybe he will remove disabled car parks from shopping centres to stop them from coming?

[mighty_tiger_79]

Maybe Morrison will sort out dole bludgers and long term unemployed which is long overdue.

[Q.]

If you want to make a comparison, Greece did nothing to fix tax evasion.

And neither are we.

Tax evasion is not an easy problem to solve. Nor is a fair taxation system easy to develop.

The GST is one that corporations have some difficulty dodging on the revenue side, but independent tradies don't, because they can decide to only work for cash as many up here do. However, an increased GST gets those cash workers when they spend at least, but an increased GST rate would come down more heavily on the everyday person. By contrast, income tax and turnover tax is something corporations can duck by distributing income between their subsidiaries here and overseas and choosing in which section to declare the profits - at their manufacturing site in, say, Thailand, their sales point, say, here , and their shipping line based in, for example, the Caymans or Liberia, but higher income tax levels may hit the middle wage earner harder.

I'd personally favour and income tax with a higher tax free threshold and a steeper rise at the very high end, but that is difficult to balnce correctly too. In principal a super-tax on incomes over $300,000 per annum and a super-super-tax on those on 7 figure salaries and bonuses may look good, but I'm sure there would be holes in any plan to do that too.

We also don't want to tax big businesses so much it encourages them to leave the country entirely.

And I recall the time when Paul Keating had a shot at stopping negative gearing on rental properties and had to back down when a shortage of rental properties developed and rents rose rapidly.

SO were do we go??

Certainly not to spending the money anyway and gambling on it all working out, and/or to relying on finding a magic way to raise more revenue preferably from "them" not "us".

It's got to be tackled from both sides. Make cuts, but make the effort to stimulate an increase in tax receipts.

Also, the whole 'ending the age of entitlement' mantra is a blatantly hypocritical when you don't do anything the cut the billions lost to supperannuation concessions of which 48% is received by the top 12% of wage earners.

[Q.]

Maybe Morrison will sort out dole bludgers and long term unemployed which is long overdue.

Not really. We already have one of the lowest welfare spend amongst the OECD.

[RustyCage]

Also long term unemployed are hardly in the category of dole bludgers

[Jimmy_041]

Maybe Morrison will sort out dole bludgers and long term unemployed which is long overdue.

Not really. We already have one of the lowest welfare spend amongst the OECD.

Is that not because we means test it and have a good private superannuation system?

[Q.]

Maybe Morrison will sort out dole bludgers and long term unemployed which is long overdue.

Not really. We already have one of the lowest welfare spend amongst the OECD.

Is that not because we means test it and have a good private superannuation system?

Yep. We income test welfare payments more than any other country.

[Psyber]

.... Also, the whole 'ending the age of entitlement' mantra is a blatantly hypocritical when you don't do anything the cut the billions lost to supperannuation concessions of which 48% is received by the top 12% of wage earners.

I don't really disagree with you there.
There are some people with massive superannuation - like politicians, some bureaucrats, and some very highly paid executives.

One problem with taxing superannuation at either the input end, or the output end, is deciding where is a reasonable point to start the taxation applying, and how much to tax - there has to be some concession to encourage most people to put some away rather than spend it now.

Certainly the approach during the Hawke/Keating regime had two accountancy firms advise me the costs of running my own self-managed superannuation fund then, given the taxation regime that applied, made it not worth setting up. I took their advice and sold property to pay off my debts and consolidate as interest rates were rising, and moved back into property after the 1987-88 crisis. That sort of approach was why superannuation savings were low later when John Howard decided to make generous catch up provisions so that less people would be pension or part-pension dependent in the long run.


Another problem is making fair adjustments as return rates rise and fall with economic fluctuations regardless of the notional worth of the fund - a concept governments and bureaucracies are a bit slow moving to handle.

(My fund, for example, is returning as income about 2/3 of what it was in 2007-8 despite the amount of money inside the fund having been increased by further contributions from my intermittent country medical locum work.)

[Gozu]

As expected the embarrassment that is David Johnston dumped from Defence and kicked out of the cabinet.

[Q.]

.... Also, the whole 'ending the age of entitlement' mantra is a blatantly hypocritical when you don't do anything the cut the billions lost to supperannuation concessions of which 48% is received by the top 12% of wage earners.

I don't really disagree with you there.
There are some people with massive superannuation - like politicians, some bureaucrats, and some very highly paid executives.

One problem with taxing superannuation at either the input end, or the output end, is deciding where is a reasonable point to start the taxation applying, and how much to tax - there has to be some concession to encourage most people to put some away rather than spend it now.

I agree, which is why it's unfathomable that he cut the Low Income Super Contribution (LISC) – a policy that refunded the 15% tax on super contributions for workers earning less than $37,000 a year.

In providing massive taxation concessions to high income earners, the budget loses billions of dollars of forgone revenue. At the same time, the super system won't relieve pressure on the aged pension, since low income earners receive no concessions, which both impedes their ability to build-up a retirement nest egg and discourages them from making additional contributions.

[Jimmy_041]

.... Also, the whole 'ending the age of entitlement' mantra is a blatantly hypocritical when you don't do anything the cut the billions lost to supperannuation concessions of which 48% is received by the top 12% of wage earners.

I don't really disagree with you there.
There are some people with massive superannuation - like politicians, some bureaucrats, and some very highly paid executives.

One problem with taxing superannuation at either the input end, or the output end, is deciding where is a reasonable point to start the taxation applying, and how much to tax - there has to be some concession to encourage most people to put some away rather than spend it now.

I agree, which is why it's unfathomable that he cut the Low Income Super Contribution (LISC) – a policy that refunded the 15% tax on super contributions for workers earning less than $37,000 a year.

In providing massive taxation concessions to high income earners, the budget loses billions of dollars of forgone revenue. At the same time, the super system won't relieve pressure on the aged pension, since low income earners receive no concessions, which both impedes their ability to build-up a retirement nest egg and discourages them from making additional contributions.

I may be wrong but as far as I am aware the LISC is still available up to $500. My maths says 15% of 9.25% of $37,000 is $513.
What the change did do was stop me topping up my kids super and accessing the $1,000 (and before that $1,500)
I cant agree about not relieving the pressure on the aged pension - it already is and will significantly grow in the next 50 years. Only the absolute poorest will need the pension in 50 years (probably 25 years)
The tax on high income contributions was revenue neutral. All it did was employ public servants. Appeals to lefties but doesn't achieve a thing.
The problem with the growing super nest egg is its like Kate Upton in a bikini to politicians who want to steal and spend it, and once they start, they wont stop.

[toot toot]

Jimmy,

LISC & the co-contribution are two different things.

I disagree about only the poorest needing the pension in 50 years. The fact you can withdraw your whole super once you reach the age limits allows people to blow the entire super in one go (I've seen it happen). Super should help relieve some of the pressure, but unfortunately there is too many people who can't control their spending. They will withdraw their super & treat it like lotto winnings not their retirement savings.

[Q.]

.... Also, the whole 'ending the age of entitlement' mantra is a blatantly hypocritical when you don't do anything the cut the billions lost to supperannuation concessions of which 48% is received by the top 12% of wage earners.

I don't really disagree with you there.
There are some people with massive superannuation - like politicians, some bureaucrats, and some very highly paid executives.

One problem with taxing superannuation at either the input end, or the output end, is deciding where is a reasonable point to start the taxation applying, and how much to tax - there has to be some concession to encourage most people to put some away rather than spend it now.

I agree, which is why it's unfathomable that he cut the Low Income Super Contribution (LISC) – a policy that refunded the 15% tax on super contributions for workers earning less than $37,000 a year.

In providing massive taxation concessions to high income earners, the budget loses billions of dollars of forgone revenue. At the same time, the super system won't relieve pressure on the aged pension, since low income earners receive no concessions, which both impedes their ability to build-up a retirement nest egg and discourages them from making additional contributions.

I may be wrong but as far as I am aware the LISC is still available up to $500. My maths says 15% of 9.25% of $37,000 is $513.
What the change did do was stop me topping up my kids super and accessing the $1,000 (and before that $1,500)
I cant agree about not relieving the pressure on the aged pension - it already is and will significantly grow in the next 50 years. Only the absolute poorest will need the pension in 50 years (probably 25 years)
The tax on high income contributions was revenue neutral. All it did was employ public servants. Appeals to lefties but doesn't achieve a thing.
The problem with the growing super nest egg is its like Kate Upton in a bikini to politicians who want to steal and spend it, and once they start, they wont stop.

That was what was cut.

[Jimmy_041]

As I said, I'm no expert.
I though the LISC and co-contribution were the same
What's this then? https://www.ato.gov.au/Individuals/Super/In-detail/Contributions/Low-income-super-contribution/

Example: Working out LISC eligibility
Julie earns $36,000 a year as a childcare assistant. In the 2012–13 financial year, Julie’s employer makes a super guarantee contribution of $3,240 into her super fund. Julie lodges an income tax return which includes tax deductions of $1,000, resulting in an adjusted taxable income of $35,000 ($36,000 - $1,000).
The table below shows how Julie worked out whether she was eligible for a LISC:
Table: How Julie worked out if she was eligible for a LISC

Criteria met? Amount
Super fund has my TFN? Yes
Made concessional super contributions? Yes $3,240
Had an adjusted taxable income of $37,000 or less? Yes $35,000
Received at least 10% of income from employment, business or a combination of both? Yes
Had not held a temporary resident visa during the year? Yes

Julie will receive a low income super contribution of $486 (15% of $3,240) paid into her super fund.

[Q.]

It exists for 2013/14 and will cost a touch under $1bil, but I'm certain it was cut for future financial years.

[Jimmy_041]

It exists for 2013/14 and will cost a touch under $1bil, but I'm certain it was cut for future financial years.

Nope: http://www.superguide.com.au/how-super-works/super-tax-refund-for-lower-income-earners

Mind you, who TF knows whats in and out from their budget, so no big error