# Should the GST be increased/widened?



## SirRumpole (12 February 2015)

The discussion is going on as to whether the GST should be increased or widened to close the deficit gap.

This is a regressive tax that hits the lower income people the hardest and it would be politically dangerous to implement further changes, unless compensated for by tax cuts and pension increases.

While the average consumer can't avoid GST, businesses get a refund for the GST they pay. On the principle that it's easier to avoid company tax than GST, why not remove the refund to businesses for GST paid, and compensate by lowering the company tax rate ?

If it's good enough for the consumer, why not for business ?


----------



## Hodgie (12 February 2015)

SirRumpole said:


> The discussion is going on as to whether the GST should be increased or widened to close the deficit gap.
> 
> This is a regressive tax that hits the lower income people the hardest and it would be politically dangerous to implement further changes, unless compensated for by tax cuts and pension increases.
> 
> ...




If businesses didn't get the refund they would likely just pass the cost to them onto the customer as they do with everything else which is factored into price.

Also, anyone can register for GST and get GST refunds on things like GST costs incurred on investment products, you don't need to be a business entity to do this. I guess it's the way our whole system works, any expenditure incurred when trying to generate income gets tax relief/refunds while general living expenses do not. 

Items purchased by the businesses are being used to generate income whereas when the consumer purchases these items or services they are simply going to be consumed which is why the business gets the benefit and the consumer does not.


----------



## SirRumpole (12 February 2015)

Hodgie said:


> Items purchased by the businesses are being used to generate income whereas when the consumer purchases these items or services they are simply going to be consumed which is why the business gets the benefit and the consumer does not.




Without the consumer business doesn't have business. It's the consumption of goods and services that generate income for business, not the absence of a tax.

If you lower the company tax rate you attract more investment which increases the supply of services and keeps prices down. 

Maybe if businesses pay GST the company tax rate can be abolished altogether as it's an expensive tax to collect. GST is efficient to collect so the overall result would be positive.


----------



## sydboy007 (12 February 2015)

I've got no issue with broadening the GST, thought don't see an increase as justifiable considering the majority of exemptions benefit those in the higher income deciles.

Having said that, I would prefer to see changes to the GST part of a more comprehensive package that examines


Land taxes to replace stamp duties - why do the 6% of households buying property each year pay an unfair share of the revenue required by the states?
Limiting to removal of the halving of CGT - benefits the wealthy most.
Changes to super concessions - easiest would be full tax on contributions
Bring back some form of Reasonable Benefits Limit to super to stop it being treated as a tax shelter by the rich
Examine why the primary residence is invisible to the pension assets test - asset poor gen x and y have to pay higher taxes because of this.
Quarantine Negative Gearing to new housing builds and against the income of the asset invested in ie capitalise the losses to the cost base if they outweigh the income generated as pretty much every other country does.

We have world beating tax expendtirues worth close to 8% of GDP.  Clamping down on them would increase efficiency and fairness while also helping to make capital allocation into productive investments rather than housing a more viable option.

The below graph from the Henry review shows how we need to move away from corporate and income taxes, along with stamp duties.  Land taxes are pretty much the most efficient available.  The super chart shows how poorly targeted super concessions are and just how concentrated wealth has become in Australia.


----------



## drsmith (12 February 2015)

The table below from the ABS is an interesting read,

http://www.abs.gov.au/ausstats/abs@...ummary&prodno=5506.0&issue=2012-13&num=&view=

The top 4 taxes provided 76% of our tax revenue in 2012/13 highlighting an obvious area for reform.


----------



## Value Collector (12 February 2015)

SirRumpole said:


> why not remove the refund to businesses for GST paid, and compensate by lowering the company tax rate ?




Because the purpose of the tax is to be a 10% tax on the final retail sale price. if each step in the supply chain had to add 10% and there was no refunds, it would end up being much more more.

eg. If I make clay, and sell the clay to sir rumpole for $1.10, he actually pays me $1 and I sent this extra 10c to the government as GST. but then Sir rumpole makes a brick with the clay, and sells it for $2.20 to a retailer, he then owes 20c to the government, but gets a credit for the 10c gst he has already paid to me, the retailer sells the brick to the consumer for $3.30, the retailer owes the government 30cents gst, but gets a credit for the 20cents he paid to sir rumpole.

So the total tax on the end product was 10% being 30c, but 10c was paid by the clay maker, 10c was paid by the brick maker, and 10c paid by the retailer.

If each step wasn't able to claim back the gst they paid when they purchased their goods, then the final tax amount would have been 60c not 30c as it should be


----------



## Value Collector (12 February 2015)

sydboy007 said:


> [*]Limiting to removal of the halving of CGT - benefits the wealthy most.




the capital gains tax discount is required to offset inflation, other wise your just taxing inflation.

Your meant to be taxing capital gain profits, not simply taxing increases in price due to inflation.

Remember when your dealing with shares, property or any real asset, part of its "capital gain" is not due to increasing value, but rather the it's price has been pushed up by inflation, providing a discount on gains helps this.


----------



## SirRumpole (12 February 2015)

Value Collector said:


> Because the purpose of the tax is to be a 10% tax on the final retail sale price. if each step in the supply chain had to add 10% and there was no refunds, it would end up being much more more.
> 
> eg. If I make clay, and sell the clay to sir rumpole for $1.10, he actually pays me $1 and I sent this extra 10c to the government as GST. but then Sir rumpole makes a brick with the clay, and sells it for $2.20 to a retailer, he then owes 20c to the government, but gets a credit for the 10c gst he has already paid to me, the retailer sells the brick to the consumer for $3.30, the retailer owes the government 30cents gst, but gets a credit for the 20cents he paid to sir rumpole.
> 
> ...




These things could be compensated for by not charging the consumer the final gst because it has already been paid for in the manufacturing and other processes and therefore added to the retail price. The rate could be adjusted 
suitably so that the price effects can be controlled. Or, you can leave the GST on the final price as well and lower income tax rates and raise pensions.

The main point is that companies are avoiding company tax in spades, but they can't avoid GST. That was the main argument for imposing it on the consumer in the first place. Most PAYE consumers can't avoid income tax, but companies can. Having them pay GST makes the tax system more efficient.


----------



## sydboy007 (12 February 2015)

Value Collector said:


> the capital gains tax discount is required to offset inflation, other wise your just taxing inflation.
> 
> Your meant to be taxing capital gain profits, not simply taxing increases in price due to inflation.
> 
> Remember when your dealing with shares, property or any real asset, part of its "capital gain" is not due to increasing value, but rather the it's price has been pushed up by inflation, providing a discount on gains helps this.




Bring back the previous system of bumping up the cost base by CPI.  Easily done in the age of computers.


----------



## McLovin (12 February 2015)

SirRumpole said:


> These things could be compensated for by not charging the consumer the final gst because it has already been paid for in the manufacturing and other processes and therefore added to the retail price.




I'm not sure I follow. Consumers won't pay the tax because the tax is already included in the price? Isn't that the same outcome?



SirRumpole said:


> The main point is that companies are avoiding company tax in spades




Says who?


----------



## SirRumpole (12 February 2015)

McLovin said:


> I'm not sure I follow. Consumers won't pay the tax because the tax is already included in the price? Isn't that the same outcome?




No, they won't pay the final 10% at the till as well as what's included in the price.



> Says who?




Lots of people. You should read more.

http://www.abc.net.au/news/2014-09-...lian-companies-pay-less-than-10pc-tax/5775870


----------



## McLovin (12 February 2015)

SirRumpole said:


> Lots of people. You should read more.
> 
> http://www.abc.net.au/news/2014-09-...lian-companies-pay-less-than-10pc-tax/5775870




When did tax minimisation become tax avoidance?


----------



## SirRumpole (12 February 2015)

McLovin said:


> When did tax minimisation become tax avoidance?




Semantics, they equate to the same thing.


----------



## overhang (12 February 2015)

No I don't support broadening the GST to fresh food and have already written to my local MP about this.  It's an efficient but regressive tax, if all other options were exhausted like super concessions, negative gearing, CGT concession and we still need to raise tax revenue then I'm not opposed to raising the GST.  But it's already too cheap to eat unhealthy processed rubbish and that gap will only widen if we apply the GST to fresh food.  Obesity is a huge problem in our Western society and we all know the health ramifications that come from obesity.  I would support a junk food tax before broadening the GST to fresh food.


----------



## drsmith (12 February 2015)

sydboy007 said:


> Bring back the previous system of bumping up the cost base by CPI.



That I agree with as it's a more equitable system for long term investment. 

One of the problems though was that a significant gain pushed the taxpayer into high marginal rates. The answer to that at the time was to calculate the tax on 1/5 of the gain and then multiply that by 5. 

Overall though it delivered little relief for more medium term investments (~3 to 5 years) to tax on capital for those on higher incomes from high marginal rates so I think an additional discount to CPI is required such that the real level of capital gain is taxed at something closer to the corporate rate. 

In other words, go back to a CPI indexed cost base and have a further discount of up to about 1/3 tapered in over a period of years from initial investment.

In the absence of significantly lower marginal rates of income tax, the present 50% discount should be tapered at 10% intervals to take full effect after an investment has been held for 5 years and CPI cost base indexation should also be available as an alternative where that provides a better outcome for the taxpayer than the discount above.

Longer term, the top rate of income tax should be much closer to the corporate rate such that any fixed CGT discount can be done away with altogether.


----------



## Julia (12 February 2015)

overhang said:


> No I don't support broadening the GST to fresh food and have already written to my local MP about this.  It's an efficient but regressive tax, if all other options were exhausted like super concessions, negative gearing, CGT concession and we still need to raise tax revenue then I'm not opposed to raising the GST.  But it's already too cheap to eat unhealthy processed rubbish and that gap will only widen if we apply the GST to fresh food.  Obesity is a huge problem in our Western society and we all know the health ramifications that come from obesity.  I would support a junk food tax before broadening the GST to fresh food.



+100.


----------



## Hodgie (12 February 2015)

SirRumpole said:


> Semantics, they equate to the same thing.




They may both lead to less tax being paid but doing one of those things can land you a prison cell.


----------



## boofhead (12 February 2015)

Are you aiming to assist state coffers or federal coffers? Are you hoping increase in GST improving the state coffers flows throw to lower trasfer of funds from federal coffers to state coffers?


----------



## pixel (12 February 2015)

overhang said:


> No I don't support broadening the GST to fresh food and have already written to my local MP about this.  It's an efficient but *regressive *tax, if all other options were exhausted like *super concessions, negative gearing, CGT concession* and we still need to raise tax revenue then I'm not opposed to raising the GST.  But it's already too cheap to eat unhealthy processed rubbish and that gap will only widen if we apply the GST to fresh food.  Obesity is a huge problem in our Western society and we all know the health ramifications that come from obesity. * I would support a junk food tax *before broadening the GST to fresh food.




totally agree


----------



## SirRumpole (12 February 2015)

Hodgie said:


> They may both lead to less tax being paid but doing one of those things can land you a prison cell.




Ah no. Tax *evasion* will land you in a prison cell, avoidance is using legal loopholes to minimise tax.

As i say, semantics.


----------



## Hodgie (12 February 2015)

SirRumpole said:


> Ah no. Tax *evasion* will land you in a prison cell, avoidance is using legal loopholes to minimise tax.
> 
> As i say, semantics.




Right you are, I had my nouns mixed up. I stand corrected.


----------



## SirRumpole (12 February 2015)

boofhead said:


> Are you aiming to assist state coffers or federal coffers? Are you hoping increase in GST improving the state coffers flows throw to lower trasfer of funds from federal coffers to state coffers?




In my dream world the States would not exist, but yes if the States get more revenue from GST, the Feds could ease off on tied grants and such.


----------



## Tisme (12 February 2015)

I reckon increasing the GST will eventually translate into increased spending and debt, rather than balancing budgets.


----------



## McLovin (12 February 2015)

Hodgie said:


> Right you are, I had my nouns mixed up. I stand corrected.




So did I. In any event why shouldn't a company minimise its taxation? If the government doesn't like it, then close the loopholes.

And I disagree with the general idea that the anti-avoidance rules are not working (they're so far reaching it's hard to believe they don't), although there maybe some exceptions. I'd put good money on more revenue being lost through GST fraud (I think I saw 15% of revenue being lost) than through company taxes.


----------



## noco (12 February 2015)

At least with the GST, one new how much tax one was paying for a selected item unlike the old sales tax and the carbon tax which was a hidden cost and nobody new exactly how much extra was being paid for a product.Whether the compensation given to pensioners on the impact of the carbon tax was enough, one may never know.

Paul Keating increased the sales tax on motor vehicles from 20 to 25 % and nobody was any the wiser because it was a hidden cost. When the GST was introduced the S/T was replaced with 10% GST which cars cheaper.

If the GST was increased to 15% it would bring in an estimated amount of around $23 billion based on the same products applicable to today...I doubt very much if any party would be game enough to expand the GST to all food lines.

There will lots of opposition to any increase in the GST but somewhere along the line both state and federal governments will have to raise finance from some where whether it be death duties, vehicle registration, land tax, stamp duty and many other options and no matter which political party introduce it, it will not be popular...When the GST was introduced, state governments agreed to eliminate stamp duties and they never did....Stamp duty is still applicable to certain items even as of today.

It is up to all the states to be in agreement of any increase in the GST so the repercussions will be on all political parties....There is one thing for sure and that is all the states are after more money.


----------



## McLovin (12 February 2015)

noco said:


> At least with the GST, one new how much tax one was paying for a selected item unlike the old sales tax and the carbon tax which was a hidden cost and nobody new exactly how much extra was being paid for a product.Whether the compensation given to pensioners on the impact of the carbon tax was enough, one may never know.




My parents were in commercial furniture for about 30 years. The old WST was a nightmare to administer. I remember there were different tax rates depending on how high the back of an office chair was. A drink with caffeine in it (like Coke) had a different rate to one without it (like Fanta). The GST is much better. I remember how happy the guys in accounts were when the change was made.


----------



## drsmith (12 February 2015)

The GST in my view should be broadened to include all goods and services (but not investment income) with the increased proceeds to remove inefficient state taxes. That after all was its original intention before the Democrats butchered it.


----------



## McLovin (12 February 2015)

drsmith said:


> The GST in my view should be broadened to include all goods and services (but not investment income) with the increased proceeds to remove inefficient state taxes. That after all was its original intention before the Democrats butchered it.




I disagree. Food should be exempt. There are people out there who struggle to put food on the table and I struggle with the idea of putting a new tax on their backs.


----------



## drsmith (12 February 2015)

McLovin said:


> I disagree. Food should be exempt. There are people out there who struggle to put food on the table and I struggle with the idea of putting a new tax on their backs.



Compensation could be considered as necessary through the income tax/welfare system. While this would reduce the scope by which inefficient state taxes could be removed, it could still deliver a significant overall simplification to our tax system.

Some compensation would obviously also come as a result of the removal of inefficient state taxes and not all food is presently exempt.


----------



## Ferret (12 February 2015)

I also think food should remain exempt.  

A diet based on fresh produce is much healthier than one of processed foods but, unfortunately, processed foods are often cheaper.  This disparity shouldn't be increased.


----------



## Julia (12 February 2015)

McLovin said:


> I disagree. Food should be exempt. There are people out there who struggle to put food on the table and I struggle with the idea of putting a new tax on their backs.






Ferret said:


> I also think food should remain exempt.
> 
> A diet based on fresh produce is much healthier than one of processed foods but, unfortunately, processed foods are often cheaper.  This disparity shouldn't be increased.



Agree 100% with McLovin and Ferret.  Whack a tax on crap 'food', and provide an incentive to choose fresh fruit and vegetables.
We have an obesity crisis.  The woman in the checkout queue ahead of me yesterday was morbidly obese.
Her trolley contained two *cartons* of Pepsi Max, six loaves of sliced white bread, four cakes, two packets of frozen chips, ready made pasta 'meals', and zero fruit or vegetables.


----------



## drsmith (12 February 2015)

Some food is already subject to GST and some isn't which I think is broadly based around as to whether it's cooked and/or served as take away and what isn't.

Chicken for example gives an idea of the complexitiy this creates,

https://expertsystems.ato.gov.au/sc...cSearchableFoodList.aspx?PID=68&ms=Businesses


----------



## noco (12 February 2015)

Small business with a turn over less than $75,000 do not charge GST and therefore do not collect for the Government.

It would no doubt be possible for a small business offering a service to be paid by cash and in doing so would be able to keep his turn over below $75,000.


----------



## Smurf1976 (12 February 2015)

SirRumpole said:


> These things could be compensated for by not charging the consumer the final gst because it has already been paid for in the manufacturing and other processes and therefore added to the retail price.




That would massively favour imports over local production (of anything) unless we can somehow impose our GST on costs incurred in other countries (impractical in practice).

End result = imports more competitive, Australian business less competitive = higher unemployment and a drop in tax paid by business (due to there being less business activity).


----------



## Smurf1976 (12 February 2015)

Value Collector said:


> the capital gains tax discount is required to offset inflation, other wise your just taxing inflation.



The same argument could be made about interest on bank deposits since, in general terms, the rate paid is at most an offset to inflation and in many cases not even that.


----------



## drsmith (12 February 2015)

Smurf1976 said:


> The same argument could be made about interest on bank deposits since, in general terms, the rate paid is at most an offset to inflation and in many cases not even that.



Capital investment involves greater financial risk than interest bearing deposits and thus supports more favourable tax treatment.

Negative gearing though combined with the present CGT discount favours capital investment too much in the short to medium term in my view as reflected in the price of residential property.


----------



## drsmith (12 February 2015)

noco said:


> Small business with a turn over less than $75,000 do not charge GST and therefore do not collect for the Government.
> 
> It would no doubt be possible for a small business offering a service to be paid by cash and in doing so would be able to keep his turn over below $75,000.



One would imagine that a turnover of $75k would lead to a relatively small profit unless the margin was very high or in other words, a hobby business.

I'm not sure what presently the best approach is to deal with transactions via Mr C. Ash but ultimately one can envisage a time when all transactions can be done or at least recorded electronically.

Ideally there shouldn't be a small business threshold but if the GST is broadened and hence simplified, that may at least offer the opportunity to lower it without it becoming an excessive burden on low turnover enterprises.


----------



## Tisme (13 February 2015)

McLovin said:


> My parents were in commercial furniture for about 30 years. The old WST was a nightmare to administer. I remember there were different tax rates depending on how high the back of an office chair was. A drink with caffeine in it (like Coke) had a different rate to one without it (like Fanta). The GST is much better. I remember how happy the guys in accounts were when the change was made.




Yes the WST  book(s) was a great read. I recall partnering with a huge multi national and what amazed they hadn't picked the double negative language on the tax application and had pinged themselves with a ~20% voluntary tax for decades. Of course decades of cronyism meant that the WST was a hotchpotch of hidden incentives for favoured industries.


----------



## SirRumpole (13 February 2015)

Smurf1976 said:


> That would massively favour imports over local production (of anything) unless we can somehow impose our GST on costs incurred in other countries (impractical in practice).
> 
> End result = imports more competitive, Australian business less competitive = higher unemployment and a drop in tax paid by business (due to there being less business activity).




That's the way it appears on the surface, but if you tax business inputs (possibly exempting salaries), then does that not encourage business to lower their costs to be more competitive and to be more efficient and discerning about what they spend their funds on ?


----------



## Value Collector (13 February 2015)

SirRumpole said:


> These things could be compensated for by not charging the consumer the final gst because it has already been paid for in the manufacturing and other processes and therefore added to the retail price. The rate could be adjusted
> suitably so that the price effects can be controlled. Or, you can leave the GST on the final price as well and lower income tax rates and raise pensions.
> 
> The main point is that companies are avoiding company tax in spades, but they can't avoid GST. That was the main argument for imposing it on the consumer in the first place. Most PAYE consumers can't avoid income tax, but companies can. Having them pay GST makes the tax system more efficient.




the current system is the best way to ensure its 10% across all industries, and no one is disadvantaged.

the example I gave only had 3 steps, picture something like scrap metal recycling and trading, where scrap trades on thing margins, but may pass through 5 different hands before it hits the blast furnace, then there is all the manufacturing and retailing, the profit margin on the whole process would be 25% but the tax would be over 100%


----------



## Value Collector (13 February 2015)

sydboy007 said:


> Bring back the previous system of bumping up the cost base by CPI.  Easily done in the age of computers.




As dr Smith pointed out there is also the compensation needed for people whos capital gains, which actually took years to accumulate are forced to post the gain against a single years income.

eg, an investor that sells a property may make a gain of $200,000 which might have taken 10years to accumulate, however the $200K would be pushed onto the tax return in a single year and then force them into a high tax bracket, giving them the discount compensates this, as well as CPI


----------



## SirRumpole (13 February 2015)

Value Collector said:


> the current system is the best way to ensure its 10% across all industries, and no one is disadvantaged.
> 
> the example I gave only had 3 steps, picture something like scrap metal recycling and trading, where scrap trades on thing margins, but may pass through 5 different hands before it hits the blast furnace, then there is all the manufacturing and retailing, the profit margin on the whole process would be 25% but the tax would be over 100%




Depends on what you set the gst rate at for each step.


----------



## McLovin (13 February 2015)

Julia said:


> We have an obesity crisis.  The woman in the checkout queue ahead of me yesterday was morbidly obese.
> Her trolley contained* two cartons of Pepsi Max*, six loaves of sliced white bread, four cakes, two packets of frozen chips, ready made pasta 'meals', and zero fruit or vegetables.




At least she went the sugar free option!

I've never understood why some people are so averse to preparing semi-healthy food. You know exactly what went into it, it's much cheaper and it tastes infinitely better.


----------



## SirRumpole (13 February 2015)

McLovin said:


> I've never understood why some people are so averse to preparing semi-healthy food. You know exactly what went into it, it's much cheaper and it tastes infinitely better.




Sheer laziness.


----------



## McLovin (13 February 2015)

SirRumpole said:


> Depends on what you set the gst rate at for each step.




So some industries will pay more in tax than others?


----------



## SirRumpole (13 February 2015)

McLovin said:


> So some industries will pay more in tax than others?




Some individuals pay more tax than others.

Some pay less when they should pay more.

Life just aint fair sometimes.


----------



## McLovin (13 February 2015)

SirRumpole said:


> Some individuals pay more tax than others.
> 
> Some pay less when they should pay more.
> 
> Life just aint fair sometimes.




It's not the same thing. You'll just end up with capital flowing to whatever industry it is taxed the lightest in. Not to mention the inequality of such an arrangement, after spending the last thirty years removing distorting tax policies.

Sounds like a great way to kill off more than a few industries.


----------



## SirRumpole (13 February 2015)

McLovin said:


> It's not the same thing. You'll just end up with capital flowing to whatever industry it is taxed the lightest in. Not to mention the inequality of such an arrangement, after spending the last thirty years removing distorting tax policies.
> 
> Sounds like a great way to kill off more than a few industries.




What industries would be most affected in your opinion ?


----------



## Julia (13 February 2015)

McLovin said:


> At least she went the sugar free option!



Well, that shows how much I know about those drinks.  I shouldn't assume:  thought the 'Max' must have indicated maximum flavour, high caffeine, not sugar free.
Thanks for the enlightenment, McLovin.

Must have been some sort of rationalisation that all that sugar free pop would balance the rest.
Or the addition of three chocolate eggs (not the little ones) that she added as she paid with the remark "these will do me on the way home."


----------



## McLovin (13 February 2015)

SirRumpole said:


> What industries would be most affected in your opinion ?




Wherever something has to pass through many hands. Like the example VC gave. If each step is taxed along the way then it will be easier to put the scrap metal on a ship and send it up to Indonesia to be processed. The local industry would be toast.


----------



## SirRumpole (13 February 2015)

McLovin said:


> Wherever something has to pass through many hands. Like the example VC gave. If each step is taxed along the way then it will be easier to put the scrap metal on a ship and send it up to Indonesia to be processed. The local industry would be toast.




If you then taxed imports to compensate then maybe it wouldn't be worthwhile to send stuff offshore.

Raw materials are being sent offshore for processing  already and have been for years so what are you going to do to stop it ? Where is the steel industry we used to have ? If capital flows into more lightly taxed industries because they are more efficient what's wrong with that ?


----------



## McLovin (13 February 2015)

SirRumpole said:


> If you then taxed imports to compensate then maybe it wouldn't be worthwhile to send stuff offshore.




So basically you tax an industry to the point of it being non-economic but then to stop it going out of existence you put a tariff in place to protect it from imports and end users pay price. This is like Whitlam era economics.



SirRumpole said:


> Raw materials are being sent offshore for processing  already and have been for years so what are you going to do to stop it ? Where is the steel industry we used to have ?




I used that industry as an example, the point was industries that have long supply chains will be unfairly punished. 



SirRumpole said:


> If capital flows into more lightly taxed industries because they are more efficient what's wrong with that ?




They're not more efficient. Having a long supply chain is not automatically inefficient. Wasn't it Adam Smith who talked about the uplift in productivity from the divsion of labour? What you're proposing will reduce specialisation in the economy and instead force companies to do as much inhouse as possible in order to minimise transfer tax when they pass the goods down the chain. Or send it offshore.


----------



## SirRumpole (13 February 2015)

> So basically you tax an industry to the point of it being non-economic but then to stop it going out of existence you put a tariff in place to protect it from imports and end users pay price. This is like Whitlam era economics.




No, you don't tax industries to the point of being non economic, you introduce the "reform" at a low rate so as to enable industries to adjust. 

As to tariffs, virtually every other industrialised country subsidises their exports, what tariffs do is reduce the economic disadvantages to local industries by compensating them for the subsidies that foreign imports receive.

You can adjust the tariff rate to balance the need for our industries to be more efficient with the desire of the consumer for cheaper goods.


----------



## McLovin (13 February 2015)

SirRumpole said:


> No, you don't tax industries to the point of being non economic, you introduce the "reform" at a low rate so as to enable industries to adjust.
> 
> As to tariffs, virtually every other industrialised country subsidises their exports, what tariffs do is reduce the economic disadvantages to local industries by compensating them for the subsidies that foreign imports receive.
> 
> You can adjust the tariff rate to balance the need for our industries to be more efficient with the desire of the consumer for cheaper goods.




It's not really worth debating because you just keep shifting your argument.

I have enjoyed the 1970s economics class though, so thanks.


----------



## moXJO (13 February 2015)

SirRumpole said:


> No, you don't tax industries to the point of being non economic, you introduce the "reform" at a low rate so as to enable industries to adjust.
> 
> As to tariffs, virtually every other industrialised country subsidises their exports, what tariffs do is reduce the economic disadvantages to local industries by compensating them for the subsidies that foreign imports receive.
> 
> You can adjust the tariff rate to balance the need for our industries to be more efficient with the desire of the consumer for cheaper goods.




Yeah, I don't think so. Some of the things you mentioned seem like the old system which was a nightmare.


----------



## Value Collector (13 February 2015)

McLovin said:


> Wherever something has to pass through many hands. Like the example VC gave. If each step is taxed along the way then it will be easier to put the scrap metal on a ship and send it up to Indonesia to be processed. The local industry would be toast.




yep, you would kill the fragmented network of small business owned scrap yards, dealers and collection enterprises, in favour of the big vertically integrated operators, who would then ship the scrap over seas.

not to mention imported steel would suddenly be very cheap in comparison to local steel.


----------



## SirRumpole (13 February 2015)

Value Collector said:


> yep, you would kill the fragmented network of small business owned scrap yards, dealers and collection enterprises, in favour of the big vertically integrated operators, who would then ship the scrap over seas.
> 
> not to mention imported steel would suddenly be very cheap in comparison to local steel.




What local steel ? 

As I said such industries have been struggling for years. If we want a steel industry it would be better off being government owned on a national basis. We don't have the market for a lot of small operations.


----------



## SirRumpole (13 February 2015)

McLovin said:


> It's not really worth debating because you just keep shifting your argument.
> 
> I have enjoyed the 1970s economics class though, so thanks.




The argument is not shifting, it just has a lot of aspects. But if you don't feel able to continue, thanks for your contribution.


----------



## Value Collector (13 February 2015)

SirRumpole said:


> What local steel ?
> 
> .




Do you think Australia doesn't produce steel any more?



> As I said such industries have been struggling for years.




Yes, and this Tax you suggest would not help them





> If we want a steel industry it would be better off being government owned on a national basis. We don't have the market for a lot of small operations




The market is bigger now than it was in the 50's when the local steel industry was in its golden years.

and we have many speciality small steel producers, In an industrial estate where my father worked there is a guy that makes specially steel products, using custom blends, he has a mini arc furnace, there would be guys like that around Australia, his margins would be very tight already.


----------



## Value Collector (13 February 2015)

SirRumpole said:


> The argument is not shifting, it just has a lot of aspects.




yes a lot of aspects, this tax would be overly complicated, with terrible side effects. 

the current system is very simple and fair, you just don't seem to like the idea that a business gets a refund of the GST it's paid, even though there is a very good reason for this.


----------



## McLovin (13 February 2015)

Value Collector said:


> yes a lot of aspects, this tax would be overly complicated, with terrible side effects.
> 
> the current system is very simple and fair, you just don't seem to like the idea that a business gets a refund of the GST it's paid, even though there is a very good reason for this.




Bingo.


----------



## SirRumpole (13 February 2015)

> Yes, and this Tax you suggest would not help them




If you have been reading from the start, tax on inputs is offset by a lowered tax on profits.

 People who can innovate and reduce their costs are rewarded by paying less tax for their efforts. Isn't that what competition and incentive are all about ?

If you can eliminate profits tax altogether then you can get rid of a massively complex and inefficient accounting and compliance bureaucracy that smart lawyers can drive a truck through. I don't really see how you can say that the GST is "overly complicated" when it's one of the most efficient taxes to collect, and very hard to avoid.


----------



## Value Collector (13 February 2015)

SirRumpole said:


> If you have been reading from the start, tax on inputs is offset by a lowered tax on profits.
> 
> People who can innovate and reduce their costs are rewarded by paying less tax for their efforts. Isn't that what competition and incentive are all about ?
> 
> .




why not just keep the system we have, a simple tax that is 10% of the final sale price, and a 30% tax on business profits. Seems fair and very simple.



> If you can eliminate profits tax altogether




Profits are what should be taxed.



> I don't really see how you can say that the GST is "overly complicated" when it's one of the most efficient taxes to collect




You suggested system of offsetting imports with tariffs. overtaxing the public but offsetting that with other tax breaks etc is complex


----------



## SirRumpole (13 February 2015)

Value Collector said:


> why not just keep the system we have, a simple tax that is 10% of the final sale price, and a 30% tax on business profits. Seems fair and very simple.




You call the corporate tax compliance system SIMPLE ? Really ? How many accountants and tax inspectors are needed to audit and inspect the accounts of businesses ? It's massively complex and expensive. 

And you call the system FAIR when companies can profit shift and minimise their tax ?

The current system is neither simple or fair.



> Profits are what should be taxed.




Why ?



> You suggested system of offsetting imports with tariffs. overtaxing the public but offsetting that with other tax breaks etc is complex




No more complex than what we have now, and I don't think it would overtax the public if the GST rate was lowered.


----------



## Value Collector (13 February 2015)

SirRumpole said:


> Why ?




Because Taxing profits seems a lot better than taxing losses.


----------



## SirRumpole (13 February 2015)

Value Collector said:


> Because Taxing profits seems a lot better than taxing losses.




Businesses who make a loss should think whether they should be in business.


----------



## moXJO (13 February 2015)

SirRumpole said:


> Businesses who make a loss should think whether they should be in business.




Business can have bad years.

Wouldn't business spending on upgrades, repairs and other business expenses also stop with no deductions?


Also assembling a product from multiple materials under this tax system would wear a lot of the tax and business would simply offshore. 


Is this a similar idea to old 'One Nations'  2% tax?


----------



## SirRumpole (13 February 2015)

moXJO said:


> Business can have bad years.




I'm sure arrangements could be made



> Wouldn't business spending on upgrades, repairs and other business expenses also stop with no deductions?




Business has to think about whether the upgrades etc will be good for them in the long run. If these things add to the bottom line profit (on which they pay less tax) then they will do them. Capital expenditure could be treated differently to revenue expenditure for taxation purposes.



> Also assembling a product from multiple materials under this tax system would wear a lot of the tax and business would simply offshore.




The compensation is to pay less tax on the bottom line.



> Is this a similar idea to old 'One Nations'  2% tax?




I don't know, what was that ?


----------



## Smurf1976 (13 February 2015)

SirRumpole said:


> That's the way it appears on the surface, but if you tax business inputs (possibly exempting salaries), then does that not encourage business to lower their costs to be more competitive and to be more efficient and discerning about what they spend their funds on ?




Business already has a strong incentive to minimise costs. But if your production is taxed, and an overseas competitor's isn't, then you've got no real chance of survival in the long term. You'll always be at a disadvantage to the untaxed rival.

I don't see how adding a tax somehow leads to lower business costs. And in industries where the cost cannot be passed on at all (anything trade exposed), that's a problem.


----------



## Smurf1976 (13 February 2015)

SirRumpole said:


> If capital flows into more lightly taxed industries because they are more efficient what's wrong with that ?




Being more lightly taxed has no bearing on efficiency, unless you are proposing that the rate of tax be set for each individual business based on some objective measure of efficiency. That would be incredibly difficult to administer.


----------



## Smurf1976 (13 February 2015)

SirRumpole said:


> What local steel ?




Whyalla (One Steel) and Port Kembla (Bluescope) come immediately to mind as blast furnace facilities producing steel from iron ore and coal.

TEMCO in Tasmania makes ferro alloys, used in steel production, and exports most production to numerous overseas buyers.

There's also a number of places that melt down either raw steel or scrap in electric or gas furnaces in order to produce various end products.


----------



## SirRumpole (14 February 2015)

Smurf1976 said:


> Whyalla (One Steel) and Port Kembla (Bluescope) come immediately to mind as blast furnace facilities producing steel from iron ore and coal.
> 
> TEMCO in Tasmania makes ferro alloys, used in steel production, and exports most production to numerous overseas buyers.
> 
> There's also a number of places that melt down either raw steel or scrap in electric or gas furnaces in order to produce various end products.




I'm glad they still exist, but the future looks grim



> Author
> 
> Diana Kelly
> 
> ...


----------



## Logique (14 February 2015)

GST goes to the states. How will that help the federal books. 

No GST on fresh food.


----------



## sydboy007 (14 February 2015)

Why not follow the Swiss and bring in broadly based wealth taxes.

The tax base for the wealth tax is net wealth, i.e. gross wealth reduced by the sum of the taxpayer's documented debt as well as personal allowances and social deductions that vary from canton to canton.

The table below shows the wealth tax due in the capital town of each canton. By way of an example, the annual tax for a net wealth of CHF 500,000 in the canton of ZÃ¼rich is around 0.12 percent. The maximum individual wealth taxes levied in all cantons vary between 0.14 (Canton of Nidwalden) and nearly 1 percent (Canton of Geneva).





There's plenty of options out there to make our tax system far far more efficient.  I'd like to see the Feds just cut back on grants to the states over say a decade, with savings directed to balancing the budget and eventually lowering income taxes when possible.

The states would then finally be forced into their own tax reform, whether it's via pushing for GST amendments or introducing broadly based land taxes.  Resolve the fiscal imbalances where by the states are able to raise the revenue requird to meet their social obligations.  Kill off the blame game between states and feds.

We have to kill off stamp duties and payroll tax, while drastically lowering corporate and income taxes.  Reduce the revenue by half from those sources and replace with taxes that are less costly to implement and harder to avoid or minimise.  That's why I like land taxes so much.  It's practically impossible to avoid and only needs to be on land zoned commercial or residential.

Cracking down on trusts used to income share should also be a priority.  that could net $1B a year in extra revenue.

Then we can start having a conversation along the lines proposed by Liberal Democrats Senator, David Leyonhjelm:



> …our taxes haven’t even covered each year’s government spending. Over the past 40 years, budget deficits have been the norm…If anything, I and my fellow baby boomers should pay the rest of Australia a lump sum when we retire, to cover the debt we are leaving…
> 
> And it’s not as though my taxes have been devoted to buying assets that will be in service for decades to come. Successive Commonwealth governments have been selling off these assets for much of my taxpaying career. Rather, my taxes have been devoted to providing services to the voters of the day, including many from which I’ve benefited…
> 
> Given the debt we will leave behind, baby boomers like me have a duty to make the asset test comprehensive. Those who own million dollar houses shouldn't rely on welfare when they can draw on their own wealth…




The “I’ve paid taxes all of my life” argument also doesn’t hold much weight, for reasons outlined above by Senator Leyonhjelm. As illustrated brilliantly by the Grattan Institute:

http://grattan.edu.au/wp-content/uploads/2014/12/820-wealth-of-generations3.pdf

_In the past, each generation took out more from the budget over its lifetime than it put in. This “generational bargain” was sustainable when incomes rose quickly – the norm for 70 years. However, government transfers from younger to older cohorts are now so large that future budgets may not be able to afford them as the population ages. Consequently, the generational bargain is at risk…_

The Grattan Institute also showed that older households have captured most of the growth in Australia’s wealth over the past decade, with households aged between 65 and 74 some $200,000 wealthier today than households of that age 8 years ago. Meanwhile, the wealth of households aged 25 to 34 has gone backwards.




It is blatantly unfair to expect workers – whose share of the population will fall as the population ages and the proportion of retirees rises – to keep shouldering more and more of the tax burden and Budget cuts, at the same time as tax concessions on superannuation and housing, as well as access to the Aged Pension, go largely untouched.


----------



## SirRumpole (14 February 2015)

> It is blatantly unfair to expect workers – whose share of the population will fall as the population ages and the proportion of retirees rises – to keep shouldering more and more of the tax burden and Budget cuts, at the same time as tax concessions on superannuation and housing, as well as access to the Aged Pension, go largely untouched




It's also blatantly unfair to expect taxpayers to pay for other people's children via the family tax benefits which were introduced in a mining boom and are no longer affordable.

The government could simply say that these benefits would no longer be available for children born after say 30/6/2017, saving the budget billions from then on. Nothing is taken away from people that they are already getting, and those planning children will have to ensure that they are in a financial position to do so.

That should be part of the "personal responsibility" mantra that the Libs keep harping on about.



> There's plenty of options out there to make our tax system far far more efficient. I'd like to see the Feds just cut back on grants to the states over say a decade, with savings directed to balancing the budget and eventually lowering income taxes when possible.




Or get rid of the States altogether. Federal takeover of public hospitals like Rudd proposed. Then turn States into administrative regions only without legislative powers.


----------



## Smurf1976 (14 February 2015)

So far as industry is concerned, something that is generally missed in discussion (everywhere) is that globalisation is not a new concept. It has been tried before, failed, and was followed by protectionism which lead to the establishment of most big industries, for example steel, car manufacturing, paper, chemicals, refineries and so on, in Australia in the first place.

We are now seeing what amounts to a currency war at the global level. That is the first stage of the failure of globalisation and an eventual return to protectionism. It will happen, the only question being the timing but the signs are there now that the pendulum has gone about as far as it's going to go in the free trade direction.

Once we get to that point, it matters little whether tax is applied at the point of production or at the point of sale, since with limited trade and protectionism it makes little difference in practice. But we're at the other extreme at the moment, and applying tax at the production end under present circumstances would bring a lot of pain economically so long as globalisation is still a going thing.

So far as the steel industry is concerned, I should have added to my previous post that there is also an iron pellet plant at Port Latta (Tas) which produces a bit over 2 million tonnes a year. The iron ore is sent from the mine (about 85km away) to the plant by pipeline - a world first when it was built but plenty of pipelines (globally) carry ores, coal etc these days.


----------



## SirRumpole (14 February 2015)

Smurf1976 said:


> So far as industry is concerned, something that is generally missed in discussion (everywhere) is that globalisation is not a new concept. It has been tried before, failed, and was followed by protectionism which lead to the establishment of most big industries, for example steel, car manufacturing, paper, chemicals, refineries and so on, in Australia in the first place.




Globalisation may be going on, but is there any sign of Europe lowering its tariff structure or the US reducing industry and agricultural subsidies ?


----------



## Julia (14 February 2015)

Syd mentioned the Grattan Institute above.  The following is full article from today's "Australian":  a bit long but worth a read.


> WEALTHY older people who warehouse their investments and properties in superannuation should be the subject of a government crackdown in the hunt for genuine, fair budget savings.
> 
> Grattan Institute chief executive John Daley has remade the case for a dramatic structural overhaul of retirement policy in light of a looming budget crisis, savings measures stalled in the Senate and an ageing population.
> 
> ...


----------



## Smurf1976 (14 February 2015)

SirRumpole said:


> Globalisation may be going on, but is there any sign of Europe lowering its tariff structure or the US reducing industry and agricultural subsidies ?




Thinking of every significant employer within the state which is engaged in actually producing something tangible (as distinct from simply warehousing, retailing etc), every single one of them ultimately competes against overseas producers of the same or similar goods and services.

Norske Skog, Nyrstar, Vodafone, Cascade, Boags, Incat, Impact, TEMCO, Bell Bay Aluminium, Grange, every mine and every farm. Even things like pie factories and the power industry to a large extent. They are all ultimately competing against overseas producers. The only ones who aren't are retailers of things not easily bought overseas, services such as car repairs, plumbers etc, the various activities of government and so on. But those who are actually making something physical, or serving a wider market outside the local area, are absolutely subject to competition.

Whilst I foresee the demise of globalisation at some future time, right now it's the only game in town so we need to play along. Taxation policy needs to bear this in mind - Australia is a high cost place to do business to start with, taxing production isn't going to help our situation. At some future time it might make sense, but not now


----------



## SirRumpole (14 February 2015)

Smurf1976 said:


> Whilst I foresee the demise of globalisation at some future time, right now it's the only game in town so we need to play along. Taxation policy needs to bear this in mind - Australia is a high cost place to do business to start with, taxing production isn't going to help our situation. At some future time it might make sense, but not now




In that case perhaps we should take into account the level of subsidies that our overseas competitors receive when determining such things as tariffs and import quotas. Tax imports and use the money to subsidise our own producers.

Australia does not have the resources that Japan, China, Europe and the US use to subsidise their products and trying to compete on a level playing field is impossible because there isn't one. So we keep flogging ourselves trying to be "globally competitive" when our trading partners are taking us for a ride despite the much vaunted "free" trade agreements. What is the end game of all this ? Perhaps Europe and the US will eventually go broke subsidising their industries. I doubt it as they will then just print more money. 

We are on a hiding to nothing whatever happens.


----------



## Smurf1976 (15 February 2015)

SirRumpole said:


> In that case perhaps we should take into account the level of subsidies that our overseas competitors receive when determining such things as tariffs and import quotas. Tax imports and use the money to subsidise our own producers.




Protectionism is out of fashion at the moment but I'm sure we'll see it again someday. Future generations will likely see another go at go at globalisation too since it's all cyclical.

But in the meantime, we're in a situation where governments of all persuasions expect Australian business to compete with the lowest common denominator overseas. As such, the last thing they need is to be paying a tax on all production.


----------



## Value Collector (16 February 2015)

sydboy007 said:


> Why not follow the Swiss and bring in broadly based wealth taxes.
> 
> The tax base for the wealth tax is net wealth, i.e. gross wealth reduced by the sum of the taxpayer's documented debt as well as personal allowances and social deductions that vary from canton to canton.
> 
> ...




That sort of tax seems silly, different peoples net worth have very different earnings profile.

I mean a farmer that owns a farm worth $1M, might not earn very much on that capital, and a lot of that earnings is the result of labour.

Where as another guy that owns $1M worth of computers, might have a website earning $1M a year.

It would be like charging company tax based on the book value of the company, obviously different industries earn different amounts on the capital invested in them, Woolworths earns 26% on its equity others struggle to 5%.

The best idea is just to tax the profits, as we do now,


----------



## SirRumpole (16 February 2015)

Value Collector said:


> The best idea is just to tax the profits, as we do now,




Yes, fine, as more companies are shifting profits offshore and avoiding tax.


----------



## Value Collector (16 February 2015)

SirRumpole said:


> Yes, fine, as more companies are shifting profits offshore and avoiding tax.




There is ways to reduce that, and they are far less complicated than your system of over taxation, and tariffs and subsidises etc


----------



## SirRumpole (16 February 2015)

Value Collector said:


> There is ways to reduce that, and they are far less complicated than your system of over taxation, and tariffs and subsidises etc




Please tell us what these measures are, and more importantly, pick up the phone to Joe Hockey and tell him, because he's bottled out on trying to reduce company tax avoidance.


----------



## sydboy007 (17 February 2015)

Value Collector said:


> That sort of tax seems silly, different peoples net worth have very different earnings profile.
> 
> I mean a farmer that owns a farm worth $1M, might not earn very much on that capital, and a lot of that earnings is the result of labour.
> 
> ...




Seems to work for the Swiss

They certainly have a more diversified economy than we have.

I think taxing wealth is in some ways the fairest way to tax.  Those who gain the most from the collaboration within an economy pay the most tax.  Also makes it harder to loophole your way like the rich in Australia to paying very low % rates of tax.


----------



## sydboy007 (17 February 2015)

Value Collector said:


> There is ways to reduce that, and they are far less complicated than your system of over taxation, and tariffs and subsidises etc




Might be true except for

* EU 59B euro on famr subsidies
* USA - seems to be in the $20-30B range
* China $261B last year and rising 10% this year

Then we have the protection of manufactured goods in most of the richer countries.

It does annoy me when I see the supermarket chains using cheap imports to displace local produce simply because foreign tax payers are pumping billions of $ to subsidise their farmers production.  I'd prefer some for of tariff equalisation that limits to nets out this subsidy.  Then if the imports are still cheaper I can accept that on the basis of true competition.


----------



## SirRumpole (17 February 2015)

Value Collector said:


> There is ways to reduce that, and they are far less complicated than your system of over taxation, and tariffs and subsidises etc




Hello, hello, calling VC, are you out there ???

Still waiting for your miraculous solution to foiling company tax avoidance and making the tax system fairer.


----------



## Value Collector (17 February 2015)

SirRumpole said:


> Please tell us what these measures are, and more importantly, pick up the phone to Joe Hockey and tell him, because he's bottled out on trying to reduce company tax avoidance.




Give me an example of a situation you wish to stop.


----------



## Value Collector (17 February 2015)

sydboy007 said:


> Also makes it harder to loophole your way like the rich in Australia to paying very low % rates of tax.




Not really, how would you go about valuing all the private business assets?

Companies would just depreciate assets to make there book value seem lower.

Also, would I end up getting massive tax bills just because my shares went up, even though they don't pay a dividend? That's not really fair, how would I pay it? And do I get a refund when them hares go down?


----------



## SirRumpole (17 February 2015)

Value Collector said:


> Give me an example of a situation you wish to stop.




I mentioned offshore profit shifting by companies and you said that there are measures that could be taken to stop this, so what are they ?


----------



## Value Collector (17 February 2015)

SirRumpole said:


> I mentioned offshore profit shifting by companies and you said that there are measures that could be taken to stop this, so what are they ?




And I said give me an example of the "offshore profit shifting" and I will tell you.


----------



## SirRumpole (17 February 2015)

Value Collector said:


> And I said give me an example of the "offshore profit shifting" and I will tell you.




http://www.smh.com.au/business/ato-chief-warns-on-profit-shifting-20130626-2oxlw.html


----------



## Value Collector (17 February 2015)

SirRumpole said:


> http://www.smh.com.au/business/ato-chief-warns-on-profit-shifting-20130626-2oxlw.html




If it can be shown that a local company is setting up an offshore agency simply to avoid tax, this could be shown to be tax avoidance and the company could be prosecuted accordingly. Just start testing some big name Aussie companies that are involved and hit them hard as a deterrent.

Even still though the companies revenues would still be generating tax dollars because their employees will be paying tax, they will be paying gst, land taxes, and spending dollars in other ways that generate taxes.

But yes, we could outlaw (I think they already are outlawed) schemes designed to avoid tax.

--------

I see nothing wrong with a company like apple using systems to raise the whole sale price that they supply their products to their Australian division to keep some of the profits offshore, Because the biggest chunk of the profits are being generated offshore.

When they take a bunch of materials and build a phone or an ipad, they are generating a lot of value, Having a structure that shifts that value to another entity, and then that entity supplies that ipad or iphone to their retail arm in Australia at a whole price rather than letting it flow through at the manufacture cost, does generate a lower profit for the retail arm, but that's ok because that retail arm wasn't responsible for the value generation in the first place.


----------



## SirRumpole (17 February 2015)

> When they take a bunch of materials and build a phone or an ipad, they are generating a lot of value, Having a structure that shifts that value to another entity, and then that entity supplies that ipad or iphone to their retail arm in Australia at a whole price rather than letting it flow through at the manufacture cost, does generate a lower profit for the retail arm, but that's ok because that retail arm wasn't responsible for the value generation in the first place.




That's fine for the company, but if we as a country are just buying stuff from overseas, how are we earning the money to pay for it ? The minerals boom won't last forever as we have recently found out, so what's the substitute ?


----------



## sydboy007 (17 February 2015)

Value Collector said:


> If it can be shown that a local company is setting up an offshore agency simply to avoid tax, this could be shown to be tax avoidance and the company could be prosecuted accordingly. Just start testing some big name Aussie companies that are involved and hit them hard as a deterrent.
> 
> Even still though the companies revenues would still be generating tax dollars because their employees will be paying tax, they will be paying gst, land taxes, and spending dollars in other ways that generate taxes.
> 
> ...




How does a local specialist IT firm compete when they're paying full tax within Australia?  Shouldn't there be at least some resemblance to paying a market rate for the various IP the likes of Apple and Google are charging?  How doe sa smallish company like STW communications compete against Google or Yahoo where they can sell similar advertising and not pay local taxes?

A good step would be to force companies to have far easier to understand accounts.  If even forensic accountants have trouble unearthing how the money is moving around within a company then there's something very wrong.  How can an auditor sign off on it?

Then we have the story of Telstra's foxtel loan

http://www.smh.com.au/business/medi...ans-to-foxtel-questioned-20150215-13f3nb.html

I still can't quite grasp how this isn't a clear artificial transaction for tax avoidance.

Glencore has done similar with providing loans to Australian subsidiaries at inflated interest rate margins, and I'm sick of the mining sector counting royalties as taxes to try and make it look like they're paying a lot of tax.  It's like an Airline treating staff as a tax, or a farmer treating the cost of seed as a tax.

I'm heartened today there's talk that super contributions might end up being taxed at marginal rates.  That's a step towards reducing the regressive nature of super taxation.  Super contribution concessions are forecast to cost the budget $22.3B by June 2018, a cost to the budget growing at roughly 7.8% a year, while the cost of concessionally taxing earnings within super funds will balloon to just shy of $27B by June 2018, a growth rate of 13.5% a year.  What other Govt programs have costs escalating like this?  We're talking about revenue sums that would pay for our current outlays on medicare AND defence AND unemployment benefits.  yes yes, the savings would reduce if you tax it more heavily, but the savings would still be much higher than anything the Govt has currently proposed, and definitely would pass the pub fair go sniff test.  

Wrap it up with a focus on the $20B in fees charged for the system with a target of halving them in 5 years.  Argue that these reductions will help to reduce the cost of the tax increase.  Force super funds to break out fees charged and present them as a $ figure, rather than hidden away from site as is currently the way.  Someone with a $100K balance sees a fee of $450 on their semi annual statement will hopefully start to question what they're getting for it.

Throw in some tightening up on CGT and NG, and while the budget wont be balanced, it will certainly give us the breathing space to stop the ratings agencies downgrading us and when that happens we'll then have drastic austerity measures forced upon us.


----------



## Value Collector (17 February 2015)

SirRumpole said:


> That's fine for the company, but if we as a country are just buying stuff from overseas, how are we earning the money to pay for it ? The minerals boom won't last forever as we have recently found out, so what's the substitute ?




that's up to us to find things to export over seas, Mining, tourism, food, media content, financial services, health care products whatever you can think of. the world is your oyster so to speak.

I am a glass half full kinda guy, I see a world of opportunity, and am actively investing in it.

I don't believe in mercantilism, I think the global economy is a great thing.


----------



## SirRumpole (17 February 2015)

Value Collector said:


> that's up to us to find things to export over seas, Mining, tourism, food, media content, financial services, health care products whatever you can think of. the world is your oyster so to speak.
> 
> I am a glass half full kinda guy, I see a world of opportunity, and am actively investing in it.
> 
> I don't believe in mercantilism, I think the global economy is a great thing.




Realistically, we are in a pool full of sharks that are a lot bigger than us. There may be a few niche markets out there, but nothing that is going to employ large numbers of people, and you have already promoted production going offshore, so what is there to sell ?

In the end, the only market we can depend on is our own. We should satisfy that first before we start thinking we can take on the big boys.


----------



## Value Collector (17 February 2015)

sydboy007 said:


> How does a local specialist IT firm compete when they're paying full tax within Australia?  Shouldn't there be at least some resemblance to paying a market rate for the various IP the likes of Apple and Google are charging? .




The company tax doesn't stop them competing, they compete all year, make a profit if they can, then then pay a tax on the profit.

What can make them less competitive is the GST, sales taxes etc, obviously a foreign company gets a 10% head start if the are not charging gst. because they have no presence in Australia.



> How doe sa smallish company like STW communications compete against Google or Yahoo where they can sell similar advertising and not pay local taxes?




it's only really the gst that is putting them behind, does google charge gst? If they do I can't see a tax based competitive advantage.



> I'm sick of the mining sector counting royalties as taxes to try and make it look like they're paying a lot of tax.  It's like an Airline treating staff as a tax, or a farmer treating the cost of seed as a tax.




Royalties on mining are a bit like a farmer having to buy water rights, it is really a tax. I don't see miners complaining about royalties, they accept them, it's just when the media of politicians try to make out that mining companies are making unfair amounts of money that they point out that huge amounts of revenues end up in government coffers already. 


The government collects enough tax already, they just have to ensure people aren't avoiding the tax already in place and then stop wasting it.


----------



## Value Collector (17 February 2015)

SirRumpole said:


> There may be a few niche markets out there, but nothing that is going to employ large numbers of people.




We have a pretty low unemployment rate, and a global "niche" market is a massive thing for a country our size.

But we don't need to focus on big things, we can get thousands of niche businesses, serving the globe.



> and you have already promoted production going offshore, so what is there to sell ?




Sorry, where did I say that?

I don't have a problem with producing things off shore, but I haven't "promoted" it.



> In the end, the only market we can depend on is our own. We should satisfy that first before we start thinking we can take on the big boys




Serving ourselves involves taking on the big boys? it would mean we have to produce a better phone than the Iphone, better TVs than samsung, better game consoles than sony, better movies than Hollywood etc.

We should import things it makes sense to import, and focus on our strengths.

and also encourage both corporations and Individuals to invest overseas, there is nothing stopping Aussies buying shares in Apple, Google, Coca cola etc. 

I for one bought a chunk of The Walt Disney company, that's going to bring revenue back to Australia.


----------



## Tisme (17 February 2015)

sydboy007 said:


> Seems to work for the Swiss
> 
> They certainly have a more diversified economy than we have.




I found everything in Swissland () very very expensive...I wonder if it's the taxation treatment doing that?


----------



## SirRumpole (17 February 2015)

Value Collector said:


> We have a pretty low unemployment rate, and a global "niche" market is a massive thing for a country our size.
> 
> But we don't need to focus on big things, we can get thousands of niche businesses, serving the globe.




Once the "big boys" realise that we have corned a niche market they will use their muscle to move in and take over. 

This has happened over and over again. The US uses it's bigger market as leverage to get more of its beef into Japan, squeezing us out. As I said , the only market we can depend on is our own.

Globalisation is a con.


----------



## Value Collector (17 February 2015)

SirRumpole said:


> Once the "big boys" realise that we have corned a niche market they will use their muscle to move in and take over.
> 
> This has happened over and over again. The US uses it's bigger market as leverage to get more of its beef into Japan, squeezing us out. As I said , the only market we can depend on is our own.
> 
> Globalisation is a con.




Many Australian businesses are the big boys, CSL, Westfield, BHP and Rio dominate their sectors.

But you can't move the Great Barrier Reef or the Gold Coast to china tourism is big business to australia, food production, especcially high end stuff make great exports,.

If we can't make a profitable economy from the big land of ours we are mugs, but sitting around being pessimistic won't improve either the economy or your own net worth, three is plenty of opportunity to make money. To me the glass is more than half full.


----------



## drsmith (18 February 2015)

Some numbers,



> The new research, conducted by KPMG, estimates that raising the GST to 15 per cent and applying it to all goods and services would raise an extra $42.9 billion in the first year.
> 
> Other scenarios, such as maintaining some exemptions on a 15 per cent rate, would raise between $26 to $36.8 billion.
> 
> Leaving the GST at 10 per cent but extending it to everything would raise an estimated $12.1 billion.




http://www.abc.net.au/news/2015-02-18/gst-increase-would-leave-nation-better-off-cpa/6130664


----------



## SirRumpole (18 February 2015)

drsmith said:


> Some numbers,
> 
> 
> 
> http://www.abc.net.au/news/2015-02-18/gst-increase-would-leave-nation-better-off-cpa/6130664




As the GST goes to the States, how will this help the Federal Budget ?

The Feds would have to cut grants to the States and that would result in a bitter fight.


----------



## bellenuit (18 February 2015)

drsmith said:


> Some numbers,
> 
> 
> 
> http://www.abc.net.au/news/2015-02-18/gst-increase-would-leave-nation-better-off-cpa/6130664




I can never see WA agreeing to a GST increase unless their is a dramatic improvement for them in the distribution ratios. It would be very unpalatable for the WA government to consent to a GST increase to 15% which would perhaps increase the take FROM WA consumers by $3B - $4B, if only $1B or so of that comes back to the state after the federal distribution.


----------



## drsmith (18 February 2015)

bellenuit said:


> I can never see WA agreeing to a GST increase unless their is a dramatic improvement for them in the distribution ratios. It would be very unpalatable for the WA government to consent to a GST increase to 15% which would perhaps increase the take FROM WA consumers by $3B - $4B, if only $1B or so of that comes back to the state after the federal distribution.



This problem is largely one of timing. In short, WA's GST share does not respond quickly enough to variations in mining royalty income.


----------



## drsmith (18 February 2015)

SirRumpole said:


> As the GST goes to the States, how will this help the Federal Budget ?
> 
> The Feds would have to cut grants to the States and that would result in a bitter fight.




https://www.aussiestockforums.com/forums/showthread.php?t=29542&p=860533&viewfull=1#post860533

https://www.aussiestockforums.com/f...t=29542&page=2&p=860605&viewfull=1#post860605

In terms of achieving the above, it's the base that should be broadened as this also simplifies the tax.

https://www.aussiestockforums.com/f...t=29542&page=2&p=860626&viewfull=1#post860626


----------



## pixel (18 February 2015)

drsmith said:


> This problem is largely one of timing. In short, WA's GST share does not respond quickly enough to variations in mining royalty income.




The two are also affecting different groups differently, so it's hard to compare, let alone weigh on against the other. If the GST base were broadened to include fresh food, school and medical services, the effect would put a disproportionate burden on population groups that can least afford it. Lower mining royalties don't help low-income families.


----------



## drsmith (18 February 2015)

pixel said:


> The two are also affecting different groups differently, so it's hard to compare, let alone weigh on against the other.* If the GST base were broadened to include fresh food, school and medical services, the effect would put a disproportionate burden on population groups that can least afford it.* Lower mining royalties don't help low-income families.




https://www.aussiestockforums.com/f...t=29542&page=2&p=860610&viewfull=1#post860610

My bolds.


----------



## drsmith (24 February 2015)

An interesting piece today on the administrative burden of the GST,



> Mr Reed called on the Australian government to make a simple and effective reform of the GST by abolishing the requirement to provide additional information on GST-free transactions.
> 
> “We need to simplify the GST so that small business operators need only determine if a transaction is one where GST applies or if it is GST-free.”
> 
> ...



The above reads like a worthwhile reform in itself. 

How much more time though could be saved by broadening the base of the GST ?


----------



## tech/a (24 February 2015)

Western Government is ridiculously wasteful.

How do you thing CBA WOW WSF BHP would fare if every 4 yrs 
the management team from the top down was replaced by
another team who knew little about what you do and less
about how to run day to day business.

Hopelessly!!!

They are continuously in debt making stupid decisions 
Totally un qualified to run their business and supplied 
with a 'You can trade while insolvent' free card.

You and I would have to close up!

They want to raise GST---


----------



## sydboy007 (25 February 2015)

tech/a said:


> Western Government is ridiculously wasteful.
> 
> How do you thing CBA WOW WSF BHP would fare if every 4 yrs
> the management team from the top down was replaced by
> ...




management at bhp hasn't been crash hot. Billions in shareholder wealth wiped out since 2000. Rio even worse

Woolworths has royally stuffed up the masters rollout. 

Comm bank let the financial planners run riot for years. 

Not that I have much respect for the last few governments we've had, but the private sector in Australia is no Paragon of efficiency either.


----------



## drsmith (13 March 2015)

On matters economics, Greece and a relatively small cashflow problem,



> GREECE’S government has confirmed that it may raid the country’s pensions and social security system to raise money to meet its huge debt repayments.
> 
> With Athens having to find 6 billion euros ($6.4 billion) in the next two weeks alone to pay its creditors, and its bailout frozen, the finance ministry said it is to ask parliament to allow it to raise money from the reserves of state bodies.
> 
> ...




http://www.theaustralian.com.au/bus...-plug-debt-bills/story-e6frg926-1227260931577


----------



## Logique (13 March 2015)

Painful though it may be, an increase to 12.5% GST is probably politically saleable - by a good political salesperson that is. Take it to the next election.

Of all the measures being bandied about, it's at least fair (at the point of sale anyway, perhaps less so when distributed to the States), and ensures that the big end of town pays their share. Streamline the admin to save costs.

But broadening of the base is unlikely to be saleable, and imho, all those years ago Meg Lees and the Dems probably got it right.


----------



## sptrawler (13 March 2015)

drsmith said:


> On matters economics, Greece and a relatively small cashflow problem,
> 
> 
> 
> http://www.theaustralian.com.au/bus...-plug-debt-bills/story-e6frg926-1227260931577




On the European subject, I never realised Germany has only recently introduced a minimum wage 8.50 euros, that's about  Aus $11.50.
We wonder how our low income earners manage.

https://au.news.yahoo.com/thewest/o...oyers-get-creative-to-skirt-new-minimum-wage/


----------



## noco (13 March 2015)

Logique said:


> Painful though it may be, an increase to 12.5% GST is probably politically saleable - by a good political salesperson that is. Take it to the next election.
> 
> Of all the measures being bandied about, it's at least fair (at the point of sale anyway, perhaps less so when distributed to the States), and ensures that the big end of town pays their share. Streamline the admin to save costs.
> 
> But broadening of the base is unlikely to be saleable, and imho, all those years ago Meg Lees and the Dems probably got it right.




Logique, I believe an extra 2.5 % would only bring in approx. $12 billion.....Sooner or later all the states will be screaming for an increase including the Labor states....15 % would more likely to be...New Zealand are on 15 % GST


----------



## Smurf1976 (13 March 2015)

For those too young to remember, 15% was the rate proposed when the GST idea was first seriously debated circa 1993.


----------



## sptrawler (13 March 2015)

Smurf1976 said:


> For those too young to remember, 15% was the rate proposed when the GST idea was first seriously debated circa 1993.




Absolutely, also from memory, a GP co payment was recommended, when medicare was introduced.


----------



## drsmith (13 March 2015)

Broadening the base remains the best economic option and is saleable with the right compensation through other areas of tax transfer.

Raising the GST in itself is just a tax increase and not tax reform.


----------



## drsmith (30 March 2015)

Some broad numbers,



> Australia raises $56 billion from the GST. If it boosted the rate to 15 per cent it could raise $80 billion.
> 
> The department is also worried about the growing importance of spending on items not subject to the GST such as health and education and goods sold online. It says the proportion of sales covered by the GST has slipped from 56 to 47 per cent in the past 10 years.




If the GST was broadened to all sales without changing the rate, it would raise $119bn on those numbers.

http://www.smh.com.au/federal-polit...more-gst-less-income-tax-20150329-1maeco.html

The ABC also has a piece on the above discussion paper including the current complexities of GST on pizza rolls,



> The ATO has advised that determining whether a pizza roll is taxable requires consideration of the depth of any filling or topping, the recipe for the dough and whether the roll can be cut, have additional filling added or is expected to be served as is.




http://www.abc.net.au/news/2015-03-30/government-paper-questions-gst-rates-exemptions/6357110


----------



## noco (30 March 2015)

drsmith said:


> Some broad numbers,
> 
> 
> 
> ...




Doc, I would be delighted  to view the Treasury models requested by the Labor Party......Not likely though as Labor would keep that a deep dark secret...Labor tried to keep it a secret that they had even considered any alterations to the GST.


----------



## sptrawler (30 March 2015)

drsmith said:


> Some broad numbers,
> 
> 
> 
> ...




Well Chris Bowen on 7.30 said there is no way Labor will touch it, the gst is set in stone.

Sounds like a Tony Abbott, bite you in the ar$e statement to me. 
Isn't it all so predictable, " Chris you said on my t.v show blah, blah, blah" . Makes me sick the predictabilty of it.


----------



## noco (31 March 2015)

sptrawler said:


> Well Chris Bowen on 7.30 said there is no way Labor will touch it, the gst is set in stone.
> 
> Sounds like a Tony Abbott, bite you in the ar$e statement to me.
> Isn't it all so predictable, " Chris you said on my t.v show blah, blah, blah" . Makes me sick the predictabilty of it.




I heard that an increase in the GST to 15% would bring in an extra $80 billion, so the argument of how it will affect aged pensioners could be compensated with a percentage increase......Would you say $1billion could be used for the compensation of the extra GST that pensioners would have to pay.

One way of taking from those who can afford it and giving to those who cannot.

Whilst all the states and territories and the federal government have to agree to any change in the GST, I believe it will come to a stage where even the Labor states, who are being starved of money, will eventually  have to come to the party.

Why did the previous Labor government do some modelling of the GST if they were not thinking of some  changes.....There seems to be some hypocrisy here.


----------



## Hodgie (31 March 2015)

noco said:


> I heard that an increase in the GST to 15% would bring in an extra $80 billion




They estimated that if they raised the GST to 15% it would bring in a total of $80 Billion. Which is a $24 Billion increase from previous figures of $56 Billion.


----------



## noco (31 March 2015)

Hodgie said:


> They estimated that if they raised the GST to 15% it would bring in a total of $80 Billion. Which is a $24 Billion increase from previous figures of $56 Billion.




Yes...correction...you are right, but nevertheless there is still room there to compensate  the less well off.


----------



## Craton (31 March 2015)

My bet is that GST will broaden, rise or both.
Seems to be the most simplest and quickest way to raise govt. revenue.

Bowen's statement is the exact opposite of Labors intention. He's no a very good liar...


----------



## Logique (31 March 2015)

GST increase has a certain inevitability if the Coalition is returned next time, they might even run on it.

Ring-fencing fresh food is probably the best compensation measure - since it's not just pensioners that will suffer, what about all those people on basic wage (or less), and mightn't currently be required to pay tax.


----------



## Craton (31 March 2015)

Logique said:


> GST increase has a certain inevitability if the Coalition is returned next time, they might even run on it.
> 
> Ring-fencing fresh food is probably the best compensation measure - since it's not just pensioners that will suffer, what about all those people on basic wage (or less), and mightn't currently be required to pay tax.




I understand the fresh food argument but the fact is that food is a good and a service is required to provide if for consumption.
I also understand that the poorest will suffer (don't they always?) so why not use an "exception card"?
Pensioners could use their pension card for example. Yes, I understand that this can lead to misuse and abuse but with biometrics or simple photo ID, this can be negated.

Oh, and no I'm not for raising the GST but I'm also a realist.


----------



## Knobby22 (31 March 2015)

We don't need to raise the GST. Where it is higher in Europe the blackmarket thrives. look at Greece and Spain.
Possibly it could be widened slightly.

The additional money could be easily obtained through getting rid of some of the tax lurks to do with Super and property which everyone from David Murray down to people on this site have mentioned. 

There could be a modification of the GST to target multinationals who are avoiding income tax in this country.
It could be that if you are a company that pays less than 10% tax due to tax arrangements then you would be directly liable for GST. I am sure some policy wonk could work out a good method.


----------



## drsmith (31 March 2015)

Rising the GST rate to 15% would raise $24bn according to the Fairfax numbers above but it remains the case that doing this does nothing for simplifying the tax nor addressing its diminishing base as a proportion of sales which impacts its long term growth as a proportion of the economy. The latter in particular will see us constantly coming back to review the rate.

Broadening the base however will raise $63bn on those same numbers, simplify the tax and better maintain it as a proportion of the economy. This will reduce the future need to review the rate. Whether we change the base or rate, changes elsewhere in tax/transfer will still be argued to address its regressive nature. Increasing the rate is therefore not fundamentally advantageous over broadening the base on this specific point with the only distinction being the extent of change required elsewhere in tax transfer. 

It remains the case that increasing the rate is just a tax increase and not tax reform.


----------



## Knobby22 (31 March 2015)

Good points. Also note that the figures show that raising the rate by 50% does not result in a 50% increase in revenue. Obviously due to the expectation of increased tax avoidance.


----------



## bellenuit (31 March 2015)

Knobby22 said:


> Good points. Also note that the figures show that raising the rate by 50% does not result in a 50% increase in revenue. Obviously due to the expectation of increased tax avoidance.




How do you avoid GST?  I thought one of the main benefits of GST vs income tax is that the black economy can avoid the latter, but not GST.

Could the non corresponding increase in revenue be simply because people will buy less when prices rise due to increased GST?


----------



## Knobby22 (31 March 2015)

bellenuit said:


> How do you avoid GST?  I thought one of the main benefits of GST vs income tax is that the black economy can avoid the latter, but not GST.
> 
> Could the non corresponding increase in revenue be simply because people will buy less when prices rise due to increased GST?




You know those businesses that will only accept cash? Classic example.
if you use a tradesperson, they might let you pay part of it in cash and give you some of the GST money.
If the rate rises there will be more incentive to do so.


----------



## noco (1 April 2015)

Some interesting facts of GST/VAT around the world which ranges from 5% to 27%.


http://en.wikipedia.org/wiki/Value-added_tax


----------



## drsmith (14 April 2015)

SA premier Jay Weatherill would prefer to bring back state taxes such as financial institutions duty in preference to changing the GST. 

http://www.abc.net.au/news/2015-04-14/gst-rate-jay-weatherill-state-taxes/6390696?section=sa

No doubt he's been inspired by the federal government plans for their own deposits tax.


----------



## drsmith (20 July 2015)

Tax talk seems to have started up again ahead of this week's state/federal leaders retreat. 

The early signs are not good as the states are simply lining up to increase the overall tax take without so much as a sniff on reform.

NSW premier Mike Baird wants to raise the GST to 15% without broadening the base and SA Premier Jay Wetherill's alternative is to raise income taxes through an increase in the Medicare levy. Both are nothing more than tax increases along the respective party lines of regressivity and progressivity.

It can only go uphill from here, hopefully.


----------



## pixel (20 July 2015)

drsmith said:


> Tax talk seems to have started up again ahead of this week's state/federal leaders retreat.
> 
> The early signs are not good as the states are simply lining up to increase the overall tax take without so much as a sniff on reform.
> 
> ...




Yeah: Hit the lowest-paid workers and Pensioners hardest! There's so many of them, yet they can't afford to lobby for a fair go. Our Politicians are a disgrace!


----------



## luutzu (20 July 2015)

pixel said:


> Yeah: Hit the lowest-paid workers and Pensioners hardest! There's so many of them, yet they can't afford to lobby for a fair go. Our Politicians are a disgrace!




Nothing stimulate demand more than a tax on consumption. It also help you get re-elected too.


----------



## Tisme (20 July 2015)

Why would it cost $2bn to implement GST on overseas purchases? Are they going to make a whole new Ebay tax or something? 

The value for customs is always peppercorn or "used" anyway ..... hmm maybe Australia Post could profit from the move by opening the parcels.


----------



## noco (20 July 2015)

New Zealand are thriving on  15 % GST and they in the black thanks to a conservative government.


----------



## Macquack (20 July 2015)

noco said:


> New Zealand are thriving on  15 % GST and they in the black thanks to a conservative government.




I would have thought you would be a proponent of small government, as in lower taxes. 

Lower government expenditure and lower taxes?


----------



## sptrawler (20 July 2015)

It is probably the easiest, across the board tax increase, to sell.


----------



## Macquack (20 July 2015)

sptrawler said:


> It is probably the *easiest, across the board tax increase, to sell*.




Not to me it is not.

Apart from the additional cost on the consumption side, as a sole trader, the GST is an effective income tax. Sptrawler, are you retired so this side of the equation does not effect you?


----------



## SirRumpole (20 July 2015)

sptrawler said:


> It is probably the easiest, across the board tax increase, to sell.




Oh yeah, increasing the price of virtually everything for everyone really goes well with the consumers.

Selling a mining tax, or reduction of negative gearing concessions would be a lot easier , but the dodo's in government are governing for their mates not the country.


----------



## Smurf1976 (20 July 2015)

sptrawler said:


> It is probably the easiest, across the board tax increase, to sell.




From a purely political perspective I think that abolishing, or at least reducing to match actual road funding, petrol tax along with any increase in GST would increase popularity of the move. 

Petrol excise often comes up as something people don't like, and if you exclude the various "sin" taxes (alcohol, cigarettes etc) then petrol is one of the very few things where the present tax rate is far higher than the rate of GST applied. At present, the overall tax on petrol is close to a third of the retail price.

I'm not arguing that it is or isn't good policy, just thinking in terms of something that would gain support of the masses and petrol immediately comes to mind there.


----------



## noco (20 July 2015)

SirRumpole said:


> Oh yeah, increasing the price of virtually everything for everyone really goes well with the consumers.
> 
> Selling a mining tax, or reduction of negative gearing concessions would be a lot easier , but the dodo's in government are governing for their mates not the country.




You cannot make the poor richer by making the rich poorer......That is what socialism is all about.


----------



## Macquack (20 July 2015)

noco said:


> You cannot make the poor richer by making the rich poorer......That is what socialism is all about.




You have got it all wrong.

Yes, you can make the poor richer by making the rich poorer.

And, No, that is not what socialism is all about.

Noco, you continue to frustrate and bore me.

Tell me you genius solution for public roads will ya?

Or don't you leave your "private" estate?


----------



## luutzu (20 July 2015)

SirRumpole said:


> Oh yeah, increasing the price of virtually everything for everyone really goes well with the consumers.
> 
> Selling a mining tax, or reduction of negative gearing concessions would be a lot easier , but the dodo's in government are governing for their mates not the country.




That's what mates are for


----------



## luutzu (20 July 2015)

noco said:


> You cannot make the poor richer by making the rich poorer......That is what socialism is all about.




Turns out you can't make the poor richer by making the rich richer either.

So what to do? 

Ah well, just make the rich richer and they might buy a few street art or make some large tax-deductible donation to some shelter or something.


----------



## sptrawler (20 July 2015)

Macquack said:


> Not to me it is not.
> 
> Apart from the additional cost on the consumption side, as a sole trader, the GST is an effective income tax. Sptrawler, are you retired so this side of the equation does not effect you?




I am retired, and on a fixed income, from whatever my investments make. Therefore an increase in GST would have a marked effect on my lifestyle and disposable income.

If you are a sole trader you must be making money, or you are in the wrong business. If the goods or services you provide are required, an increase of 5%, applies to all your competitors, so the net cost to you should be negligible. 

The reason I said it made sense, was it is easily applied and would put an immediate brake on the spiralling deficit. It could be implemented immediately and then be reviewed, with the overall review of the tax base.

Pandering to all and sundry, just allows the enormity of the problem, to compound. 

Nobody seems to worry about that.


----------



## sptrawler (20 July 2015)

SirRumpole said:


> Oh yeah, increasing the price of virtually everything for everyone really goes well with the consumers.




That's going to happen anyway, just a drop in the value of the Aus$ will do that.

At least with the gst, everyone pays it, doesn't matter who you are. 
If you buy a 200 series Land Cruiser for $120,000 you pay $18,000, if you buy a Mitsubishi Mirage, you pay $1,500.
Currently the difference is $12,000 as opposed to $1,000.




SirRumpole said:


> Selling a mining tax, or reduction of negative gearing concessions would be a lot easier , but the dodo's in government are governing for their mates not the country.




The mining tax was dumb, it was focused at a sector of the economy that had high risk, high upfront costs.
The immaturity of the tax is highlighted right now, who would invest in the mining sector? If there was a tax sitting there to smack you if they struck it rich.
What is different between a mining super profits tax, or a banking super profits tax, or a high tech super profits tax? Why single out mining, if it is regarding the removal of a non renewable resource, it should have focused on tonnage not profits.IMO

With negative gearing, I don't agree with it, however it would be scary if a change to it caused a collapse in the building sector. It will happen, but it won't happen while building is propping up the economy.IMO

It would be nice if all the required changes could be carried out, at a definitive point in time, but that doesn't happen.
A huge shift of our tax base will be required, IMO it will be painfull, but it will happen whether people like it or not.
The broader you spread the load, the less it effects those at the bottom. The GST does that.IMO many other taxes need adjusting and implementing, but gst is the easiest.


----------



## luutzu (20 July 2015)

sptrawler said:


> That's going to happen anyway, just a drop in the value of the Aus$ will do that.
> 
> At least with the gst, everyone pays it, doesn't matter who you are.
> If you buy a 200 series Land Cruiser for $120,000 you pay $18,000, if you buy a Mitsubishi Mirage, you pay $1,500.
> ...




Any tax on consumption will always disadvantage the poor and average people more than the rich. 

It might seem like a fair tax since it's across the board, but the poor will lose out and even the gov't admit that with all the talk of those earning less than $100K will actually benefit through rebates or whatever.



Say you have two family, one average and one earning a few times above that.

All else being equal, they both spend similar amount on goods and services as necessity. But the average or poor family will have very little disposal income after all necessity while the richer family will likely have a lot more savings, and with those savings they invest or go overseas and spend.

So already you are  increasing the tax on a large portion of the poorer family's income while the rich and richer's proportional share of the burden isn't... proportional.

Fairness aside, it's poor economic policy because a tax on consumption will mean less consumption, mean less demand, less jobs... which leads back to loss jobs and still less demand.


If the gov't is concern about economic decay and revenue issue, invest more. Failing that, stimulate demand from the bottom.

If class warfare is to take place, take it to the rich. They can better afford it, and what's more, it will lead to less speculation in financial assets and with increase demand they might actually see the economics in investing in real jobs and less speculation in global financial assets.


----------



## sptrawler (20 July 2015)

luutzu said:


> Any tax on consumption will always disadvantage the poor and average people more than the rich.
> 
> It might seem like a fair tax since it's across the board, but the poor will lose out and even the gov't admit that with all the talk of those earning less than $100K will actually benefit through rebates or whatever.
> 
> ...




That is all a bit misleading,IMO

Those who have plenty of money, won't reduce their consumption.

Those on low incomes can be compensated and the tax doesn't apply to basic food items. Unfortunately it does apply to junk food, cigarettes and alcohol. 

Also, to say the poor and rich spend similar amounts on goods and services, is ridiculous.IMO

I have well off friends and poor friends, I know who is spending the most on goods and services.

The other way, is as you say "take it to the rich". When I started work, the top tax rate was 60%, that cut in at about $60,000 from memory.

Allowing for inflation, let's reintroduce it at about $250,000, sounds good to me.
Or maybe, make the first $40,000 tax free then a flat 35% above that.lol That would look after the poor.
You just have to work out what makes you look good to the poor, without affecting you.lol


----------



## sptrawler (20 July 2015)

noco said:


> You cannot make the poor richer by making the rich poorer......That is what socialism is all about.




And when everyone ends up poor, what do you do then?

Like the old saying goes" you can't bring someone up to your level, who doesn't want to change, you end up at their level".


----------



## luutzu (21 July 2015)

sptrawler said:


> That is all a bit misleading,IMO
> 
> Those who have plenty of money, won't reduce their consumption.
> 
> ...




Rebates and compensation can, and will, be remove. You can bet the tax will stick around though.

I know poor people and some of them spend as much as the rich 

I know, I was simplifying for illustrative purposes. Key word is proportional.

Let say I'm rich (nice to imagine that way sometime) and say you're the average Aussie battler earning $50K a year against my $200k.

The rent, power, phone, food and other bare necessity of life costs your family $40k, leaving you $10 in savings.

My imaginary self have more so my necessities costs $80k, leaving me $120k. 

In proportion to my income, I am already taxed less than you. So we're not paying the same share of tax even though I spent twice as you. And with the $120, I could invest in stocks or bonds and will only be taxed at half if i ever realised  capital gain.. get myself a good accountant and good thing might also happen with that too.

Your $10k at the bank will earn some interest and taxed at your income rate; if there's emergency and you need to spend it it'll be taxed at GST too.


If, say, capital gains tax are remove and income from investments are the same as income... it's fairer and the poor won't be hit so hard and bear most of the burden.

----

Have probably said it before but let's repeat... 

In the US after WW2 until at least the 1970s... tax on corporation and the millionaires were in the 90s; wages were fair (high?) and they enjoyed the greatest period of economic growth and equality ever in the history of the world - this even though there's segregation and all that.

Reduction in corporate tax and on high income earners haven't made it better since 1980s.

I'm no accountant but the little I do know here and there, you have got to admire how the game is being played.


----------



## sptrawler (21 July 2015)

luutzu said:


> Rebates and compensation can, and will, be remove. You can bet the tax will stick around though.
> 
> I know poor people and some of them spend as much as the rich
> 
> ...




I suppose the underlying problem, that you aren't mentioning is, if you are on $50k/ annum you aren't paying any tax anyway, when you include concessions. 

Also the imaginary self on $200k will be paying probably approx $60k tax. So he really is on $140k, also has to pay $2k medicare and probably $6k private health. No concessions on school fees or anything else.

What you really want is the person on $200k to pay $100k in tax, and the person on $50k to get an extra $50k in handouts.

Why wouldn't the person with the hassle of a $200k/annum job, just chuck it in and drive the council side loader, for $70k/annum?

You can strip out incentive, but then everyone ends at the lowest common denominator.

I know the ceo's of companies are on obscene money, and it should be stopped.

But plebs who work up to $150-200k/ annum jobs, won't be getting the money for nothing.IMO


----------



## sptrawler (21 July 2015)

Sorry Iuutzu, I'm wrong.

Your imaginary self on $200,000/ year doesn't pay $60,000, he pays $67,547 including medicare then ad $6,000 for private health.

Let's just round it off at $70,000, so instead of $200,000, you actually have $130,000.

Doesn't sound any ware near as romantic, as your example.

So, how much more do you want to take of him, and give to the person on $50k who isn't paying any tax?


----------



## qldfrog (21 July 2015)

what is missing is that if you are rich, yopu do not pay income tax;
so if on 200 a year your accountant come and help, and you invest in neg geared property then get a nice refund;
GST is on any real computation the fairer tax (but not if you actually believe taxation is working: the fact is it is not)
I am also in the camp where i do not work if taxed above 50%; I can afford it so i do it; with a great life balance and a poorer ATO as a result.The more I look, the more such people i know;
even at current rates, taxation on work income is disproportionally high in this country, and high rates start way too low
Go for GSt increase anyday, at least i wioll not subsidised a RE bubble and the killing of innovation


----------



## Tisme (21 July 2015)

I don't really know what the rich have to do with the GST, it was always a way to redistribute excess middle class wealth. The 2% top money makers increase assets and live off company expenditures which is generally shareholder money and attracts a much higher FBT income to the govt than income tax would.

Simplistic assumptions that you can make the wealthy class poor doesn't even hold up in communist countries, which seem to have vast numbers of oligarchs.

It's been posted here by others that there doesn't seem to be a budget emergency anymore and the current govt hasn't been slow in doubling the net debt after slamming the previous govt. 

The "infrastructure" reign of Tony Abbott is a fizzog with no great halo projects, just cynical promises of funding that requires the states (i.e. us) to go further into debt or suffer the wedge politics the promises are designed to create.

Increasing the GST will only create incipient spend and debt. It's been a party since Bob Hawke reworked the economy and there is a generation of mini entrepreneurs who don't know the meaning of hand to mouth, let alone zero personal debt, so if the unlikely does happen and 15% GST reduces net public debt, personal debt will increase to pay for sustained lifestyles.


----------



## Logique (21 July 2015)

Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.

Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.

This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.


----------



## Junior (21 July 2015)

Logique said:


> Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.
> 
> Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.
> 
> This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.




I agree with the above.

GST should not be a priority above reviewing Super, stamp duty, NG, Income and Corporate tax rates/structures.

As has been discussed previously, the cost of super tax concessions and NG has been going through the roof, while the effect of bracket creep on incomes is starting to hurt.  We have a relatively high corporate tax rate too.  All this while those over 65 can stuff millions and millions in super and pay no income tax at all!

GST should not be high on the list of priorities.


----------



## sptrawler (21 July 2015)

Junior said:


> I agree with the above.
> 
> GST should not be a priority above reviewing Super, stamp duty, NG, Income and Corporate tax rates/structures.
> 
> ...




I agree with you junior, the only problem is, all the real tax reform appears to have been put in the too hard basket.

The GST is an easy hit, that isn't percieved as favouring any sector, whether that is fact or not doesn't matter. 
It is the perception that matters, when your motivation is re election and keeping your nose in the trough.


----------



## overhang (21 July 2015)

sptrawler said:


> Sorry Iuutzu, I'm wrong.
> 
> Your imaginary self on $200,000/ year doesn't pay $60,000, he pays $67,547 including medicare then ad $6,000 for private health.
> 
> ...




Where are you getting this idea that someone on 50k receives concessions?  If we're talking about an average person here then surely this person has no dependents and thus I believe not eligible for any handouts.  I just ran the calculator and someone on 50k a year pays $8,547 in tax, so I'd hardly call that not paying any tax. 

Iuutzu is spot on that when you compare the two they would be paying quite similar amounts on unavoidable services, the richer person may have a larger house but both need heating, still need water, still need a phone, still need car rego and the list goes on.  Iuutzu also raises the good point that the rich person is far more likely to travel abroad anyway and thus contribute little consumption tax to the Australian economy for that big budgeted holiday while the poor person can't afford to leave. 

You can't make the poor richer by making the rich poor but you shouldn't make the poor poorer either through regressive consumption taxes.  I don't trust the compensation for low income earners either, it would be good short term but the government would slowly eat away at it by lowering the concession rates against CPI.


----------



## Junior (21 July 2015)

I have a problem with expanding the tax to cover fresh food.  We have an obesity epidemic in this country.  As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.

Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer.  Not worth the hassle.

A rate of 15% is too much, too soon at a time where consumer confidence is already low.  Maybe widen the net a little bit and increase to 12%.  Extra revenue must go towards health and education.


----------



## nioka (21 July 2015)

Supposedly, Australia is a resource rich country. Other resource rich countries use that as the main source of revenue. Simple low cost way of getting revenue as opposed to a GST which is a burden for small business with the work involved in the record keeping etc. Resource tax increases, that's what is needed.

Of course the mining giants would use their might and influence to stop this being implemented. A smaller public service would result so the boffins behind government would be against it as well. it would take a lot of backbone for a government to get this enforced and operative. Is there such a thing?


----------



## overhang (21 July 2015)

Junior said:


> I have a problem with expanding the tax to cover fresh food.  We have an obesity epidemic in this country.  As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.
> 
> Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer.  Not worth the hassle.
> 
> A rate of 15% is too much, too soon at a time where consumer confidence is already low.  Maybe widen the net a little bit and increase to 12%.  Extra revenue must go towards health and education.




I support a junk food tax, is is quite expensive to eat healthy as opposed to a takeaway meal or processed food from the supermarket.  A junk food tax could be administered by taxing any food that has greater than X% of calories derived from fats.  We should never broaden GST to include fresh food.


----------



## SirRumpole (21 July 2015)

Logique said:


> Increasing the GST seems like the easy way out to me. What about some structural reform, like making the international conglomerates pay their fair share of tax. What about reining in all the middle class welfare. Or politicians pay and expense accounts.
> 
> Let's not forget that if Labor gets back in, a carbon/emission control cost impost is coming.
> 
> This is why the Australian public should fight a GST increase all the way, and at the very least resist the broadening of the base to fresh food.




My sentiments exactly. The Federal government is forcing a GST increase by starving the States of funds untill they scream in submission. All because Hockey is too lazy to chase the corporate tax dodgers and upper income welfare bludgers.


----------



## drsmith (21 July 2015)

Junior said:


> I have a problem with expanding the tax to cover fresh food.  We have an obesity epidemic in this country.  As it stands the cheapest/easiest way to eat is at McDonalds, we don't need to make it worse by increasing the cost of veggies.
> 
> Theoretically some GST on fresh food would be OK, on the condition that the rate is increased for junk food....but that would be difficult to define and administer.  Not worth the hassle.
> 
> A rate of 15% is too much, too soon at a time where consumer confidence is already low.  Maybe widen the net a little bit and increase to 12%.  Extra revenue must go towards health and education.



As it is it's difficult to administer. As an example there's 5-pages worth GST/GST free listings for bread/bread products alone.

https://expertsystems.ato.gov.au/sc...cSearchableFoodList.aspx?PID=68&ms=Businesses

As for fast food and the like, the tax system is not the place to influence lifestyle choices. It doesn't work for alcohol and the excise on that is not intended to. Its purpose is to raise revenue.

Colin Barnett seems to have offered the most sensible commentary so far but it's still largely a discussion about how to increase the overall tax take rather than reform tax.



> Ahead of the meeting, Mr Baird said lifting the current 10 per cent GST to 15 per cent, without extending its reach, would bring funding certainty to cash-strapped States.
> 
> Mr Barnett, describing it as a “lazy option”, said increasing the GST to 15 per cent would be too big to be acceptable for most Australians. He thought 12.5 per cent was a better rate.
> 
> ...




https://au.news.yahoo.com/thewest/a/28934061/barnett-backs-gst-increase/


----------



## Junior (21 July 2015)

drsmith said:


> As for fast food and the like, the tax system is not the place to influence lifestyle choices. It doesn't work for alcohol and the excise on that is not intended to. Its purpose is to raise revenue.




The tax system serves many purposes.  Raising revenue is the primary purpose.

Maybe it hasn't worked for alcohol, maybe it has.  It has helped reduce consumption of tobacco products.


----------



## drsmith (21 July 2015)

Junior said:


> The tax system serves many purposes.  Raising revenue is the primary purpose.
> 
> Maybe it hasn't worked for alcohol, maybe it has.  It has helped reduce consumption of tobacco products.



With tax there's a fundamental conflict between trying to use it to drive lifestyle choices and system complexity. Individual cases may have merit but need to be considered in that broader context and also through the prism that education should be the primary driver of lifestyle choice. In other words, the case needs to be compelling.

When something as broad as fresh food is exempted on the basis of lifestyle choice, it's making that a primary purpose at considerable expense to the stated primary purpose.


----------



## Handofnod (21 July 2015)

Increasing the tax is always the easiest way out, because everything is too hard or there is some sort or vested interest to go down this path, instead of fixing the barriers of the economy (which includes, social disadvantage, lack of jobs, lack of housing etc).

If you increased tax on food, then there will be more disadvantage places like what is happening here:
http://www.abc.net.au/news/2015-07-...vantage-entrenched-in-certain-suburbs/6631580


----------



## SirRumpole (21 July 2015)

Junior said:


> The tax system serves many purposes.  Raising revenue is the primary purpose.
> 
> Maybe it hasn't worked for alcohol, maybe it has.  It has helped reduce consumption of tobacco products.




Even if taxes haven't reduced the consumption of alcohol, they help pay for the damage done by those products.


----------



## pixel (21 July 2015)

SirRumpole said:


> Even if taxes haven't reduced the consumption of alcohol, they help pay for the damage done by those products.




Sounds good in theory, but alcohol taxes go into consolidated revenue, thus helping pay for Bronnie's chopper rides and other "entitlements" our Canberra Overlords find necessary.
Conceded, some may be spent on advertising campaigns, e.g. "Alcohol, think again" and such. But those benefit primarily the advertising and media industry; their effect on kids' binge drinking and alleged adults DUI is debatable.


----------



## SirRumpole (21 July 2015)

pixel said:


> Sounds good in theory, but alcohol taxes go into consolidated revenue, thus helping pay for Bronnie's chopper rides and other "entitlements" our Canberra Overlords find necessary.
> Conceded, some may be spent on advertising campaigns, e.g. "Alcohol, think again" and such. But those benefit primarily the advertising and media industry; their effect on kids' binge drinking and alleged adults DUI is debatable.




Someone has to pay for hospitalisation caused by road accidents, drunken brawls and alcohol induced domestic violence, so the coffers would be worse off if not for those taxes.


----------



## sptrawler (21 July 2015)

overhang said:


> Where are you getting this idea that someone on 50k receives concessions?




There you go, my apologies, I thought someone on $50k was still eligible for some low income tax offset.


----------



## drsmith (21 July 2015)

GST reform should focus on tax simplification both in terms of the GST itself and the inefficient state taxes it could replace. Broadening the base addresses the first and the extra revenue can address the second. 

The removal of inefficient state taxes in itself would provide an element of compensation however where more is required, the opportunity for broader reform of tax transfer is also an option for some of the extra revenue, in particular at the lower end of the income scale.

Direct reform of the income tax base by reducing income deductibility options and CGT reform could be the direct approach to reducing marginal income tax rates higher up the income scale.

I'm not in favour of increasing the GST tax take or the income tax take through the Medicare levy (or otherwise) simply to increase the proportion of tax in the economy. Governments first need to spend the taxes they currently get more wisely.


----------



## MrBurns (21 July 2015)

I have lost complete faith in most politicians State and Federal, they wont be changing anything unless it benefits themselves.

They live in a world where they believe no one has money problems and they certainly haven't they take money from the taxpayer for every little thing they do , from lunch at Parliament house to chauffer driven cars.

If they need more money, easy, just hit the taxpayer, have an enquiry and plenty of "discussion" and lets not forget having a "conversation" to make it look like they're actually thinking about it but in the end, they take, we give, end of story.


----------



## sptrawler (21 July 2015)

drsmith said:


> GST reform should focus on tax simplification both in terms of the GST itself and the inefficient state taxes it could replace. Broadening the base addresses the first and the extra revenue can address the second.
> 
> The removal of inefficient state taxes in itself would provide an element of compensation however where more is required, the opportunity for broader reform of tax transfer is also an option for some of the extra revenue, in particular at the lower end of the income scale.
> 
> ...




As per what Kerry Packer said 20 or 30 years ago, nothing changes.

The squeakiest wheel, gets the most oil. There is no accountability, for any spending, at any level.:1zhelp:

Be that the welfare recipient, on the tax payers back, or the politicians on the taxpayers back.

The age of entitlement is alive and well, at all levels of society in Australia, and it will not change easily.lol


----------



## pixel (21 July 2015)

MrBurns said:


> I have lost complete faith in most politicians State and Federal, they wont be changing anything unless it benefits themselves.
> 
> They live in a world where they believe no one has money problems and they certainly haven't they take money from the taxpayer for every little thing they do , from lunch at Parliament house to chauffer driven cars.
> 
> If they need more money, easy, just hit the taxpayer, have an enquiry and plenty of "discussion" and lets not forget having a "conversation" to make it look like they're actually thinking about it but in the end, they take, we give, end of story.






sptrawler said:


> As per what Kerry Packer said 20 or 30 years ago, nothing changes.
> 
> The squeakiest wheel, gets the most oil. There is no accountability, for any spending, at any level.:1zhelp:
> 
> ...




I agree with both of you.
But what's the solution?
Do we conclude that the Westminster System has reached a dead end? Do we have to seek a new way of electing a new breed of representatives? Can we return to the principle of *effective*separation of powers that really works? Where it's not the politicians that determine what they're entitled to, but where the electorate sets the boundaries - maybe even in hindsight, when it is evident, how each has performed?

But never mind - it'll never happen because the current crop of lawyers and megalomaniacs have entrenched themselves to such an extent that it would take a Putsch or a Revolution to get rid of them. And I wouldn't want to wish that on Australia - not just yet...


----------



## sptrawler (21 July 2015)

pixel said:


> I agree with both of you.
> But what's the solution?
> Do we conclude that the Westminster System has reached a dead end? Do we have to seek a new way of electing a new breed of representatives? Can we return to the principle of *effective*separation of powers that really works? Where it's not the politicians that determine what they're entitled to, but where the electorate sets the boundaries - maybe even in hindsight, when it is evident, how each has performed?
> 
> But never mind - it'll never happen because the current crop of lawyers and megalomaniacs have entrenched themselves to such an extent that it would take a Putsch or a Revolution to get rid of them. And I wouldn't want to wish that on Australia - not just yet...




There isn't a solution, untill we go broke.

Everyone has a ridiculous sense of what they should get, and it in no way reflects the effort they put in, to get it.

It has to end in tears.IMO


----------



## MrBurns (21 July 2015)

pixel said:


> I agree with both of you.
> But what's the solution?
> Do we conclude that the Westminster System has reached a dead end? Do we have to seek a new way of electing a new breed of representatives? Can we return to the principle of *effective*separation of powers that really works? Where it's not the politicians that determine what they're entitled to, but where the electorate sets the boundaries - maybe even in hindsight, when it is evident, how each has performed?
> 
> But never mind - it'll never happen because the current crop of lawyers and megalomaniacs have entrenched themselves to such an extent that it would take a Putsch or a Revolution to get rid of them. And I wouldn't want to wish that on Australia - not just yet...




I agree the same as they'll never get to the bottom of child exploitation rings as there are too many at the top involved. I hope you saw 60 Minutes last Sunday 
It's a case of Dracula being in charge of the blood bank.

Makes me want to move out of town to somewhere less involved if there is such a place.


----------



## overhang (21 July 2015)

sptrawler said:


> There you go, my apologies, I thought someone on $50k was still eligible for some low income tax offset.




You've used the sarcasm tag so I'm having a little difficulty interpreting your message.  Do you believe that someone on 50k receives tax concessions or have you accepted that they will actually pay about 8.5k tax?


----------



## sptrawler (21 July 2015)

overhang said:


> You've used the sarcasm tag so I'm having a little difficulty interpreting your message.  Do you believe that someone on 50k receives tax concessions or have you accepted that they will actually pay about 8.5k tax?




You're the one who made the statement, you check you're facts.


----------



## overhang (21 July 2015)

sptrawler said:


> You're the one who made the statement, you check you're facts.




I've checked my facts and the fact is as i mentioned which is a far cry from your claim that someone on 50k pays no tax.  I want you to prove your claim.


----------



## luutzu (21 July 2015)

pixel said:


> I agree with both of you.
> But what's the solution?
> Do we conclude that the Westminster System has reached a dead end? Do we have to seek a new way of electing a new breed of representatives? Can we return to the principle of *effective*separation of powers that really works? Where it's not the politicians that determine what they're entitled to, but where the electorate sets the boundaries - maybe even in hindsight, when it is evident, how each has performed?
> 
> But never mind - it'll never happen because the current crop of lawyers and megalomaniacs have entrenched themselves to such an extent that it would take a Putsch or a Revolution to get rid of them. And I wouldn't want to wish that on Australia - not just yet...




The system has done a U-turn. Going back to when only landed gentry could vote and run gov't.

Now everyone votes and their votes are counted, just it doesn't count for much.


If the people know what's been going on, they'd be on the streets reclaiming Australia - and not from the immigrants and Muslims either.

----

Some points from a report on Inequality in Australia:
*INCOME & WEALTH INEQUALITY IN AUSTRALIA. By DAVID RICHARDSON & RICHARD DENNISS
JULY 2014*
www.tai.org.au Policy Brief. Income and wealth inequality in Australia. Policy Brief No. 64. July 2014. 

-Inequality between those with the most and those with the least is rising in Australia.
Australia is one of the wealthiest countries in the world, but there are many people in our
society who are falling behind.

- Senior executive pay is now 150 times greater than average weekly earnings.  [in the US it's 360 to 1, so we're half way there?]

- While income distribution is unequal, the distribution of wealth is even more so. The top 20
per cent of people have five times more income than the bottom 20 per cent, and hold 71
times more wealth. Perhaps the gap between those with the most and those with the least is
most starkly highlighted by the fact that the *richest seven individuals in Australia hold more
wealth than 1.73 million households in the bottom 20 per cent.* [from David Cay Johnson, top 16 American families own the same wealth as 160 million poorest Americans]

- Despite consistent public support for reducing inequality, the government is currently seeking
to reduce income support. In fact, in recent months the Abbott government has begun to
argue that inequality is not just unavoidable, but also beneficial. Rather than use the welfare
system to redistribute income, the government is seeking to ensure that welfare payments
grow at a significantly slower rate than wages. The result will inevitably be an even bigger
gap between those with the most and those with the least.

- in the last eight years, the cost of tax cuts
introduced by successive governments has amounted to around $170 billion and that the top
ten per cent of income earners received more benefit from those tax cuts than the bottom 80
per cent of taxpayers combined.


----------



## luutzu (21 July 2015)

overhang said:


> I've checked my facts and the fact is as i mentioned which is a far cry from your claim that someone on 50k pays no tax.  I want you to prove your claim.




I think he was referring to family income. Assuming that individual earning under $28K pays no income tax, so $50K is under $56k?

But sptrawler, my point is still valid though, obviously


----------



## overhang (21 July 2015)

luutzu said:


> I think he was referring to family income. Assuming that individual earning under $28K pays no income tax, so $50K is under $56k?
> 
> But sptrawler, my point is still valid though, obviously




Well that would be quite ignorant of him when I said I was referring to individuals and you also seemed to be referring to an individual rather than a family.


----------



## sptrawler (21 July 2015)

luutzu said:


> I think he was referring to family income. Assuming that individual earning under $28K pays no income tax, so $50K is under $56k?
> 
> But sptrawler, my point is still valid though, obviously




Your point is valid, but as I was, you were using journalistic license to embellish your point.

But as for concessions, I think the lito doesn't cut out till about $60k


----------



## Tink (22 July 2015)

MrBurns said:


> I agree the same as they'll never get to the bottom of child exploitation rings as there are too many at the top involved. I hope you saw 60 Minutes last Sunday
> It's a case of Dracula being in charge of the blood bank.
> 
> Makes me want to move out of town to somewhere less involved if there is such a place.




I didn't watch it, Mr Burns, but I saw the article.
http://www.news.com.au/entertainmen...edophile-network/story-e6frfmyi-1227447820543

Children - The Big Losers 
https://www.aussiestockforums.com/forums/showthread.php?t=17282

Off Topic


----------



## sptrawler (22 July 2015)

overhang said:


> You've used the sarcasm tag so I'm having a little difficulty interpreting your message.  Do you believe that someone on 50k receives tax concessions




My answer is "Yes".


Do you agree with Iuutzu, with his inference that someone on $200,000 pays no tax, in post #156?

Let say I'm rich (nice to imagine that way sometime) and say you're the average Aussie battler earning $50K a year against my *$200k.*

The rent, power, phone, food and other bare necessity of life costs your family $40k, leaving you $10 in savings.

My imaginary self have more *so my necessities costs $80k, leaving me $120k*.

My bolds. 

Where's the tax component in that statement?

Which is what the banter, between myself and Iuutzu started from.


----------



## overhang (22 July 2015)

sptrawler said:


> My answer is "Yes".
> 
> 
> Do you agree with Iuutzu, with his inference that someone on $200,000 pays no tax, in post #156?
> ...




That is all reasonable but what I drew exception to was when you stated the tax the individual on 200k would pay but then claimed that the individual on 50k would pay no tax which simply isn't the case and I felt that if you believed someone on 50k pays no tax then it would be reasonable to think that lower income earners are receiving enough handouts that an increase in the GST wouldn't be unreasonable to them.


----------



## luutzu (22 July 2015)

sptrawler said:


> My answer is "Yes".
> 
> 
> Do you agree with Iuutzu, with his inference that someone on $200,000 pays no tax, in post #156?
> ...




That's one way to infer; the other is I'm talking about after-tax income or just pick figures to show how the rich will always benefit more from a consumption tax than the average/poor person/family.

But main point was it disproportionately disadvantage the poor; it's also bad economic policy as it literally tax demand for goods and services - something you'd want to stimulate to create jobs and give that multiplier effect that would be good for the ATO.

As others have said, it's fairer and would make better sense if, say, they close the tax loopholes that permit multi-nationals to claim expense or report lower profit by shifting assets between different subsidiaries.

There's a bunch of things they could do to just bring fairness back in the equation, but of course that's not going to happen.


----------



## sptrawler (22 July 2015)

luutzu said:


> That's one way to infer; the other is I'm talking about after-tax income or just pick figures to show how the rich will always benefit more from a consumption tax than the average/poor person/family.
> 
> But main point was it disproportionately disadvantage the poor; it's also bad economic policy as it literally tax demand for goods and services - something you'd want to stimulate to create jobs and give that multiplier effect that would be good for the ATO.
> 
> ...




I agree whole heartedly, NG, super, multinational tax avoidance, all should be addressed.

The point I made, was from a government point of view, what is the easiest one to implement?

IMO, the increase in the GST is the easiest for them and we all know that governments like the easy path.


----------



## sptrawler (22 July 2015)

overhang said:


> That is all reasonable but what I drew exception to was when you stated the tax the individual on 200k would pay but then claimed that the individual on 50k would pay no tax which simply isn't the case and I felt that if you believed someone on 50k pays no tax then it would be reasonable to think that lower income earners are receiving enough handouts that an increase in the GST wouldn't be unreasonable to them.




Like I said, it was a bit of tonque in cheek banter.

I never said that an increase in gst wouldn't be unreasonable to them, there you go again, off on a tangent.


----------



## overhang (22 July 2015)

sptrawler said:


> Like I said, it was a bit of tonque in cheek banter.
> 
> I never said that an increase in gst wouldn't be unreasonable to them, there you go again, off on a tangent.




I probably should have known you would not have been naive enough to believe that they wouldn't pay tax so I misjudged the tongue in cheek, can never be too sure though when we have a treasurer that believes poor people don't drive lol

I agree though with you both that all though there are more suitable options to raise revenue the government will probably take the easy route and increase the GST and why not, they we have an opposition with no back bone and offering little alternative.  I think they would win if they took it to an election.


----------



## sptrawler (22 July 2015)

overhang said:


> I agree though with you both that all though there are more suitable options to raise revenue the government will probably take the easy route and increase the GST and why not, they we have an opposition with no back bone and offering little alternative.  I think they would win if they took it to an election.




I personally think, Australian politicians really needs to take a good look at themselves, and the image they are projecting to the electorate.

Australians aren't stupid and can see the fiscal situation is dire, they also see the excesses that that politicians bestow on themselves, at our expense.

Australians IMO, also find it a bit rich when politicians try to tell them that the welfare system is unaffordable, when the politicians welfare system is the most ridiculously unaffordable of all.

Australians, again IMO, find it very difficult to summon up respect, for people who by their actions and behaviour don't deserve it.

It really is about time that all aspects of tax and welfare were assessed as to there merit, including the governments.

Maybe starting the transformation, from the age of entitlement, needs to start from the top down,
rather than from the bottom up.

There is nothing that encourages change more, than leaders, leading by example.

As if that's going to happen, there's that flock of pigs flying over again.lol


----------



## drsmith (22 July 2015)

Scott Morrison,



https://www.youtube.com/watch?v=DWAXG-PFIv0

More broadly on the welfare front,



> Scott Morrison has laid out a welfare reform blueprint that tries to address the failure of federation to solve housing problems, seeks to tap into private investment to create social bonds for welfare and looks at limiting total family welfare income to end intergenerational welfare dependency.
> 
> The Social Services Minister has declared that “compassionate conservatism” around the world is cutting welfare dependency, costs to taxpayers and reducing long-term welfare dependency.
> 
> ...




http://www.theaustralian.com.au/nat...reform-blueprint/story-fn59niix-1227452385904


----------



## luutzu (22 July 2015)

sptrawler said:


> I personally think, Australian politicians really needs to take a good look at themselves, and the image they are projecting to the electorate.
> 
> Australians aren't stupid and can see the fiscal situation is dire, they also see the excesses that that politicians bestow on themselves, at our expense.
> 
> ...




I think that young idealistic youth is still inside you somewhere sptrawler 

True though... I don't really know why politicians don't do what is popular, and right, by the population. They say and all their messages are "for the people", "for the country" - so they know they'll get support from the people if they do things right by the people... yet for some reason they tend not to.

Maybe they're just out of touch and really have no respect for the masses at all; or they actually believe that what's good for the rich is also good for the poor - eventually, somehow.

But then again, if you're not a team player you'd not be a team member at all. So let's be in the team and try to affect change from within, until the means and the end just got mixed up. But it pays the bills though.


----------



## sptrawler (22 July 2015)

luutzu said:


> I think that young idealistic youth is still inside you somewhere sptrawler
> 
> True though... I don't really know why politicians don't do what is popular, and right, by the population. They say and all their messages are "for the people", "for the country" - so they know they'll get support from the people if they do things right by the people... yet for some reason they tend not to.
> 
> ...




Yes Iuutzu, and as drsmith and I said in the 'who will replace Tony Abbott' thread, Scott Morrison appears to be the only politician who can see the wood despite the trees.

To me, he seems to be the only one of either side, that has the courage of his convictions.

However having said that, I've been conned before.

I still have a slight bit of smoke left over from my youth, whether it would be classified as fire, is questionable.


----------



## luutzu (23 July 2015)

sptrawler said:


> Yes Iuutzu, and as drsmith and I said in the 'who will replace Tony Abbott' thread, Scott Morrison appears to be the only politician who can see the wood despite the trees.
> 
> To me, he seems to be the only one of either side, that has the courage of his convictions.
> 
> ...




I think we've all been conned before. So I'm quite wary of politicians and try not to have any idols - that way will be pleasantly surprised when good work is done, but otherwise can enjoy the fun from both sides.

Saw this lecture by this American journalist/historian in his 70s (Robert Scheer I think) for his book - The Pornography of Power. And man, you could hear his heart broke when he talks of Bill Clinton and Obama.

How he supported both of them, have great hope that since they came from the common people they would be friendlier to the masses, know struggles... then how he just see them selling out to money and power, literally selling out to big business and Wall St.

He said Bill Clinton was asking his advisors why Wall St. didn't like him, and how to make them like him. Advisors came back and a bunch of Wall St. bankers were put in high powered position and the Cabinet. Then came deregulation of derivatives and all that fun stuff Bush Jr. is mostly taking the blame for.

Same with Obama - all hope and change became just a slogan once he became the Democratic nominee and got the same set of advisors Bill Clinton got.

But the way money and politics are, even the most thoughtful politicians will put their career first and everything else second.

Listening to Howard Zinn... there is hope but he had found that hope do not come from great leaders, it had never came from the top - despite what history books teaches us. All great change and revolution came about because the people mobilise and organised - then politicians, being opportunitistic as always, will lean with the people once it look like the people are winning, they then came in and "lead".

So even if there are great leadership and geniunely civic-minded politician out there, them few cannot affect change and the stubborn ones will be isolated and spit out if the masses do not threaten to storm the gates and demand change. Hence we have public relation, propaganda for the manufacturing of consent; we have job insecurity to keep the masses occupied and easy access to light entertainment to pass the day; a great public educational system that doesn't teach much about thinking or enquiries; and a couple of big bad wolves out there just waiting to terrorise  our children if we don't permit imperial grand strategy abroad and invasion of citizen's privacy at home.


So if Scheer's conclusion about Clinton and Obama - that politicians from poor families, won scholarship and know who has the money and who has the power and know that to get both you need to serve money and power - best to not put faith in leadership;

If the blue blood are like those Chris Hedges - a poor kid on scholarship to studies with the elite - observed; that they are a different breed very isolated from the world and whose world revolves around ordering poor and generally ethnic adults; whose schooling revolved around literally running the world; and whose failures are always taken care of... Hope in them is probably misplaced too.

What about the people?

They're too busy putting food on the table and keep the lights on; too well educated to question much; and so will only rise when the world's about to go to heck.

Maybe the only hope is a real, serious and imminent external threat at the time where a real leader just took office, when the masses are marching and the oligarchs are momentarily shaken and lose their grip on power. 

Until all that align, it's business as usual and money trickles up but dreams and fine speeches trickle down.


----------



## luutzu (4 November 2015)

Sure is good to have friends in high places.

*GST hike to hit poor hard and leave rich unscathed, research shows*
http://www.smh.com.au/federal-politics/political-news/gst-hike-to-hit-poor-hard-and-leave-rich-unscathed-research-shows-20151104-gkqkyg.html



> [BThe analysis by the respected National Centre for Social and Economic Modelling shows the current 10 per cent GST consumes 13.4 per cent of disposable income for those in the bottom fifth of households, but that would rise to more than 20 per cent if the rate were lifted to 15 per cent, as is favoured by some within the Coalition government.
> Households in the top 20 per cent, though, would experience a much milder impact, increasing from a mere 5.9 per cent of disposable income to 8.8 per cent.
> [/B]


----------



## sptrawler (4 November 2015)

luutzu said:


> Sure is good to have friends in high places.
> 
> *GST hike to hit poor hard and leave rich unscathed, research shows*
> http://www.smh.com.au/federal-politics/political-news/gst-hike-to-hit-poor-hard-and-leave-rich-unscathed-research-shows-20151104-gkqkyg.html
> ...




That looks pretty dramatic, but if you run the numbers on the bottom income and top income, it really is dramatic.

The bottom income bracket $26,131, tax take goes from $3501 to $4677 and maximum $5300. They pay no income tax, no medicare and are probably not working, also probably qualify for handouts. Therefore easy to compensate, just increase the handouts.
Easy, take it off the person working two jobs and earning $172,000, just tax him more.


The top income bracket $172,638, tax goes from $10,185 to $13,120 and a maximum of $15,192. 
Then add to that $50,000 income tax plus $3,500 medicare levy, plus private health $3,500.

An extra $5,000 tax on a worker who is already paying $57,000 more, so that makes $62,000 of the $172,000.
How much more do you want to take?


----------



## luutzu (4 November 2015)

sptrawler said:


> That looks pretty dramatic, but if you run the numbers on the bottom income and top income, it really is dramatic.
> 
> The bottom income bracket $26,131, tax take goes from $3501 to $4677 and maximum $5300. They pay no income tax, no medicare and are probably not working, also probably qualify for handouts. Therefore easy to compensate, just increase the handouts.
> Easy, take it off the person working two jobs and earning $172,000, just tax him more.
> ...




But there's the tax cuts to stop bracket creeps; then at $170K+ income you can afford a few very creative accountants with a couple tricks up their sleeves


----------



## sptrawler (4 November 2015)

luutzu said:


> But there's the tax cuts to stop bracket creeps; then at $170K+ income you can afford a few very creative accountants with a couple tricks up their sleeves




Yes take on debt to offset your loses, which costs you more than you save, thus eating more of your take home pay.
It all sounds good,but the reality is a couple on $50k each in a low stress job, are sitting pretty.

Like I said $170k is actually about $100k take home, $50k equates to no tax, after rebates, I know where the losses are.
There is an equality problem, it just isn't politicaly correct to mention it.lol


----------



## luutzu (5 November 2015)

sptrawler said:


> Yes take on debt to offset your loses, which costs you more than you save, thus eating more of your take home pay.
> It all sounds good,but the reality is a couple on $50k each in a low stress job, are sitting pretty.
> 
> Like I said $170k is actually about $100k take home, $50k equates to no tax, after rebates, I know where the losses are.




Wouldn't be if you split it with your spouse, hire your son and pay a few odd paper filing to the niece   Or so I heard 

Equality aside, increasing GST is just bad policy.

I find the tax policies since whenever is actually having it backwards.
You'd want to encourage spending, not savings and investments - not investments managed by the current graduates of finance anyway.

Very strange that we're supposed to be a market driven economy where the consumers tell businesses where and what to invests in through their spending; then our genius in Canberra thought to curb that and direct people's cash towards savings and financial markets... to invest in what? in financial markets?


----------



## luutzu (5 November 2015)

sptrawler said:


> ....
> There is an equality problem, it just isn't politicaly correct to mention it.lol




Did you just say that the top end of town are being unfairly treated?

Not that late in Perth is it?


----------



## Logique (5 November 2015)

luutzu said:


> Sure is good to have friends in high places.
> 
> *GST hike to hit poor hard and leave rich unscathed, research shows*
> http://www.smh.com.au/federal-politics/political-news/gst-hike-to-hit-poor-hard-and-leave-rich-unscathed-research-shows-20151104-gkqkyg.html
> ...



Regressive and predatory, and this is the proof.


----------



## qldfrog (5 November 2015)

GSt the only tax drug dealers, pimps and fraudster pay.
Save the battlers....


----------



## Tisme (5 November 2015)

Logique said:


> Regressive and predatory, and this is the proof.




Poor people deserve to be punished for not sharing the heavy lifting required to get us out of the mess they created by voting Labor (then Liberal).


----------



## luutzu (5 November 2015)

Logique said:


> Regressive and predatory, and this is the proof.




If you want to take lollies, take it from babies with no guardians around.


----------



## luutzu (5 November 2015)

Tisme said:


> Poor people deserve to be punished for not sharing the heavy lifting required to get us out of the mess they created by voting Labor (then Liberal).




Also teaches the poor that it's not so nice being poor; better to be rich. That's how you encourage poor people to be rich - you get them to pay more for being poor and show them they'd be paying less if only they get off their behind.


----------



## luutzu (5 November 2015)

qldfrog said:


> GSt the only tax drug dealers, pimps and fraudster pay.
> Save the battlers....




I never knew French people have a sense of humour. We we, naw naw


----------



## sptrawler (5 November 2015)

luutzu said:


> Did you just say that the top end of town are being unfairly treated?
> 
> Not that late in Perth is it?




No I was just pointing out your example, was a bit misleading, not that anyone is interested in that aspect.

Same as the difference between, $170,000 gross income and $50,000 gross income, works out to roughly $50,000 after tax and concessions.
This is why Labor, coalition and just about every economist is saying personal tax has to come down, it just makes us less and less competitive.

But people don't want to hear that, they just want, someone has to pay for it.


----------



## sinner (5 November 2015)

sptrawler said:


> Same as the difference between, $170,000 gross income and $50,000 gross income, works out to roughly $50,000 after tax and concessions.




Got any evidence to back this statement up? Not sure how this makes sense at all given our tax bracket system.

Up until recently I was making $150kpa gross and bringing home significantly more take home pay than my friends on $50kpa gross.


----------



## CanOz (5 November 2015)

sinner said:


> Got any evidence to back this statement up? Not sure how this makes sense at all given our tax bracket system.
> 
> Up until recently I was making $150kpa gross and bringing home significantly more take home pay than my friends on $50kpa gross.




Agree, from memory at my last position i was in the top bracket and paying 29% tax at the end of the year....excl. bonus


----------



## sptrawler (5 November 2015)

sinner said:


> Got any evidence to back this statement up? Not sure how this makes sense at all given our tax bracket system.
> 
> Up until recently I was making $150kpa gross and bringing home significantly more take home pay than my friends on $50kpa gross.




Only anecdotal evidence, it has been stated on many financial forums and stages, that a married couple on $50k pay no effective tax after rebates and concessions are taken into account.
A married couple on 150k will pay about $ 50,000 in tax, medicare levy and private health insurance.
So effectively the difference in take home pay is $50k, which isn't to be scoffed at, it is still $1k a week.

The problem is though, increasing the concessions on the $50k earner( because they aren't paying effective tax), has to come from somewhere.

I'm not saying that it is right or wrong, but increasing concessions, means increasing tax. 
This leads to the problem of increasing tax on the productive sector of the economy, makes the economy less competitive with other Countries.

There is no easy answer, everyone wants everything to stay the same, but we are in a downward spiral. To maintain everyones living standard and the welfare systems,* everyone* is going to have to pay more. One way or another.


----------



## Ves (5 November 2015)

sptrawler said:


> Only anecdotal evidence, it has been stated on many financial forums and stages, that a married couple on $50k pay no effective tax after rebates and concessions are taken into account.
> A married couple on 150k will pay about $ 50,000 in tax, medicare levy and private health insurance.
> So effectively the difference in take home pay is $50k, which isn't to be scoffed at, it is still $1k a week.



At 50/50 income split  (you didn't specify) it's closer to $30k than $50k.


----------



## trainspotter (5 November 2015)

Logique said:


> Regressive and predatory, and this is the proof.




Do the math peeps ... $26,131 and increase of 6.7% = $33.67 per week without taking into account the FAS, CSA, Part A & B tax benefits, Health Care card blah de blah blah hand outs from guvmint.

Other end of the scale is $96.28 per week worse off. NO TAX BENEFITS .. NUFFIN !!!!!!!!!!

Oh but wait the graph is skewed to GST percentage of disposable income?? Statistics eh ??

"Do not put your faith in what statistics say until you have carefully considered what they do not say."  ~William W. Watt

Tax on 172k per annum is $52,000 = $2307 per week in hand and NO handouts

Tax on 26k per annum is $1,482 = $474 per week in hand and can receive up to 5k per annum in guvmint assistance from low wages to super contributions etc.

Get a grip people or soon enough the meek will inherit the earth and WHO will pay tax then to give the meek the money they deserve?  (insert stupid look here)



> 50% of all income tax in Australia is paid by 10% of the working population.“ – Federal Treasurer Joe Hockey, interview with Fran Kelly on ABC RN Breakfast, July 27, 2015.
> According to the 2015-16 Federal Budget, Australians paid around A$176 billion in personal income taxation in the 2014-15 financial year (Table 5 of Budget Paper 1). The Treasurer, Joe Hockey, claims that around 50% of this taxation is paid by the top 10% of the working age population as ranked by their income.




http://theconversation.com/factchec...ia-paid-by-10-of-the-working-population-45229


----------



## nioka (5 November 2015)

luutzu said:


> Also teaches the poor that it's not so nice being poor; better to be rich. That's how you encourage poor people to be rich - you get them to pay more for being poor and show them they'd be paying less if only they get off their behind.




That is a statement by someone that obviously hasn't lived / doesn't live, in the real world.


----------



## luutzu (5 November 2015)

nioka said:


> That is a statement by someone that obviously hasn't lived / doesn't live, in the real world.




You've taken it out of context 

Was saying that all those politicians are saying or implying when they do these kind of taxes - encourage hard work and innovation and fairness etc.


----------



## Logique (6 November 2015)

Yes I thought you were using irony Luutzu. 

TS, we happen to have a progressive tax system. The Turnbull/Morrison proposal redistributes a big segment of the increased GST take as tax cuts for the higher brackets.

Their 15% GST proposal is simply a tax increase, and it's lazy, elitist and regressive policy.

Where is the Coalition rhetoric now, about Australia having a spending problem, not a revenue problem.

It's an electoral gift for Shorten and Plibersek, if they can tear themselves away from prancing around on the beach at Kiribati.


----------



## Tisme (6 November 2015)

luutzu said:


> You've taken it out of context
> 
> Was saying that all those politicians are saying or implying when they do these kind of taxes - encourage hard work and innovation and fairness etc.





 Shame on you luutzu


----------



## luutzu (6 November 2015)

Tisme said:


> Shame on you luutzu




  How is it that you could get away with saying stuff like that and I can't?


oh yea, heard from Morrison about "new era"; from Turnbull about fair and equitable tax... we're going to get it alright.


----------



## Tisme (6 November 2015)

luutzu said:


> How is it that you could get away with saying stuff like that and I can't?
> 
> .




Skin tone? 

What would a Viet know about GST and Humour


----------



## drsmith (6 November 2015)

luutzu said:


> Sure is good to have friends in high places.
> 
> *GST hike to hit poor hard and leave rich unscathed, research shows*
> http://www.smh.com.au/federal-politics/political-news/gst-hike-to-hit-poor-hard-and-leave-rich-unscathed-research-shows-20151104-gkqkyg.html
> ...



In terms of the debate between broadening the base of the GST and increasing the rate, that table allows us to calculate the proportional impact of broadening the base as described therein on each of the income groups as follows,

$26,131: 34%
$49,636: 38%
$75,931: 33%
$105,503: 31%
$172,638: 29%

The difference is relatively small between the groups and in my view adds further weight to broadening the base before increasing the rate.


----------



## drsmith (6 November 2015)

Logique said:


> Regressive and predatory, and this is the proof.



There's two ways to deal with the regressive nature of taxing consumption. That's either as a tax on an item by item basis as existed under the pre-GST sales tax regime (which incidentally governments used to change (increase) on an ad-hoc basis) or a broader based more efficient consumption tax (GST) with compensation elsewhere within tax/transfer to manage regressivity.

Beyond that, it's an argument about whether or not consumption should be taxed at all.


----------



## Knobby22 (6 November 2015)

The GST is such a political animal and in the States hands. If I was Turnbull I would ignore it as a distraction and work on other elements of the taxation system. I personally don't think there is much of an argument to increase it, maybe widen it a bit to include education. Just a vote loser really.


----------



## drsmith (6 November 2015)

The GST is a significant part of the tax mix and on that basis alone needs to be considered as part of the overall reform process. 

If it's not then reform is significantly compromised from the outset.


----------



## Bill M (6 November 2015)

I think raising the GST will hit lower income families that have kids the hardest, particularly if it is extended to include food.

What about just raising tax levels by just 1c in all brackets. ie. 19c per dollar bracket becomes 20c and 32.5c bracket becomes 33.5c, I reckon almost everyone most probably could manage that, even I as a self funded retiree could. Whether it would fill the shortfall for the services required, I don't know.


----------



## Junior (6 November 2015)

Bill M said:


> I think raising the GST will hit lower income families that have kids the hardest, particularly if it is extended to include food.
> 
> What about just raising tax levels by just 1c in all brackets. ie. 19c per dollar bracket becomes 20c and 32.5c bracket becomes 33.5c, I reckon almost everyone most probably could manage that, even I as a self funded retiree could. Whether it would fill the shortfall for the services required, I don't know.




Income tax already increases every year as a %% of income due to bracket creep.  The top marginal tax rate is already 49% with budget repair levy and medicare.  Should be lowered not increased!

Self funded retirees have a MTR of 0% thanks to tax free pensions!!


----------



## drsmith (6 November 2015)

Whether it's income tax, GST or any other tax, simply increasing them to raise more revenue only encourages governments to spend more and it turn seek more tax.


----------



## Bill M (6 November 2015)

Junior said:


> Self funded retirees have a MTR of 0% thanks to tax free pensions!!




Not those under the age of 60 drawing a super pension. They still get taxed on the concessional part of their super, less 15% offset.

I still pay tax on the other stuff I have out of super, I am expecting a tax bill this year for sure. They got to raise revenue somehow, It's just a matter of how.


----------



## Tisme (6 November 2015)

drsmith said:


> Whether it's income tax, GST or any other tax, simply increasing them to raise more revenue only encourages governments to spend more and it turn seek more tax.





agreed


----------



## Junior (6 November 2015)

I'm OK with raising rate of GST if it comes with permanent tax cuts in other areas, ie:
* stamp duty
* raise income tax brackets
* permanent cut to company tax rate
* scale back super tax concessions
* A cap/limit on tax free super pensions
* GST should not be imposed on fresh fruit/vegetables - we are fat enough as it is!


----------



## trainspotter (6 November 2015)

If we don't raise it then this will be us very, very soon.


----------



## Ferret (6 November 2015)

Junior said:


> * GST should not be imposed on fresh fruit/vegetables - we are fat enough as it is!




100% agree.  We shouldn't be driving people away from healthy eating.  Leave fresh food out of the GST mix.


----------



## DB008 (6 November 2015)

Increase GST to 15%

Flat tax rate of 20% (which should remove loopholes like Trusts et al...)

Remove negative gearing

Benefits should be slashed - l'm sick to death of paying for bludgers, they should also look at stopping benefits of people who earn a combined income of more than $150k (like childcare/medical benefits)

It will never happen, so why even talk about it....


----------



## SirRumpole (6 November 2015)

Something has to be done about the ballooning health expenditure.

More diseases being diagnosed, more expensive machines and drugs to treat them and the rapidly increasing mental health problem meaning ever more expensive psychiatrists to pay.

This is all a consequence of rapidly increasing population (a large proportion of which is immigration) which I cannot see any need for. Of course businesses say they need more customers but they are not prepared to employ them here, eg more call centres going to the Phillippines, manufacturing is dying and technology will take over many jobs.

There is not enough focus on the rapidly changing demographics that are destroying our way of life.


----------



## luutzu (6 November 2015)

Tisme said:


> Skin tone?
> 
> What would a Viet know about GST and Humour





The guy's pretty funny there. But he probably misunderstood why his mother dressed his brother up to look like a girl.

Asians/Chinese believe that after a tragic early death in the family or if the child suffer a serious illness (or dangled by a pirate), the name and gender should be changed and the mother's role changed to be a nurse instead of his real mum. To fool evil spirits etc. Hence Khoa was dressed up to look like a girl - not the poor refugee story. Though it won't be as funny.

Here's a funny story from us.

When we first got here the Red Cross gave us mattresses and clothes too. Also gave us a bean bag. It got torn off (3 boys in the family) all over the carpet. It's one of those 70s long-haired carpet you can't just sweep up. 

So we did the best we can with little fingers.

Then one day a vacumn cleaner salesman turns up 

Fancy vac going for something like $2,000. He said it's the best out there. Did a demo on Dad's shirt to show how a clean shirt could contain so much dust... Then Dad has an idea... can you show me how it works on a real carpet?

The salesman was onto it but he was a good sport 

----

Another one...

You know those canned dog food?
Friends of the parents were among the first Viets to settled here and haven't a clue about English. So one of the guys thought those dog food were actual dog meat - what rich crazy people would make food for dog that fancy right?

Being a drinker and you know, dog meets beer.

He eventually figured it out somehow but said it tastes pretty good.


----------



## luutzu (6 November 2015)

SirRumpole said:


> Something has to be done about the ballooning health expenditure.
> 
> More diseases being diagnosed, more expensive machines and drugs to treat them and the rapidly increasing mental health problem meaning ever more expensive psychiatrists to pay.
> 
> ...




Ballooning costs are not always due to larger population - due to higher costs of medicine and other tests, making big pharma really rich. All so they are more innovative and efficient or something.

With the Transpacific Trade deals that's been signed... big pharma want to extend patents on their drugs from 10 to 15 (around there) years before a generic could be made from it. Last I read there were talks of going only to 12 years. And by changing a few molecule on the same old drug, it's considered "new"... so yea, costs a fair bit just with that agreement.

Don't think it is the case in Aus., but in the US this economist was saying how big pharma lobbied to put one line into a bill whereby the US gov't cannot negotiate on drug prices - cannot use it huge buying power to get cheaper drugs. That line costs the US taxpayers something like $1 Trillion over 10 years.

They're very creative these... people.


----------



## luutzu (8 November 2015)

*Tax hike: How a 12.5 per cent GST will cost houses three times more than carbon price*
http://www.smh.com.au/federal-politics/political-news/tax-hike-how-a-125-per-cent-gst-will-cost-houses-three-times-more-than-carbon-price-20151107-gkt8h5.html



> ...It shows the government would raise about $14 billion a year by broadening the GST base or raising the rate to 12.5 per cent.
> ...
> 
> It estimates a carbon price of $28 per tonne would raise the same amount.
> ...


----------



## sptrawler (8 November 2015)

luutzu said:


> *Tax hike: How a 12.5 per cent GST will cost houses three times more than carbon price*
> http://www.smh.com.au/federal-politics/political-news/tax-hike-how-a-125-per-cent-gst-will-cost-houses-three-times-more-than-carbon-price-20151107-gkt8h5.html




Well that sounds obvious, most sensible people complained about the carbon tax, because it hammered small business and manufacturing.

Hitting people with more gst, is the right move IMO if people want to spend more, eat out more, have more welfare, education, Government services etc.
Who better to pay for it, than the people who want it?

The carbon tax, was just hitting companies who supply jobs with an added cost, now we are wanting to reduce their tax to stimulate jobs, how crazy is that. Dumb Labor, Dumb.IMO 

If the public wants increased welfare, wants to help all and sundry, to feel good when they cook a shrimp on the bbq. The public should pay for it, end of story.

Who do they think should pay for it?, Oh anybody but themselves. What a hoot, a land full of losers.


----------



## luutzu (8 November 2015)

sptrawler said:


> Well that sounds obvious, most sensible people complained about the carbon tax, because it hammered small business and manufacturing.
> 
> Hitting people with more gst, is the right move IMO if people want to spend more, eat out more, have more welfare, education, Government services etc.
> Who better to pay for it, than the people who want it?
> ...




we still have manufacturing to worry about impact of carbon tax on it?


----------



## sptrawler (8 November 2015)

luutzu said:


> we still have manufacturing to worry about impact of carbon tax on it?




We need small manufacturing to start up, to supply jobs, we can't all work at McDonalds.

But then again, when I see the size of young people today, maybe we can.


----------



## luutzu (8 November 2015)

sptrawler said:


> We need small manufacturing to start up, to supply jobs, we can't all work at McDonalds.
> 
> But then again, when I see the size of young people today, maybe we can.




You'd need strong demand for new manufacturing to start up or current ones to keep going. Making goods and services more expensive will slow down consumer demand. As for small micro bob the builder kind of business they'll lower their price, pay their couple staff less and get a few jobs cash in hand so no GST.


Funny how gov't always talk about not having enough money, spending too much, need to be more competitive and fair... then they cut social services, make laws that's easier for the fluro-collar to get fired without much compensation or warning - making them think twice about wage increases etc....

So the working class got the shaft and less services, but then for big business and the friends of ours, job security and competitiveness and fairness mean BHP ought to have more money, pay less tax and have "red tapes" like EPA approvals remove... so they can not fire people they could easily fire when profit is a bit slow.


Well there's always Oportos...


----------



## sptrawler (8 November 2015)

luutzu said:


> You'd need strong demand for new manufacturing to start up or current ones to keep going. Making goods and services more expensive will slow down consumer demand. As for small micro bob the builder kind of business they'll lower their price, pay their couple staff less and get a few jobs cash in hand so no GST.
> 
> 
> Funny how gov't always talk about not having enough money, spending too much, need to be more competitive and fair... then they cut social services, make laws that's easier for the fluro-collar to get fired without much compensation or warning - making them think twice about wage increases etc....
> ...




There would have to be a huge drop in living standards(wages), to encourage major manufacturing to base itself here.
Either that or a massive increase in population, thereby increasing domestic demand, to underpin manufacturing.
Neither of those will happen IMO, so it will be a slow grind, small manufacturing and services, will be the mainstay for the next few years.
Farming and agriculture will take off IMO, but due to automation and mechanisation, it won't be a major employer.

Therefore as I said, if people want the services, lifestyle and welfare system, we currently enjoy, they will have to pay for it themselves.

It is o.k just saying hit this company or, that company, but IF they are paying the corporate tax rate of 30%, they are paying a reasonable amount by World standards.

It isn't an easy thing, but as the third world takes our first world manufacturing and value adding jobs, their lifestyle(wages) increase.

The flip side is our lifestyle falls, as we decline toward a third world economy, simple logics.

The result is to maintain our lifestyle, we *all* have to donate more, as we as a country earn less.

It isn't rocket science, just my opinion, everyone should be trying to minimise their outgoings build a stronger more efficient family unit.

Get a job, any job, rather than welfare. There is no way the welfare system will cope, if everyone ends up on it.


----------



## luutzu (9 November 2015)

sptrawler said:


> There would have to be a huge drop in living standards(wages), to encourage major manufacturing to base itself here.
> Either that or a massive increase in population, thereby increasing domestic demand, to underpin manufacturing.
> Neither of those will happen IMO, so it will be a slow grind, small manufacturing and services, will be the mainstay for the next few years.
> Farming and agriculture will take off IMO, but due to automation and mechanisation, it won't be a major employer.
> ...




Manufacturing will need to be what they'd call "jobs of the future". Problem is politicians know what they're saying just they don't train people for it - want to privatise uni and higher education instead.

Nothing beats teachers who want to make a buck... works real in VN where schools are so crowded and teachers paid so low that teachers don't teach while at school but offer extra tuition after hours. So the poor kids whose parents can't pay extra will learn ABCs while their mates learn ABCDEF.

Australia is practically a mining country with some ag. and a few banks holding us up. Yea ag is not big on labour, mining is going robotic, and the banks are crazy profitable but will soon enough go the way of Woolies checkouts.

Then once uni is privatised, GST increased, it'll be every man for himself like the good old revolutionary days.

----

Big corporations don't pay 30% income tax; nor do rich people earning anything above half a million.

Sure they pay 30% or whatever is written on profit... but income and profit is a tricky definition to pin point.. that's the idea I guess.

BHP, and others, got caught earlier for selling the ore cheap to their subsidiary in Singapore right? Using exchange or whatever, the profit on what they sell to themselves is low.. so 30% on that goes to ATO. From low-taxed overseas shelter and exchanges they mark it up and ship to the Chinese and keep the profit offshore.

30% tax? Mathematically speaking, yea.

Same with millionaires. Set up a "company", hire your spouse or kids, claim GST back on this and that "business expenses"... so the rate is there, just if you have enough dole, you're not going to pay it. Perfectly legal, I guess.

----

Anyway, if we do GDP per capita, or other measure of wealth and growth Australia has since WW2... As a nation we're much richer now yet we can't seem to afford anything and a larger percentage are struggling to make ends meet.

So there's a widening gap, and it's not because we're poor as a nation. Just that while all mates are equal, some are more equal than others. And polcies such as these are the cause.


----------



## Tisme (9 November 2015)

sptrawler said:


> Well that sounds obvious, most sensible people complained about the carbon tax, because it hammered small business and manufacturing.
> 
> Hitting people with more gst, is the right move IMO if people want to spend more, eat out more, have more welfare, education, Government services etc.
> Who better to pay for it, than the people who want it?
> ...




I think the carbon tax was a cloak of invisibility that companies used to jack up their prices, especially those connected with power production and delivery.

There has been a recent case where this was indicated with one large company pinged for charging an extraordinary amount of SSG levy on refrigerant gases.... and as I recall the Liberals played hard and fast on the cost to consumers because of coolroom repairs (which use insignificant amounts of gas in the scheme of things).


----------



## sptrawler (9 November 2015)

Tisme said:


> I think the carbon tax was a cloak of invisibility that companies used to jack up their prices, especially those connected with power production and delivery.
> 
> There has been a recent case where this was indicated with one large company pinged for charging an extraordinary amount of SSG levy on refrigerant gases.... and as I recall the Liberals played hard and fast on the cost to consumers because of coolroom repairs (which use insignificant amounts of gas in the scheme of things).




It is what it is, manufacturing has shut down and it won't be starting up again quickly. If it was attractive financially to manufacture in Australia, they wouldn't have shut down.
Life is going to get tougher, whether we like it or not.IMO
We can only take money of Peter to pay Paul, for so long, then Peter runs out of money.


----------



## Tisme (9 November 2015)

sptrawler said:


> It is what it is, manufacturing has shut down and it won't be starting up again quickly. If it was attractive financially to manufacture in Australia, they wouldn't have shut down.
> Life is going to get tougher, whether we like it or not.IMO
> We can only take money of Peter to pay Paul, for so long, then Peter runs out of money.




Manufacturing is another issue to what I'm talking about. Refrigerant gas for instance is usually just a pass over product imported either in bulk, or inside air conditioners. 

I'm not sure if it's the case anymore, but when I worked on power stations, companies like Parsons built the gen sets overseas and imported them; adding handling costs and profit along the way.

We have traditionally been a KD or CKD industrial outpost for Great Britain or the USA, with things like trains, buses, etc, even automobiles to an extent. The value add profit component has largely been eaten away before the stuff hits the docks and when we do manufacture we tend to pay fees and royalties to overseas companies for the design and hi tech components.

Our move to, for want of a better word, the "Service" industry means we have lots of bums on seats adding administrative cost to product under the guise of compliance, logistics, quality, etc that simply makes us a top heavy national bureaucracy and therefore uncompetitive against work for and low reward for toil countries.

Remember the mantra of the 80's when Hawke and Keating could see this coming and pushed for the clever (educated and erudite) country in the face of stoich opposition by the conservatives who pined for a return to the good old days of riding on the sheep's back and pig ironesque policies?


----------



## sptrawler (9 November 2015)

Tisme said:


> I'm not sure if it's the case anymore, but when I worked on power stations, companies like Parsons built the gen sets overseas and imported them; adding handling costs and profit along the way.



Small world, I ran Parsons units as a Power Station Controller, most of my working life.




Tisme said:


> Remember the mantra of the 80's when Hawke and Keating could see this coming and pushed for the clever (educated and erudite) country in the face of stoich opposition by the conservatives who pined for a return to the good old days of riding on the sheep's back and pig ironesque policies?




Ah yes, the good old clever country, our education standards have fallen ever since.


----------



## luutzu (9 November 2015)

sptrawler said:


> Small world, I ran Parsons units as a Power Station Controller, most of my working life.
> 
> ...




Ahh... know I know why you pick Homer, d'oh.


----------



## luutzu (9 November 2015)

sptrawler said:


> It is what it is, manufacturing has shut down and it won't be starting up again quickly. If it was attractive financially to manufacture in Australia, they wouldn't have shut down.
> Life is going to get tougher, whether we like it or not.IMO
> We can only take money of Peter to pay Paul, for so long, then Peter runs out of money.




Yea, heavy industry/manufacturing is gone forever in Aus. 

Worked on NSW Warratah fleet and they manufacture the main structure in China, shipped it over to Aus for minor slotting in, electrical works, scratch repairs and testing. We can't compete with the Chinese on those built.

Thing is though, that project still provide a lot of work to Australian manufacturing... but it's not continuous work and when you stop/start manufacturing like that, it's not just the labour costs that make us uncompetitive, it's the learning curve and setting up costs that kind does it.

I mean, WTP took some 3 years and a lot of money and effort to get the gears and system in place... it then did really well, with quality and costs pretty much under control, the right people in place, the right skill sets and people... Then it stopped and disassembled. 

NSW could have gotten another 20 sets for relatively cheap but nope. Option wasn't taken up and a few years later the gov't thought of tendering for a new fleet of 60 sets. 

So yea, not always labour costs or union ruining budgets.


----------



## Logique (10 November 2015)

Turnbull is full of it.  If he ever get's tired of politics, he has a big career ahead of him selling used cars.



> http://www.smh.com.au/federal-polit...alcolm-turnbull-declares-20151109-gkufp4.html
> 
> ...Malcolm Turnbull has described as "feeble" a growing Labor scare campaign against any GST increase but has nonetheless moved to insulate his government by declaring outright that whatever is agreed, it will not leave the poorest households out of pocket...


----------



## qldfrog (10 November 2015)

luutzu said:


> So yea, not always labour costs or union ruining budgets.



for once i will agree with Luutzu 
Last 15 y in IT, outsourcing was the buzz word, so no job for graduates/no uni courses and now, after dismayal results with outsourcing, a pathetic productivity cost on the all Oz industry, companies are looking for senior developpers and can not find them..surprise surprise
This idea that you can start stop an industry in a flash or and find again the market share you have lost is pipe dream,it will take decades to recover, 
So IMHO, GST is one way to go, a limit on the tax advantages for super and ensuring global corporatation pay their fair shares of taxes in australia


----------



## Tisme (10 November 2015)

Logique said:


> Turnbull is full of it.  If he ever get's tired of politics, he has a big career ahead of him selling used cars.




Listening to the Treasurer this morning on AM, apparently the debate isn't about GST at all, but income tax and the opposition are effectively hijacking the conversation !!! 

Good thing no one here is considering the GST as an issue, because the govt isn't.:bonk:

And the other chestnut (according to the treasurer)  is that the govt is looking at ways to increase the pie by growing the economy and profitability, ...shame the first half of their tenure was designed to shrink the opportunity with an austerity policy.  All over the shop like the proverbial underpants


----------



## luutzu (10 November 2015)

qldfrog said:


> for once i will agree with Luutzu
> Last 15 y in IT, outsourcing was the buzz word, so no job for graduates/no uni courses and now, after dismayal results with outsourcing, a pathetic productivity cost on the all Oz industry, companies are looking for senior developpers and can not find them..surprise surprise
> This idea that you can start stop an industry in a flash or and find again the market share you have lost is pipe dream,it will take decades to recover,
> So IMHO, GST is one way to go, a limit on the tax advantages for super and ensuring global corporatation pay their fair shares of taxes in australia




Only once? When will you catch up on your readings? 

Yea they think they can start/stop, until they find out at great cost they can't then they get 457 skilled people in to manage the thing, then go on about how Australians can't build anything.

With IT... I think we mostly hire DBAs and graphic designers to maintain the databases and to give the US and overseas app a new face. From the little that I know, IBM and Microsoft products for enterprises are simply out of the box stuff made years ago overseas and Australian businesses will have to adapt to it; can't make any changes, and if it's needed and go up the chain it will be charged a small fortune.


Global corporations... we can't even know how much tax they're paid, forget about their fair share... can't know because privacy is very very important for corporations; not so important for us people though.


----------



## Logique (10 November 2015)

Parliament Question Time today.

Discarding their palm frond head dresses and tropical island leisure wear, the Opposition finally finds it's voice on the regressive 15% GST, favoured by Malcolm Turnbull.

Fun to watch him squirm. His vision for the nation? About as far as he can see from the front window of his Point Piper mansion.

The Nationals got it in writing, they knew a used car salesman when they saw one.


----------



## SirRumpole (10 November 2015)

Instead of asking the same gormless gst questions in QT, maybe the opposition should ask about this

http://www.afr.com/business/energy/...rofit-senate-tax-inquiry-told-20151108-gktu7s


----------



## Bill M (10 November 2015)

SirRumpole said:


> Instead of asking the same gormless gst questions in QT, maybe the opposition should ask about this
> 
> http://www.afr.com/business/energy/...rofit-senate-tax-inquiry-told-20151108-gktu7s




Neither side is dealing with this, why?

They are all complaining about it so it should be easy peasy in the senate. Why isn't it being confronted head on and urgently? Can anybody tell me why it's still going on?


----------



## Tisme (10 November 2015)

Bill M said:


> Neither side is dealing with this, why?
> 
> They are all complaining about it so it should be easy peasy in the senate. Why isn't it being confronted head on and urgently? Can anybody tell me why it's still going on?




Campaign funds channeled through fake "Institutes"


----------



## Logique (11 November 2015)

SirRumpole said:


> Instead of asking the same gormless gst questions in QT, maybe the opposition should ask about this
> 
> http://www.afr.com/business/energy/...rofit-senate-tax-inquiry-told-20151108-gktu7s



$248 tax on $1.7Bill, that's outrageous.


----------



## luutzu (11 November 2015)

Logique said:


> $248 tax on $1.7Bill, that's outrageous.




I actually thought there's a M behind $248 in tax. No M. dam, wouldn't it be nice if we could pay the same amount on our income.


----------



## drsmith (26 November 2015)

> South Australian premier Jay Weatherill told a business lunch in Adelaide he would be taking a plan to the next leaders' meeting for an increase in the GST from 10 to 15 per cent on the condition that the extra revenue was kept by the Commonwealth rather than the states. In return, the federal government would allocate the states a fixed proportion of its income tax revenue.
> 
> Most other Commonwealth grants to the states would be converted to a share of the income tax base, he said.
> 
> ...



Just broaden the base Jay. Then the states will get a growth tax without the convolutions of the above.

http://www.smh.com.au/federal-polit...tional-backing-of-15-gst-20151126-gl93as.html

Interestingly, I heard Adam Bandt commenting on the GST on ABC radio today and it seems he's seen the light on broadening the base relative to raising the rate.


----------



## Craton (27 November 2015)

So when I hear of tax cuts say, to offset the "proposed" GST hike, all I'm hearing is that Peter is robbing Paul (and as usual Paul is me), then I'll be the loser in the long run.

Has GST or equivalent gone done, being reduced, lowered at all, anywhere in the world?
Certainly not that I'm aware of and hence, the cynic in me sees that both the rate and the base will increase and broaden over time.

Its only logical unless, of course, deflation reduces the cost to govt. in providing our services. Yeah, like that's gonna happen anytime soon.

I reckon we all know it is just a matter of time before rate, base or both go up and broaden. Maybe we'll end up with varied GST rates similiar to Ireland, Italy, Algeria, Greece, Belgium, Tunisa, Turkey, UK, Finland, Egypt, France and the like.

The varied rate seems a lot more palatable but whatever happens, an increase is a cert.


----------



## Smurf1976 (27 November 2015)

I'm not opposed in principle to broadening or increasing GST, but first I'd like to see:

1. Everyone actually paying the taxes we already have. Close the "loopholes" that are in practice only available to big corporates.

2. Stop the wasteful spending and passing up of opportunity by governments in general.

If there's a hole in the bottom of a car's fuel tank then it's a lot smarter to fix the hole in the tank rather than asking for a pay rise such that you can afford to keep pouring fuel on the ground. Same principle with everything.


----------



## SirRumpole (27 November 2015)

Smurf1976 said:


> I'm not opposed in principle to broadening or increasing GST, but first I'd like to see:
> 
> 1. Everyone actually paying the taxes we already have. Close the "loopholes" that are in practice only available to big corporates.
> 
> ...




If you do 1. and 2. then maybe you don't need to alter the GST.

Changing the GST is the easy way out. Harder is dealing with corporate / high end tax avoidance. Unfortunately people with mobile money may shop around for better deals if taxes on them go too high. I can't see Gina Reinhart moving her mines to the Caymans though.


----------



## luutzu (27 November 2015)

SirRumpole said:


> If you do 1. and 2. then maybe you don't need to alter the GST.
> 
> Changing the GST is the easy way out. Harder is dealing with corporate / high end tax avoidance. Unfortunately people with mobile money may shop around for better deals if taxes on them go too high. I can't see Gina Reinhart moving her mines to the Caymans though.




Yea, it's easier to audit and take it to the little guys - just send them a letter and they'll cough it up or find they have a job to go to so a fight isn't worth it.

Send a letter to the Big Aussie... better send an army of qualified experts and prepare for the long battle.

It's pretty amazing what corporations can get away with. I mean, oil and gas companies all seem to report losses last year. Just get some consultants and experts in, claim market condition is bad and will get worst so the assets aren't producing much so they have to be written down as an expense/impairment.

Hope I'm wrong about that accounting gimmick but apparently that's how it's done. and it's legal! 

If the same rule apply to us normal people... let say I injured my leg, or the industry look pretty tough for my line of work and my wages/revenue will be lower. So my asset (myself) is impaired and that's a deduction on this year's income.

That can't be right, right?


----------



## luutzu (27 November 2015)

Craton said:


> So when I hear of tax cuts say, to offset the "proposed" GST hike, all I'm hearing is that Peter is robbing Paul (and as usual Paul is me), then I'll be the loser in the long run.
> 
> Has GST or equivalent gone done, being reduced, lowered at all, anywhere in the world?
> Certainly not that I'm aware of and hence, the cynic in me sees that both the rate and the base will increase and broaden over time.
> ...




Increase GST will increase cost of living, cost of doing business. Then on top they privatise utilities because investors love nothing more than to put out money buying stuff they then make "efficient" and pass the savings onto customers who have no other choice but to take whatever price is "reasonable".

Then once these double taxation are the new norm, the private corporations might neglect to maintain the assets properly and it's all stuffed... taxpayers will have to bail themselves out and buy it back again and make them nice capitalists richer still.

You got to admire how the game is played though.


----------



## DB008 (27 November 2015)

Spoiler Alert - Right Wing Alan Jones talks about a 2% tax on everything with a Texan Senator. 

What do you think?

http://www.2gb.com/audioplayer/138296​


----------



## Smurf1976 (27 November 2015)

luutzu said:


> Then once these double taxation are the new norm, the private corporations might neglect to maintain the assets properly and it's all stuffed... taxpayers will have to bail themselves out and buy it back again and make them nice capitalists richer still.




Tasmanian Government Railways. Taken over (nationalised) by the Australian Government late 1970's.

Then sold to Pacific National in the 1990's, end result of which was that a train couldn't run, not even at walking pace, from one end of the state to the other without a derailment. They couldn't have run it further into the ground if they'd tried. Freight moved to road and no surprises that the roads fell apart as a result of that.

Then the state government bought it back a few years ago for somewhere around $30 million so not much. But then pouring $$$ into it each and every year - new tracks, new sleepers, new rolling stock, new locomotives. Basically had to replace every single thing that makes up a working railway. There's pretty much zero chance that it's ever going to make a profit, but at least it's cheaper and safer than having all that freight on roads that weren't designed or built to cope with it.

It would have been a much better outcome for taxpayers to just keep it all along and accept any small losses it made along the way. Fixing it has cost an outright fortune once everything's added up.

I am not in any way against private enterprise per se, Smurf ain't no socialist as such. But private enterprise underwritten by government, and that's inevitably the case when we're talking about critical infrastructure, ends up being a case of all profits being privatised and any major losses being passed through to taxpayers. It's just not a good deal for taxpayers or, in most cases, consumers.


----------



## SirRumpole (28 November 2015)

Smurf1976 said:


> I am not in any way against private enterprise per se, Smurf ain't no socialist as such. But private enterprise underwritten by government, and that's inevitably the case when we're talking about critical infrastructure, ends up being a case of all profits being privatised and any major losses being passed through to taxpayers. It's just not a good deal for taxpayers or, in most cases, consumers.




Noco will be disappointed that you are not a socialist I'm sure.

There has to be some criteria applied as to whether it is in the national interest to have vital infrastructure controlled by private enterprise, because it usually happens that it ends up being foreign owned and therefore the people who run it have no direct benefit from it running properly.

Private companies can go bankrupt when things get tough and just walk away from messes they have created; eg James Hardy reducing asbestos compensation.

 The current government is just privatising for the sake of their ideology, I would certainly have asked some harder questions regarded the privatisation of Medibank private, and the effect that there is now no stabilising force preventing 'managed care' in which decisions about our medical treatment are made by insurance companies not doctors. But of course some Ministers will be popping up on the boards of these privatised service companies as a thank you for services to corporatisation.


----------



## luutzu (28 November 2015)

Smurf1976 said:


> Tasmanian Government Railways. Taken over (nationalised) by the Australian Government late 1970's.
> 
> Then sold to Pacific National in the 1990's, end result of which was that a train couldn't run, not even at walking pace, from one end of the state to the other without a derailment. They couldn't have run it further into the ground if they'd tried. Freight moved to road and no surprises that the roads fell apart as a result of that.
> 
> ...




So Tas Rail is about to be floated then? 

Heard similar cases in the UK and US a while back too.

In the UK, Branson's Virgin and pals did a similar deal, walked away with a billion or two extracted from a UK rail network after the taxpayers have to buy it back to fix the stuff ups.

In the US, the gov't actually cut funding to Amtrak. They've been cutting it every year for a while now. So with those cuts there's no new safety or significantly new loco upgrades etc., Service is then poor then soon they claim gov't can't run anything so flock it off to their pals.


----------



## luutzu (28 November 2015)

SirRumpole said:


> Noco will be disappointed that you are not a socialist I'm sure.
> 
> There has to be some criteria applied as to whether it is in the national interest to have vital infrastructure controlled by private enterprise, because it usually happens that it ends up being foreign owned and therefore the people who run it have no direct benefit from it running properly.
> 
> ...




Yea true. There should some sort of independent review whether the sales is to a domestic or foreign entity. It's not like homegrown capitalists will be nicer than foreign ones. If the infrastructure or the corporation is essential to the running of the country, they will take risks and make the most money out of it knowing that if the risk pays off they get the profit but if it fail they will be bailed out because the gov't got no other choice.

But yes, a career in politics is very short... you'd need a few directorships to retire on.


Heard from a few economists that capitalism and entrepreneurship in the US, and I guess true too for UK and Aus., is somewhat of a joke. Just about all advances in technologies and industry has been funded by gov't research labs or funded with taxpayers money through gov't contracts or tax breaks.

On game changing development, the gov't pay and take all the risks, then once the technology is successful it's offloaded to private enterprise to make money out of. So take Boeing... most of the technologies on their planes and jets were funded by US taxpayers through Pentagon contracts building bombers and spy planes. Or Google or Apple and the internet of things.

But we're all told that gov't can't do anything except maybe declare war and stand in the way of private enterprise and competitiveness.


----------



## Smurf1976 (28 November 2015)

The crux of all this is that our governments are collectively choosing to give away large sums of money on an ongoing basis via these "deals" covering everything from gambling to railways.

So long as that continues, it's pointless paying more tax in the same way as it's pointless putting more fuel in the car when there's a hole at the bottom of the tank. 

No matter how much money we hand to governments, they'll still be broke if they keep giving it away.


----------



## luutzu (28 November 2015)

Smurf1976 said:


> The crux of all this is that our governments are collectively choosing to give away large sums of money on an ongoing basis via these "deals" covering everything from gambling to railways.
> 
> So long as that continues, it's pointless paying more tax in the same way as it's pointless putting more fuel in the car when there's a hole at the bottom of the tank.
> 
> No matter how much money we hand to governments, they'll still be broke if they keep giving it away.




All true. But maybe that's the point though.

It's reverse Robin Hood. The people get to pay more and more, got less and less for it, and the gov't never seem to be able to afford anything.


----------



## Logique (1 December 2015)

Peter Reith says NO to the GST increase.  

Meanwhile the PM and Julie Bishop make heros of themselves at our expense, flinging away $800Mill of taxpayers money on 'climate change'.  

And they've got the nerve to say there's a revenue problem, requiring a GST increase! Well they can forget it.

The real problem is a spending problem. 



> *Malcolm Turnbull should shut down the discussion about raising GST*
> November 30, 2015 - by Peter Reith
> http://www.smh.com.au/comment/raisi...urnbull-before-christmas-20151130-glbb1y.html
> 
> ..Today's best candidate for dumping is the proposal to increase the rate of the GST. Turnbull should shut down this discussion before Christmas...






> *Turnbull pledges $800 million for climate*
> Tuesday, 1 December 2015
> Sky News: http://www.skynews.com.au/news/top-...million-for-climate.html#sthash.XUng03pM.dpuf
> 
> ...


----------



## qldfrog (1 December 2015)

Logique said:


> Peter Reith says NO to the GST increase.
> 
> Meanwhile the PM and Julie Bishop make heros of themselves at our expense, flinging away $800Mill of taxpayers money on 'climate change'.
> 
> ...




your own quote says it: 800M redirected from foreign aid, so not a cent more, and maybe less in the pockets of the various corrupt O/S politicians/oz business dealing in foreign aid.not a bad decision


----------



## luutzu (1 December 2015)

Logique said:


> Peter Reith says NO to the GST increase.
> 
> Meanwhile the PM and Julie Bishop make heros of themselves at our expense, flinging away $800Mill of taxpayers money on 'climate change'.
> 
> ...




Nooo... We can forget it, they're the ones deciding. They're the Decider, if you will.


----------



## luutzu (1 December 2015)

qldfrog said:


> your own quote says it: 800M redirected from foreign aid, so not a cent more, and maybe less in the pockets of the various corrupt O/S politicians/oz business dealing in foreign aid.not a bad decision




I saw on ABC, briefly, that Foreign Aids to the ME has been cut since Captain Abbott send our non-boots there. Those funds, I'm guessing, were redirected towards the war chest for the year.

Carrot and Sticks... if we're using the sticks, less carrot. That's how you win wars man.


----------



## Logique (1 December 2015)

qldfrog said:


> your own quote says it: 800M redirected from foreign aid, so not a cent more, and maybe less in the pockets of the various corrupt O/S politicians/oz business dealing in foreign aid.not a bad decision



A sleight-of-hand policy, which doesn't make it a good one, and just makes it harder for the next government. 

Too clever by half, and only what you'd expect from this leadership. 

And btw, some foreign aid actually goes to the needy, as opposed to Third World oppressive, symbolic gestures from a Paris hotel.


----------



## Logique (2 December 2015)

At least B.Bishop only spent $5,000.

Like I said, a spending problem.



> http://www.news.com.au/finance/work...t/news-story/27873595f64f51a1da24a8064dddeaea
> 2 Dec 2015
> 
> * The Foreign Minister is accused of ordering an empty RAAF Challenger jet to fly from Canberra to Perth to pick up her and her boyfriend from a charity dinner* on October 18, the Daily Telegraph reports.
> Ms Bishop and her partner David Panton were reportedly the only two passengers on the flight, *costing $30,000* for the red-eye journey.


----------



## Tisme (2 December 2015)

Logique said:


> At least B.Bishop only spent $5,000.
> 
> Like I said, a spending problem.




What's in a name eh ... both of them live like Bishops


----------



## luutzu (2 December 2015)

Logique said:


> At least B.Bishop only spent $5,000.
> 
> Like I said, a spending problem.




Would be cheaper to charter a private jet from Perth. Saw some rich Brit chartered one for her dog from Africa to the UK and it only costs some $28,000 pound. But I guess you'd only be cost conscious like that if you're paying for it.


----------



## luutzu (2 December 2015)

Tisme said:


> What's in a name eh ... both of them live like Bishops




Yes, but the important question is: Do they feel our pain? 

Back in the uni days, a professor was saying some old dude back then argued that a country should only be governed by its elite, its richest, its land owning gentry. Why? Because the rich have so much money that they cannot be bribed or corrupted by it; so much luxury that they will only spend time working for the common wealth and not of their own private interests.

Don't think that argument stacks up though.


----------



## Tisme (2 December 2015)

luutzu said:


> Yes, but the important question is: Do they feel our pain?
> 
> Back in the uni days, a professor was saying some old dude back then argued that a country should only be governed by its elite, its richest, its land owning gentry. Why? Because the rich have so much money that they cannot be bribed or corrupted by it; so much luxury that they will only spend time working for the common wealth and not of their own private interests.
> 
> Don't think that argument stacks up though.




The old Plutocrat argument. Wealth is never enough for the rich, even when they label themselves as philanthropists they still derive their power from accumulating wealth and fame.


----------



## luutzu (2 December 2015)

Tisme said:


> The old Plutocrat argument. Wealth is never enough for the rich, even when they label themselves as philanthropists they still derive their power from accumulating wealth and fame.




Don't boil my entire paragraph down to four words Alfalfa


----------



## Logique (3 December 2015)

luutzu said:


> Yes, but the important question is: Do they feel our pain?
> Back in the uni days, a professor was saying some old dude back then argued that a country should only be governed by its elite, its richest, its land owning gentry. Why? Because the rich have so much money that they cannot be bribed or corrupted by it; so much luxury that they will only spend time working for the common wealth and not of their own private interests.
> Don't think that argument stacks up though.



Indeed. It might have been partly true back in Churchill's day, but far less so in latter days.


----------



## Logique (28 October 2019)

Nearly 4 years since the last post on this thread. The Feds have bided their time..

I see the Feds are having another go at trying to increase the rate of GST, to 12.5%. They'll just abolish the States Payroll Tax they say ..We've seen this movie before.

To the PM's credit, and Anthony Albanese's, they have dismissed this notion out of hand. As they should. Raising the rate of GST would be a regressive move. The taxation system should be progressive. You don't slug poor people proportionately more for food and utility bills.

The now defunct Australian Democrats party -made a lasting contribution to societal fairness in this country, opposing GST on food

The political party that opposes raising the rate of GST, is the party that wins my vote.


----------



## SirRumpole (28 October 2019)

Logique said:


> Nearly 4 years since the last post on this thread. The Feds have bided their time..
> 
> I see the Feds are having another go at trying to increase the rate of GST, to 12.5%. They'll just abolish the States Payroll Tax they say ..We've seen this movie before.
> 
> ...




While I agree with abolishing State payroll tax there are other ways of raising the replacement revenue than slugging the consumers, like a tax on digital revenue from Amazon, Facebook, Twitter, Instagram etc, or a decent mining tax.


----------



## sptrawler (28 October 2019)

SirRumpole said:


> While I agree with abolishing State payroll tax there are other ways of raising the replacement revenue than slugging the consumers, like a tax on digital revenue from Amazon, Facebook, Twitter, Instagram etc, or a decent mining tax.



Spot on Rumpy and not untill that avenue is completely exhausted, should they even think of increasing the GST.
It is about time Government stopped hitting the easy targets and started to get an acceptable tax return from those you mention.


----------



## Smurf1976 (28 October 2019)

SirRumpole said:


> While I agree with abolishing State payroll tax there are other ways of raising the replacement revenue than slugging the consumers, like a tax on digital revenue from Amazon, Facebook, Twitter, Instagram etc, or a decent mining tax.



As a concept I'm not opposed to the idea that the GST could be some rate other than 10% but agreed yes - close the various tax loop holes before we raise the rate of anything.


----------

