Australian Federal Election - 2022

[PZ99]

If the company pays the 30% on the dividend to the ATO, or to the shareholder, wouldn't it be the same effect on the bottom line?

Well not as far as I understand and I'm probably making a fool of myself here with this but.... as it is now a bank pays $1 dividend and the share price drops $1 when it goes XD.

However an additional 30 cents is paid to the ATO and the low income earner is refunded that 30 cents so their overall pay is $1.30. No ?

But if we go with your suggestion the bank just pays the $1.30 as a divvy and therefore the SP drops $1.30 instead of just the $1.00

PZ would like to know if this is viable

 

[moXJO]

Well that's good then because getting rid of it won't crash the housing market despite all the hoo-haa + we can find something better to do with that $13b per year of taxpayers' money.

NZ got rid of it - I think Labor should grow a pair and follow suit.

Meh. I don't really care. But at some point I might.
There was an nft game that had multiple streams of income that you could make. At the high point of the good times you could pull some serious real world dollars.

However every one started whinging and one by one those revenue streams got cut off. All the way to the point that you couldn't make any money.

Don't cut off potential revenue streams.

We have public sector wanks wasting money hand over fist. So no, let's not get rid of it.

 

[PZ99]

Meh. I don't really care. But at some point I might.
There was an nft game that had multiple streams of income that you could make. At the high point of the good times you could pull some serious real world dollars.

However every one started whinging and one by one those revenue streams got cut off. All the way to the point that you couldn't make any money.

Don't cut off potential revenue streams.

We have public sector wanks wasting money hand over fist. So no, let's not get rid of it.

Heh heh... I understand a lot of those public sector wanks are MP's who own quite a few houses. Dutton, Albo et-al

At the end of the day the reason we can't balance a budget is because there are too many middle class welfare recipients who will be the first to complain when their taxes go up to pay for all this evil socialism

No I don't really care either. Labor could've manned up but they didn't so budget surpluses are gone forever and we'll just keep kicking them cans... or are they buckets now ? LOL

 

[sptrawler]

Well not as far as I understand and I'm probably making a fool of myself here with this but.... as it is now a bank pays $1 dividend and the share price drops $1 when it goes XD.

However an additional 30 cents is paid to the ATO and the low income earner is refunded that 30 cents so their overall pay is $1.30. No ?

But if we go with your suggestion the bank just pays the $1.30 as a divvy and therefore the SP drops $1.30 instead of just the $1.00

PZ would like to know if this is viable

Yes, I don't know, not all shares drop by the same amount as the divvy, maybe the share price would drop more I really don't know.
But on the books $1 div + 30c tax = $1.30 to the bottom line both ways, I would think.
Maybe the market would respond differently, but there would be a huge amount more income tax collected that way.
The same as the way that retail and Industry funds were going to keep the franking credits, but SMSF's were going to lose them, if they were after saving money, they would have saved billions more taking the credits off the retail and industry funds as well.
I'm all for getting rid of it, as long as it is across the board.

 

[Smurf1976]

At the end of the day, no-one will ever be able to justify to me why non-taxpayers should get a tax refund for tax that they didn't pay to begin with. How is it a 'refund'?

On one hand I see the point.

On the other there's the "me too" aspect.

Someone could work for only 3 months of the financial year and as a result of that end up with a great big tax refund of the Income Tax their employer handed to the ATO.

For that matter, even those who are in constant full time work often find ways to get tax refunds despite having paid no tax directly themselves. It's common to the point that many, younger people in particular, often incorrectly think "Tax Return" means a return of tax to the taxpayer since they've never been in a situation of not receiving at least something back.

The answer of course is that with both wages and dividends, whilst the business physically hands the money to the ATO it's not actually their money they're handing over, it's the employee's or the shareholder's money. Once you realise that point, the rest then becomes entirely consistent.

If we're going to deny refunds to one group on the basis that they didn't make the transaction then that should, in the interests of consistency, apply to everyone.

It's the targeting of one specific group and a fairly limited one at that which many objected to. If they'd gone after everyone with the same approach, there'd have been little argument against it beyond the obvious that it hits those who've fallen on hard times, with a decrease in income, most heavily which is of course a moral issue.

Meanwhile those who spent the lot and didn't save for the proverbial rainy day not only aren't paying a cent in tax on investments, since they don't have any, but they also received a handout the moment they lost income with the pandemic. That cost a hell of a lot more than just applying normal tax rates to investors with a refund where appropriate.

 

[Smurf1976]

Because they didn't pay any tax to start with!!!

A franking credit by definition is a credit for tax paid.

You invest in XYZ and they hand 30% of your dividends to the ATO. That's your money being handed over, it didn't come from government.

Eg you receive a $1000 dividend. $700 is deposited into your account and $300 is sent to the ATO. You are then required to declare the full $1000 as income since it is. $1000 income with $300 tax paid.

Exact same arrangement as if you'd worked for an employer who deducted tax from your income. Your income is the full amount, including the tax deducted, since that's your money not the employer's.

In both cases the exact same tax rates apply under present arrangements. Exactly the same down to the cent and in both cases you'll receive a refund if the amount of tax paid exceeds the amount required to be paid under the exact same Income Tax scale.

Therein lies the question - why, exactly, would we apply higher tax to investing? Do we not want people to invest and avoid relying on welfare when their income stops? It's a lot cheaper to have someone paying less tax, which is still a positive contribution just a smaller one, than to have them on the dole or pension after all which is a very real, direct cost to government.

All that said, I'd be less opposed to taxation if the money were at least spent wisely. The amount of money thrown around in recent times, and the inefficiency with which it has been spent, is nothing short of an insult to everyone paying tax regardless of the amount.

Take a look at your own electorate wherever that is and the list of federally funded projects. Two questions flow from that:

1. How much of this stuff is really necessary?

2. Even if it is necessary, why on earth does it cost the price of a house just to build a toilet block? Etc.

Certainly from what I've observed, I'm paying tax in order to knockdown and rebuild facilities that I'd never consider rebuilding if they were my own property since they were more than adequate for the purpose they serve. And even if I did rebuild them, well I could come up with a less architectural design and save half the cost for a still perfectly adequate facility.

If we're aiming to fix the budget, something I agree with in principle, then there's a hell of a lot of spending that could be scrapped before we need to take money away from individuals.

 

[SirRumpole]

Heh heh... I understand a lot of those public sector wanks are MP's who own quite a few houses. Dutton, Albo et-al

At the end of the day the reason we can't balance a budget is because there are too many middle class welfare recipients who will be the first to complain when their taxes go up to pay for all this evil socialism

No I don't really care either. Labor could've manned up but they didn't so budget surpluses are gone forever and we'll just keep kicking them cans... or are they buckets now ? LOL

Negative gearing should only apply to one dwelling per taxpayer.

That lets the Mums & Dads etc have their retirement property but stops those trying to make a business out of it at the taxpayers expense.

 

[PZ99]

Negative gearing should only apply to one dwelling per taxpayer.

That lets the Mums & Dads etc have their retirement property but stops those trying to make a business out of it at the taxpayers expense.

That's a respectable viewpoint but I still think it should be phased out completely because it has created a sense of entitlement that's full of unintended consequences such as encouraging investors to take on massive debt that they can't service unless they claim a form of welfare from the taxpayer

 

[sptrawler]

That's a respectable viewpoint but I still think it should be phased out completely because it has created a sense of entitlement that's full of unintended consequences such as encouraging investors to take on massive debt that they can't service unless they claim a form of welfare from the taxpayer

Spot on an investment should be able to stand up without a tax break. Nevative gearing was intended to help establish a business, to offset the losses until it made a profit, the cost of a house in Sydney it will never be positive geared, so it is a speculative purchase which shouldnt be allowed as a negative geared proposition.
It should be seen as speculative and loses shluld only be allowed to be arried forward and used to offset against any capital gain IMO.

 

[SirRumpole]

Spot on an investment should be able to stand up without a tax break. Nevative gearing was intended to help establish a business, to offset the losses until it made a profit, the cost of a house in Sydney it will never be positive geared, so it is a speculative purchase which shouldnt be allowed as a negative geared proposition.
It should be seen as speculative and loses shluld only be allowed to be arried forward and used to offset against any capital gain IMO.

Agreed in principle, I was speaking more politically as Labor tried to ditch it completely but couldn't get it through so you have to go with the path of least resistance.

The alternative is to lie at the election campaign then ditch it and hope the electorate forgives you.

 

[sptrawler]

Agreed in principle, I was speaking more politically as Labor tried to ditch it completely but couldn't get it through so you have to go with the path of least resistance.

The alternative is to lie at the election campaign then ditch it and hope the electorate forgives you.

The problem with Labors plan was they were only ditching it on established homes, if they were going to ditch it on all property it would have been acceptable, as it was the wealthy would have been the only ones to benefit.
Your idea of capping it is much more equitable, but it would put more pressure on Govt to provide social housing, negative gearing is really just a perk for the private sector to provide social housing instead of the Govt.
As usual though people will find ways to use the system to maximise returns, so you have people negative gearing million dollar houses and claiming a refund on the rent shortfall, so in reality it just becomes a low holding cost loan, while the person waits for a capital appreciation.
That really isnt what it was designed for.
Well that's my opinion, right or wrong.

 

[rederob]

Crisis?

I mean a major and prolonged one. Economic most likely but if not that then something else drastic enough that the population demands a strong leader who makes things happen.

So covid wasn't a crisis?
It has been going over 2 years now, which I thought might be long enough to be called "prolonged."
And if you think it hasn't impacted politics then you only need to look at State election outcomes in the intervening period.

 

[Eager]

@Smurf Thank you for your clear explanation re franking credits, which actually made sense to me. I think it's obvious now that I was talking about what I saw as an unfair advantage to passive income earners, who happen to be more likely to fall in the zero tax bracket, compared to people who do real work and see an in-your-face fortnightly tax grab on their payslips.

I understand now, tax is tax is tax.

Having said that, I still don't feel any sympathy for old mate crying poor if he lost his franking credits, considering his multi-million dollar share portfolio.

 

[basilio]

1. How much of this stuff is really necessary?

2. Even if it is necessary, why on earth does it cost the price of a house just to build a toilet block? Etc.

Certainly from what I've observed, I'm paying tax in order to knockdown and rebuild facilities that I'd never consider rebuilding if they were my own property since they were more than adequate for the purpose they serve. And even if I did rebuild them, well I could come up with a less architectural design and save half the cost for a still perfectly adequate facility.

I think this is a very critical point.

As far as I can see much of Federal spending has become gravy train for big business and political spivs. Yes we need to have quality community assets.
Yes we want to have decent aged care.

Yes we should have excellent support to get people retrained and into jobs.

But seriously all my direct and indirect experience says these responsibilities have just become a giant gravy train for those smart enough and politically connected.

The COVID outbreak was a classic example of businesses who basically rorted the tax payers in providing health services.

The company that made millions from COVID contracts

COVID-19 has left a huge toll on us all, and taken the lives of more than 7,000 Australians. But there are some companies that have simply thrived because of it, particularly those charged by the federal government with providing goods and services like masks and other protective equipment. So...

www.abc.net.au

 

[sptrawler]

@Smurf Thank you for your clear explanation re franking credits, which actually made sense to me. I think it's obvious now that I was talking about what I saw as an unfair advantage to passive income earners, who happen to be more likely to fall in the zero tax bracket, compared to people who do real work and see an in-your-face fortnightly tax grab on their payslips.

I understand now, tax is tax is tax.

Having said that, I still don't feel any sympathy for old mate crying poor if he lost his franking credits, considering his multi-million dollar share portfolio.

Agree 100%, as long as old mate and the industry and retail super funds are treated the same, or else all old mate has to do is move his money from his SMSF into an industry fund then he gets his franking credits back.
Which then has actually solved nothing.

 

[Smurf1976]

So covid wasn't a crisis?
It has been going over 2 years now, which I thought might be long enough to be called "prolonged."
And if you think it hasn't impacted politics then you only need to look at State election outcomes in the intervening period.

It was a crisis but an external and suppressed one.

The cause was well known to have been not of the Australian Government's doing, economic effects were very heavily suppressed with special payments of all kinds and even if someone did feel inclined to engage in public protest, doing so was at odds with the nature of the crisis being a pandemic.

Now replace that with anything which the Australian Government either has caused or is widely perceived to have caused and which cannot be contained or offset. An economic crisis, breakdown of international relations to the point it brings consequence to ordinary people, banking crisis or whatever. That'll bring an extremely different response almost certainly.

 

[rederob]

It was a crisis but an external and suppressed one.

Not in my world! Family members suffered financial losses in excess of $20k relating to travel plans, and I ended up in hospital emergency.

The cause was well known to have been not of the Australian Government's doing, economic effects were very heavily suppressed with special payments of all kinds and even if someone did feel inclined to engage in public protest, doing so was at odds with the nature of the crisis being a pandemic.

How is that relevant? It was either a crisis, or it was not!
It massively affected employment and businesses, to the point that many closed and have never reopened.
It led to the most severe lockdowns ever experienced in most States/Territories and divided households and communities on the scientific issue of vaccinations, and individual rights.
It led to skill shortages that remain to this day, and supply chain concerns that also have not been fully resolved.

Now replace that with anything which the Australian Government either has caused or is widely perceived to have caused and which cannot be contained or offset.

Again, totally irrelevant.
The government ran up record debt because it was dealing with a pandemic, the likes of of which have never been experienced in a century.

An economic crisis, breakdown of international relations to the point it brings consequence to ordinary people, banking crisis or whatever.

Really?
Our nation's international border was closed for almost 2 years, while often spontaneous State/Territory border closures caused transport and holiday delays and disruptions never previously experienced!
You cannot deny the record debt that occurred, and the blame game that the government indulged in, to the point our nation's relationship with our principal trading partner is at its lowest ebb and still declining. We exploited China hate to a level where it's ok that we support military incursions in the South China Sea on the basis of "freedom of navigation", but declare a Chinese ship outside continental waters as a "spy ship."

That'll bring an extremely different response almost certainly.

So you are saying the government's dealing with this pandemic - which has not gone away and is causing more deaths nowadays than earlier - didn't elicit a response that was any different to previously?
When did we ever need a JobKeeper or JobSeeker response to an issue, or instigate border closures and repressive Health Act measures to control the movement of people?
When did we last run up a similar level of debt to counteract a major issue - aka "crisis"?

My personal view is that Morrison's handling of the pandemic has left him much worse off as a leader, and can be contrasted with the efforts of McGowan and several other State Premiers who experienced record levels of public support for their efforts.
Compare that with what Rudd did as a response to the GFC and the acclaim Australia received, aside from the plaudits of most economists and Keating's world best Treasurer badge.

 

[wayneL]

Not in my world! Family members suffered financial losses in excess of $20k relating to travel plans, and I ended up in hospital emergency.

How is that relevant? It was either a crisis, or it was not!
It massively affected employment and businesses, to the point that many closed and have never reopened.
It led to the most severe lockdowns ever experienced in most States/Territories and divided households and communities on the scientific issue of vaccinations, and individual rights.
It led to skill shortages that remain to this day, and supply chain concerns that also have not been fully resolved.

Again, totally irrelevant.
The government ran up record debt because it was dealing with a pandemic, the likes of of which have never been experienced in a century.

Really?
Our nation's international border was closed for almost 2 years, while often spontaneous State/Territory border closures caused transport and holiday delays and disruptions never previously experienced!
You cannot deny the record debt that occurred, and the blame game that the government indulged in, to the point our nation's relationship with our principal trading partner is at its lowest ebb and still declining. We exploited China hate to a level where it's ok that we support military incursions in the South China Sea on the basis of "freedom of navigation", but declare a Chinese ship outside continental waters as a "spy ship."

So you are saying the government's dealing with this pandemic - which has not gone away and is causing more deaths nowadays than earlier - didn't elicit a response that was any different to previously?
When did we ever need a JobKeeper or JobSeeker response to an issue, or instigate border closures and repressive Health Act measures to control the movement of people?
When did we last run up a similar level of debt to counteract a major issue - aka "crisis"?
View attachment 141799
My personal view is that Morrison's handling of the pandemic has left him much worse off as a leader, and can be contrasted with the efforts of McGowan and several other State Premiers who experienced record levels of public support for their efforts.
Compare that with what Rudd did as a response to the GFC and the acclaim Australia received, aside from the plaudits of most economists and Keating's world best Treasurer badge.

I haven't got the time, and I doubt many do, to fisk this response.

But let's just say that my eyeball muscles are becoming fatigued from rolling.

RAT neg, so I'm going to the pub for a few pints.

It's happy hour after 6 p.m. at the Woodbridge hotel, $6 pints of Guinness and all the Irish folk will be jammin' with their instruments and singing ditties.

I'll be the only bloke with an Australian accent, come and say g'day.

 

[wayneL]

It's happy hour after 6 p.m. at the Woodbridge hotel, $6 pints of Guinness and all the Irish folk will be jammin' with their instruments and singing ditties.

London to a brick this will be played

 

[wayneL]

This is obviously a bit edited, but albo is showing even more cowardice than scomo.

I will be no longer surprised if the Liberal heathen get up. Previous comments still apply, don't care so long as there is a reasonable crossbench to "keep the bastards honest".