Budget 2012 - Is the government hitting the carbon tax panic button?

[drsmith]

With the government having made it's education tax rebate a simple cash payment to be dished out ahead of the carbon tax, there are now speculation that the 1% business tax cut will be delayed to pay for a carbon tax sweetner.

http://www.dailytelegraph.com.au/ne...tax-sweetener/comments-e6freuy9-1226349848497

The questions, as always, is what happens when the suger hit moves beyond the brief journey across the taste buds.

Infrastructure too could also be in trouble.

http://www.theaustralian.com.au/nat...isability-scheme/story-fndbwnla-1226350056038 (Subscription required).

 

[Julia]

With the government having made it's education tax rebate a simple cash payment to be dished out ahead of the carbon tax, there are now speculation that the 1% business tax cut will be delayed to pay for a carbon tax sweetner.

Exactly what happened.

This might be a bit off topic, but I've been impressed by Chris Urhlman recently, especially when socking it to Swannie after the Budget presentation tonight.
Give him another year or so and imo he'll be way better than his predecessor
Kerry O'Brien. (I actually had to stop for a few seconds there to try to remember his name!)

Anyone else made similar observations about Mr Urhlman?

Or The Budget?

 

[McLovin]

This budget is a disgrace, even by the new normal of middle class welfare (pork barreling) started by Howard and Costello. $820 for a kid in highschool no questions asked.

I'd love to see how they plan on getting back to surplus, what a pipe dream.

What a non-event budget. We're flying without engines.

 

[Julia]

I'd love to see how they plan on getting back to surplus, what a pipe dream.

I was irritated to hear the ABC Local Radio evenings presenter introduce a post Budget discussion by telling the audience that "The Treasurer has actually delivered a surplus".

I have fired off an appropriately worded email to her suggesting there is a massive difference between promising something and actually delivering it.

Swannie gets more frenetic in his delivery every day and was especially nervy and jumpy in his interview with Chris Urhlman, eyes darting everywhere and shifting nervously in his seat.

Then tomorrow all members of the government will be across all the media spruiking.

Sigh.

 

[McLovin]

I was irritated to hear the ABC Local Radio evenings presenter introduce a post Budget discussion by telling the audience that "The Treasurer has actually delivered a surplus".

I like the ABC but sometimes they show their bias a little too obviously.

The estimates assume that unemployment doesn't change and GDP returns to 3-3.5% growth. I've got news for Wayne, with no productivity gains we ain't going back to the days of 3%+ growth.

Swannie gets more frenetic in his delivery every day and was especially nervy and jumpy in his interview with Chris Urhlman, eyes darting everywhere and shifting nervously in his seat.

He looked uncomfortable delivery his speech to the Parliament.

 

[fatmango]

As usual, the government has panicked and tried to buy some votes. They have not learned anything from their past mistakes and as a life-long Labour supporter this is disappointing. As a school teacher for 32 years (public, none of this private soft c..k stuff) the education handout is a farce - both in terms of public policy and basic economics. Most government school resource schemes are only a couple of hundred dollars a year and if 80% of parents pay you are happy. Uniforms are another hundred or so and excursions are a thing of past as red tape makes it not worth the trouble. For most parents $820 is a good profit. Who advises these people?

 

[sails]

Is this one of the ways they plan to have a surplus? Just run up more debt...

PRIME Minister Julia Gillard won't rule out that the Government could be forced to lift the Commonwealth's $250 billion debt ceiling to deliver Labor's promised Budget surplus.

Read more: Budget 2012 could see new debt crisis

 

[Knobby22]

I thought it was surprisingly good.

We expected a severely contractionary budget.

Instead tax cuts, education handouts and certain cuts to middle class welfare that should have been cut long ago.

Finally we are getting one of the things I have always thought we needed (New Zealand had it long ago) the National Disability Insurance Scheme.

Also I liked the Aged care package so more people could stay in their homes.

The extra money we all get will help retailers and the rustbelt states.

Quite a clever budget. I was surprised on the good side. Can't find much to dislike.

Summary: not much nasty and a few things that are quite nice!

 

[Bill M]

Summary: not much nasty and a few things that are quite nice!

I like it too, they have trippled the the tax free threshold from $6,000 to $18,200 something that will certainly help us self funded retirees. What that means to my wife and I is that we can get $700 p/w income from our investments and pay no tax.

Full Story Here: http://www.dailytelegraph.com.au/news/budget-2012-case-studies/story-e6freuy9-1226350381516

 

[moXJO]

I thought it was surprisingly good.

We expected a severely contractionary budget.

Instead tax cuts, education handouts and certain cuts to middle class welfare that should have been cut long ago.

Finally we are getting one of the things I have always thought we needed (New Zealand had it long ago) the National Disability Insurance Scheme.

Also I liked the Aged care package so more people could stay in their homes.

The extra money we all get will help retailers and the rustbelt states.

Quite a clever budget. I was surprised on the good side. Can't find much to dislike.

Summary: not much nasty and a few things that are quite nice!

Not much of a tough budget, more of a cash splash to try and entice labors base voters back.

What a non-event budget.

I have to agree

 

[skc]

Has anyone ever done some numbers on the effective "disposable income after government transfer" at various income levels.

With things like $800 for highschool kids, means tested private health insurance, family benefits etc. The cut off for these various handouts are usually around $70-100k mark.

So the question is...assuming all else being equal, is someone earning say $55k actually better off than someone earning $75k, after all these transfer payments?

 

[joea]

Here is a link to opinions of a few people through crikey.

http://www.crikey.com.au/2012/04/19/ask-the-economists-does-a-surplus-give-the-rba-cover/
hopefully this will open.
joea

 

[Logique]

I like it too, they have trippled the the tax free threshold from $6,000 to $18,200....Full Story Here: http://www.dailytelegraph.com.au/news/budget-2012-case-studies/story-e6freuy9-1226350381516

But removed the Low Income Offset Bill, so it's nothing like tripled. Added a couple of $thousand to the threshold is about all.

Poster Julia has been following this and may comment.

 

[Bill M]

They did not remove the low income tax offset, they reduced it to $445.

Lets say the average retired couple earns $20,000 each per year. Under the new system each person will be $702.90 better off every year. With the new tax offset someone earning 20k virtually pays no tax, that is darn good in my books.

Check out this website, they will clearly calculate it out for you. Put in 20k for the 2011 - 2012 return then put in 20k for the 2012 - 2013 return, you will be out in front by $702.90c per person. I'll take some of that!

Website here: http://www.taxcalc.com.au/1213.html

 

[Logique]

OK thanks I'll check that out.

 

[Julia]

As usual, the government has panicked and tried to buy some votes. They have not learned anything from their past mistakes and as a life-long Labour supporter this is disappointing. As a school teacher for 32 years (public, none of this private soft c..k stuff) the education handout is a farce - both in terms of public policy and basic economics. Most government school resource schemes are only a couple of hundred dollars a year and if 80% of parents pay you are happy. Uniforms are another hundred or so and excursions are a thing of past as red tape makes it not worth the trouble. For most parents $820 is a good profit. Who advises these people?

It has nothing to do with education. It's another stimulus hand out, partly to make people feel better about the carbon tax and partly to get them to buy some more retail products.

Finally we are getting one of the things I have always thought we needed (New Zealand had it long ago) the National Disability Insurance Scheme.

Knobby, you might be thinking of NZ's Accident Compensation Commission. This has nothing to do with disabilities and should have been copied by Australia years ago.
It manages all accidents regardless of cause, has a central administration that pays for treatment and compensates for time lost, long term injury effects etc.
No one sues anyone and there's no opportunity for the lawyers' delight that exists here, not to mention the general stress and misery all round.

NZ might, however, have introduced a Disability Insurance Scheme which I haven't heard about.

Also I liked the Aged care package so more people could stay in their homes.

Agree. Though in reality the financial provision for this will not look after anything like the necessary number.

I like it too, they have trippled the the tax free threshold from $6,000 to $18,200 something that will certainly help us self funded retirees. What that means to my wife and I is that we can get $700 p/w income from our investments and pay no tax.

Full Story Here: http://www.dailytelegraph.com.au/news/budget-2012-case-studies/story-e6freuy9-1226350381516

Bill if you talk to a competent accountant you will find that under the pre 1 July rules a single person can earn $30,000 in retirement without paying any tax.

I'm tired of trying to correct this "the tax free threshold has tripled" stuff.
I'll attach a screenshot of how it works which shows no such tripling and that will be the last time I'm going to bother.

 

[Bill M]

Bill if you talk to a competent accountant you will find that under the pre 1 July rules a single person can earn $30,000 in retirement without paying any tax.

I'm tired of trying to correct this "the tax free threshold has tripled" stuff.
I'll attach a screenshot of how it works which shows no such tripling and that will be the last time I'm going to bother.

Thanks for that Julia, whichever way you want to look at it using your screenshot or my calculator that I posted, most of us will be better off under the new tax free threshold wouldn't you agree? In my wife's and my case we will be $1400 p/y better off as a self funded couple.

 

[Knobby22]

Knobby, you might be thinking of NZ's Accident Compensation Commission. This has nothing to do with disabilities and should have been copied by Australia years ago.
It manages all accidents regardless of cause, has a central administration that pays for treatment and compensates for time lost, long term injury effects etc.
No one sues anyone and there's no opportunity for the lawyers' delight that exists here, not to mention the general stress and misery all round.
.

Yes, I was. I thought it was similar, that's disappointing.

 

[drsmith]

Having again walked away from earlier commitments, this budget is an act of desperation by Labor and only serves to further highlight their untrustworthyness.

This following article struck me as a good summary.

http://www.theaustralian.com.au/new...money-management/story-fn53lw5p-1226350308760

It will be interesting to see how Tony Abbott responds.

Labor is attempting to provide handouts to its base and beyond, wedge Tony Abbott into threatening to take them away, and in the process force voters to sit up and take notice of the variables between the government and the alternative government.

Stop kicking the government and start comparing it with the opposition is the catchcry.

The surplus target is the red herring, wealth redistribution is the real story. Which makes it a more politically oriented budget than most. Forget all the talk about the focus being on economic settings to help put downward pressure on interest rates. If that happens it will be a bonus for Labor. The main purpose behind this budget is to re-engage with mainstream voters. Targeted cash injections is the method.

 

[drsmith]

It will be interesting to see how Tony Abbott responds.

We have a response from Joe Hockey,

Shadow treasurer Joe Hockey said the Coalition would support these welfare benefits.

''The Family Tax Benefit Part A and the allowances which are out in 2013, we are inclined to support because the carbon tax will have an impact on families,'' he said this morning.

If the Coalition is elected and abolishes the mining tax, it would have to find the $2.9 billion from other areas, creating a potential cost-blowout in its costings.

The Coalition will oppose another handout - the so-called Schoolkids Bonus - which is not being funded by the mining tax.

''This sugar hit cash payment that they have to get out before the first of July we are going to oppose,'' he said.

''It is bad policy, it is not linked in any way to education it is simply about a bribe to the Australian electorate and the Australian electorate won't like it.''

This measure will pay families $410 a year for each child of primary school age and $820 for each child of high school age.

http://www.smh.com.au/business/fede...es-funded-from-mining-tax-20120509-1yc0e.html