Federal Labor Party discussion

[Knobby22]

So what's new?

I wonder where the levy money would be kept, for safe keeping, incase it's needed to bail out a bank.lol

The government must think everyone is stupid, not just me.

It goes into general revenue so if it was needed it wouldn't be there. Its a tax not a levy.

 

[basilio]

The Government has already decided to offer a guarantee on bank deposits up to $250k so it has a potential immense liability on its books in the event of a crash.

A Tax/levy could be put aside as an insurance against such an event but in fact if there was a bank crash I suspect the cost would be far higher than the proposed income.

Another way to do this might be to add an extra 1% tax bite to the profits of banks which is then placed in the Future Fund.

To be fair the banks were getting an exceptionally good run with the government guarantee at no cost enabling them to access lower cost funds. And they are doing so well..

 

[noco]

Three new tax in one week and whose pocket will it finally come out of?

You whistle and I'll point.

And here we have Mr Chaos running around the globe with an open cheque book with one trip paid for by one of the big tobacco companies.




http://blogs.news.com.au/couriermai...s_labor_runs_out_of_money_again/#commentsmore

 

[noco]

Maybe we might see some more dirty linen come out of the wash as Obeid seeks vengence.



http://blogs.news.com.au/couriermai...d_claims_he_got_rudds_nsw_labor_ally_his_job/

 

[johenmo]

Rather reminiscent of John Howard - complete with tracksuit. The things people will do - have they no self-respect?

 

[sptrawler]

The Government has already decided to offer a guarantee on bank deposits up to $250k so it has a potential immense liability on its books in the event of a crash.

A Tax/levy could be put aside as an insurance against such an event but in fact if there was a bank crash I suspect the cost would be far higher than the proposed income.

Another way to do this might be to add an extra 1% tax bite to the profits of banks which is then placed in the Future Fund.

To be fair the banks were getting an exceptionally good run with the government guarantee at no cost enabling them to access lower cost funds. And they are doing so well..

I certainly hope it is a levy on deposits, then everyone who gets their pay, welfare payment, disability payment, pension, dividends or any other payment, paid into the bank, pays it.
Magic.
It is another tax no one can avoid, just as good as putting up the gst, without doing it.

It is a shame Labor isn't as clever spending the money, as they are finding new ways to raise it.lol

Yes Kev is on TV telling us that the economy is in great shape, while the RBA is dropping interest rates to stop us going into recession.
I don't think the public believe Kev.

 

[Julia]

To be fair the banks were getting an exceptionally good run with the government guarantee at no cost enabling them to access lower cost funds. And they are doing so well..

Could you please provide evidence that the government guarantee was provided at no cost?
That is entirely contrary to all the publicity at the time which made clear the banks were paying a fee to the government for the privilege of the guarantee.

This tax is a joke. The banks' capacity to balance their books is far and away superior to that of the government.
How ironic that this incompetent government is slapping a tax on the banks!
About as truthful as any suggestion that the tobacco tax is all about health. What rubbish. It's all about filling the budget hole. If it were actually about health, and the government actually believed the additional cost would inspire people to stop smoking, then they wouldn't receive the damn additional revenue, would they, because the sales would not be there!!!

Yes Kev is on TV telling us that the economy is in great shape, while the RBA is dropping interest rates to stop us going into recession.

Exactly.

I don't think the public believe Kev.

Well, about half of them apparently do, sptrawler, however incredible that might be. Short memories for damn sure.

 

[sptrawler]

Well, about half of them apparently do, sptrawler, however incredible that might be. Short memories for damn sure.

Yes its amazing how much traction Kev is getting from reactionary policy, trying to move back to where he was before he took office in 2007.

His current policies, are are a direct reflection of their policy failures.
There is nothing they can hold up as a shining example of six years in office.
That is why he is going back to 'Howard lite' it worked last time.

 

[stewiejp]

Great new taxes, and yes I am being sarcastic -

1 - Tobacco. Kev's getting serious about cancer is he? Good on him - has anybody told him he is not the first politician to raise taxes on smokes? 12.5% increase in the "levy" per year for 4 years IIRC. Pretty big hike, glad he's not just trying to feed the ALP's addiction to spending money right? Those saying, "It's about time smokers paid...." - surely you're not serious are you? Let's not pretend smokers haven't been paying taxes on their filthy (yet profitable for tax) habit these past 20 odd years....

2 - Bank tax to fund the guarantee. As Julia stated, I'm pretty sure I've heard of them already paying for this in some way when it was introduced, though I could be wrong. In any case, being a bank shareholder I'm confident these taxes/levies will be passed on to the consumer so my investments aren't affected. Got to be a good thing. So long as I can continue with my fee free banking I'll be happy. Anyone who thinks the banks will pay some of their profits (ala the mining tax) - 1% was mentioned earlier, as an extra tax/levy is dreaming. Much easier for the banks to pass on their costs (+ a healthy profit margin for themselves) than the mining companies..

3 - I am sure I read there was another one... Has anyone been charged with Industrial Manslaughter yet for the pink bats debarkle... still makes me angry that one...

As stated, hopefully these new dips into the peoples' pockets will swing voters the other way..

 

[basilio]

Regarding the suggested insurance levy on deposits.

, bank depositors will face additional costs with the banks certain to pass on a 0.05 per cent insurance levy on deposits up to $250,000.

The government believes the levy will cut the return on a $10,000 deposit by ''less than 50 ¢ per month''.

Modelling suggests it would raise $733 million in its first 18 months, staying in place until a war chest of $15 billion was amassed to bail out banks in trouble. The scheme would start on January 1, 2016.

The banks are understood to have known about the plan since October.

The money would be collected from the banks, not from depositors, and placed in a new Financial Stability Fund, to be administered by the Future Fund or some other government agency, and invested in low-risk, high-quality assets.

Although quarantined for bank bailouts, the levy would be counted as revenue.

It was proposed by the Council of Financial Regulators, chaired by Reserve Bank governor Glenn Stevens, as an insurance payment for the risks the government takes on by guaranteeing their deposits.

Read more: http://www.smh.com.au/federal-polit...-car-makers-20130801-2r2af.html#ixzz2al3yPZUL

The Australian Government supported the funding of the banking system during the GFC with the introduction in October 2008 of the Guarantee Scheme for Large Deposits and Wholesale Funding.

These guarantees provided the banks continued access to funds on competitive terms during the turmoil. They were critical in supporting the continued flow of credit.

The Guarantee Scheme for Large Deposits and Wholesale Funding was removed with effect from 31 March 2010

http://www.treasury.gov.au/Publicat...-the-post-global-financial-crisis-environment

I believe the Banks were very appreciative of this blanket support for them and the whole financial system. From memory this was the time when overseas banks were experiencing runs the fear of similar events in Australia was very real.

 

[Knobby22]

Thanks Basilio.
I was misinformed. The amount collected will be quarantined.
I think the market has overreacted, should be a surge in bank shares today.

 

[noco]

Good old Mr Chaos 07 ready to hit our pockets yet again.

Good onya Kevvie this should bring you some votes. Cant wait for next weeks poll.


http://www.couriermail.com.au/news/...llion-for-budget/story-fnihsrf2-1226689834813

 

[MrBurns]

Rudd is showing the same lack of judgement as Gillard, hate to think what he'd dream/stuff up if he won.

 

[sptrawler]

Thanks Basilio.
I was misinformed. The amount collected will be quarantined.

I wonder how well it is quarantined, if it is classed as revenue.

 

[Julia]

I believe the Banks were very appreciative of this blanket support for them and the whole financial system. From memory this was the time when overseas banks were experiencing runs the fear of similar events in Australia was very real.

Rubbish. There was no genuine fear of bank runs in Australia.

These guarantees provided the banks continued access to funds on competitive terms during the turmoil.

Note "on competitive terms": translation = they paid a fee for the guarantee as I have said earlier.

Thanks Basilio.
I was misinformed. The amount collected will be quarantined.
I think the market has overreacted, should be a surge in bank shares today.

I wonder how well it is quarantined, if it is classed as revenue.

Exactly. How is classified as revenue, helping to fill Labor's budget black hole, if it's quarantined, Knobby?
An economist this morning (didn't catch his name) said the 'insurance levy' would take 44 years to just amount to enough to potentially bail out a second tier bank.

The whole idea is as genuine as imagining the additional tax on tobacco is all about health.

 

[Knobby22]

Exactly. How is classified as revenue, helping to fill Labor's budget black hole, if it's quarantined, Knobby?
:

Its treated the same way as the future fund. Adds to the government figures though presumably won't be accessible. But we all know about politicians and a pot of money.
I agree it is unnecessary and we don't need more taxes. I used to hate the FID tax.

I was right about the market over reacting yesterday. Lovely rise today.

 

[db94]

not so good for Labor http://au.finance.yahoo.com/news/budget-takes-33-billion-revenue-020949855.html

I wonder what excuses Labor will use this time, oh I reckon they will be saying we'll return the budget to surplus the next. This has been going on for years now Not thats theres anything wrong with a deficit but dont keep lying and digging yourself in a bigger hole!

 

[basilio]

Quote Originally Posted by basilio View Post

I believe the Banks were very appreciative of this blanket support for them and the whole financial system. From memory this was the time when overseas banks were experiencing runs the fear of similar events in Australia was very real.

Rubbish. There was no genuine fear of bank runs in Australia. Julia

Julia I don't believe you are correct on the situation in Australia in September 2008.

It was a time of real financial terror. Banks were falling over left right and centre as well as major Australian corporations with large property liabilities (and obviously exposure to banks).

If you would like to refresh your memory check out this analysis of the period. I have quoted only one section but the whole document is worth reading.

Despite the funding challenges faced by the banks and the volatility in Australian fixed income and equity markets, it was not until September 2008 that alarm spread outside financial markets. As governments around the world began guaranteeing bank depositors, Australians began to realise that their own deposits were not guaranteed. This led to fears that Australian financial institutions, particularly regional banks and credit unions, could experience a run by depositors, something that none could withstand regardless of the underlying strength of their balance sheets. Fearing the catastrophic effect this could have on the Australian economy, the Federal Government swiftly moved from plans to guarantee sums of up to $20,000 to announcing on 12 October 2008 a comprehensive guarantee of all retail deposits for three years. At the same time, they announced a guarantee scheme for bank wholesale borrowing to ensure Australian banks could compete for funding against other Government-guaranteed banks around the world

http://www.stubbornmule.net/2008/10/australia-and-the-gfc/

 

[Julia]

I've never heard of "The Stubborn Mule" which seems to be your source here.
If there was any fear of our banks falling over, it would have been a contagion of fear, not a realistic assessment that our well regulated, profitable banks were actually going to collapse.

To prevent such an unnecessary concern spreading, the government came up with the guarantee as a way of saying 'stop worrying, folks, we're the government and we're here to help'.

Then they charged the banks for this.

Given the status of our big four banks as some of the most stable and profitable in the world, if they were to collapse we might as well all fold our tents.

 

[sails]

I wonder how well it is quarantined, if it is classed as revenue.

Smoke and mirrors, IMO. It seems they quarantine it but add it into receipts to help hide deficit in the budget.