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The Abbott Government

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SirRumpole said:
Figures can prove anything I suppose.

One thing I'm sure of is that corporate tax must be a nightmare to administer, given that the tax act has bloated out from one book when I went to college to a whole bookshelf now.

What about progressively reducing deductions that corporations are currently allowed, which can cover a multitude of sins, and at the same time reducing the company tax rate ?

That will ease the burden on the tax department allowing staff reductions, and reduce the business expense of justifying deductions, therefore making company tax more efficient.
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The original Rudd MRRT was partly along those lines. Pretty much every economics article I've read has repeatedly said that land taxes and GST are far more efficient in collecting revenue than income / corporate taxes. There's a mountain of evidence to back up what I'm saying, heck it's one of the reasons Howard fought to bring in the GST.

I think land taxes are the simplest of all to implement. Difficult to hide land, probably the best ownership records we have, and pretty easy to determine it's value and bring some of the true economic rent back into the public purse than constantly benefiting the private sector.

I just don't think our politicians are up to the task of explaining the issues and showing economically rational ways forward.

Personally I'd like to see the budget provide estimates of the tax expenditures. They're a hidden tax on us all as other taxation has to be higher to account for the loss of revenue. Even if the OECD is wrong, and say tax expenditures are only 5% of GDP, that's still the equivalent of $80B in spending or twice the current deficit.

Maybe if I use the last budget figures it gets a bit easier to understand my argument about taxation efficiency

http://www.budget.gov.au/2012-13/content/overview/html/overview_42.htm

* Income Tax 163B collected - roughly $39B consumer welfare loss

* Company and resource rent taxes collected $82.4B - roughly $33B consumer welfare loss

Lets say we bring in a land tax and broaden the GST base so as to allow a halving of the revenue received via income and corporate taxes.

So Income tax drops to $81.5B and Corporate tax to $41.2B

I'll go conservative and say that this tax change will halve the consumer welfare loss of each

So the land tax and broadening of GST will need to raise $122.7B, but in the process we've halved the consumer welfare loss of each so there's a net benefit of $36B or ~ the current cost of the aged pension. Plenty enough to see stamp duties finally wiped out.

If the federal Govt was smart they'd combine a progressive land tax with the ability for the states to vary the level - along the lines of how US states are able to set different sales and land tax levels. Probably a better way to encourage development out of the capital cities, and I'd say it will help with housing affordability as building properties where land values are lower will probably start to provide better economic returns to building companies - progressively higher land tax should in theory limit how much someone is willing to pay for a property.

Combine this with a true legislation repeal day to make things easier for businesses with further corporate tax reductions paid for by corporate tax expenditure cuts, and the party that starts talking along these lines will definitely get my attention. Abbott's in the box seat, but I don't think he has any intention of being this economically rational.

* NBN CBA - paid for an not used
* Commission of Audit - paid for and not shown to Treasury before the budget is released.

Some will argue it's not up there with "pink bats" but it's only been 7 months and this kind of waste is not a good sign.
 

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drsmith said:
Federal Treasurer Joe Hockey outlines details of Commission of Audit report ahead of release next week and the May budget.

http://www.abc.net.au/news/2014-04-23/joe-hockey-outlines-details-of-commission-of-audit/5407616
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Considering they weren't willing to show it to treasury, so hasn't really helped frame the budget, and we're now told the CoA didn't look at direct action either because as the head of the Audit has said:

“The Commission of Audit couldn’t really look at it because we didn’t have a policy to look at,” he said.
“If they had a policy and it was out there we would have had a look at it, but in the absence of any detail we couldn’t.”


Read more: http://www.smh.com.au/federal-polit...e-emissions-20140424-zqya6.html#ixzz2zkqG7Dou

beside being a political weapon against Labor, what was the point of the expense??

I do love the honesty when Mr Sheppard said "If they had a policy.." :D
 
sydboy007 said:
Considering they weren't willing to show it to treasury, so hasn't really helped frame the budget, and we're now told the CoA didn't look at direct action either because as the head of the Audit has said:
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While there may be questions about some of this government's individual policies (as there are with all governments), it's emerging that this government is going to establish a broader long term fiscal management plan early in this term. This is something the previous government didn't do and as a consequence could only deal with the emerging fiscal situation in an increasingly reactionary way.

The results of that both politically and in terms of resultant fiscal outcomes speak for themselves.
 
drsmith said:
While there may be questions about some of this government's individual policies (as there are with all governments), it's emerging that this government is going to establish a broader long term fiscal management plan early in this term. This is something the previous government didn't do and as a consequence could only deal with the emerging fiscal situation in an increasingly reactionary way.

The results of that both politically and in terms of resultant fiscal outcomes speak for themselves.
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It's a bit early to be calling that isn't it? We don't know what this government will do, so far it's been all talk.
 
McLovin said:
It's a bit early to be calling that isn't it? We don't know what this government will do, so far it's been all talk.
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Loads of commissions and audits of just about everything, though few of them have been released for public scrutiny, and even less seems to have had any recommendations used.

Far cry from the transparent and responsible Government they harped on about while in opposition, but then oppositions are always pro transparency and Governments seem to keep everything as a state secret.

case in point

http://www.independent.co.uk/news/w...bott-with-images-of-cute-kittens-9274549.html
 
Fear not young Syd.

The CoA will be released next Thursday and I'd suggest a greater proportion of its recommendations will see light of day relative to those from the Henry tax review.
 
drsmith said:
While there may be questions about some of this government's individual policies (as there are with all governments), it's emerging that this government is going to establish a broader long term fiscal management plan early in this term. This is something the previous government didn't do and as a consequence could only deal with the emerging fiscal situation in an increasingly reactionary way.

The results of that both politically and in terms of resultant fiscal outcomes speak for themselves.
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All I see is kites being flown left right and centre but happy for you if are buying all of that.
 
sydboy007 said:
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Far cry from the transparent and responsible Government they harped on about while in opposition, but then oppositions are always pro transparency and Governments seem to keep everything as a state secret.
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I agree. They should;

Be more transparent

Lay their cards on the table

Come out of the closet

Let all state secrets be an open book

Tell the truth about their economic failings

Admit they have stuffed up

Be open to the electorate on all things

Aim to let their truth, honesty and veracity be a model to all.

In other words, be more like the Labor/Greens. If they need help with this approach they could always ask sydboy for advice.
 
Calliope said:
I agree. They should;

Be more transparent

Lay their cards on the table

Come out of the closet

Let all state secrets be an open book

Tell the truth about their economic failings

Admit they have stuffed up

Be open to the electorate on all things

Aim to let their truth, honesty and veracity be a model to all.

In other words, be more like the Labor/Greens. If they need help with this approach they could always ask sydboy for advice.
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Always seems to be your raison d'etre that you hold up Labor as the way things should be.

I just want a Government to walk the walk rather than doing mostly the opposite to what they say they will.

Do you think it's sensible to have a CoA and not show it to Treasury, and keep it secret till just 2 weeks before the budget? Do you think it's sensible to have direct action environmental policy so poorly defined that the Government hasn't been able to run it through any form of CBA or COA or pretty much any economic analysis? Why spend millions of dollars on a CBA for the CBN only to have the minister say no need, just do the rollout as I've decreed even though it's rank hypocrisy because I winged at Labor for 3 years that they didn't do a CBA to justify their NBN policy.

Why does it matter what Labor did? Unless you are holding Labor up as the way for thing to be done, and I really hope not, then shouldn't this Government be held accountable to what they said before the election, or is that a standard only to be applied to Labor?
 
sydboy007 said:
just want a Government walk the walk rather than doing mostly the opposite to what they say they will.
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Me too. Sorry I omitted that cliché. Another i forgot was "Let the sun shine in".:D

I winged at Labor for 3 years that they didn't do a CBA to justify their NBN policy
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Synonyms for "winged".
feathered, elevated, fleet, wounded, lofty, rapid, swift, sublime, alate, alar, penate.

Which one did you use? Im not surprised you were ineffectual.
 
They must think this policy is utter **** to be releasing it in the afternoon before ANZAC day:

Government releases policy white paper on Direct Action climate change plan

The Federal Government has released its detailed policy white paper on its Direct Action climate change plan.

At the core of the policy is the $2.5 billion emissions reduction fund (ERF) which the Government says will pay industry for activities that reduce carbon emissions.


http://www.abc.net.au/news/2014-04-24/government-releases-climate-change-policy-white-paper/5409262
 
drsmith said:
It's actually a green paper, but it looks very white on my desktop. ;)

http://www.environment.gov.au/syste...99a3-040705fead3b/files/erf-green-paper_1.pdf
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It seems to be just a slightly more defined thoughty bubble to what they went to the election with.

Some initial questions I have are:

The alternative global model is purchasing abatement. Instead of a heavy punitive tax, a
buy-back model focuses on activities that reduce emissions.

The money comes from general Government revenue ie taxation so someone is paying extra tax to support this.

At the start of the Emissions Reduction Fund, a simple process would be adopted to make it
as easy as possible for businesses to participate. Businesses could submit bids at any time
and, at regular intervals, the Clean Energy Regulator could run tender rounds to select eligible
offers on a lowest-cost priority basis up to a benchmark price. This benchmark would be
commercial-in-confidence to encourage businesses to submit their lowest price.

So there's currently no defined process, but it will be simple.

The Clean Energy Regulator could seek redress if emissions reductions are found not to have occurred.

Could? Why not SHOULD? If a company breaks it's contractural obligations then shouldn't they pay back the money they've been provided?

In the mining sector, there are opportunities to reduce fugitive emissions through destruction of waste coal mine gas.

Why do tax payers have to subsidise multibillion dollar mining companies for this?

Many changes in business activities and practices reduce emissions. Those changes are often
associated with actions to lower business costs such as energy costs. While these activities
make a positive contribution to reducing Australia’s emissions, they do not require incentives to take place.

Isn't DA all about the above?

Emissions reduction methods will be developed collaboratively with emissions reduction
providers.

So they want to repeal the current carbon abatemnt scheme but they don't actually have a ready to go policy to replace it.

Some of the most prospective low-cost emissions reduction opportunities exist outside major
industrial settings, such as energy efficiency improvements in commercial buildings, more fuel
efficient transport use and the diversion of waste from landfills.

Isn't this "associated with actions to lower business costs such as energy costs". So the policy says they wont be covered, but then says they will be?

Facility methods would be a key way in which the Emissions Reduction Fund could quickly
facilitate large-scale emissions reduction projects across a broad range of sectors. Potential
emissions reduction activities covered by these methods include: switching to less
emissions-intensive fuel sources, optimising boiler efficiency and recovering waste heat within the facility.

Once again, seems very much like "associated with actions to lower business costs such as energy costs".

Details that are commercially sensitive, including the Government’s benchmark price for
auctions and the price of emissions reductions in individual contracts, would be kept
confidential in order to encourage participation and to preserve competition in auction
processes.

Seriously, they believe that will happen? What about staff that move between companies? What about law firms or other companies that will see bids from different companies? How do you stop gaming of the system? The airlines ran a cartel on international freight for years before being caught.
 
Thanks to this buffoon we may be spared the stupidity, waste and uselessness of the Direct Action climate change plan. He would like to stop the PPL also, but i'm afraid it will get through the Senate in a modified version with Green support.

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