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The Abbott Government

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sydboy007 said:
I don't expect things to be fixed in a day, but I do expect to have a feel for a coherent strategy by now, and there doesn't seem to be one.

lets look at the CoA. Loaded with economic dries and ignores the politics of the changes that need to be made. Little in the it that can help the Government educate (for want of a better word) the public on why the changes are desirable.

Worse, the Government set the terms of the CoA so narrowly and explicitly ignored:

* The GST
* $120B+ of tax expenditures.

If I'm going to pay for an audit that I plan to use to help get my finances in shape, I'm not going to hobble the audit by setting up major areas of my finances as off limits. That's what this Government has done. It's not economically rational.

As for super, we can no longer afford the current system. Something fairer where everyone gets the same tax expenditures each year is probably the best way forward. At least that would be a progressive system rather than the massively regressive system we currently have, but the Abbott Govt has already sided with the 16000 super fund members earning over 100K tax free each year over the couple of million members who were to benefit from the LISC. The Abbott Government purposefully told the CoA to ignore this issue. To me if a system is costing around $60B a year then it's ripe for some massive savings.

Throw in an ex banker heading the financial services review I don't expect any changes, especially when you read about the scandals now coming out regarding financial planers at the CBA under his time as CEO. Funny how that kind of corruption is ignored, but the merest whiff of union corruption gets anyone on the right into a near rabid frenzy. Damning that ASIC ignored it, damning that Labor allowed them to as well.
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There seems like a stratergy to me, you may not like it, but it is more coherent than Labors was.
Talk about a near rabid frenzy, I would say that pretty well covers the chorus against the governments every idea and that's before a budget is put in place.
Well at least the frenzy over 'they will never be able to stop the boats' seems to have abated.
Now all we have to do is wait and see what happens fiscally, maybe then all the screamers and lefties will be proven wrong yet again.
It is really hillarious watching Shorten on t.v, trying to pretend they had nothing to do with the fiscal situation, he is a real goose. I must say though, he has all the makings of a Labor treasurer, thick skin, look straight in the camera while bulls###ing.lol
 
noco said:
Just pile it up on the credit card and let the next Government work out how to pay for it all.......Comrades of the Greenies don't know any other way.
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And the old schoolboys don't know much else but hysterical rhetoric when it comes to our debt/deficit in comparison with the rest of the world.
 
drsmith said:
Some numbers on the deficit tax that make more sense even if the levy itself still doesn't.


With Medicare (2%) included, the effective income tax rates from $80k to $180k are 40% and 49% above $180k.

The combined effects of the 0.5% Medicare levy increase and deficit tax would from the above be as follows,

Income Extra tax (0.5% Medicare levy increase + deficit tax)
$50,000 $250
$80,000 $400
$100,000 $700 ($500 + $200)
$150,000 $1450 ($750 + $700)
$180,000 $1900 ($900 + $1000)
$200,000 $2400 ($1000 + $1400)

http://www.heraldsun.com.au/news/vi...ver-new-debt-tax/story-fni0fit3-1226900288574
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With the latest media tweak at a threshold of $100k for 1% on top of the marginal rate and 2% above $180k, the numbers are as follows,

Income Extra tax (0.5% Medicare levy increase + deficit tax)
$50,000 $250
$80,000 $400
$100,000 $500
$150,000 $1250 ($750 + $500)
$180,000 $1700 ($900 + $800)
$200,000 $2200 ($1000 + $1200)

It is more likely to come in at $100,000, rising to a 2 per cent increase on the top marginal rate of taxation that cuts in at $180,000.

The current thinking remains that it will be in place for four years.
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Some media commentary has also appeared on how politically bad it was for the government to let the media run with the more extreme numbers earlier in the week.

http://www.smh.com.au/federal-polit...ld-seal-tony-abbotts-fate-20140502-zr2hx.html
 

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SirRumpole said:
And the old schoolboys don't know much else but hysterical rhetoric when it comes to our debt/deficit in comparison with the rest of the world.
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It is beyond belief that you compare our debt with the rest of the world, it's like comparing your personal debt with someone in the U.S, U.K or anywhere else. It is just a nonsense comparison, which has no relevance to anything.
The only thing it does do is show how badly the previous government has performed. Going from no debt to $300billion in six years.:eek:
It could have been worse, the goon show could have been re elected.:xyxthumbs
Policy on the run, band aid taxes and band aid programes put together on the back of napkins.
At least the current government, right or wrong, is structuring a fiscal policy on feedback from outside sources.
Not just blindly shooting from the hip, ala the last government. Whether they make a better fist of it, only time will tell and they will be judged, just as the last government was.
But the constant raving, before even the first budget, now that is hysteria.
 
sydboy007 said:
I wonder if that graph includes tax expenditures. Those on the higher incomes get the lions share of super tax expenditures, along with the halving of the GST rate. Then we have wonderful discretionary trusts that help shelter the assets of the rich too.
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Very true sydboy.

Also the big end of town such as Google is making hundreds of millions out of us and hardly pays any tax. It is very simple to set up a loan if you are wealthy, where you set up a company and borrow from it and have to pay it back so skipping all the tax. Not to mention trust funds and many other tricks. Pity us PAYG losers.

Newscorp is eagerly awaiting the rule change to gain Channel 10 as a reward for their slavish devotion. Next on their list will be to shut down ABC's News 24 channel and replace it with FOX.
 
Logique said:
Very interesting Dr Zacchary.

Just 2.3% of workers earn + $180,000/ann. Big revenue raiser any additional tax on them! (eg deficit tax)

Also why work more hours, when earnings of $37,001+ brings such a massive jump in taxation, i.e.

Earnings up to $37,000 = 3.7% tax

Earnings $37,001+ = 32.8% tax
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There's the folly in being so reliant on income and corporate taxation.

The faster this Government realises taxing hard work is counter productive the better.

After hearing of the deficit levy I've decided to take up my company's offer to purchase up to 2 weeks extra leave. After tax it's like getting 2 for the price of 1
 
It seems to me the have nots?? here have a thought that high income earners ( and I am talking 180k-1000k ) have access to tax minimisation strategies that are available to the mega rich.

I can almost assure you there there are not many people in those income brackets who pay less ?% tax than people below the maximum marginal rate.

They still pay truckloads more than the average Joe, who is in fact subsidised often by those who have worked longer hours / sacrificed certain areas of their life to achieve such incomes.

But then again, the world owes certain people a living, and unfortunately those that work the smartest / hardest are often not the beneficiaries of any "generosity" of those who like to enjoy themselves.

MW

PS Yes, I do think that a small percentage of the community expects handouts, not handups.
 
sptrawler said:
The only thing it does do is show how badly the previous government has performed. Going from no debt to $300billion in six years.:eek:
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What's really terrible is Labor are still spending it.........when will it ever end, why wont Labor stop spending our money?
 
sydboy007 said:
There's the folly in being so reliant on income and corporate taxation.

The faster this Government realises taxing hard work is counter productive the better.

After hearing of the deficit levy I've decided to take up my company's offer to purchase up to 2 weeks extra leave. After tax it's like getting 2 for the price of 1
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Thanks for your posts Syd you really bring some excellent contributions to these threads
 
This graph shows just how lopsided our taxation system is.

Notice how consumption tax had the stimulus bounce, and has been on a continual decline since. No wonder the states are near bankrupt too.

Our tax system favours speculation over thrift and penalises PAYG earners far to heavily. I'm thinking I've got a better chance at lotto mega draw win than any meaningful tax reform on budget night, but I'll be happy if there's some good surprises.

Note: That consumptions taxes will take multiple hits with the FTAs recently announced. Billions in import tariffs will be lost, and I've yet to hear how the Government expects to replace this lost income.
 

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medicowallet said:
It seems to me the have nots?? here have a thought that high income earners ( and I am talking 180k-1000k ) have access to tax minimisation strategies that are available to the mega rich.

I can almost assure you there there are not many people in those income brackets who pay less ?% tax than people below the maximum marginal rate.

They still pay truckloads more than the average Joe, who is in fact subsidised often by those who have worked longer hours / sacrificed certain areas of their life to achieve such incomes.

But then again, the world owes certain people a living, and unfortunately those that work the smartest / hardest are often not the beneficiaries of any "generosity" of those who like to enjoy themselves.

MW

PS Yes, I do think that a small percentage of the community expects handouts, not handups.
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+1. I'm reminded of the people who decline any suggestion that they had the option of saving for their own retirement. They offer that they could not possibly be expected to do so because "compulsory super has only been in place for less than half their working lives".

If there's any logic in that I can't see it. What was to stop them saving for their own retirement anyway?
It doesn't take any sort of mathematical wizard to realise that a government pension (even if it were to still exist when they reach the age of eligibility) is hardly enough for a comfortable retirement.
 
IFocus said:
What's really terrible is Labor are still spending it.........when will it ever end, why wont Labor stop spending our money?
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I agree. It will never end. The Gonski Education reforms and the NDIS were cunningly designed to wedge the Coalition and to bleed the economy of billions far into the foreseeable future. Both are hugely inefficient and wasteful like all Labor projects, and the truth is we can't afford them.
 
Calliope said:
I agree. It will never end. The Gonski Education reforms and the NDIS were cunningly designed to wedge the Coalition and to bleed the economy of billions far into the foreseeable future. Both are hugely inefficient and wasteful like all Labor projects, and the truth is we can't afford them.
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But PPL is? Removing the resource tax which is about the most efficient tax wasn't a wedge policy against Labor? Then we have the removal of the LISC meaning something like 3.8 million people pay more in super tax than income tax, yet roughly 16000 will be blessed with an extra $75M each year. How does that help reduce future aged pension costs?

Yes, the Abbott Government certainly knows how to ensure the pain from fiscal consolidation is distributed fairly. Certainly in the same vein as $5000 trips for 2 hour meetings.
 
Julia said:
+1. I'm reminded of the people who decline any suggestion that they had the option of saving for their own retirement. They offer that they could not possibly be expected to do so because "compulsory super has only been in place for less than half their working lives".

If there's any logic in that I can't see it. What was to stop them saving for their own retirement anyway?
It doesn't take any sort of mathematical wizard to realise that a government pension (even if it were to still exist when they reach the age of eligibility) is hardly enough for a comfortable retirement.
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Combined with the fact they were able to buy relatively well located shelter for around 3 times the average wage compared to the current 6 on the edge of a major city and 9 if you want access to decent public transport. With such low housing costs it should have been relatively easy to pay off the mortgage and start saving for the future. Even my dad was able to scrap together around $100K in super for when he retired and he spent many years on a low income keeping peoples gardens in shape and handyman jobs for pensioners who had no one else to help them. My parents lived pretty frugally and knew the value of saving.

It's just another facet to how so many people want to blame someone else when most of the time they just need to take the initiative and sort things out for themselves. Our politicians could also stop blaming everyone else and start taking a bit of responsibility. Lead by example! Now there's an old style tradition Abbott could have brought back instead of knights and dames or racial bigotry.
 
A problem is that imo what the majority vote for is not necessarily what is best for the majority.

A problem is that we vote for our self interests and that this leads to a mishmash of policy that often is a detriment to the majority.

I have no problem at all paying tax to aid the needy, but middle class welfare has proven to be a huge mistake, aiding in the housing boom and disincentivising hard work and self improvement

I 100% agree we need courage and conviction in a pm. But that would be political suicide
 
I believe Joe Hockey has explained it very well in the link below....If you live beyond your means, you have to borrow money to satisfy your materialistic thirst....but eventually it has to be paid back with a heap of interest.

In years gone by when we did not have credit cards, you did without until you could afford it...Yes you could borrow from the bank to buy a house on one third deposit and you could buy a new car on hire purchase....but when you went shopping for living, food and clothing, you had to pay cash.

Either the Comrades of the Greens are dumb when it it comes to finances or they are just playing politics to suit their own egos and with very little interest in the welfare of the nation.


http://www.couriermail.com.au/busin...onal-credit-card/story-fnihpj8r-1226904320467
 
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