The Abbott Government

[Julia]

So for Christ sake stop complaining about what you think you should have or what you have not got in comparison to the other person who has been a lot wiser in the way he or she has lived their past life.

Reading through this last page, I also had the above impression. All this fuss about a $7 co-payment!
In NZ (which, incidentally although struck harder by the GFC and the ChCh earthquake) is now moving upward, the opposite direction to Australia) there have never been free doctor consultations. Most people pay around $30. There is no evidence this has caused any adverse effect to primary care, seen children go unvaccinated or any of the other disasters that Labor and its acolytes are predicting will occur here.

Anyway, given the politically based determination of Labor and the minor parties to block the measure in the Senate, it won't be going through, so none of you need worry.

You might instead start to worry when taxes rise and things really do get tough as the country borrows more and more to pay the interest on the debt.

 

[SirRumpole]

Reading through this last page, I also had the above impression. All this fuss about a $7 co-payment!


In NZ (which, incidentally although struck harder by the GFC and the ChCh earthquake) is now moving upward, the opposite direction to Australia) there have never been free doctor consultations. Most people pay around $30. There is no evidence this has caused any adverse effect to primary care, seen children go unvaccinated or any of the other disasters that Labor and its acolytes are predicting will occur here.

I actually paid $50 out of the $70 consultation fee for my last doctor's appointment, but my flu shot cost only $15.

FWIW I think Labor and the Greens took the wrong tack by opposing the co-payment outright. The argument should have been on how it was spent. The Medical Research fund idea is absurd. People will see no value for their payment for 10 years at least. If the money went direct to public hospitals the copayment is justifiable.

You might instead start to worry when taxes rise and things really do get tough as the country borrows more and more to pay the interest on the debt.

Modest tax increases across the board is more justifiable than hitting the neediest people. That way everyone contributes. I think that could be justified as long as it is seen that all sectors make a contribution.

Axing the 1.5% reduction in company tax (where the average percentage rate actually paid by corporations is around 22%) would signal that the government believes the corporate sector should pay as well. At the moment the impression is that "the big end of town" is not pulling their weight.

 

[sydboy007]

Having read all the waffle from the main contenders in this discussion, I am more than satisfied you will never keep every one happy all the time, half the time or none of the time at all.

Most people are a greedy jealous bunch......why should he get more than me?......why should I work past 65 and not get the aged pension when I have worked hard and paid taxes all my life......Why should I work at all when I can get the dole or a disability pension ( in many cases not entitled to it)?........Why shouldn't I go to the pub every night and pi$$ my money against the wall......smoke my head off and become a burden to the tax payer because I have a liver problem or lung cancer?......Who said I can't go to a casino or pub and send my savings down the slot of a poker machine and when it is all gone apply for social security and a cheap housing commission unit......Yeah...don't worry about where the money comes from or who has to pay for it......She'll be right mate as we so often hear.

IF you don't believe people have the right to spend their money as they choose then what do you propose to do? Should we remove pokie machines and close all the casinos? Make all forms of gambling illegal?

Do we close all the pubs and bottle shops. maybe back to prohibition?

Would you like to quote some stats as to the level of fraud within the welfare system? How does that compare with the fraud going on in the financial services industry? CBA and the silver doughnut would put any avid welfare cheater to shame.

The level of housing commission units has been declining as a % of total housing, so in relative terms there's less of the population receiving that benefit.

As for being greedy and jealous, can you point to statements within this discussion that show this to be the case?

 

[sydboy007]

Well as I said ,reset the tax levels back to sustainable levels, as they were pre mining boom. Everyone has had fun, now back to reality as per the normal grind years. Obviously the thresholds would have to be higher to reflect higher average wages, but as you say maybe the tax rates shouldn't have been dropped.

Also welfare payments increased at unsustainable rates, over recent years, that needs to be brought back into line also.

We can't change history, but it doesn't mean we can't learn and change the future.

So why has Abbott chosen to repeal the carbon tax, but not the associated tax cuts and welfare increases? He's chosen to give up over $7B in revenue yet not chosen the easiest and most defensible course of action ie the tax is gone so the compensation provided is no longer needed.

Why does Abbott want to shut the CEF when it's generating a return similar to the future fund and encouraging private sector funds on a $2+ basis for each $ of loans provided? With the mining CAPEX cliff starting to get steep from next year you'd think the Govt would want to encourage as much investment as possible, yet it has seen billions of potential clean energy shelved by it's stance.

is it sensible policy to create a medical fund using $5 of the proposed co-payment when the budget is in deficit? From the sounds of it this was a policy thought bubble and not particularly well thought out.

 

[SirRumpole]

IF you don't believe people have the right to spend their money as they choose then what do you propose to do? Should we remove pokie machines and close all the casinos? Make all forms of gambling illegal?

I think it's pertinent to ask whether the people who are now complaining about people spending their money on pokies are the same people who were roundly condemning the Labor government's proposed pokie tax ?

 

[sydboy007]

Have you checked up on that? I am so over it. FFS


If I find you are wrong Banco, I will be all over you forever, I am so pi$$ed of with this budget missinformation. I don't forget and i don't forgive, also I expect to be treated the same way.

So We will check out that statement!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

Well two minutes later first google entry.


Those who have special health needs, such as those with Health Assessments or those on Chronic Disease Management programs, will be exempt from the patient contribution.

Well before this times out, it looks like me and you are going to have issues.lol
Sounds like another brain fart from labor as GG would say.
I hate bad language but you really make me angry, the problem with ill founded scare tactics, it sends us all down the chute.
Also diminishes your credibility.

just interested to know if you've decided you're correct or Banco is correct?

 

[Julia]

FWIW I think Labor and the Greens took the wrong tack by opposing the co-payment outright. The argument should have been on how it was spent. The Medical Research fund idea is absurd.

I don't think it's absurd of itself. Medical research, properly targeted is absolutely necessary and should not be left up to the pharmaceutical industry.

If the money went direct to public hospitals the copayment is justifiable.

Not sure about that. Shouldn't the public hospital budget be a separate issue? Aren't the hospitals run by the States? The $7 going to hospitals would seem to increase an already complicated system. I'd prefer to see it simply becoming part of supporting Medicare.

Modest tax increases across the board is more justifiable than hitting the neediest people. That way everyone contributes. I think that could be justified as long as it is seen that all sectors make a contribution.

I don't disagree with that. Would you include in that a reduction in the tax free threshold?
How about increasing the GST? Or broadening the base?

Axing the 1.5% reduction in company tax (where the average percentage rate actually paid by corporations is around 22%) would signal that the government believes the corporate sector should pay as well. At the moment the impression is that "the big end of town" is not pulling their weight.

That may be the perception amongst some, but we need to remember that it's business (and government, of course) that provides jobs and if investment conditions are too onerous, companies will just go elsewhere.

If I hear one more person, eg the female senator for PUP, say "tax the banks - they can afford it", obviously in complete ignorance of the reality that any additional tax applied to banks will simply be passed on to customers, I'll throw up!

So why has Abbott chosen to repeal the carbon tax, but not the associated tax cuts and welfare increases? He's chosen to give up over $7B in revenue yet not chosen the easiest and most defensible course of action ie the tax is gone so the compensation provided is no longer needed.

Because, syd, as you well know, he was reckless enough to make such a totally unnecessary pre-election promise and is reluctant to be seen to be breaking yet another promise. Of course the compensation is no longer relevant or needed.

Mr Abbott made so many promises which he had no need to make in the first place. Labor was covered in opprobrium, there was obviously going to be a change of government, yet he continued with the sloganeering (is that a word?) and the gratuitous promises.

 

[SirRumpole]

I don't think it's absurd of itself. Medical research, properly targeted is absolutely necessary and should not be left up to the pharmaceutical industry.

Indeed yes, but under the Coalition plan it is old people who will contribute the most because they see the doctor more and use more medicines.

If you want a fairer system of financing a medical research fund, then increase the Medicare levy so that everyone contributes. The money could then be distributed immediately to those currently doing research and not in 10 years.

Not sure about that. Shouldn't the public hospital budget be a separate issue? Aren't the hospitals run by the States? The $7 going to hospitals would seem to increase an already complicated system. I'd prefer to see it simply becoming part of supporting Medicare.

Putting the co-payment directly into Medicare would be a better alternative than the research fund.

Yes, the public hospital system is run by the States, but they need to be run Federally, coordinated with the rest of the Health system run by the Federal government, instead of the States and territories doing their own thing and putting their hands out to the Feds during COAG.

I don't disagree with that. Would you include in that a reduction in the tax free threshold?
How about increasing the GST? Or broadening the base?

Just a modest increase in the tax rates across the board. Lowering the threshold hits lower paid people more than others as does increasing the GST rate or broadening the base. Taxing super as a proportion of the highest marginal rate paid by the taxpayer would help correct the disproportionate benefits gained by upper income earners.

That may be the perception amongst some, but we need to remember that it's business (and government, of course) that provides jobs and if investment conditions are too onerous, companies will just go elsewhere.

As I said, companies are on a good wicket now, because most of them don't pay the amount of tax that they should, by reason of avoidance measures such as cost shifting to foreign tax havens.

 

[sydboy007]

Because, syd, as you well know, he was reckless enough to make such a totally unnecessary pre-election promise and is reluctant to be seen to be breaking yet another promise. Of course the compensation is no longer relevant or needed.

Mr Abbott made so many promises which he had no need to make in the first place. Labor was covered in opprobrium, there was obviously going to be a change of government, yet he continued with the sloganeering (is that a word?) and the gratuitous promises.

So rather than come out presenting a rational argument as to why he's going to remove the CT compensation, he's instead come up with a load of poorly designed policy. That's not Labor's fault. That's not the Senate's fault. As Rudd was knee capped by a lot of his stoopid promises, so too is Abbott. Thye are own goals and the sooner people stop trying to lay the blame elsewhere the sooner the Government might actually take ownership of the problems.

I'm sure there'd still be some stupid opposition of policies even if they were all reasonable and economically rational, but the fact is a lot of the current budget policies aren't very rational. As Abbott and the Liberals have often used the household budget metaphor, if you have 1 area of spending costing 2.8% of your annual spending, and another at 15%, which is easier to cut back on the provide the easier path to spending less? Yet the Govt has chosen to target income and disability support spending over clamping down on spending on the aged which are the above levels of Govt spending. Not one tax expenditure was touched in the budget.

If you can argue that the medical research fund is good policy, then why wait 6 to 7 years before it begins to fund any research? That's what Hockey has provided as the current timeline to hit the $20B target before any research is funded.

How does that compare with CSIRO funding cuts that are leading to the closure of some research of highly infectious diseases? When / If funding becomes available in 6 or so years it's highly unlikely the talent we've lost will return.

 

[noco]

IF you don't believe people have the right to spend their money as they choose then what do you propose to do? Should we remove pokie machines and close all the casinos? Make all forms of gambling illegal?

Do we close all the pubs and bottle shops. maybe back to prohibition?

Would you like to quote some stats as to the level of fraud within the welfare system? How does that compare with the fraud going on in the financial services industry? CBA and the silver doughnut would put any avid welfare cheater to shame.

The level of housing commission units has been declining as a % of total housing, so in relative terms there's less of the population receiving that benefit.

As for being greedy and jealous, can you point to statements within this discussion that show this to be the case?

People can spend their money as they please and is non of mine or your business so long as when they run out of money they don't come to the taxpayer for a hand out......I could not care less if they took away casinos, clubs and pubs with poker machines......they would go broke if they depended on me because I have enough brains to know you will never beat them so why waste your money?

Reference housing commission ............as at 1st Q 2014 35,029 were waiting for Government housing......as 2nd Q 30/06/20124 there were 34,632 waiting.

Social welfare fraud is rife in Australia and as the link below shows several have been caught and some $360,000.000 has been either saved or recovered.

http://www.aic.gov.au/publications/current series/tandi/421-440/tandi421.html


Table 1: Compliance and anti-fraud outcomes, 2006–07 to 2008–09 Year Customers ‘000s Reviews Cancelled or adjusted down Referred to Director of Public Prosecutions Prosecutions Convictions Prosecutions resulting in conviction (%) Fraud-related Investigations Debts and savings from fraud investigations

Year Customers ‘000s Reviews Cancelled or adjusted down Referred to Director of Public Prosecutions Prosecutions Convictions Prosecutions resulting in conviction (%) Fraud-related Investigations Debts and savings from fraud investigations






Table 1: Compliance and anti-fraud outcomes, 2006–07 to 2008–09 Year Customers ‘000s Reviews Cancelled or adjusted down Referred to Director of Public Prosecutions Prosecutions Convictions Prosecutions resulting in conviction (%) Fraud-related Investigations Debts and savings from fraud investigations
2006–07 6,500 4,276,281 628,705 5,261 3,400 3,355 98.7 42,000 $127,000,000
2007–08 6,520 4,431,309 702,624 5,312 2,658 2,624 98.6 35,885 $140,200,000
2008–09 6,840 3,867,135 641,504 5,082 3,388 3,354 98.9 26,084 $113,400,000
Total 12,574,725 1,972,833 15,655 9,446 9,333 98.7 103,969 $380,600,000


Source: Centrelink 2010
Australian data

The following section presents data supplied by Centrelink on its compliance and fraud-related activities and outcomes. Unlike the UK Department for Work and Pensions, Centrelink does not provide estimates of fraud but reports on detected errors and fraud prosecution actions and outcomes. Formal fraud investigations are usually initiated through compliance and eligibility reviews. Reviews occur in large numbers each year. There is a crossover of triggers and methods, including routine data-matching, random sampling, identity checks and public tip offs.

Table 1 reports on the outcomes of reviews for the three year period 2006–07 to 2008–09. Of note is the fact that typically, only 15.7 percent of reviews led to cancellations or reductions in payments. Of these, as few as 0.8 percent were referred to the Commonwealth Director of Public Prosecutions (CDPP); with 0.5 percent being prosecuted. Prosecutions resulted in a 98.8 percent conviction rate. Overall, in the three years, 0.04 percent of customers were convicted of fraud. For the same period, fraud investigations were estimated to have produced $380.6m in gross savings and amounts targeted for recovery. This compares with $1.4b in overpayments identified and debts generated from the review process. Fraud therefore accounted for approximately 26.2 percent of invalid payments. Furthermore, on average, only 15.1 percent of investigations resulted in a prosecution referral. In 2008–09, Centrelink referrals accounted for 69 percent of defendants prosecuted by the CDPP (2009: 115–116).
Figure 1: Trends in compliance reviews, 1997–08 to 2008–09 (n)

Trends in compliance reviews, 1997–08 to 2008–09 (n)

Source: Centrelink unpublished data 2010

Table 2 provides a snapshot of fraud across the top 15 benefit types. Within this group, the Single Parenting Payment and Newstart Allowance (unemployment benefit) together accounted for 72 percent of convictions and $33.5m of debt. The Disability Support Pension and Partnered Parenting Payment together accounted for a further 14.7 percent and $7.6m of debt.

Figure 1 shows longer term trends for compliance reviews and adjustments for the 12 year period from 1997–2008 (when Centrelink was established) to 2008–09. They show that, in terms of the number of Centrelink customers, compliance reviews increased by 54.5 percent from an average of 41.1 percent of customers up to 2001–02, to an average 63.4 percent subsequently, while cancellations or adjustments more than doubled from 4.3 percent to 10.1 percent.

Figure 2 shows that referrals to the CDPP have increased less dramatically, with prosecutions and convictions at a fairly stable rate.
Table 2: Fraud across top 15 benefit types, 2008–09 Rank Benefit type Convictions Debt associated with prosecution ($)
1 Parenting Payment—Single 1,280 22,157,531
2 Newstart Allowance 1,045 11,303,971
3 Disability Support Pension 301 5,675,043
4 Parenting Payment—Partnered 174 1,896,174
5 Youth Allowance Student 85 1,180,800
6 Austudy (Centrelink) 69 964,492
7 Age pension 59 1,270,728
8 Carer (Disability Support) 44 600,458
9 Carer Pension (Other) 40 497,621
10 Carer (Age) 25 337,888
11 Youth Allowance Job Seeker 26 168,395
12 Widow Allowance 24 607,314
13 Family Tax Benefit 23 366,385
14 Sickness Allowance 17 179,109
15 Carers Allowance (Adult) 16 63,192

Source: Centrelink unpublished data 2010

Note: Cases can be recorded against more than 1 benefit type

Do your own research next time Syd.

 

[Julia]

Indeed yes, but under the Coalition plan it is old people who will contribute the most because they see the doctor more and use more medicines.

If you want a fairer system of financing a medical research fund, then increase the Medicare levy so that everyone contributes. The money could then be distributed immediately to those currently doing research and not in 10 years.

Makes sense, if in fact research is funded by Medicare. I'm not sure that's the case. You might like to expand on this.

Yes, the public hospital system is run by the States, but they need to be run Federally, coordinated with the rest of the Health system run by the Federal government, instead of the States and territories doing their own thing and putting their hands out to the Feds during COAG.

Agree, but that's not really what we're discussing here. There's a case to be made for just local government plus a federal government, bypassing the states. Might be worth starting a thread on this.

Just a modest increase in the tax rates across the board. Lowering the threshold hits lower paid people more than others as does increasing the GST rate or broadening the base. Taxing super as a proportion of the highest marginal rate paid by the taxpayer would help correct the disproportionate benefits gained by upper income earners.

That's still messy. What about the NZ system where all income is taxable, including pensions, no tax free threshold, and the levels of taxation are appropriately adjusted?

As I said, companies are on a good wicket now, because most of them don't pay the amount of tax that they should, by reason of avoidance measures such as cost shifting to foreign tax havens.

That happens with a very few companies. The company tax rate is amongst the highest in the world. You have ignored my point about needing to be careful not to provide a disincentive to companies to operate here because of the jobs factor.

So rather than come out presenting a rational argument as to why he's going to remove the CT compensation, he's instead come up with a load of poorly designed policy. That's not Labor's fault. That's not the Senate's fault. As Rudd was knee capped by a lot of his stoopid promises, so too is Abbott. Thye are own goals and the sooner people stop trying to lay the blame elsewhere the sooner the Government might actually take ownership of the problems.

I'm sure there'd still be some stupid opposition of policies even if they were all reasonable and economically rational, but the fact is a lot of the current budget policies aren't very rational. As Abbott and the Liberals have often used the household budget metaphor, if you have 1 area of spending costing 2.8% of your annual spending, and another at 15%, which is easier to cut back on the provide the easier path to spending less? Yet the Govt has chosen to target income and disability support spending over clamping down on spending on the aged which are the above levels of Govt spending. Not one tax expenditure was touched in the budget.

If you can argue that the medical research fund is good policy, then why wait 6 to 7 years before it begins to fund any research? That's what Hockey has provided as the current timeline to hit the $20B target before any research is funded.

How does that compare with CSIRO funding cuts that are leading to the closure of some research of highly infectious diseases? When / If funding becomes available in 6 or so years it's highly unlikely the talent we've lost will return.

Presumably we should take the above as comment, rather than any questions you actually expect any of us to answer.

 

[SirRumpole]

Makes sense, if in fact research is funded by Medicare. I'm not sure that's the case. You might like to expand on this.

I don't know how medical research is funded at the moment. General revenue is a big bucket of money out of which a lot of things are financed, there doesn't have to be a specific source. I'm just saying that if medical research is seen as important by this government, then increasing the Medicare levy is a fairer way of financing it, rather than depending mostly on the old who most likely won't see the results of this research.

That's still messy. What about the NZ system where all income is taxable, including pensions, no tax free threshold, and the levels of taxation are appropriately adjusted?

There has to be a discussion about the relative merits of this system. Does NZ pay Family Tax benefits for example ?

Maybe if we phased out that system which was bought in by John Howard in a mining boom then we could maintain the current taxation arrangements, or even reduce taxes. Family tax benefits seem to be increasingly unsustainable in the current environment.

What is the purpose of a tax free threshold ? To take a load off low income earners. It also takes a load off the taxation department by not wasting resources on recovering trivial amounts of tax, but I'm open to arguments on what effects abolishing the threshold would have.

 

[Knobby22]

Julia's comment got me interested to look up the NZ tax system, as usual they appear to be advanced compared to Oz. I would love to swap leaders as their Prime Minister, John Key, appears to be very competent and has real experience working internationally. Tell you what, I will swap Tony Abbott, Brandis and Hockey and throw in a patrol boat (wish).

NZ tax at a glance:

Personal income
Top rate: 33% from $70,000
30% - $48,001 to $70,000
17.5% -$14,001 to $48,000
10.5% - $0 to $14,000

Company income
28%

Tax credits
Working for Families credits for low and middle income earners

Social security & insurance levies etc.
Social security and health: covered by general tax, though many people have private health insurance
ACC (New Zealand’s unique accident compensation scheme): earners pay 1.45% up to a maximum of $118,191 in earnings. Motorists pay a levy with their annual car registration. Employers pay insurance cover based on industry risk.

Estate tax
None

Capital gains & dividends
Capital gains: generally not on New Zealand investments but applies to foreign debt and equity investments

Dividends
Imputation system to avoid double tax

Gift duty
None since 2011

Tax on savings
Little tax relief on contributions to New Zealand retirement schemes, but saving is not compulsory. Tax paid at normal income levels at source but distributions are tax free. No mortgage interest tax benefits except for investment property

Fringe benefit tax
Paid by employer, up to a rate of 49.25% for employer provided cars, low interest loans, medical insurance premiums, foreign superannuation contributions etc. FBT is tax deductible so employer cost is effectively the same as paying cash remuneration

Sales & excise tax
Goods and services tax (GST) of 15% on most things.
Excise tax paid on petrol, tobacco, alcohol

 

[SirRumpole]

Julia's comment got me interested to look up the NZ tax system, as usual they appear to be advanced compared to Oz.

"Advanced" is a personal assesment, and what works (if it does) in one economy doesn't always work in another.

 

[Knobby22]

True, I am not a tax law specialist, but NZ just appears to have a simpler system that runs at a lower cost to us. I think it is more efficient also, we have so many ways for companies to avoid tax, they just pay a lower rate and get rid of some of the loopholes but I may be wrong about this.

I also really love their accident compensation system.
Instead of following their lead we have followed the US and now we have the overhead of lawyers fees and ambulance chasing adds on TV.

BTW New Zealanders do have a family tax benefit.

Their economy is only as big as Queensland.

 

[SirRumpole]

True, I am not a tax law specialist, but NZ just appears to have a simpler system that runs at a lower cost to us.

I also really love their accident compensation system.
Instead of following their lead we have followed the US and now we have the overhead of lawyers fees and ambulance chasing adds on TV.

I also don't know enough about the NZ system to make comparisons, but I agree that it looks simpler.

Maybe their accident compensation could be compared to our NDIS in the way it works. There certainly are a lot of ads here for compensation lawyers and if NZ have a system that cuts out the legal eagles and gives a higher payout to victims, then I'm all for it.

 

[wayneL]

Total tax take is substantially higher in nz. In addition, the effective tax rate on those with low income is very burdensome.

 

[sydboy007]

Capital gains & dividends
Capital gains: generally not on New Zealand investments but applies to foreign debt and equity investments

This seems to be unfair as the wealthier you are the higher the level of capital gains will be as a source of income.

It's probably been done to encourage investment in the local economy, but I'd not be surprised that it's a major source of revenue leakage.

 

[sydboy007]

Do your own research next time Syd.

So fraud accounted for 1/4 of cases, while stuff ups were 75%. Seems some major cost savings could be made by simplifying the system.

I'd love to see you have the same fire in the belly over the financial advice scandals that have seen much higher levels of fraud along with much higher levels of money lost.

Why research a claim someone else has made? If you're not willing to provide proof to back up your claim then either you're just plain lazy or quite likely to be making things up.

 

[SirRumpole]

Total tax take is substantially higher in nz. In addition, the effective tax rate on those with low income is very burdensome.

With a top personal tax rate of just 33% on incomes over $70,000 is seems as though the rich have a very good deal at the expense of the not so rich.

John Key is a soul mate of our PM, so watch out low income earners, the big bite may not be far away.