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SirRumpole said:
Treasurer Joe Hockey faces $51 billion deterioration in finances between budget and MYEFO, economists say



Wonder how long Hockey will last as Treasurer ?

Might be time to give Turnbull a go.
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Obviously Labor's fault that iron ore prices have fallen so far. I mean it was totally unforeseeable that the oncoming 300M surplus supply in the seaborne trade would cause such a dramatic fall in prices. The Liberals in WA are still holding to their $110+ forecasts for the next few years.

So much political capital wasted on PPL / Doctor Tax / Internet Tax / Uni Tax.

Less effort wasted on that and a bit more into bringing the public on on worthwhile issues like an increase of fuel indexation and limiting negative gearing and the ability to use super as a tax minimisation vehicle.

I'm betting the MRRT and Carbon tax revenue is starting to look like the better options now. Car FBT would have been a nice little increase in revenue as well.

Joe will have to hope the $8B he gave the RBA was shipped overseas so he can start to pull dividends out again.

It would seem the Govt is going through a similar revenue fall as Labor did in the GFC. As Christopher Pyne has claimed, it would be an easy job to run a surplus with that kind of hit to revenue. Hopefully Joe is up to the Job Pyne has set him. Maybe the China FTA will save us like the AUS-US trade deal was supposed to bring in limitless opportunities for us, though the $2B lost to the generics industry and the $200M+ increase to the PBS each year certainly didn't seem to be the kind of benefits that was spruiked.
 
Bill Heffernan doesn't like the FTA with China

China free trade deal could 'turn into disaster' without safeguards, Liberal senator Bill Heffernan says

A senior Liberal senator is warning a free trade deal with China could "turn into a disaster" for Australia if appropriate safeguards are not put in place.

In an exclusive interview with the ABC, Bill Heffernan raised the prospect of China cutting its tariffs, but then manipulating its currency to come out ahead.

"How do you really have a trade agreement with a country that won't put their currency on the market? I mean we should learn from our free trade agreement with the US," Senator Heffernan said.

"When we signed that agreement we were at 65 cents, when we enacted it the following February we were at 67 cents to the US.

"We did away with 5 per cent and 15 per cent tariffs and within a few years we found ourselves at a huge trade disadvantage because we had a 45 per cent currency tariff against us because we went parity with the US and above parity at one stage."

The Government is hoping to seal a deal with Australia's biggest trading partner when the Chinese president Xi Jinping visits Australia this weekend.

At the present time... it's a non-market currency which makes it very difficult for us [to] manage good times, bad times, high interest rates, low interest rates
Senator Bill Heffernan

"Thanks to a lot of focus from Australia and from China over the last 12 months, I think it is very much on track for success in the next few days," Prime Minister Tony Abbott told reporters in Beijing on Monday.

"Still a few things to finalise, but I think very much on track for success in the next few days."

While welcoming a possible breakthrough, Mr Heffernan warned Australia could still be a loser because of China's currency.

"At the present time... it's a non-market currency which makes it very difficult for us [to] manage good times, bad times, high interest rates, low interest rates," he said.

"In code, it really means we can't win until the currency comes on the market."

The Federal Agriculture Minister Barnaby Joyce rejected concerns from his Coalition colleague that China's fixed currency will negate any benefits of a free trade deal.

Senator Joyce said Australia needs to step up its trade with China so national debt can be paid off.

"If we don't do a deal with China, if we don't trade with what is now our major trading trading partner, then our capacity to pay our bills and re-float our economy after the disastrous episode of the previous government, is going to be impinged," he said.

"We have to make sure that our soft commodities - such as wheat, such as beef, such as cotton, such as wool - start flowing in a more formidable form."

Government sources have told the ABC a deal is looking likely, but some key issues are still being negotiated.

Mr Abbott said the pact was not perfect and could be changed.

"We are trying to build a house," he said.

"Let's build the first storey and then in a year or two we can build the second storey and maybe even a third storey, but let's get things done and I very much hope that we will be able to say that we have got things done within a few days."

http://www.abc.net.au/news/2014-11-...s-concerns-over-china-free-trade-deal/5880740
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sydboy007 said:
Do you believe taxes should be automatically increased, or should the Govt of the day make the case for an increase in tax revenue with each budget?

I do support an increase in fuel excise, but I don't support automatic increases in them, unless we're going to do the same with income tax thresholds as well.
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Without CPI indexation, the value of the fuel excise falls in real terms. The logic in your support for its indexation I assume is that the real value of this excise will be maintained if it's indexed to inflation.

Because of the progressive nature of our income tax system, income tax already rises in real terms due to bracket creep.
 
sydboy007 said:
Obviously Labor's fault that iron ore prices have fallen so far. I mean it was totally unforeseeable that the oncoming 300M surplus supply in the seaborne trade would cause such a dramatic fall in prices. The Liberals in WA are still holding to their $110+ forecasts for the next few years.

So much political capital wasted on PPL / Doctor Tax / Internet Tax / Uni Tax.

Less effort wasted on that and a bit more into bringing the public on on worthwhile issues like an increase of fuel indexation and limiting negative gearing and the ability to use super as a tax minimisation vehicle.

I'm betting the MRRT and Carbon tax revenue is starting to look like the better options now. Car FBT would have been a nice little increase in revenue as well.

Joe will have to hope the $8B he gave the RBA was shipped overseas so he can start to pull dividends out again.

It would seem the Govt is going through a similar revenue fall as Labor did in the GFC. As Christopher Pyne has claimed, it would be an easy job to run a surplus with that kind of hit to revenue. Hopefully Joe is up to the Job Pyne has set him. Maybe the China FTA will save us like the AUS-US trade deal was supposed to bring in limitless opportunities for us, though the $2B lost to the generics industry and the $200M+ increase to the PBS each year certainly didn't seem to be the kind of benefits that was spruiked.
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I'm betting the tax changes required, will need to be far more drastic than those we keep mentioning.

Time will tell, untill then enjoy the spend.
 
drsmith said:
Without CPI indexation, the value of the fuel excise falls in real terms. The logic in your support for its indexation I assume is that the real value of this excise will be maintained if it's indexed to inflation.

Because of the progressive nature of our income tax system, income tax already rises in real terms due to bracket creep.
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I don't disagree.

What I am arguing is that shouldn't Govt revenue be something that is set forward in the budget each year. If Abbott wants another $500M in fuel excise revenue each year, shouldn't the treasure ask for it as part of the budget process, or at least set out specific increases over say the term of the Govt?

Automatic CPI increases in revenue is the easy option for the Govt, but doesn't seem particularly fair to tax payers.
 
sydboy007 said:
Automatic CPI increases in revenue is the easy option for the Govt, but doesn't seem particularly fair to tax payers.
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You said before you support it but with the following caveat on income tax,

sydboy007 said:
I do support an increase in fuel excise, but I don't support automatic increases in them, unless we're going to do the same with income tax thresholds as well.
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What specifically did you have in mind ?
 
drsmith said:
You said before you support it but with the following caveat on income tax,



What specifically did you have in mind ?
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Don't know what syd had in mind, but Malcolm Fraser proposed tax indexation whereby the income tax threshold was linked to inflation, but people thought it was a con and it got howled down.
 
sydboy007 said:
again.

As Christopher Pyne has claimed, it would be an easy job to run a surplus with that kind of hit to revenue.
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I must admit the Libs had six years to crystal ball accurately and they weren't shy claiming Swan was inept when his crystal ball didn't match their MarkII version, with the hindsight option.

Wiping the debt should be a snap for the brains trust in charge now surely?

I'm still wondering why we are being taxed into non productivity, when we are supposed to be a team, Team Australia, and teams go for the win don't they?
 
Tisme said:
I must admit the Libs had six years to crystal ball accurately and they weren't shy claiming Swan was inept when his crystal ball didn't match their MarkII version, with the hindsight option.

Wiping the debt should be a snap for the brains trust in charge now surely?

I'm still wondering why we are being taxed into non productivity, when we are supposed to be a team, Team Australia, and teams go for the win don't they?
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I suppose a minor difference was, Swann had control of both houses, so any budget measures were passed.

Hockey has to deal with 'looney tunes' and most budget savings are being blocked, or heavily modified.

Team Australia, is going to lose, $300billion and counting, sooner or later the blowout has to be addressed.

Meanwhile enjoy the entertainment.:D
 
sptrawler said:
I suppose a minor difference was, Swann had control of both houses, so any budget measures were passed.

Hockey has to deal with 'looney tunes' and most budget savings are being blocked, or heavily modified.

Team Australia, is going to lose, $300billion and counting, sooner or later the blowout has to be addressed.

Meanwhile enjoy the entertainment.:D
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I don't think the current senate is any more obstructionist than what we had with the last one. If anything Abbott has good old Clive and he's been quite willing to support the Government after he's done his song and dance routine. Labour had plenty of their revenue measures blocked by Abbott.

Still, it will be interesting to see what excuses the current Govt gives about how unforeseeable what is now happening, yet I've been reading plenty of blogs detailing the path we now find ourselves on from more than a year ago.

If the deficit Labor "generated" was all about over spending, isn't it the same for the Abbott Govt? I suppose at least this time around there wont be an unforseen 35% increase in Chinese debt, in just one year, to help commodity prices surge, so any spending to help cover the income shock wont then be called "wasted" money.

I wonder if the masses are ready for 0.50 USD again, but even that is unlikely to do much for us now we've allowed most of the manufacturing to shut down, siphoned off most of the gas for LNG so we can barely compete to make fertilizer and explosives. The only bright spot is Chinese tourism, though with the slow burning property crash and slow economy that might not last for too much longer.
 
sydboy007 said:
I wonder if the masses are ready for 0.50 USD again, but even that is unlikely to do much for us now we've allowed most of the manufacturing to shut down, siphoned off most of the gas for LNG so we can barely compete to make fertilizer and explosives.
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Actually, we're not really competitive at making anything these days. It goes way beyond turning gas into fertilizer, we can't even make basic goods like machine parts competitively in Australia these days. That said, the LNG is a serious issue given that it's effectively irreversible no matter what happens going forward. Eg we could cut wages at some point or change the tax system but we're never likely to get gas prices back down.

Fuel excise is an interesting one, the only rational explanation for which is a firm belief that oil supply is going to be a problem (a concept with which I agree) or alternatively as a form of tariff on imports (given that much of the oil we use is imported). Without those two, we'd logically have an energy excise applied equally to coal and gas as well rather than taxing one energy source (oil) but not others. :2twocents
 
sydboy007 said:
I wonder if the masses are ready for 0.50 USD again, but even that is unlikely to do much for us now we've allowed most of the manufacturing to shut down, siphoned off most of the gas for LNG so we can barely compete to make fertilizer and explosives.
Click to expand...

Actually, we're not really competitive at making anything these days. It goes way beyond turning gas into fertilizer, we can't even make basic goods like machine parts competitively in Australia these days. That said, the LNG is a serious issue given that it's effectively irreversible no matter what happens going forward. Eg we could cut wages at some point or change the tax system but we're never likely to get gas prices back down.

Fuel excise is an interesting one, the only rational explanation for which is a firm belief that oil supply is going to be a problem (a concept with which I agree) or alternatively as a form of tariff on imports (given that much of the oil we use is imported). Without those two, we'd logically have an energy excise applied equally to coal and gas as well rather than taxing one energy source (oil) but not others.

If all the money raised was spent on roads etc then fuel excise could be considered as a means of paying for that infrastructure mostly by those who use it. But in practice, there's a very loose link between excise and road funding such that it is in practice and energy tax more than a road funding tax.

Politically, the fuel pain will arrive at some future time when oil prices go up and the AUD has dropped. That's when we'll hear the screams about excise. In the meantime, government is basically (in a political sense) taking advantage of falling oil prices to raise a tax at a time when petrol prices aren't much of an issue politically. :2twocents
 
sydboy007 said:
I don't think the current senate is any more obstructionist than what we had with the last one. If anything Abbott has good old Clive and he's been quite willing to support the Government after he's done his song and dance routine. Labour had plenty of their revenue measures blocked by Abbott.

Still, it will be interesting to see what excuses the current Govt gives about how unforeseeable what is now happening, yet I've been reading plenty of blogs detailing the path we now find ourselves on from more than a year ago.

If the deficit Labor "generated" was all about over spending, isn't it the same for the Abbott Govt? I suppose at least this time around there wont be an unforseen 35% increase in Chinese debt, in just one year, to help commodity prices surge, so any spending to help cover the income shock wont then be called "wasted" money.

I wonder if the masses are ready for 0.50 USD again, but even that is unlikely to do much for us now we've allowed most of the manufacturing to shut down, siphoned off most of the gas for LNG so we can barely compete to make fertilizer and explosives. The only bright spot is Chinese tourism, though with the slow burning property crash and slow economy that might not last for too much longer.
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It really is hard to see where our growth is going to come from, we are a high taxing, high wages, high energy cost economy.
Add to that, the fact it is much more efficient to transport raw iron ore, than processed steel.
Then throw in the fact we are a very small market and it really is complicated.

Then supplying one of the best welfare, health and education systems in the world.
Also the highest priced housing, indexed pensions, tax free super, concesionally treated savings and tax deductable investment loans.

Then you have the Federal and State Government costs with the members and their staff, cars, perks and costs.
Add to that the unfunded cost of the Federal and State retired members and their tax free indexed super, plus perks.

Seems like the elastic band is stretched somewhat.lol

Even if taxes are increased in the select areas, the underlying problem of supplying welfare and low personal tax rates has to have some underlying growth to support it.

Where that first world economy is going to come from, to support our first world lifestyle, I certainly can't see it.
 
sptrawler said:
It really is hard to see where our growth is going to come from, we are a high taxing, high wages, high energy cost economy.
Add to that, the fact it is much more efficient to transport raw iron ore, than processed steel.
Then throw in the fact we are a very small market and it really is complicated.

Then supplying one of the best welfare, health and education systems in the world.
Also the highest priced housing, indexed pensions, tax free super, concesionally treated savings and tax deductable investment loans.

Then you have the Federal and State Government costs with the members and their staff, cars, perks and costs.
Add to that the unfunded cost of the Federal and State retired members and their tax free indexed super, plus perks.

Seems like the elastic band is stretched somewhat.lol

Even if taxes are increased in the select areas, the underlying problem of supplying welfare and low personal tax rates has to have some underlying growth to support it.

Where that first world economy is going to come from, to support our first world lifestyle, I certainly can't see it.
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I believe those luxury lurks and perks are about to be cut and not before time.

We have stopped making things here because of the high cost of wages, increased annual leave, leave loading, penalty rates etc. etc. thanks to the unions dating back to the 50's..we are now paying the price......we would need a wage freeze for the next ten years and back to 40 hours a week and do a fair days work for a fair days pay if we were to become competitive again.......not that it is likely to happen.
 
noco said:
I believe those luxury lurks and perks are about to be cut and not before time.

We have stopped making things here because of the high cost of wages, increased annual leave, leave loading, penalty rates etc. etc. thanks to the unions dating back to the 50's..we are now paying the price......we would need a wage freeze for the next ten years and back to 40 hours a week and do a fair days work for a fair days pay if we were to become competitive again.......not that it is likely to happen.
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How about we freeze your pension for a start?
 
This government never suggested it would deliver a surplus in this term of government.

Wayne Swan delivered a surplus if I recall his words correctly.
 
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