The Albanese government

[farmerge]

In "normal" times the low and middle taxpayers don't save, but this time with prices rising I think a lot if them will if they can, but mostly their tax cuts will be eaten up by increasing costs so they won't be rushing out to buy things they can't afford and therefore won't be adding to demand.

Sir R not to sure about that. The peasants mostly have no understanding what a dollar is worth, as they deal with a piece of plastic, which has no monetary value. Its not the same as pulling out a 50 or 100 dollar note to pay for something and getting small change back

 

[sptrawler]

IMO, cut the crap, stop the subsidies and handouts that are just delaying the inevitable and increasing the inflationary problems.

Can the third stage tax cuts, increase the GST to 15%, raise the welfare payments 5% to compensate and lower the bottom tax rate from 19% to 15% to compensate, also every worker gets the same benefit rather than the highly paid getting multiple times more

Can negative gearing until housing prices settle, then re establish a better model, that results in a more balanced outcome.
Charge overseas investors a 60% tax on residential property purchases , as per Singapore.

Reduce immigration, with the expectation of a contracting mining outlook, as China floods the market with cheap minerals causing an expected contraction in Australian mining activity.

Allocate money to build nursing training facilities at all major public hospitals and relocate university lecturers to said facilities.
This would add staff to public hospitals and give trainee nurses real world training, rather than sending them into the workplace poorly equiped for reality.

That is just 2 minutes back of the napkin.

IMO it would broaden the tax base and allow the economy to settle and catch up on lost ground.

Well it sounds like 1 out of 3 ain't bad @ Sir Rumpole, hopefully they add the GST component next.

Most taxpayers to get $804, but high-end tax cut halved as government rewrites stage 3

The government will halve the stage 3 tax cuts for the highest earners and use the money to deliver an $804 tax cut across the board.

www.abc.net.au

The government is proposing to cut the bottom rate of tax, which applies below $45,000, from 19 per cent to 16 per cent.

 

[basilio]

No surprises on The Sun front. Giving Albo an absolute bollocking for his deft switcheroo on the Stage 3 Tax cuts.

Yesterday Liberal Sussan Ley vowed the Opposition would go to the next election determined to unpick the Albo Stage 3 rendition and restore the additional tax cuts they had promise for high income earners.

That always seemed like a heroic stance. Cooler heads have prevailed overnight and Susan has done a reverse pike and decided they won't go to the next election offering tax increases on the 90% of low-middle income households to fund the 10% of taxpayers earning over $150k. Smart thinking.

Sussan Ley retreats from comments suggesting Coalition would repeal Labor’s stage-three tax cut changes​

Deputy opposition leader denies promising to roll back Albanese government’s changes and says Labor ‘lied’ about the tax cuts

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Paul Karp Chief political correspondent
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Thu 25 Jan 2024 10.21 AEDTLast modified on Thu 25 Jan 2024 11.42 AEDT


The deputy opposition leader, Sussan Ley, has walked back earlier comments suggesting the Coalition would repeal Labor’s revamped tax cuts that more than double tax relief for Australians on the average income.

On Thursday, Ley clarified that the opposition’s position is to “support the existing stage-three arrangements” but denied promising to roll them back in a bid to head off a Labor campaign that the Coalition will claw back low and middle-income tax relief.

Labor MPs and the treasurer, Jim Chalmers, had seized on Ley’s earlier suggestion the Coalition “absolutely” supports a repeal to argue that the opposition will fight the next election promising to tear up tax cuts that are more generous to 11 million Australians.

In a demonstration of the dilemma more generous tax cuts present to the Coalition, the opposition leader, Peter Dutton, painted Labor as the threat to its own new policy.

In his regular 2GB Radio spot, Dutton questioned how voters could “believe these tax cuts will survive if Labor is re-elected” given the government’s “credibility issue” after abandoning stage three.

Sussan Ley retreats from comments suggesting Coalition would repeal Labor’s stage-three tax cut changes

Deputy opposition leader denies promising to roll back Albanese government’s changes and says Labor ‘lied’ about the tax cuts

www.theguardian.com

 

[sptrawler]

I think Albo has pulled off a blinder, the only downside is the fact it is unfunded, with the increased expenditure I would have liked to have seen some indication as to where the slack is going to be picked up.
Who knows maybe the next budget may stick to the same theme and present some intelligent initiatives, that would be novel it has been years since any meaningful change to the tax structure has been enacted.
But this move by Albo is a breath of fresh air, hopefully it continues and brings some equity back in society.

 

[mullokintyre]

I think Albo has pulled off a blinder, the only downside is the fact it is unfunded, with the increased expenditure I would have liked to have seen some indication as to where the slack is going to be picked up.
Who knows maybe the next budget may stick to the same theme and present some intelligent initiatives, that would be novel it has been years since any meaningful change to the tax structure has been enacted.
But this move by Albo is a breath of fresh air, hopefully it continues and brings some equity back in society.

Via Bracket creep.
thats how they got to a surplus.
mick

 

[sptrawler]

Via Bracket creep.
thats how they got to a surplus.
mick

Very true, plus more gst through inflation, but I would rather see low income earners pay less tax, than see high income earners pay less tax.
The other benefit IMO is, it makes employment more attractive to welfare recipients, they actually take more home.
Which even if it doesn't convert the die hard ones, it will encourage some to have a go.

 

[mullokintyre]

Very true, plus more gst through inflation, but I would rather see low income earners pay less tax, than see high income earners pay less tax.
The other benefit IMO is, it makes employment more attractive to welfare recipients, they actually take more home.
Which even if it doesn't convert the die hard ones, it will encourage some to have a go.

What do you define as low income earners?
the lowest 50% pay barely pay 2% of income tax now.
It is far better to provide direct subsides to the lowest income earners, that way the tax custs do not flow on to the highest income earners.
According ton CEDA the lowest quintile end up with around $40,000 P.a. on average.
for that average person, 40% of their income goes on rent, and although such persons would be very rare, the home owner equivalent, mortgage cost, would be even higher if they were paying off a mortgage.
Mick

 

[sptrawler]

What do you define as low income earners?
the lowest 50% pay barely pay 2% of income tax now.
It is far better to provide direct subsides to the lowest income earners, that way the tax custs do not flow on to the highest income earners.
According ton CEDA the lowest quintile end up with around $40,000 P.a. on average.
for that average person, 40% of their income goes on rent, and although such persons would be very rare, the home owner equivalent, mortgage cost, would be even higher if they were paying off a mortgage.
Mick

With our progressive tax system, the Government deems what they consider a low income earner, what I or you consider as low income is very subjective.
I have a daughter with two children (8 and 13) and earns about $40k per annum, I wouldn't say she is well off, but some may.
As I said in my original post, I would much rather the Government moved away from being overly dependent on income tax and changed the tax system to better reflect a changing society.
With technology, there is an expectation that there will be fewer jobs and we may end up having a universal living wage no point in taxing that.

But it is a huge issue, the well off are incentivised to negative gear and provide social housing, with no limit on how much of a tax offset they can get, I knew someone with a huge property portfolio balanced so that they didn't pay any income tax.

Meanwhile the rent is only limited by what they can get for it, so 40% of the average persons wage going in rent is a misnomer, it is what the market can bear and working families can't live on the street.

So would a better system be, that a family can claim their mortgage interest up to a certain value of house, that the Government incentivises builders to supply at a predetermined price range?

That way housing is supplied and the incentive is focused on the lower end of the market, rather than carte blanche, as is the case at the moment?

There are a myriad of ways of addressing an issue, at the moment the Government incentives for supplying housing is a bit like the NDIS was, an open cheque book with little monitoring, of whether the outcomes are a reasonable reflection of the expenditure.

All I see is a ponzi scheme myself, but hey that's only my opinion, as I said a more broad based tax base will be required.

 

[Smurf1976]

It is far better to provide direct subsides to the lowest income earners, that way the tax custs do not flow on to the highest income earners.

An issue there is that whenever government goes down that track, they seem to leave out quite a few of those low income people whereas a tax cut captures the lot.

Eg they say yep here's a subsidy for low income earners but look into the detail and the individual needs to be on welfare to get it for example, it's not available to someone who's (for example) just working part time or they're really struggling as a sole trader in business.

 

[wayneL]

I would be looking at the other side.

1/What savings could be made in expenditure not productive for the economy as a whole. How many government departments could actually be deleted all together as we have seen with Javier Melei? Afuera!!

2/How much does the tax system cost to administer and can there be efficiencies made there. IOW, are there aspects of taxation which betray the law of diminishing returns, ie cost more than they collect?

3/Are there isaspects of enforcement which are uneconomic. IOW it costs more in enforcement than it actually collects..

4/Taxation is an impost on economic growth, a simpler, less aggressive tax system would encourage enterprise and GDP growth and ultimately an increase in tax receipts. This has been shown time and time again.

Looking for ways to increase the taxation base from a shrinking economy will exacerbate that shrinkage and Australia is well on the path towards that, especially with the current WEF inspired "stakeholder capitalism"/corporateism / socialism ideology.

 

[SirRumpole]

Via Bracket creep.
thats how they got to a surplus.
mick

With our progressive tax system, the Government deems what they consider a low income earner, what I or you consider as low income is very subjective.
I have a daughter with two children (8 and 13) and earns about $40k per annum, I wouldn't say she is well off, but some may.
As I said in my original post, I would much rather the Government moved away from being overly dependent on income tax and changed the tax system to better reflect a changing society.
With technology, there is an expectation that there will be fewer jobs and we may end up having a universal living wage no point in taxing that.

But it is a huge issue, the well off are incentivised to negative gear and provide social housing, with no limit on how much of a tax offset they can get, I knew someone with a huge property portfolio balanced so that they didn't pay any income tax.

Meanwhile the rent is only limited by what they can get for it, so 40% of the average persons wage going in rent is a misnomer, it is what the market can bear and working families can't live on the street.

So would a better system be, that a family can claim their mortgage interest up to a certain value of house, that the Government incentivises builders to supply at a predetermined price range?

That way housing is supplied and the incentive is focused on the lower end of the market, rather than carte blanche, as is the case at the moment?

There are a myriad of ways of addressing an issue, at the moment the Government incentives for supplying housing is a bit like the NDIS was, an open cheque book with little monitoring, of whether the outcomes are a reasonable reflection of the expenditure.

All I see is a ponzi scheme myself, but hey that's only my opinion, as I said a more broad based tax base will be required.

If you want to broaden the tax base, then a resource export tax is a good way to do it.

Whether that is now politically possible is another matter.

 

[Smurf1976]

IOW, are there aspects of taxation which betray the law of diminishing returns, ie cost more than they collect?

Not a federal example but Victoria spending $1.7 billion on a public transport ticketing system must come close surely?

I can't believe there isn't a cheaper way to collect train fares.

 

[sptrawler]

If you want to broaden the tax base, then a resource export tax is a good way to do it.

Whether that is now politically possible is another matter.

It makes a lot of sense, we have discussed it before, where the royalties system could be used to charge a tax commensurate with the market price of each material.
We discussed it way back, when the stupid super profits tax was floated, a volumetric system as used with royalties makes a lot more sense and is much easier to operate.
Now all of a sudden, the Governments are talking about it, just dumb that it has never been done before IMO.
Benchmark our production cost and raise/lower the royalties as profits rise and fall, it just becomes a progressive tax the same as income tax scales.
When iron ore is selling at $30/ton the royalty drops to minimum, when it sell at $150/ton the royalty raises to an agreed maximum a sliding scale/ton makes much more sense than a super profits tax that could be offshored.
But it didn't have the punch line and optics of a "super profits tax", now as China start screwing us, common sense is starting to prevail, otherwise we are toast IMO.

With mines closing and FIFO jobs on the line, WA's government throws a lifeline to nickel miners

Nickel miners could pay less to mine in WA, as the government holds crisis talks with the resources industry as mines shut and hundreds of jobs are lost.

www.abc.net.au

From the article
Changes to the amount of money miners pay to dig up precious metals in Western Australia have been floated at government crisis talks as the nickel industry bears the brunt of a global price decline.
Federal resources minister Madeline King and WA mines minister David Michael met with nickel and lithium industry heavyweights today, pledging state and federal level support.
Mr Michael said reforms to WA's royalty scheme based on price, on a sliding scale, were put forward and he would take them to government.

It means nickel miners could pay less to operate in WA.

"It's something that I've committed at least to investigating with the sector," he said.

"Royalty reform which will go on for a very long time is something that would affect the government and the mining sector for many years."
Currently WA levies 2.5 per cent on nickel sales, generating $128 million in 2022.

In WA, one of three royalty rates (2.5 per cent, 5 per cent and 7 per cent) are applied depending on the form of the mineral when it is sold and how much it is processed.
Attempts to change the system in 2017 sparked a war with gold miners after the government sought to raise their payments.

A Nationals WA policy to increase fees iron ore miners pay to the government also saw the political demise of their leader Brendon Grylls in 2016.

That plan would have taken a 25 cent per tonne production rental fee set for BHP Billiton and Rio Tinto in the 1960s, and increase it to $5 a tonne, raising billions of dollars of extra revenue for the state.

When asked whether he thought iron ore or gold producers would be open to longer-term reform, the mines minister conceded he wasn't sure.

"It depends what the reform looks like," Mr Michael said.
Mr Michael also flagged short-term relief could be on the cards in the form of royalty payment deferrals but could not provide details on what would trigger repayments.
Ms King said she would also take a proposed production tax credit – designed to encourage processing of minerals onshore — to treasury to be costed.
Global mining players including BHP were present at the meeting.

BHP's Nickel West asset president Jessica Farrell said it was critical Australia remained globally competitive in strategic minerals.

"I think we have a real crisis, and in terms of working on that in Australia we need speed," she said
The lithium industry, also due to meet with government today, has plunged 80 per cent in the past year.

Western Australia has a five per cent royalty rate on the value of lithium concentrate and it accounted for four per cent of WA's total royalty revenue.

Lithium royalties in Western Australia rose from $60 million in 2021 to $457 million in 2022.

 

[Smurf1976]

If you want to broaden the tax base, then a resource export tax is a good way to do it.

Even better is make it optional.

Export unprocessed ore and pay a tax.

Export refined metal and no tax.

"Half way" stage products, eg alumina, would pay a "half way" rate of tax.

The aim being not to collect tax directly but to grow the economy and industrial base.

 

[sptrawler]

Even better is make it optional.

Export unprocessed ore and pay a tax.

Export refined metal and no tax.

"Half way" stage products, eg alumina, would pay a "half way" rate of tax.

The aim being not to collect tax directly but to grow the economy and industrial base.

It isn't as though we haven't done it before, in the 1960's BHP from memory was given royalties relief on the condition they built a blast furnace in Kwinana, which they did.
I assume similar situations happened over East, with Whyalla, Kembla and Newcastle, then along came globalisation and tariff removal, where the rush to get the cheapest labour and the maximum profits took over.
Now we are trying to undo it all, IMO if we don't we will be in a huge mess, it took 40 years to get to this state I don't think we have 40 years to unwind it.

 

[farmerge]

Even better is make it optional.

Export unprocessed ore and pay a tax.

Export refined metal and no tax.

"Half way" stage products, eg alumina, would pay a "half way" rate of tax.

The aim being not to collect tax directly but to grow the economy and industrial base.

The trouble is, is there enough brain power in the dusty halls of power to see the logic in something like this.

 

[mullokintyre]

An issue there is that whenever government goes down that track, they seem to leave out quite a few of those low income people whereas a tax cut captures the lot.

If you don't pay tax - virtually anyone on a pension, you miss out on a tax cut.
As I pointed out the bottom 50% of people pay only b2% of the tax.

Mick

 

[SirRumpole]

As I pointed out the bottom 50% of people pay only b2% of the tax.

Income tax yes, not GST which is regressive and hurts those on low incomes worse than high income earners.

 

[sptrawler]

Income tax yes, not GST which is regressive and hurts those on low incomes worse than high income earners.

Anything that cost money, hurts those on low income worse than those on high income.

With GST everyone pays the same, what hurts those on a low income the most, is the fact they are on a low income and we are importing workers to fill higher paying jobs.
Just another of life's conundrums.

It is an interesting subject, those on welfare are generally the poorest, but pay no tax because their income is actually paid for by tax as they don't earn anything.
So depending on what they spend their money on, they the same as everyone else pay some GST on everything except non processed food from memory and somehow that isn't fair either.

I'm starting to understand where my youngest son is coming from, with his outlook.

 

[mullokintyre]

Income tax yes, not GST which is regressive and hurts those on low incomes worse than high income earners.

Are you sure about that Sir Rumpole?
There is no GST on Rents or Mortgages.
There is no GST on Health and medical services.
There is no GST on fresh food items and non restaurant/takeaway meals.
No GST on education
No GST on Water, sewerage and draiinage.
No GST on recognised Childcare services tht). have any educational componet(hence they all do).
For a low income family that would probably cover 80% of their expenditure.
The well off would be spending a lot more on items that attract GST.
If you abolished all GST, who do you think would end up with the most extra disposable income in their pockets?
mick