The Budget - What are you looking for?

[twojacks28]

if there is one thing i cannot stand it is those who say the high income earners get the biggest tax cuts every year and soon. this year there were bigger tax cuts for higher income and lower income earners. however last year middle income earners got the biggest tax cut. what you have to look at is the percentage over the years compared to the one year. also middle income people got a smaller tax cut this year as it is mostly made up for the family packages which gives them even more.

it was the best budget yet! hands down.

 

[bullmarket]

I think it was a pretty good budget overall as well.

The changes to super are really good for me although I still have a few years yet before I hit 60

:iagree: 2jacks28 - from memory the lower tax rates got a bigger chunk in % terms of the tax cuts in previous years.

cheers

bullmarket

 

[Smurf1976]

The family packages etc do not automatically apply to middle income earners. A great many middle income earners, particularly those doing the greatest amount of physical work which keeps this country running and prosperous, will not see a cent in family tax incentives.

Accordingly family tax should not be counted as tax relief for middle income earners but as welfare in general. How that affects the overall long term tax relief situation I do not know. But family tax packages aren't automatically part of tax relief for middle income earners. At least not unless the government has radically altered the conditions applying to them.

For the record, I'm not complaining at all about the effects the budget has on me personally. I'm just not impressed with the lack of long term focus 5, 10 or 20 years out given the huge opportunities available to be pro-active rather than leave problems for the future. Most of us will still be alive when that future arrives. I guess it doesn't buy votes today however...

 

[bullmarket]

Hi smurf1976

I don't think it will be as many as you say that won't see a cent - and I would also have thought that whether a relief, handout or whatever is called a tax cut or welfare is totally irrelevant.

What to me would be more important is the total extra $ gained annually. Whether someone then called it a tax cut or welfare would matter zero to me

cheers

bullmarket

 

[twojacks28]

no i wasnt saying that the families package goes to all middle income earners as that is not possible. but it does apply to many australians. as I stated above over the past few years middle income earners and lower income earners have had bigger tax cuts pecentage wise compared to the higher income earners.

 

[canny]

Country? : :

Yes - thanks Smurf!!
My mind must have been travelling a little!!!!

 

[RodC]

For the record, I'm not complaining at all about the effects the budget has on me personally. I'm just not impressed with the lack of long term focus 5, 10 or 20 years out given the huge opportunities available to be pro-active rather than leave problems for the future. Most of us will still be alive when that future arrives. I guess it doesn't buy votes today however...

This is the really unfortunate part about the budget which really highlights the short term view of the government. Now (when we have large surpluses) is when there is the opportunity to invest in infrastructure (water, rail etc) and education, training, research and development to secure the future.
However present governments (of all persuasion) can't see past the next election.

Rod.

 

[Rafa]

The Australian lets it rip again in todays editorial....

--------------------------------------------------------

The budget vividly illustrates the size of the unexpected fiscal windfall from the China boom.................But aside from the resources sector, the economy is not running on all cylinders, particularly outside Western Australia. It grew by a sub-standard 2.5 per cent in the financial year now ending. And export volumes have grown by only 0.6 per cent a year since 2001, compared with the 20-year average of 5.9 per cent. That is, the economy has hit speed limits to growth. The manna is coming almost exclusively from the higher prices China and other markets are prepared to pay for our mineral resources. And it is only four years or so since Mr Costello was warning that the ageing population could require much more government spending, and the taxes to pay for it.


While the Treasurer is rightly celebrating his tax cuts and increased welfare spending, this budget does not do as much as is required to keep economic growth strong. In particular it does not tackle infrastructure capacity constraints and shortages of skilled workers. Certainly there is more money for major freight roads. But the antiquated rail system receives just $270 million for new work – little more than a third of what Canberra intends to spend on improving the Hume Highway. And in an example of politics as usual, Mr Costello ducked damaging the Government's relationship with the road freight industry by cancelling a planned increase in the charge heavy vehicles pay. While the federal public service is becoming more bloated, the Government has not tackled the skilled labour shortages that business warns impede growth. While the Treasurer announced $2 million for a training college for clowns, he has no new plan to expand the job-generating skills of Australia's workforce, especially the 500,000-plus unemployed. Mr Costello also ducked the opportunity for real reform to our ramshackle tax system, especially the $10 billion or so of selective concessions that could be cut to fund a more substantial reduction in rates. And while more money will be spent on assisting families, effective marginal tax rates still punish people on social security, clawing back most of what extra they earn.

 

[twojacks28]

the government has invested for the future. what do you call investing in roads the murray darling river etc. if you dont call that investment for the future what do you. also they put $10 Billion away for next years budget aswell!!!

 

[Smurf1976]

The investment in roads is of questionable value, that's my main gripe with the government not investing in the future.

Given all that is known about faltering oil discovery rates, the commodities boom and climate change it seems silly to invest in additional road capacity which is ultimately needed only due to long distance freight and then have to build a major rail system to replace it. It would be a lot cheaper to simply build the rail network now and not spend on the roads apart from maintenance of existing capacity. And doing so would avoid the economic shock in the years between road freight becomming expensive (or out of the question altogether) and the rail network coming online with a relatively small loss compared to road investment if the oil / commodites boom does crash permanently. A good risk/reward ration in favour of rail but the government chooses road.

The decision to invest in roads looks very much like a decision made assuming that the past will continue into the future when the very basis of that, cheap oil, is being undermined as part of the commodities boom on which the budget is based. If commodity prices continue to rise then road freight over long distances makes little sense. If commodity prices fall then the bottom line falls out of the budget. Lose either way but if we invested in rail instead then that overcomes the risk that the commodties boom continues.

Infrastructure is only valuable if it serves a purpose. There's no point building roads if traffic isn't going to increase. How would an increase in long distance highway traffic be fuelled? It seems that the government either has no real knowledge on the subject (quite possible) or is choosing to ignore it (likely IMO).

Those who make the big profits from long term investment are those who see what's coming rather than assuming that the past will continue into the future. Eg those who bought oil stocks in the late 1990's or gold in 2001 as opposed to those who believed the Nasdaq would never stop rising.

Another point I could raise is how many billion $ have been set aside for engineering works to protect Australian cities and towns from the effects of a rising sea level? Has the cost even been calculated? "Billion" could well be the wrong unit of measure for this, "trillion" might be more appropriate. Or on more conventional thinking, how much is being set aside to be spent to boost the economy during the next recession?

 

[rederob]

the government has invested for the future. what do you call investing in roads the murray darling river etc. if you dont call that investment for the future what do you. also they put $10 Billion away for next years budget aswell!!!

twojacks
The word "bias" comes to mind when you regard the budget as having an eye on the future.
The budget was a wasted opportunity from a money-laden-drunk without a clue! Although he did reward the rich.
Pity the pensioners; aged or disabled.
What about skills formation?
Or border security?
Or a national energy policy?
How about research and development?
I won't go on.
The budget was a shocker.
More opportunities missed by a government that repeatedly shows no concern for our least well off, nor our brightest.

 

[twojacks28]

rednob that is the biggest load of cra* i have ever heard. i dont no how many times i have to explain it. the rich didnt get massive tax cuts. they got the same tax cuts as the lower income earners. and the middle income earners didn't get such a tax cut as they got the biggest last year. for your information rednob it is not a bad thing if you have been able to become wealthy. why should people who have made more money then others pay more tax? that is unfair. and you said something about border security. well the government spent plent this year on national and border security!! maybe you were sleeping during the budget presentation. also you can mprove and upgrade everyting every year! it is not possible. thats why they mix it up every year to cover all aspects of the australian economy. how come in most newspapers and most experts are saying this is one of the best budgets ever??? maybe rednob you are not looking at the whole thing and are just focusing on things which they have given money to but from your opinion obviosuly not enough.

and to the person who posted above rednob. investing in the infrastructure of roads is a wise decision as the population increases more cars will be on the road therefore improving roads is vital.

 

[GreatPig]

the rich didnt get massive tax cuts. they got the same tax cuts as the lower income earners.

The amount of the income tax cut varies, but someone on $150,000 pa (excluding super) gets the maximum percentage tax cut, with their annual tax bill dropping by about 11.5%.

By comparison, someone on $50,000 gets about a 4.7% cut in their tax bill, and someone on $500,000 gets a 6% cut. Anyone earning $21,600 pa or less gets no tax cut at all.

GP

 

[bvbfan]

the rich didnt get massive tax cuts. they got the same tax cuts as the lower income earners. and the middle income earners didn't get such a tax cut as they got the biggest last year.

No comment from me but I do post this and anyone can draw their own conclusions



It does make my decision easier, back to part time work for me

 

[rederob]

rednob that is the biggest load of cra* i have ever heard. i dont no how many times i have to explain it. the rich didnt get massive tax cuts. they got the same tax cuts as the lower income earners. and the middle income earners didn't get such a tax cut as they got the biggest last year. for your information rednob it is not a bad thing if you have been able to become wealthy. why should people who have made more money then others pay more tax? that is unfair. and you said something about border security. well the government spent plent this year on national and border security!! maybe you were sleeping during the budget presentation. also you can mprove and upgrade everyting every year! it is not possible. thats why they mix it up every year to cover all aspects of the australian economy. how come in most newspapers and most experts are saying this is one of the best budgets ever??? maybe rednob you are not looking at the whole thing and are just focusing on things which they have given money to but from your opinion obviosuly not enough.

and to the person who posted above rednob. investing in the infrastructure of roads is a wise decision as the population increases more cars will be on the road therefore improving roads is vital.

twojacks
You say what you want - I said only that the money went to those with most money already: Can you prove the opposite?
Border security spending is a joke - the US budget allocated AU$10b - but look closely at where our few extra dollars will go http://www.budget.gov.au/2006-07/bp2/download/bp2_expense.pdf
...and you reckon we are OK? Ahem.
twojacks
Unlike you, I looked at what the budget did/does, and what it did not do.
It was a budget of classic missed opportunities for the people as a whole, but a great opportunity for the Coalition to carry its largesse into next year's election promises.
I can't explain your inability to grasp the big picture as I don't know how short sighted you are.
But to give more money to haves and forget the have nots is not a fair way to spend our taxes, unless you plan to take your money to the grave.
As for national infrastructure projects, why not have a look at the gridlock problems faced in south est Queensland, and tell me how much was allocated in the Budget to resolve that problem.

By the way, for those wondering about the extra money on border security, most is being allocated to run detention centres ( a very forward looking approach indeed).

twojacks, come clean and tell us which branch of the Liberal party you are attached to.

 

[twojacks28]

you must look at it in detail as it is the percentages over the years which you compare. this year it evens out as different groups get different extras. must go cant explain in more detail.

 

[twojacks28]

also before i go it is the state governments responsibility to fix those roads. the government just gives money to the major projects and to the state governments which they use wherever they like. also the higher income earners already pay more tax then others. that is why that get more back in percentage but in the end it equals out as other get familiy benefits, super etc. and for the record i am not short sighted however i wouldnt be supprised if you were.

 

[rederob]

.... and for the record i am not short sighted however i wouldnt be supprised if you were.

A stunning defence!
I see you realised you were on thin ice - due to the Kyoto protocol and Australia's adherence, no doubt.
I checked my prescription and it is definitely long sightedness that I suffer:
It's a terrible affliction - being able to see further ahead than the average punter!

 

[Smurf1976]

and to the person who posted above rednob. investing in the infrastructure of roads is a wise decision as the population increases more cars will be on the road therefore improving roads is vital.

More cars maybe but they won't be travelling very far without fuel. Even the Australian oil industry has acknowledged (this week) that the falling production of oil in Australia will see the Current Account deficit DOUBLE over the coming decade even if oil prices remain constant in nominal terms. A Current Account deficit at 12% of GDP? Not for long...

Given that the oil situation is similar internationally and with the growth of China etc it's hard to see oil prices remaining constant or falling over the long term unless the economy falls in a hole. If that happens then bye bye commodities boom and budget surplus.

If we're going to invest in transport then it would make a lot more sense to invest in something which will still be useful over the long term.

I'm not sure about the other states but, to give an example, the Tasmanian Main Line railway opened in 1876. It's still running today and only now, after 130 years of service, has limited capacity finally become a problem. With a bit of modernisation and maintenance it will still be running in another 130 years and of course it could be electrified if need be. Trains will run perfectly well on firewood if fuel really becomes a problem.

Likewise the Moorina hydro-electric power station (Tas) is 100 years old this year and still running fine. Even the Snowy Hydro scheme has been operating since 1955 (fully operational since 1975) and it's nowhere near worn out yet. We have more than enough undeveloped resources to build the equivalent of another Snowy (spread across several locations) if we wanted to. Given the greenhouse and water issues it would make a lot of sense.

By comparisson, roads fall apart relatively quickly, are far less safe than rail (one train accident is headline news and uncommon whereas people die on the roads practically every day) and needs a constant supply of increasingly expensive oil and endless maintenance. It's an investment which comes with a large ongoing liability. Meanwhile, we continue to reap the rewards of the efforts of past generations which built the various state rail systems, water supply systems, the Tasmanian and Snowy hydro-electric schemes and so on which require relatively little ongoing expenditure to be kept in good order for decades if not centuries to come.

 

[son of baglimit]

oh well joe - it looks like this thread has been vandalised - shut it down....next.........