The state of the economy at the street level

[SirRumpole]

Have you ever own a business SirRumpole? Do not take that as an attack, this is not the intent, but what is your image of owning a business in 2020?
Do you have any idea of the actual struggle in term of ATO compliance, funding, compliances not even discussing the actual business.And no, you can not dump it on an accountant that easily
Why would anyone bother here?

All those are separate issues to UBI, but you are correct, they should be addressed.

 

[SirRumpole]

We will see what Josh has to say today.

I think we should be reducing company and individual income taxes dramatically; then raise GST with exceptions on rent, food and energy. This will alter government revenue streams which will essentially tax consumers that can afford it.

A resource export tax would also be a tax that consumers can afford.

5% at least on LNG, iron ore , coal, gold.

 

[Chronos-Plutus]

A resource export tax would also be a tax that consumers can afford.

5% at least on LNG, iron ore , coal, gold.

It will be difficult to get the miners on board with a resource tax; however they might be willing to consider a temporary resource tax to get our nation out of debt. Also if company income taxes are reduced, the miners might be more willing to negotiate on a temporary resource tax.

 

[SirRumpole]

It will be difficult to get the miners on board with a resource tax; however they might be willing to consider a temporary resource tax to get our nation out of debt.

By the time we get out of debt the tax would be permanent anyway.

 

[Chronos-Plutus]

By the time we get out of debt the tax would be permanent anyway.

Apparently PWC have forecast today that it will be around the year 2060.

 

[Garpal Gumnut]

It will be difficult to get the miners on board with a resource tax; however they might be willing to consider a temporary resource tax to get our nation out of debt. Also if company income taxes are reduced, the miners might be more willing to negotiate on a temporary resource tax.

It will not get up taxing resources or companies.

When the rest of the country has been investing over the last ten years in film flam industries and indulging snowflake sectors in Sydney and Melbourne, the rest of the country has been doing what Australia is good at, digging.

There is no way in the wide world that Resources Australia will tolerate a tax.

Just tax all houses worth over $750,000, a capital tax of 20% and enable our youth to get a toe on to the house ownership ladder post-Covid.

These effin grey nomads living off over priced real estate give me the sh**s.

gg

 

[SirRumpole]

There is no way in the wide world that Resources Australia will tolerate a tax.

What would they do about it ?

Stop digging ?

 

[Garpal Gumnut]

What would they do about it ?

Stop digging ?

They would enact a KevDed strategy.

If it worked against that muppet Rudd it would certainly work against Morrison and his Ship of Fools.

gg

 

[sptrawler]

At last the ridiculous situation we have got our manufacturing into, is starting to get mentioned in the media.

https://www.theage.com.au/politics/...cturing-self-sufficiency-20200727-p55fsm.html
From the article:
Australia ranks last for manufacturing self-sufficiency among its global peers, producing goods worth only about 70 per cent of the amount it consumes.

A report by think tank the Australia Institute found a third of Organisation for Economic Co-operation and Development member countries used more than they made. Australia was the least self-sufficient, while Ireland and Germany topped the list.

 

[sptrawler]

This article explains our predicament well, but as usual doesn't explain how to fix it, Australia's standard of living and welfare system has improved hugely since the 1960's.
But Australia's first world economy which funded it, has slowly slid down the slope since the 1970's, how we push it back up the slope without pain is very difficult.
What has to be remembered is, we signed the Lima agreement and reduced tarrifs etc, that got us here.IMO
https://www.abc.net.au/news/2020-07...ust-improve-lives-of-all-australians/12493668
From the article, pertinent points IMO:
*The reasons we have arrived here.
Deregulation of the financial system and vast parts of the economy, along with the removal of trade barriers, has boosted global economic growth and, in the space of little more than one generation, transformed once-impoverished nations, particularly throughout Asia, into economic powerhouses.
But economics, like many things in life, is all about balance.
Once that delicate equilibrium shifts too far from the centre, a rapid and violent reversal often takes place, a phenomenon we now are witnessing in the political sphere across the developed world.
While Australia remains a far more egalitarian society, several million, through no fault of their own, suddenly have found themselves being supported by the state for the first time.

*Where we are.
Waning consumption and stagnating retail sales forced the Reserve Bank to cut interest rates three times last year.
Add in an overreliance on a handful of raw materials to mainly one market, China, as a source of export income and we were vulnerable to an economic shock.
Also missing are the strikes and industrial disputes that accompanied that militant period and disrupted business and the economy.
The idea the Australian workforce is inflexible is a misrepresentation.
Around a quarter of Australian workers are casuals. Business lobby groups argue that has been the case for 25 years and they're right.
But go back a little further, to the early 1980s, and only 13 per cent of the workforce was casual.
*
How do we get back to where we started pre the Lima agreement and deregulation?
Globalisation and trade liberalisation transferred entire industries from developed nations into the growth economies of Asia and particularly China.
Workers ended up with a much lower share of the national income, as this graph from the Reserve Bank shows.
That share has been in decline since the 1970s as wages have undershot the growth in profits.
But improved technology and firms' ability to now employ workers in other countries at much lower rates have also had an impact, while in Australia the strong lift in population and working-age migrants has added to the workforce and lifted competition for labour.
*
So how do we get back to where we started?????????????????
(my bolds in the above text)
Increase wages?
increase taxes?
Apply tarrifs to companies that don't bring manufacturing back.
Subsidies manufacturing?
Devalue our currency, so that our wages and construction costs are similar to competing Countries and our home produced product is as cheap as the imported?

 

[jbocker]

Mate had some tickets to the footy tomorrow night Optus 3.30pm start Hawthorn v Carlton, and cannot go, he made several phone calls and could not give them away! He couldn't believe it, plenty would have liked to go but were too busy at work to knock off early. That's a good sign I suppose. I am sure he has found someone by now. I cannot go, I am going to a retirement of one my old staff.

 

[moXJO]

Little bit of a slowdown this week from various quarters.

 

[Smurf1976]

It will be difficult to get the miners on board with a resource tax; however they might be willing to consider a temporary resource tax to get our nation out of debt. Also if company income taxes are reduced, the miners might be more willing to negotiate on a temporary resource tax.

Another way is give them a means to avoid it.

Eg whatever tax is applied to iron ore exports, make it a lower rate if the ore is pelletized and make it zero if it's fed into a steelworks.

Whilst the processing won't directly pay taxes, the people it employs and the contractors and so on certainly will and the whole thing creates far more economic activity than simply loading the ore onto ships.

 

[cutz]

Perhaps this discussion should be in another thread so as to not hijack this one but for the record, I've held the same view since the 1990's.

Globalisation will crash and burn once the corporate office workers lose their jobs. That's the point where they'll wish they'd stood with the factory workers as they were marched out the door a generation earlier.

Globalisation has pretty much run its course in my view and the major trend going forward will be in the other direction, indeed that already seems to be underway. I intend that as an economic comment not a political one although the two are related.

Perhaps better to have a separate thread on it though.......

Well said Smurf1976 , also my thoughts...

 

[over9k]

Smurf - Search "peter zeihan" on youtube, and then spend a day watching his presentations in chronological order.

Globalisation is absolutely, completely, done.

 

[Garpal Gumnut]

Kmart was chockas today. My Japanese tailor Uno Anko has a shop there and I needed measuring for a new Safari Suit before summer hits. If WES drops in the Coming Calamity I'll be adding.

gg

 

[moXJO]

A few houses selling slower than usual round my way. About 4 at a month on market.
one good property sold pretty fast though. About 2 weeks on before the sold sign went up.

Things have visibly slowed down. I know that the job keeper was cut for this quarter to many businesses that couldn't show a reduction. It may have been smarter keeping it through till Christmas. But perhaps it will bounce back with the election done.

 

[sptrawler]

A few houses selling slower than usual round my way. About 4 at a month on market.
one good property sold pretty fast though. About 2 weeks on before the sold sign went up.

Things have visibly slowed down. I know that the job keeper was cut for this quarter to many businesses that couldn't show a reduction. It may have been smarter keeping it through till Christmas. But perhaps it will bounce back with the election done.

In W.A housing is moving again, after being in the doldrums for the last 5 years, the State and Federal building stimulus seems to be creating a lot of interest. From memory the building contracts have to be signed by year end, so it will be interesting to see if the momentum continues in the new year.
Generally there still seems to be a lot of consumer spending going on in the shops, I wonder if the general depressive aura around the virus, the lockdowns, the negative press, the constant 24hour media bad news cycle, isn't making people just say "sod it i may as well spend it now, things could be a whole lot worse tomorrow".
I really think this whole episode, has had a dramatic damping effect on people's enthusiasm and confidence and this may be making people assess their long term goals and what really is important.
Just my thoughts.

 

[wayneL]

Mrs and I will will be moving back to WA soon to spend our dotage reminiscing about the "Glory Days", and spending copious amounts of cash at West Leederville (etc) and regular pilgrimages to Margaret River for the wine and hemp clothing we will never wear...

... just so long as McGowan doesn't copycat Mao Tse Dan.

Of course we will want to rent for a while as we re-reconnoitre the property market.

Couldn't have picked a worse time TBH. Apparently there are 20+ apps per property ATM.

...but... I suppose we could always sleep under The Causeway?

 

[Smurf1976]

I wonder if the general depressive aura around the virus, the lockdowns, the negative press, the constant 24hour media bad news cycle, isn't making people just say "sod it i may as well spend it now, things could be a whole lot worse tomorrow".

The reality that even someone who really does have many $ millions can’t actually buy things that ordinary people could readily buy 12 months ago would rationally prompt a “live for today” mindset.

The willingness of governments to underwrite pretty much everything likewise removes rational reasons for consumers to plan for the future.