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What do you want from next weeks budget?

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cutz said:
I also harbor a small amount of resentment in a system that rewards tax dodge techniques; I could never see the point of paying extra interest (to the banks) taking on huge risk in order to take away tax revenue (from society).
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do you think negative gearing only occurs in property.

I would think most leveraged share investments are negative geared.

say you borrow $1000 to by bhp,... you'll probally get $30 in divs but pay $70 in interest, so your down $50 per year which you can claim.

But this only happens in the first few years,... in 5 years time BHP might have increased divs to $60 and you have paid down the loan so your interest is only $40,... now your up $20 per year,..

Negative gearing is only a short term thing,... eventually the goal is to have the earnings outgrow the interest so the investment becomes postive,

it's not a tax dodge at all.

you only invest to make money, and if you make money you pay tax one way or another, so whats a few neg years compared to perhaps 40 positive there after.
 
1. Stop manipulating the property market via the various schemes currently in place. Let it find its own true level through market forces.

2. Stop throwing borrowed money at consumption of imported goods. From the long term macro perspective, that's nothing short of outright madness.

3. Invest in infrastructure of lasting benefit to the country and that leads to greater productivity and/or establishment of new industries. That means rail, roads, ports, power, water etc not a new set of steps outside the library, a play park for the kids or any other make work schemes with little real value.

4. Establish some sort of fund to invest in industries with long term potential where private funds are, for whatever reason, not forthcoming. Sure, some of it will end up being money down the drain but it will only take a few % of winners to make it worthwhile overall. Put engineers, scientists and professional managers in charge of it, not politicians, and fund it by, say, $1 billion a year.

5. Related to point 3, but fix the water situation. We've got more than enough of the stuff, all we need to do is get on and build the infrastructure we failed to build over the past 30 years. It'll create far more employment here and now than will buying imported consumer junk and it will still be serving the Australian community a century from now. I'd be quite happy to see borrowed money used for this purpose given the long lasting nature of the asset being created with benefits spanning multiple generations - odds are inflation will end up paying most of the bill anyway.

6. Also related to point 3, take a good hard look at whether geothermal energy offers a comparative advantage to Australia. If so, do whatever is required to make it happen. Given the track record of private investors in the power industry, that probably means nationalisation - so be it if it's necessary but make sure it's run by someone competent rather than a treasury bean counter who will almost certainly mess it up completely.

7. Decide once and for all how to properly fund health and actually implement a national plan. Either public or private, just make some decisions and get on with it. Just about the entire system is an outright mess with incredible inefficiency as it stands today - just fix it and stop the constant messing about with how it's funded.

8. Get rid of the non-productive bureaucrats, consultants and especially contractors who are wasting my money. Then we won't need additional taxes to pay for the above.

9. Cut welfare for all but those who genuinely need help. The fortune saved will enable lower taxes, thus meaning the middle class simply doesn't need welfare anymore.

10. Lower the rate of GST but apply it to everything, no exceptions. I know it seems a bit harsh to tax essentials, but it's a recipe for revenue and economic instability when the funding of essential services is funded largely by taxing non-essential spending, thus guaranteeing volatility in revenue during ups and downs in the economy where stability is needed.
 
Smurf1976 said:
1. Stop manipulating the property market via the various schemes currently in place. Let it find its own true level through market forces.

2. Stop throwing borrowed money at consumption of imported goods. From the long term macro perspective, that's nothing short of outright madness.

3. Invest in infrastructure of lasting benefit to the country and that leads to greater productivity and/or establishment of new industries. That means rail, roads, ports, power, water etc not a new set of steps outside the library, a play park for the kids or any other make work schemes with little real value.

4. Establish some sort of fund to invest in industries with long term potential where private funds are, for whatever reason, not forthcoming. Sure, some of it will end up being money down the drain but it will only take a few % of winners to make it worthwhile overall. Put engineers, scientists and professional managers in charge of it, not politicians, and fund it by, say, $1 billion a year.

5. Related to point 3, but fix the water situation. We've got more than enough of the stuff, all we need to do is get on and build the infrastructure we failed to build over the past 30 years. It'll create far more employment here and now than will buying imported consumer junk and it will still be serving the Australian community a century from now. I'd be quite happy to see borrowed money used for this purpose given the long lasting nature of the asset being created with benefits spanning multiple generations - odds are inflation will end up paying most of the bill anyway.

6. Also related to point 3, take a good hard look at whether geothermal energy offers a comparative advantage to Australia. If so, do whatever is required to make it happen. Given the track record of private investors in the power industry, that probably means nationalisation - so be it if it's necessary but make sure it's run by someone competent rather than a treasury bean counter who will almost certainly mess it up completely.

7. Decide once and for all how to properly fund health and actually implement a national plan. Either public or private, just make some decisions and get on with it. Just about the entire system is an outright mess with incredible inefficiency as it stands today - just fix it and stop the constant messing about with how it's funded.

8. Get rid of the non-productive bureaucrats, consultants and especially contractors who are wasting my money. Then we won't need additional taxes to pay for the above.

9. Cut welfare for all but those who genuinely need help. The fortune saved will enable lower taxes, thus meaning the middle class simply doesn't need welfare anymore.

10. Lower the rate of GST but apply it to everything, no exceptions. I know it seems a bit harsh to tax essentials, but it's a recipe for revenue and economic instability when the funding of essential services is funded largely by taxing non-essential spending, thus guaranteeing volatility in revenue during ups and downs in the economy where stability is needed.
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Some great comments there smurf.
It is extremely frustrating to see tax payer money wasted on numerous hair brained ideas that don't provide any benefit for the long term health of the country.
I agree with the geothermal investment and if necessary build a city on the location where the geothermal is easily assessable. Move a lot of the heavy industry(heavy users of power) to this new city and these companies can have access to a constant cheap source of power. This would also have the added bonus of moving people away from the already heavily populated cities of Sydney and Melbourne.
 
Re: What do you want from next weeks budget

Julia said:
What I would like from this year's Budget is for enough Australians to get hurt so badly that they will never, ever, ever, vote for the ALP again. Not ever. Never.
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That'll never happen, look to Hinchinbrook (state seat) in NQ for what happens when you don't have a labour candidate that lives in the district, has never been to the district and has no intention of ever living in the district, and never did any campaigning in the district, they get >5000 votes from labor stalwarts, totally incomprehensible :banghead:

What Rudd apologists don't seem to understand, to be able to see the spendfest will result in a huge tax shortfall and a massive debt. Regardless of populist nonsense about taxing the rich, they will need to tax well down the income food chain, this will lead to a building resentment by the middle class (and lets face it, that's where most of Aus is) as well as more of an impost on the elderly, who typically lean right rather then left, this will lead to a populist right leaning leader (Howard was more centrist) gaining ascendency and harsh impositions imposed upon welfare and public spending in an attempt to reign in the debt laden chaos.

I fear that the backlash against the nonsense of today will be "le terrible" for those on welfare and at the bottom of the income food chain in a decade or so, this of course will be of no concern to Rudd as he will be out by then, pushed out like all of them and will concentrate on writing his memoirs. Blair is the obvious example of what will happen, fiscally irresponsible policy in England has seen the populist Labor led decade leave them with massive public and Government debts that are climbing even higher and spiralling out of control (a pre cursor to our own Government debt), a service based economy that adds no value aside from fluff being the mainstay of what they do and easily cast aside at the slightest sign of hardship.

and I have to agree with Smurf1976 nearly 100%.

*I have voted for neither labor/liberal or national in the past 15 years or so.
 
Tysonboss1 said:
do you think negative gearing only occurs in property.

I would think most leveraged share investments are negative geared.

say you borrow $1000 to by bhp,... you'll probally get $30 in divs but pay $70 in interest, so your down $50 per year which you can claim.

But this only happens in the first few years,... in 5 years time BHP might have increased divs to $60 and you have paid down the loan so your interest is only $40,... now your up $20 per year,..

Negative gearing is only a short term thing,... eventually the goal is to have the earnings outgrow the interest so the investment becomes postive,

it's not a tax dodge at all.

you only invest to make money, and if you make money you pay tax one way or another, so whats a few neg years compared to perhaps 40 positive there after.
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See that’s the bit i don't get, why should you be entitled to claim against your normal wages because your borrowing costs are more than you investment income ?, also using your BHP example yeah great theory, interest more than income, plenty of burnt fingers in 08, gotta luv it.
 
jono1887 said:
Hmm... not to sure cutting most welfare will fix anything besides reducing the deficit!! What do you think will happen to all those people that are dependent on it?? I don't think a flat tax will be appealing to many people either... especially the lower income earners who'd think the rich should pay more.

Minimize govt? how so?
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Cutting most welfare would allow for lower taxes and require less government jobs. Many of those dependent on it should not be dependent on it. Welfare should be for those who truly cannot support themselves. Where to draw the line I cannot say, but it's far more generous than it should be. If you make people responsible for themselves, they'll learn to support themselves. Obviously not everyone can, but you don't teach people to be productive by offering them a cheque every couple of weeks.

A flat-tax certainly isn't appealing to many, because most aren't looking for equal contribution. They want to maximise the contribution of others while minimising their own, and this is not restricted to any particular income class.

Minimise government, well who knows since they seem to need ten people to do one person's job ;). One way would be to significantly reduce government income and see what jobs remain. If they didn't constantly argue back and forth, we may know what they're actually meant to do, and they may actually get something done. Perhaps make it illegal for lawyers to enter politics?
 
cutz said:
See that’s the bit i don't get, why should you be entitled to claim against your normal wages because your borrowing costs are more than you investment income
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it would be a bit unfair if you were charged tax on the capital gain after 10years if you were not able to claim all the costs assosiated with generating that capital gain,

and remember one mans expense is another mans income,.. So one investor may claim a deduction for the interest, but some other investor will be paying tax on the income from that interest, so someone is paying tax somewhere.

as with any business you will generally not report a profit from year one,
 
cutz said:
also using your BHP example yeah great theory, interest more than income, plenty of burnt fingers in 08, gotta luv it.
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BHP was just a randomly picked example,..

But yes BHP has been raising its dividend so it does fit the example, if you borrowed and bought bhp 5 years ago and have been paying it off, the interest today would be less than the dividends, so it would be positively geared.
 
jono1887 said:
Hmm... not to sure cutting most welfare will fix anything besides reducing the deficit!! What do you think will happen to all those people that are dependent on it?? I don't think a flat tax will be appealing to many people either... especially the lower income earners who'd think the rich should pay more.

Minimize govt? how so?
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But the rich do pay more with a flat tax system as the higher the income x % the higher the tax paid.....
 
9. Cut welfare for all but those who genuinely need help. The fortune saved will enable lower taxes, thus meaning the middle class simply doesn't need welfare anymore.
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Oh wouldn`t that be wonderful. The welfare teet is well and truly gripped between the lips of the co-dependants in our society and the government has added birthing women to the list for the tax payers money to be siphoned into.
 
Tysonboss1 said:
it would be a bit unfair if you were charged tax on the capital gain after 10years if you were not able to claim all the costs assosiated with generating that capital gain,

and remember one mans expense is another mans income,.. So one investor may claim a deduction for the interest, but some other investor will be paying tax on the income from that interest, so someone is paying tax somewhere.

as with any business you will generally not report a profit from year one,
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Tysonboss, i think you’re missing my point,

I'm just suggesting negative gearing is pulled, that’s when borrowing/maintenance costs exceed the income from that asset therefore you claim against you normal wages for example, generally popular with property investors.

To use your example without negative gearing, after ten years you sell your asset, you've claimed interest/expenses against earnings on that asset you then pay CGT at a reduced rate, so what’s wrong with that?
 
Peter Costello as treasurer and Kevin Dudd to get hit by a BUS
 
Pappon said:
Peter Costello as treasurer and Kevin Dudd to get hit by a BUS
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This, plus

1. Takeover of hospitals.
2. Removal of payroll tax, stamp duty on insurance in exchange.
3. Takeover of all public transport.
4. Sacking of 50% of state pollies (theyre all hacks anyhow, both sides...)
5. Decrease limits for salary sacrifice to superannuation
6. Increase tax on allocated pensions to 15% (same as super)
7. Increase tax on booze, smokes, petrol/diesel, 20% fast food tax.
8. For god sake stop handing out money, and spend the above savings on decent infrastructure - water, energy (geothermal - good one!) to combat our biggest issues coming up in the next 5 years - shortage of water and shortage of oil.

That'll do.

Although I'm not hopeful...
 
Pappon said:
Peter Costello as treasurer and Kevin Dudd to get hit by a BUS
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At the rate things are going, we won't be able to afford buses much longer.

Will being run over by a horse and cart do instead? Even then, better get on with it while we can still afford to feed the horse.

Seriously, the massive opportunities in this country squandered by successive governments, both Labor and Liberal with generally strong support from the minor parties and independents, is nothing short of remarkable. The last thing we need now is more government meddling but sadly that seems to be exactly what we're going to get.
 
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