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Keane’s fantasy budget (and how to pay for it)

Yesterday we looked at the major economic challenges facing the country, with the goal of putting together a budget that addressed them, free of political self-interest.

Today we’ve had a go at putting together a series of budget measures aimed at addressing the issues of decarbonisation, housing supply, infrastructure provision and long-term fiscal stability. Let’s go through them.

1. Decarbonisation. As we noted yesterday, with a form of carbon pricing starting from July 1 and a major range of government “direct action” initiatives to support it being introduced, the primary problem we now have in the ask of reducing the Australian economy’s over-dependence on carbon compared to similar economies is the vast range of tax expenditures that encourage fossil fuel use, creating a policy push-me-pull-you that will negate the impact of a carbon price and associated measures.

In its budget submission, the Australian Conservation Foundation has costed the removal of a range of pro-fossil fuel tax concessions. We’ve adopted two of their proposals — removing the diesel fuel rebate from miners and transport (while keeping it for agriculture), and removing concessions for accelerated depreciation for investment in oil and gas assets. This would remove about $10.5 billion worth of pro-carbon subsidies across forward estimates, making a significant first step in eliminating the policy tug-of-war between the carbon pricing package and our tax system. It will also start reversing Treasury’s appalling decision to wimp out on the G20 commitment to eliminate inefficient fossil fuel subsidies.

2. Housing supply. We’ve taken three measures aimed at improving housing supply while trying to avoid the distorting, inflationary effects of the first home owner’s grant. One is to increase the government’s “Building Better Cities” scheme. This was announced in the 2010 election campaign as a program to help local councils provide the basic infrastructure needed for residential development — one of the biggest cost issues between developers and governments. The government quietly halved the program from the announced $200 million to $100 million in last year’s budget, but we’ve added $50 million per annum to it, more than doubling the size of the scheme.

We’ve also adopted Joe Hockey’s proposal to better target housing payments to the states to encourage state governments to make land available more quickly and reduce developer levies. This would have no overall cost because it would tie existing special purpose payments to performance benchmarks. But if done properly there would be some funding costs required for a Commonwealth agency such as FaHCSIA to properly monitor state government performance on the issue, so we’ve allocated some departmental funding for that. Thirdly, we’ve established a permanent additional Commonwealth social housing program to provide funding for public housing to the states — conditional on the states maintaining their overall level of existing public housing funding, or in the case of NSW and Victoria, returning funding to levels from before the financial crisis.

3. Infrastructure provision. We’ve adopted the best policy announced during the 2010 election, Andrew Robb’s infrastructure partnership bonds, a scheme designed to leverage private sector funding into infrastructure investment while (unlike the original Keating-era infrastructure bonds) minimising the risk to taxpayers by capping the scheme liability. We’ve set the scheme at $150 million a year, like the Coalition did, with the goal of reviewing it after four years to determine its effectiveness in leveraging infrastructure investment (the original policy is here).

4. Fiscal stability. We’ve also hacked into spending with the goal of reducing Commonwealth outlays, albeit with a phased approach that means we’re not ripping a significant chunk out of the economy while the growth remains a little below trend and the situation in Europe remains unresolved. But we’ve also increased spending or cut revenue in some other areas as well.

We’ve restored the original 2% corporate tax cut associated with the original Resources Super Profits Tax. The logic of the RSPT was strong — in effect use the superprofits being enjoyed by the mining sector because of an historic resources boom to ease the pressure on the non-mining sectors of the economy through a tax cut. The restoration would reverse the errors made by the government (in halving the tax cut when it cut a deal with the big miners) and the Greens and the Coalition (in blocking the cut this year).

But we’ve extended the idea of a super profits tax to the banking sector. The major banks earned around $24 billion in cash profits in 2010-11 and are on course to pass that this year. This is the direct result of an uncompetitive financial sector that is now dominated by the Big Four banks, enabling them to gouge customers and business through interest rates and fees. In the absence of serious efforts by the government to increase competition in banking or even adopt Hockey’s proposal of a financial services inquiry, a banking super profits tax (implemented via a Tobin Tax-style levy on transactions or banking licence fees) would, like the mining tax, remove some of the windfall profits enjoyed by an industry benefiting from unusual circumstances — in this case, government-engineered lack of competition — for the benefit of the rest of the community.

And we’ve hacked into middle-class welfare: the private health insurance rebate will be phased out altogether over three years, removing one of the worst pieces of public policy in the country. To address state concerns about the possible impact on hospital waiting lists, we’ve allocated additional funding for hospitals — $250 million next year, then $500 million per annum thereafter.

We’ve cut back back access to  Family Tax Benefit A and B. For Family Tax Benefit A we’ve pulled the second income threshold back from $94,316 to $70,000 and reduced the cut-off point for payments to $120,000 (which is still very generous). We’ve also reduced the Family Tax Benefit B cut-off threshold to $100,000 from $150,000. Costing these changes is difficult for anyone outside government; for our purposes we’ve assumed the Family Tax Benefit A changes would reduce the current $14 billion cost of that handout by $1 billion, and reduce the cost of Family Tax Benefit B by about $200 million. Both estimates, we think, are very conservative.

And we’ve taken the scalpel to the War On Terror, which has cost taxpayers over $16 billion since 9/11. We’ve cut ASIO’s funding from its current levels back to its 2005 levels — leaving in place the massive increase in its funding provided by John Howard, and even leaving its grandiose new headquarters intact, but saving about $130 million a year.

We’ve also recognised the dire revenue situation state and territory governments are finding themselves in due to the collapse in GST revenue growth and sluggish growth in traditional state government revenue sources like property taxes. So we’ve removed the GST exemption for food — a strong growth area in retail spending — which will provide over $6 billion in additional revenue to the states (it will also have the benefit of removing the last stain on public policy left by the wretched Meg Lees).

Finally, we made two additional spending decisions: we restored the foreign-aid cut imposed by the government in the recent budget. Australia is one of the richest nations in the world and has the pretty much the best-performing economy. We can afford to continue to be generous with our foreign aid. And we increased Newstart payments by 10% (we can’t model the exact cost of this, which may be greater than 10% depending on take-up rates, so we’ve used 10%).

The additional revenue measures will move the budget into substantial surplus more quickly, but in a measured way — a $3.5 billion surplus next year,  a $4 billion surplus the following year, then larger surpluses as the cuts to middle-class welfare kick in.

The caveat on all this, of course, is that it’s easy for commentators and economists to spell out what they think should be done, but none of us ever stand for election and face the wrath of voters like politicians have to. Many of these measures would elicit fury from voters obsessed with a sense of entitlement, and from industries benefiting from subsidies like the mining and private health insurance sectors. Some of them would be hated no matter how well they were “sold”.

But we think it’s politically do-able — after all, we haven’t even gone near really serious changes like looking for the tens of billions in tax revenue lost from exempting the family home from capital gains tax, or removing the full $10+ billion in pro-carbon subsidies.

There’s lots of fiscal reform out there to pursue. But it takes more political courage than we’ve seen lately.

*We’re engaging some of the smartest economic brains to design their fantasy budgets for Crikey. But the floor is open to amateur treasurers everywhere — email us your thoughts and we’ll compile the best responses.

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  • 1
    ConnorJ
    Posted Friday, 18 May 2012 at 1:26 pm | Permalink

    Vote #1 Crikey in 2013!

  • 2
    Peter Ormonde
    Posted Friday, 18 May 2012 at 1:39 pm | Permalink

    Yep - wouldn’t it be nice - a technocracy run by pundits … make doing the right thing so simple.

    Some of these suggestions are both economically and socially sensible - lbut some, ike the GST on food, are politically suicidal.

    So one would need to set up some sort of compensation for those on low incomes… so knock a bit off the revenue side there.

    But spread the GST to food just to feed the states???? Because they aren’t hauling in as much in stamp duty and other insane taxes they impose on employment and the like? No BK - let the states eat cake I reckon.

    But all up 8/10

  • 3
    Jimmy
    Posted Friday, 18 May 2012 at 1:57 pm | Permalink

    Generally happy with all the suggestions but I can’t see a banking super profits tax working, not only does it not have the logical nexus of “they are using our mineral and need to pay for it” of the MRRT, but as the banks have already broken the link between RBA rates and what they charge the tax will merely be passed on in the form of higher interest ratres on loans and lower rates on deposits.

    As for the courage necessary, well the current govt has brought in a carbon tax and MRRT, means tested private health, restructred FTB and other middle class welfare. initatiated the “builidng better cities” policy and the regional cities program so just because they aren’t doing everything you suggest doesn’t mean they shouldn’t get credit for the courage they have shown, especially when their policies are contrasted with what an Abbott govt is planning to do.

  • 4
    Phen
    Posted Friday, 18 May 2012 at 1:59 pm | Permalink

    Its just silly populism to claim that the rebate of diesel fuel tax shouldn’t apply to miners. The principle that use of diesel fuel in machinery and in mining equipment shouldn’t be linked to a tax intended to fund public roads is at the heart of this tax.

    Like most of the other ideas though.

  • 5
    Joe Magill
    Posted Friday, 18 May 2012 at 2:02 pm | Permalink

    It’s a great start Bernard.
    I wonder whether a phase out (over say 5 or at a stretch 10 years) of negative gearing would be politically achievable in light of the other measures proposed. A primary objective should be to remove the distortions that the tax regime creates.

    Peter Ormonde, the states do have a real revenue shortfall problem and a rising expenditure obligation. This has to be addressed if we want to maintain reasonable services. The GST removed a raft of inefficient state taxes and if we don’t fix the state problem we will only encourage their replacement. Someone has to pay for the schools, the hospitals, the police.

  • 6
    Jimmy
    Posted Friday, 18 May 2012 at 2:04 pm | Permalink

    Phen - Very true, but how much of the taxes on fuel actually go to roads these days?

  • 7
    Mark Duffett
    Posted Friday, 18 May 2012 at 2:11 pm | Permalink

    Yes to Phen. In any case, what’s the rationale for “removing the diesel fuel rebate from miners and transport, while keeping it for agriculture”? People might not need the products of the former quite as much as the latter, but they come a pretty close second.

  • 8
    Mark Heydon
    Posted Friday, 18 May 2012 at 2:13 pm | Permalink

    @ Jimmy
    Logic for a banks super profit tax (in my eyes at least) is that the big banks are effectively backstopped by a government guarantee. The rating agencies have stated that they effectively mark the banks’ credit ratings up a couple of notches as a result, which gives them access to more and cheaper funding. This shouldn’t come cost free. Though I agree in the current uncompetitive banking market any additional tax would likely be mostly passed on to customers.

    On another note, I reckon there are a number of tax issues that could be looked at, for example the 50% discount on capital gains and the use of family and other trust structures to split income.

  • 9
    Jimmy
    Posted Friday, 18 May 2012 at 2:22 pm | Permalink

    Mark Heydon - I acknowledge the “govt guarantee” concept but the tax attacks the issue from the wrong end. We need to make smaller banks and credit unions more attractive.

    Personally I do all my banking through what was the VTU credit union (now mutual bank) and have had much better interest rates than anything the big banks offer.

  • 10
    lilac
    Posted Friday, 18 May 2012 at 2:34 pm | Permalink

    Off topic I know and I apologise but finally Tony Abbott, Kathy Jackson and Michael Lawler were outed in a brilliant piece of investigative journalism yesterday in the Independent Australia.
    The article also raises questions of the Slipper affair.
    http://www.independentaustralia.net/2012/politics/how-the-hsu-tangled-jackson-lawler-and-thomson-with-abbott/

  • 11
    PK93
    Posted Friday, 18 May 2012 at 2:42 pm | Permalink

    The caveat on all this, of course, is that it’s easy for commentators and economists to spell out what they think should be done, but none of us ever stand for election and face the wrath of voters like politicians have to. “

    Before I even read the article I was going to post “why don’t you run for parliament…”

    I hope this insight leads to a little more humility in your style in future

  • 12
    tqft
    Posted Friday, 18 May 2012 at 2:51 pm | Permalink

    Why stop at banks? Why not a super profits tax on that other duopoly? Coles & Woolies.

  • 13
    John Bennetts
    Posted Friday, 18 May 2012 at 2:52 pm | Permalink

    Does anybody have a reliable handle on what tax emptions to religion are costing the rest of us, ie the great majority who are not God-botherers?

    It would take a brave person to take action, though…

  • 14
    Jimmy
    Posted Friday, 18 May 2012 at 2:57 pm | Permalink

    John - When doing the calculation don’t foget to factor in the extra welfare costs for the govt doing the work of the salvation army, St Vinnies and the various other “religious” charity organisations.

  • 15
    Microseris
    Posted Friday, 18 May 2012 at 3:18 pm | Permalink

    The war on terror reminds of the perpetual war in Orwell’s 1984.

  • 16
    Jimmy
    Posted Friday, 18 May 2012 at 3:23 pm | Permalink

    Microseris - I had to read 1984 for year 12 back in 1993 and thought it ridiculous, 20 years on and I keep thinking how true is was.

    As for the perpetual war, once communism fell they had to find some new enemy and terrorism was it. And in true 1984 fashion it didn’t matter that the current enemy was previously our friend.

  • 17
    Posted Friday, 18 May 2012 at 3:42 pm | Permalink

    John: tax exemption for self-declared “religious” groups costs us a motza: Scientology is one egregious example. Hubbard said when he created Scientology (having previously run into legal trouble pushing fake health treatments) that if you want to make a lot of money, just create a religion. Lots less oversight, more opportunity to exploit people, and packets of dough.

    Jimmy: the Salvos and Vinnies do a bang-up job which it would cost the government (taxpayer) considerably more to do, since so much of the Salvos’ and Vinnies’ work is done by committed volunteers.

    Peter: if we’re going to lift food prices by 10%, we do need to compensate low-income earners. I’ve been poor and hungry, and with food prices 10% higher at the time, I would have been a lot worse off. Poor people live on a knife-edge margin. I remember going without food for two whole days to buy my toddler a $2 hot-water bottle (we couldn’t afford heating). Going without is a lot harder when you’re not getting much the rest of the time.

    I also suggest double GST on fast food. Make fresh, healthy food more attractive. Subsidize farmer’s markets and community vege gardens. :)

  • 18
    Posted Friday, 18 May 2012 at 3:57 pm | Permalink

    Like other posters, I agree with most of fantasy treasurer Keane’s proposals.

    Fuel excise is not hypothecated for roads or any other expenditure so there should be no rebate for anyone. Start with miners and move on the farmers later.

    But Keane left the regressive tax expenditures on superannuation untouched, despite fellow Crikey contributor Eva Cox reminding us every so often that it is sexist as well as regressive!

  • 19
    Recalcitrant.Rick
    Posted Friday, 18 May 2012 at 4:26 pm | Permalink

    Maybe the super profits tax should be applied across the board. Maybe lowering the current rate substantially but taxing super profits above a certain % ??? say 12%??? No idea how it would work though.

  • 20
    Matt Hardin
    Posted Friday, 18 May 2012 at 4:28 pm | Permalink

    Didn’t cancelling negative gearing by Keating in the 90s lead to massive increases in housing rent prices?

  • 21
    LJG..............
    Posted Friday, 18 May 2012 at 4:51 pm | Permalink

    I agree that negative gearing needs to be phased out or at least minimised - say adults get to negative gear 1 extra property but no more than that.
    I think it would also have beneficial flow on effects in the property market from an environmental point of view - there is a lot of cheap and nasty, poorly insulated dog boxes going up around Melbourne at the moment to service this market. I think the quality of the product would be a little better if it was aimed at owner-occupiers rather than the rental market.
    Just an idea.
    But it needs to be phased out veeery slowly as it is one of those middle class welfare rackets that a lot of people have bought into and the blood will flow…

  • 22
    Suzanne Blake
    Posted Friday, 18 May 2012 at 6:02 pm | Permalink

    This will see an additional flight of confidence and capital from Australia

  • 23
    Andybob
    Posted Friday, 18 May 2012 at 6:15 pm | Permalink

    SB you presumably mean if Bernard were empowered to implement it, because claiming that result from the article alone would be farfetched, even for you.

    Extending GST to food would be very regressive. Perhaps such extra GST might be subject to decreasing the States dependence on pokie machine revenues.

  • 24
    Recalcitrant.Rick
    Posted Friday, 18 May 2012 at 6:42 pm | Permalink

    Dear Suzanne, the only people damaging this economy are the opposition, consistently talking it down, regardless of the world view, most economists, and the facts & figures themselves. Wreckers with no vision!

  • 25
    Suzanne Blake
    Posted Friday, 18 May 2012 at 6:46 pm | Permalink

    @ Recalcitrant.Rick

    Really? Not according to just about anyone in the know (ie: businesses who invest and employ).

  • 26
    Mal White
    Posted Friday, 18 May 2012 at 6:53 pm | Permalink

    If we are into political suicide then why not go the whole hog and introduce Capital gains tax on the family home. Make it progressive towards expensive homes.
    Use the money to help the States get rid of stamp duty on the family home.

    Stamp duty hits every home owner who wants to move. It reduces the mobility of the workforce to shift to where the work is. This is now quite a problem in Australia and I am not a fan of “fly in fly out” because it is too damaging to families.
    Capital gains tax only needs to be paid if you have made a profit and it may reduce the incentive for Australians to put so much money into the worlds largest houses.

  • 27
    AR
    Posted Friday, 18 May 2012 at 7:57 pm | Permalink

    Clytie - re fast food tax, in a manner GST does increase the cost of junk gunk but nowhere near enough. (My monomania about of abolishing ALL other taxation and taxing only energy would catch the Obesity Enablers on their grease stained chins, with downstream benefits of lower medical costs.)
    Wilson, in 60s UK, tried to tax certain activities with the Selective Employment Tax, intended to make service jobs more expensive in order to have those keen, able workers to do something more productive, like make stuff in the erstwhile workshop of the world. Didn’t get a chance to work as it was mercilessly attacked by those who became thatcher’s children of the 80s when she basically abolished british industry.
    So, ‘scuse the digression, basic fresh food should remain tax free but the kore it is worked, the higher the tax until slop sold in tins & joints is too expensive to be used as a lazy substitute for nutrition.

  • 28
    AR
    Posted Friday, 18 May 2012 at 7:59 pm | Permalink

    ..would be..but the MORE it is worked..

  • 29
    GocomSys
    Posted Friday, 18 May 2012 at 8:14 pm | Permalink

    @SB. Hi mushroom! Still in the dark and thriving on bullsh^t? You shouldn’t have brekky and the Daily Terror at Maccas! It isn’t good for your health, physically and mentally! See what it does to you! Why don’t you listen! Maybe the GST increase on fast food is not such a bad idea. Might even work for someone like you. Or possibly not!

  • 30
    Suzanne Blake
    Posted Friday, 18 May 2012 at 8:23 pm | Permalink

    Sorry @ GocomSys

    I have not been to Maccas, except for a Coffee for many many years. Kids dont even eat it.

    Increasing GST on fast food, will just hurt the disadvantaged. Is a salad at Maccas, fast food. Is Subway fast food?

  • 31
    Peter Ormonde
    Posted Friday, 18 May 2012 at 10:59 pm | Permalink

    Tried to post a precis of the article referred to above by Lilac. Moderation for four hours then disappears.

    Top job Crikey … removed a post that was far too scary to run, yes?

    Enough! I can get gutless journalism from the Mainstream Meeja.

  • 32
    Recalcitrant.Rick
    Posted Friday, 18 May 2012 at 11:24 pm | Permalink

    So SB, what is affecting business in Australia at the moment? Is it the low interest rates? Maybe it’s the low wage inflation,? Tell me what is causing them the most trouble? The answer of course is a high dollar and negative sentiment. So, what’s causing the high dollar, oh that’s right…..a succesful economy! What’s causing the negative sentiment? Lies by you and your do nothing cronies!
    I’m prepared to admit that this Government has made political mistakes, But on a policy and economic level this has been an excellent Government. Forward thinking, economically responsible and guiding the country through the GFC, the WORST economic crisis since the Great Depression without going into recession! Only an idiot would fail to see that, and that’s why Swan got a gong, and we are considered by nearly all NEUTRAL observers to have one of the worlds best run economies.
    Can anyone try and imagine what life would have been like if Abbott had won the negotiations and had to deal with the independents :-) He wouldn’t have a clue! and they’d be crossing the floor every second sitting day because his outrageous promises to them would, of course, have been broken.

    Oh, and I know how to fix the high dollar. WRECK THE ECONOMY! Vote 1 for Abbott and Hockey!

  • 33
    lilac
    Posted Friday, 18 May 2012 at 11:38 pm | Permalink

    @Peter Ormonde 4 hours in moderation! What are they scared of? The story has gone viral on Twitter but not ONE mainstream media organisation has run with it!?! I would expect that from News Limited and even Faifax these days but not the ABC and especially not Crikey, the situation reeks!

  • 34
    Peter Ormonde
    Posted Friday, 18 May 2012 at 11:46 pm | Permalink

    They are scared of lawyers Lilac … and don’t like being scooped by some clever kid I guess.

    Don’t have the smarts to lawyer proof themselves … presumably the company that publishes Crikey actually has assets. And of course assets must be protected. So you protect them by not running stories that might bring down the lawyers on you.

    And - after a few years you end up like Rupert Murdoch.

    I reckon this will be my last effort at Crikey… aside from First Dog, the rest of it is pretty middling to be honest.

    The Conversation is well worth a look for those interested.

  • 35
    Groucho
    Posted Friday, 18 May 2012 at 11:53 pm | Permalink

    What’s most interesting about Bernard’s faux budget is just how predictable the response is. For all the shrieking of socialism, wealth redistribution and class warfare pulling the candy from the hands of the “free marketeers” has them squealing like stuck pigs.

    Since when was it up to government to subsidise peoples rents? In fact when one article I saw a few years ago revisted Keating’s removal of NG it found rental prices only went up significantly in Sydney and Perth. In fact NG has the opposite effect because it drives up the price of existing stock and rents.

    If Negative Gearing makes so much fiscal sense as its proponents claim why is it specifically excluded from tax reviews? Why don’t we have a cost/benefit analysis of its operation and who is really complaining? Its not the renters who would cheer its removal so they could finally buy into the market.

    I almost fell off my chair when I heard Joe Hockey criticising the sense of entitlement to welfare in Australia. He was a senior member of a government, and still does so in opposition, who’s sole existance was attributed to entitlement mentality.

  • 36
    lilac
    Posted Friday, 18 May 2012 at 11:57 pm | Permalink

    @ Peter O
    Sadly I think you are correct! I hope you don’t give up on posting here your thoughtful, accurate and insightful posts will be sorely missed by many!
    Yes agreed, The Conversation is a good read.

  • 37
    Posted Saturday, 19 May 2012 at 7:00 am | Permalink

    I agree that the principal place of residence should not be exempted from capital gains tax. But I’m not sure about having different rates for residential properties of different value when the same rate applies to commercial property of all values. Another possibility would to be to have different rates of tax for different rates of capital gain, which I would apply to all capital gains, not just to those on the principal place of residence.

    But if we’re into real political suicide Australia should stop being just about the only OECD country without probate duty.

  • 38
    Posted Saturday, 19 May 2012 at 7:08 am | Permalink

    In fairness to the Crikey moderator, the article referred to by Lilac breaches Crikey’s first rule of posting: ‘Please stay on topic’, as Lilac acknowledges.

  • 39
    Suzanne Blake
    Posted Saturday, 19 May 2012 at 7:27 am | Permalink

    @ Gavin Moodie

    A real communist at heart, go and live in the UK and pay your 40% death duties.

    If any Government tried to bring either into Australia, that would have less sets that Labor in Queensland.

  • 40
    Posted Saturday, 19 May 2012 at 7:39 am | Permalink

    Actually, I believe that probate duty should be 100%, but I’ll settle for the UK’s inheritance tax of 40% on estates above £300,000 ($480,000) if that’s the best that can be offered.

    Unlike some other posters I don’t normally descend to personal comments, but as an exception I’ll state that I’m a socialist, not a communist, a distinction mostly lost on the rabid right.

  • 41
    Suzanne Blake
    Posted Saturday, 19 May 2012 at 7:43 am | Permalink

    @ Gavin Moodie

    Sorry to interupt ypur inner city Latte, but death duties on family assets over $480k would impact 95% of Australians (ie anyone who owns a house and a few trinkets anywhere) and won’t happen, unless your Communist mates come down here and take us over. Even China does not have this , nor North Korea or Cuba?

  • 42
    GocomSys
    Posted Saturday, 19 May 2012 at 8:25 am | Permalink

    @Gavin Moody. Its difficult not to descend to personal comments in light of ongoing annoying, senseless, useless and plain stupid comments by some. Distracts immensely from insightful and diverse post by others!
    @Mushroom. (alias SB) Nothing to say, don’t! Play somewhere else, why don’t you! Good bye!

  • 43
    Edmund Moriarty
    Posted Saturday, 19 May 2012 at 8:35 am | Permalink

    I for one would strongly support wealth or estate tax. At the moment the governments attempts to tax the rich just end up hurting people with high incomes, who are mostly trying to get rich rather than being rich, by using income tax as the weapon. The rich don’t make money from income.
    If you are serious about equality then a tax on wealth is a great idea. 10% estate duty? And I doubt we would see a flight of wealth overseas. Particularly if all the major Western economies introduced a similar wealth tax simultaneously, wouldn’t that be great!
    Super profit tax on banks??? The size of their profit is small compared to their market cap. They aren’t rolling in it at all. Their share price has halved in three years because their profits are so weak. Return on equity is what 10%??
    And almost every working Australian owns the banks via super. The decline in bank share value would hurt those entering retirement.
    But seriously just get rid of FTB and adopt most of the Henry review. An excellent plan is sitting gathering dust.

  • 44
    Peter Ormonde
    Posted Saturday, 19 May 2012 at 8:45 am | Permalink

    Gavin,

    Seems staying on topic is not regarded as sacrosanct when one has the likes of Ms Bleak and Geewizz/Troofie able to post anything they fantasise.

    No Gavin, it’s the content that frightened the “moderator” … too moderate by half… to the point of being gutless.

    Thanks for the nice words Lilac.

    Peter

  • 45
    Posted Saturday, 19 May 2012 at 8:47 am | Permalink

    Home ownership in Australia is 70%. Median house prices are about $475,000. So probate duty starting at $480,000 would be imposed on about 35% of estates.

    As I wrote before, Australia is the exception amongst OECD countries in not having probate duty.

  • 46
    Mal White
    Posted Saturday, 19 May 2012 at 8:48 am | Permalink

    @PETER ORMONDE

    I don’t always agree with your posts, however they are always interesting and thoughtful.

    I am only an occasional contributor however like you, I have had enough of the ad hoc moderator which seems to be little more than some kind of electronic roulette wheel.

    I hope you keep posting, even if it’s not on Crik.ey.

  • 47
    AR
    Posted Saturday, 19 May 2012 at 9:50 am | Permalink

    PO - I took to CONVERSATION after a previous mention by you and it is so much more cerebral than Crikey that at least the usual trolls can’t cope, with the usual suspects (from the style though somewhat modified for a different readership).
    Unfortunately, like GlobalMail and the two sites set up by Canberra Uni (?), it is not the coal face for that very reason.
    So do we talk amongst the able or try to get down & dirty with the trolls to attempt the impossible, changing those minds sufficiently open?
    That’s been the problem since the Diggers or the Chartists.

  • 48
    Peter Ormonde
    Posted Saturday, 19 May 2012 at 10:13 am | Permalink

    AR …

    Yes there was a point where Crikey was getting a regular mention in dispatches … breaking the odd story of having some additional bit of useful information that managed to squeeze itself into the public discussion and the mainstream meeja.

    But the last six months has seen a dramatic retreat to the periphery … a loss of contact and even timidity. Perhaps that extra source has just dried up or lost its appeal.

    Instead we get routine regurgitation of Essential’s latest bit of flimsy market research or a commentary on parliamentary events albeit from a left of centre perspective. The Press Gallery in exile.

    I’m sure Cr*key’s journalists are feeling a certain tiredness creeping into their bones … the quiet strangulation of the daily darg. Needs a shake-up… maybe HRT for a fading idea. A tonic.

  • 49
    Apollo
    Posted Saturday, 19 May 2012 at 12:02 pm | Permalink

    Thanks for the link to the article guys. Yah I’ve always thought Kathy Jackson is A Liberal Party person whenever I saw her on TV and was surprised she is a Union member in high position. The plot is thicken.

  • 50
    Suzanne Blake
    Posted Saturday, 19 May 2012 at 12:25 pm | Permalink

    Lefties out in force today, than God, Assange will pinch a senate seat from you in 2013 in NSW.

    Milne is a flop.

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