Nicholas Gruen writes: Re. Peter Saunders’s comments on tax and churn (yesterday, comments). Readers interested in the debate on “churning” might like to adjourn to Club Troppo (Crikey Blog of the year 2005, no less!) where we’re having an interesting discussion on the issues and trying to pin Peter Saunders down. He’s most at home claiming that there is a “philosophical difference” between us — but there’s not. We should be homing in on the real issues. Who gets what? At least when this comment was written it seems we support similar policies — maximising the extent to which benefits paid for social purposes — for instance for supporting children — accrue to people by paying less tax rather than by being taxed and then receiving benefits. Peter’s plan is to use the tax free threshold whereas I think tax credits would be better. The difference? Tax credits would pay more to poorer families who have low tax liabilities and so would enjoy limited benefits from a higher tax free threshold. And tax credits could be means tested.  Because they weren’t paid to the wealthy there would be more left over for the battlers and those in the middle. Over to you Peter.

Ruth Davies writes: Would Leo Vance like to clarify his comments in yesterday’s Crikey (comments)? He seems to be implying that he thinks it is in some way “right” for income to be redistributed from individuals to families! (“Eliminating “churn” would mean government specifically moving to cut the income of families and increase the income of individuals”). Three key reasons why people get angry about welfare churn: the government taketh away but never gives back as much as was taken; we should have the right to choose how to spend our money, not have it taken away and then given back with conditions; why should households without children subsidise those with (apart from the basic services of health and education that benefit all society)?

Adam Schwab writes: Yesterday, Gavin Robertson (comments) picked up on a very minor point in my article last Friday, claiming that the annual savings from Coles Myer’s sacking of 2,500 people meant that their average income was $60,000 not $120,000 (as stated), due to savings in “office space, power, light and heat, stationery, insurance and a few hundred other overheads.” First, unless Coles Myer sublets space in its Tooronga head office (which is very unlikely), or moves premises (which would cost a packet) it would be fairly difficult to save much on office space. Second, power, light and heat are the same thing. Third, unless Coles currently supplies its employees with Mont Blanc pens, the stationery savings are likely to be pretty negligible, especially given Coles’s buying power. Fourth, the WorkCover premium for head office employees is likely to be a fairly low 1% of salary (they are not window cleaners). Finally, the cost savings quoted in the article were “more than $300 million”, not “exactly $300 million” – the actual figure is $363 million (or $145,000 per employee). Therefore, while the $120,000 would have been marginally too high (it was sourced from anther article), that estimate is probably closer to the truth than Robertson’s $60,000 claim.

Chris Roach writes: Re. “Time to reform capital gains tax” (yesterday, item 7). Why is it so seldom that commentary on the 50% discount for capital gains tax considers its origin or rationale? I’m no expert, but I don’t think the 50% discount is some great gesture of largesse for capital asset owners. It replaced the indexation system, under which an asset’s cost base (kind of the cost of acquisition for the asset) was adjusted to take account of inflation when working out the taxable amount. Imagine looking up the inflation rate for each year of ownership, and adjusting an investment unit’s purchase price accordingly. It was hideously complex and time consuming. The 50% discount allows for the effect of inflation in the cost of acquisition in a simple and easy to apply way.

Kenneth Cooke writes: Re. “Australia’s first law officer was wrong in law” (yesterday, item 4). Not only has Philip Ruddock made a serious error in law, he is guilty of racial vilification. What else can you call the spreading of misinformation which could result in increased resentment against Aboriginal people?

Mark Duffett writes: The best of Dennis McDonald’s knowledge (yesterday, comments) is at least ten years out of date. In 1996, “Scientists are divided on the issue of whether and how human created emissions are a significant overprint on the long term cyclical warming and cooling of our planet” was a reasonable proposition. In 2006, that is no longer the case. As with any healthy science, there are dissenting voices, but there is now a clear scientific consensus that anthropogenic influences are significantly impacting natural climate cycles.

Robert Hughes writes: In yesterday’s comments section, Dennis McDonald wrote, “To the best of my knowledge, scientists are divided on the issue of whether and how human created emissions are the major, or indeed even a significant contributor to the long term cyclical warming and cooling of our planet.” I often hear this argument, but when I tried to confirm the statement I couldn’t find much evidence that there were substantial numbers of eminent scientists that don’t believe that human-created emissions are contributing to global warming. Those scientists who are on record as denying a human component to global warming seem to be either not eminent, don’t have a background in climate science or have made other assertions (for example, that there are no links between smoking and cancer) that would make most people wary of their opinions. Is it time for more Crikey lists? I would like to see two lists: one of the 10-20 most eminent scientists who have supported the idea that there is a significant human component to global warming and another of the 10-20 most eminent scientists who are on record as denying a human component. The reputations, qualifications and achievements of the scientists on both lists may be a good way for all of us who aren’t specialists in the field to assess whether statements like Dennis McDonald’s are reasonable.

Philip Comer writes: Stephen Mayne has been railing of late about the growing power of corporate giants and the power they wield in the marketplace. Accordingly he calls for more funding for the government watchdogs. However the best watchdog on corporate power is the consumer and the democracy of the market. Social networking on the internet allows individuals to discuss, critique and recommend products in an instant across the globe with online trading systems allowing for the arbitrage necessary to clear markets. Perhaps to keep corporations in check, government watchdogs should employ the unemployed to scour their junkmail for bargains and rip-offs and rant about it online: that will pay for Telstra to lay some optic fibre, that’s for sure.

Caitlin Johnstone writes: Re. Your pompous editorial about Mark Latham’s latest book (yesterday). Ironically, you reminded me exactly why I enjoyed his first book so much and why I should get this one. Unlike your editorial, Latham owns his opinion, and tells it in plain English, in his own words, from his own experience. Jeez, Crikey – quoting Thomas Jefferson? Puh-lease!!!

Tamas Calderwood writes: John Owen (comments, yesterday) is almost correct that the Russian (actually Soviet) army was primarily responsible for defeating Hitler. However, he overlooks the fact that it was American industrial production that allowed it to do so. The US produced enough equipment to arm 2,000 divisions during WWII and it was the mechanisation of the Soviet army with American trucks and jeeps (and boots and coats for its soldiers) that allowed them to crush the Nazis. John also says the US did not enter the European land war until June 1944 with the D-Day invasion, however he forgets that the US army had been fighting the Axis powers in North Africa since late 1942 and thereby helped divert German resources from the Eastern front. PS: Love your work Christian Kerr – keep it up.

Myles Tehan writes: Nick Place’s resurrection of the proposal to move Brownlow Medal night to the first week of the AFL Finals (yesterday, item 29) would exacerbate, rather than solve, the problem of interstate teams not sending their players to Melbourne for the count. For as long as the count is held during the finals series, the principle behind the clubs’ refusal will not change: they will continue to protect their players from a long flight to the count, a night away from home, and a long return flight, only five or six days before a game. To move the count to week one of the finals could see all six interstate teams keep their players at home; perhaps the Brownlow Medal would best be held on the Monday after the Grand Final, as a post-season celebration where all players could attend, and enjoy themselves, without the spectre of looming finals matches.

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Peter Fray

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