The election thread - Two middle-late aged white men trying to be blokey and convincing..., same old shit, FFS.

[al_]

Ummmmm, no.

I think our current system is waaaaaay too complicated, and allows businesses and high income earners to avoid paying appropriate tax. A GST is much harder to avoid. Spend more, pay more.

And did I say anywhere I was against rebates or benefits for low income earners ? No?

Be careful about the assumptions you make.

For the record, my tendency is towards the higher taxation/higher service provision model of several scandinavian countries.

The current system is messy, but I think the alternative is equally problematic. Sorry if I misread your intentions, but from what I saw you were spruiking the type of model that mindless right-wingers favor. I saw only a passing reference to the tax free threshold, which wouldn't be adequate for those caught in the middle - ie: where a large proportion of the Australian population lie.

Rebates and benefits work in theory but are difficult in practice. I'm bickering with Kevin (no abortions) Andrews around income testing for access to benefits right now. These benefits, rebates, allowances etc are far more vulnerable to changes in government, as we are witnessing with the productivity commission recommending dramatic changes to delivery of essential services.

And the GST clearly impacts low-income earners more than anybody else. It is dangerous to consider lifting it during a time where penalty rates and fundamental industrial protections are under fire. I am not against lifting the GST in theory, but I just know how impossible it would be to implement the necessary social policy changes effectively. I sense any dramatic changes in this area right now would suffer from the governments prevailing ideological war. It could definitely work if we had strong leadership and independent thinkers, but it isn't going to work with puppets for various conservative lobbyists at the helm.

 

[Pastavore]

I agree entirely Al.

Any wholesale tax reform would have to be modeled very carefully to avoid disadvantaging the disadvantaged (hah!), and even more problematic would be managing the lobbying and media hatchet jobs of interest groups.

The frustrating thing is I believe both major parties would have pretty similar ideas for sensible tax reform, but both know that the easy political advantage comes from opposing them. So nothing happens. Shit, the secretary of treasury has probably got the whole thing structured and modeled, just waiting for someone with the guts to say "go for it".

 

[pink poodle]

You saw a man with immense business acumen owning a bunch of bureaucrats, his comments re tax minimisation (legally) are spot on.

Senators, not bureaucrats. And I wouldn't say owned either. Hard to tell what went down due to a the editing of the video, but greed and contempt was all that .revailed n my eyes. But I would have to agree with you about his acumen and tax advice (as it relates to our system). Especially his pffft to the way the revenue is used by the various governments

 

[Calvin27]

Revenue is not used correctly in public service because politicians have no balls to do what the departments are meant to do. All they do is spend it on consultants to produce report after report. When it comes to action, they are too scared to disrupt the public.

As for the GST, it keeps getting proposed because it is virtually impossible to avoid. Someone on $500k + a year can have all assortments of trusts and investment vessels to avoid tax. GST is unavoidable unless you stop buying stuff. The key is to appropriate back to the disadvantaged to lessen the impact of the increased tax stream.

 

[Dene Dweller]

Senators, not bureaucrats. And I wouldn't say owned either. Hard to tell what went down due to a the editing of the video, but greed and contempt was all that .revailed n my eyes. But I would have to agree with you about his acumen and tax advice (as it relates to our system). Especially his pffft to the way the revenue is used by the various governments

They are synonymous in my dictionary. Feel free to watch the unedited version and yes I would use the term owned:

[video=youtube;xOLbbkC1qq0]https://www.youtube.com/watch?v=xOLbbkC1qq0[/video]

 

[floody]

Removing Negative Gearing is a very difficult subject. Overall I agree with the notion BUT it would mean many people would NOT buy investment properties. Then where would the supply of rental properties come from? That would then drive up the cost of rent due to limited supply and make cost of living difficult for more people.

Saying there would be no rentals without neg gearing is just as simplistic and unrealistic as saying that removing negative gearing would bring prices down and allow more to be owner occupiers, isn't it?

As for 18k as a tax free threshold being extremely high, please go and ask a childless single on $37k a year, who isn't even able to access a low income healthcare card by way of subsidy, how they'd feel about the additional tax impost which wouldn't even hit the sides of the kind of breaks and subsidies people on many multiples of their income can access.

 

[floody]

As for the pissing and moaning about foreign ownership in agriculture, mining and manufacturing, for fucks sake it is a historical fact of all of those industries; in some areas it was considerably higher in the golden days people yearn for. For most of Australia's commercial history we have depended on foreign markets, foreign knowledge, foreign investment, foreign protectionism. Particularly in agriculture where if outright landholding wasn't the case, certainly companies exercised contractual dominion over some SERIOUS land area. Given our concentration of single crops in some areas, whole regions supplied one or two companies for decades. America, Canada and Scandinavian companies have exercised some mega clout in our Civil Engineering sector for most of the period post WW2.

Consider the VDL company, its been operating for almost 200 years under Royal Charter, and began its life with an enormous landholding of 1,000km2 in 1826. Never has it been Australian owned. Probably 1/3 of Tasmania would not have been opened up without their influence.

I think the key question is why are we now treating yellow and brown foreign investors with such contempt?

 

[Matt H]

A lot of people in this thread have been suggesting flat income taxes combined with more consumption taxes. I really don't like the idea of this all that much. This kind of system would be incredibly regressive, with the average tax rate decreasing as income increases*. When you consider what I posted earlier about the decreasing marginal utility of income, it really doesn't make any sense at all. I guess you could say the benefits would come from the top echelons of income earners having slightly more incentive to work harder, but it's a pretty weak argument - and at what cost to the poorest?

*a diminishing proportion of income is spent on consumption goods as income rises.

As far as negative gearing and rental availability goes, I'm pretty confused by it. Most property investors judge an investment on the rental yield (income from the house/asset value), right*?

So as house prices have increased, rental yields have obviously decreased. Getting rid of negative gearing means a whole lot of rental properties aren't going to be profitable anymore, and be sold off. So this might lead to a slump in house prices... which means two things:
- Rental yields stay constant and the cost of renting decreases
- The cost of renting increases and rental yields increase...



The housing market in Australia seems way to distorted to even rationalise. Someone help me out here??

*and capital gains speculation as well, but that complicates things even more

 

[Ivan]

Matt H,

Most people buying investment properties in Australia are not investors at all, but speculators. The yields don't look very good, but they're anticipating big capital appreciation.

 

[Ivan]

As far as negative gearing and rental availability goes, I'm pretty confused by it. Most property investors judge an investment on the rental yield (income from the house/asset value), right*?

"Investors" are not the driving force behind increasing the stock of housing, as is often touted as one of the reasons for keeping negative gearing. Investors are predominately purchasing existing houses.

Graphs from here Macrobusiness.com.au

 

[Dene Dweller]

A lot of people in this thread have been suggesting flat income taxes combined with more consumption taxes. I really don't like the idea of this all that much. This kind of system would be incredibly regressive, with the average tax rate decreasing as income increases*. When you consider what I posted earlier about the decreasing marginal utility of income, it really doesn't make any sense at all. I guess you could say the benefits would come from the top echelons of income earners having slightly more incentive to work harder, but it's a pretty weak argument - and at what cost to the poorest?

*a diminishing proportion of income is spent on consumption goods as income rises.

As far as negative gearing and rental availability goes, I'm pretty confused by it. Most property investors judge an investment on the rental yield (income from the house/asset value), right*?

So as house prices have increased, rental yields have obviously decreased. Getting rid of negative gearing means a whole lot of rental properties aren't going to be profitable anymore, and be sold off. So this might lead to a slump in house prices... which means two things:
- Rental yields stay constant and the cost of renting decreases
- The cost of renting increases and rental yields increase...

View attachment 286068

The housing market in Australia seems way to distorted to even rationalise. Someone help me out here??

*and capital gains speculation as well, but that complicates things even more

I disagree, this is a very general statement and assumes constant spend on consumption goods across different levels of income. It's fine as a constant assumption for one economic modelling scenario but in reality consumption increases as income increases, which is the function of a consumption tax. The more you consume the more you pay.

Now for the cat amongst the pigeons, I think GST should never have been exempted from fresh food etc, it should have been on all goods and services, this would also be a change I'd bring in. Not the I have the demographic modelling but based on observation this would actually take some more tax from "the rich" as they would eat more fresh food cooked in home prepared meals than takeaway and processed goods. :behindsofa: Prepared for the mob.

 

[Matt H]

I disagree, this is a very general statement and assumes constant spend on consumption goods across different levels of income. It's fine as a constant assumption for one economic modelling scenario but in reality consumption increases as income increases, which is the function of a consumption tax. The more you consume the more you pay.

I'm not sure if you understood what I meant. When you receive income, you have 3 choices: consumption, investment and savings.
If you're only earning $20,000 a year, the vast majority of your income will be spent on consumption goods leaving little for investment and savings. As income increases, although consumption will increase as well, it will only increase at a diminishing marginal rate, with greater amounts saved/invested. In comparison, Gina the Hutt might spend 20x as much on consumption compared to the low income earner, but far less as a proportion of income. So the effective tax burden of a consumption tax (the amount of tax paid as a proportion of income), is going to decrease as income increases.

 

[Dene Dweller]

I'm not sure if you understood what I meant. When you receive income, you have 3 choices: consumption, investment and savings.
If you're only earning $20,000 a year, the vast majority of your income will be spent on consumption goods leaving little for investment and savings. As income increases, although consumption will increase as well, it will only increase at a diminishing marginal rate, with greater amounts saved/invested. So the effective tax burden (the amount of tax paid as a proportion of income), is going to decrease as income increases.

I understand the economic theory but I can tell you in my household it doesn't apply, income has increased significantly (although without a job at the moment), but with a wife and two kids to support there is next to nothing to invest/save.

 

[Matt H]

I understand the economic theory but I can tell you in my household it doesn't apply, income has increased significantly (although without a job at the moment), but with a wife and two kids to support there is next to nothing to invest/save.

Fair enough man, I can't comment on your situation. But let's pretend that you're currently only saving 5% of your income and spending the rest on yourself and your family. If won the lottery tomorrow, are you still only going to save 5% of it?

 

[Dene Dweller]

Fair enough man, I can't comment on your situation. But let's pretend that you're currently only saving 5% of your income and spending the rest on yourself and your family. If won the lottery tomorrow, are you still only going to save 5% of it?

Definitely invest / save but both of those activities are taxable income. I'd also buy a new bike.

 

[Calvin27]

Graphs from here Macrobusiness.com.au

Macro business is awesome. Tells you what is really going on minus all the propaganda.

 

[John U]

These useless fuckers don't want to change the flag.

Here's a bet - 1,000 internet points
New Zealand will have a new flag before Australia.
New Zealand will become a republic before Australia.

 

[driftking]

These useless fuckers don't want to change the flag.

Here's a bet - 1,000 internet points
New Zealand will have a new flag before Australia.
New Zealand will become a republic before Australia.

Why so strongly for a new flag?
Curious

I know the whole separation from England but personally I think keeping it is a good idea reasons.

-England is part of Australia's history whether we like that or not
-The flag is already a well established flag in the world its well known to be Australian.
-most importantly for me is those who fought and gave their lives for this country did so under that flag.

While the flag might represent a bit of England history it is not something at least I personally feel its not something people think about when they see the flag, we have made that flag our own and we have created our own country and connotations with that flag that is important in history.

I see no reason to change it except for a patriotic whinge about changing a technicality to separate us from England not that changing a flag changes anything anyway really. It just seems like a effort of fixing something that ain't broke.

I have no doubt I am missing some important business reasons and political advantages so I would like to be enlightened to them.

 

[John U]

I don't get the fought under the flag thing. Has anyone ever asked a soldier what they think of this? I would be of the impression that when it's used it isn't generally used by a soldier. Julie Bishop used it today.

I think changing the flag could represent progress as a country.

 

[driftking]

I think changing the flag could represent progress as a country.

I like that concept but does changing the flag actually make any progression really? I mean it doesn't make anything really change except we can say we have our own flag now. Id rather see progression that offer benefits rather than progression on paper or on a flag that lead to nothing except a happy feeling of progression.

I think the better debate is if we should become a republic. Of which I don't really care. I feel like its going to ,again an effort to show progression on paper than really show progression that makes a change. Unless becoming a republic or changing the flag actually benefits and progresses us in a way that matters I see no reason to spend time and money changing either one.