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The sniff test method of governing

It seems the government is trying to form an economic policy by the sniff test.

Over the last few days we have been barraged by a plethora of ideas leaked to the newspapers, presumably to see how they fly with the public.

We have the ‘opt out’ of superannuation idea which would see low income earners choose to receive the superannuation guarantee as wages instead. The idea was described by Council of Small Business of Australia chief executive Peter Strong as “absolutely silly.”

Aside from undermining our world-class compulsory retirement savings system, Mr Strong said giving some workers the ability to opt-out of super would also add an unmanageable layer of compliance for employers. Payroll would get a lot harder as workers would be on different hourly rates. They would also have to pay tax on the extra 9.5% income.

Then there is the idea to increase the $80,000 tax threshold to $100,000, a proposal which would help the wealthy up to 10 times more than average wage earners, according to an analysis of Treasury data, and it would be women who gain the least.

For someone for whom a recent inflation-adjusted pay rise has taken them to $82,000, the benefit of a new $100,001 threshold for the 37 cent rate is extremely small – less than the price of a cup of coffee per week at $1.70 or $90 annually. For someone earning above $100,001, the benefit will be tenfold at $17 a week or $900 a year.

We also have Kate Carnell (is anyone else getting as sick of her as I am?) in a budget submission suggesting that the Age Pension be paid as a loan to retirees who own a home, and then the ‘debt’ would be paid back by selling the house.

One-third of Australian pensioners are living in poverty, according to Oxfam, and the money spent on the Age Pension by the Australian Government, expressed as a percentage of GDP, is the third meanest rate in the OECD nations. But I guess Kate has to find savings to cover her “essential” cut to the company tax rate.

On negative gearing, we are told that Labor’s plan is a disaster, while the government floats its own idea of either limiting the number of properties that can be geared or capping the annual deduction while still enabling average tax payers to gear new and existing properties.

Those who expected Scott Morrison to give some indication of the government’s direction in his address to the National Press Club last week were sorely disappointed. We saw a lot of graphs but heard no ideas which, for a government a few months out from an election, is extremely disappointing. Very soon they are going to have to stop trialling things in the Daily Telegraph and start making some decisions. The policy vacuum for a government ending their first term is flabbergasting.

That mess ‘on the table’ needs sorting.

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  1. Michael Lacey

    The plan is neoliberal Austerity for the poor and working people and banquets for the rich; now that’s a plan!

  2. Shaun Newman

    Kaye, they are absolutely hopeless well illustrated.

  3. Salsarat

    The lowly depths to which this nefarious, deceitful pack of LIARS, cheats and thieves in the LNP will stoop is STAGGERING. Their offensive, authoritative, totalitarian fascism has extended beyond the realms of what any democratic Australian could have possibly envisaged in their worst nightmares about Australia turning into a brutally savage, inhumane fascist State! How far this country has fallen, how much it has deteriorated, been ravaged, savaged and plundered, how much it has changed for the worst since the ANNIHILATORS and Grim Reapers have been unleashed – in only two short years, this country, its once generous compassion and humanity have been DECIMATED – it is a country that is barely recognisable to what it was under the Labor government! The LNP have DRAGGED our nation’s international reputation through the sewer and doggedly maintain a RIGID path of wholesale destruction and environmental vandalism; a future where our children’s education has been defunded into complete obsolescence and dumbed down to a level of idiocy in which 99.9% of Libtard voters habitually dwell … when the masses are kept pig ignorant and misinformed through the pathological LIES, paranoia and manipulative propaganda of the Murdoch press, they will ALWAYS vote conservatively .. that has been statistically proven as FACT by international research! You couldn’t trust these pathological LIARS in the LNP with a jam jar full of five cent pieces – the litany of broken promises, offensive attacks on the most vulnerable people in our society, the callous disregard for asylum seekers undergoing a campaign of relentless torture against these helpless people .. some only tiny BABIES – the LNP are completely unconscionable. Fate is slowly catching up and now we see that Turdbullshit’s unpopularity matches that of Shorten at 50% each. What a sad, sad place Australia is in at the moment!

  4. Douglas Pye

    Indeed Kaye … the “sniff test” is designed to start with the most Draconian, and work ‘down’ from there – in accordance with reaching an ‘acceptance’ level! . Relenting by degree!

    The ongoing saga about the current ‘refugee children’ situation could be a prime example. Make no mistake about it …. Dutton and Co. will have these folk back on Nauru when the slightest opportunity occurs, as ‘remarked’ in the article.

    Whilst so much social media attention is focused on the above situation, the Govt. is able to play sleight of hand elsewhere.

    Public attention span is short lived and narrow in the social media sector (in particular) and playing the Governance Game in this arena allows for diversion and direction of attention to influence outcomes! … the … ” Oh … look over there ” ploy comes into play.

  5. kerri

    Totally agree with you on Kate Carnell! Cannot stand that woman! She reminds me of the adage about the empty vessel!
    Why are all the things we pay for in our taxes regarded as something we should pay for by this Government?
    We have paid for medicare. You have no right to sell it!
    Pensioners have paid taxes all their lives in the belief the Government would support them in their old age.
    Many, without access to superannuation or with a late start leaving them with inadequate super.
    The baby boomer bulge of pensioners will pass but those elderly citizens caught within it should not be punished for being born at the same time as a whole bunch of other people and the lack of foresight of those in government at the time they were working and contributing to the tax pool.
    I will be personally overseeing the postal votes of my pensioner parents to be assured they do vote!
    The elderly must contribute hugely to lost votes and many are sucked in by “here let me do it for you” schemes by conniving politicians.
    Saltsarat! Agreed it will take decades to undo the damage.

  6. OldWomBat

    After 2.5 years of “adults in charge” still no coherent policies or strategies other than hand it all to their supporters i.e. big money. LNP – Incompetent, intellectually and morally bereft, no social conscience and no compassion for or understanding of those not like themselves.

  7. Terry2

    So, having told us repeatedly that we must contribute to superannuation and fund our own retirement as there just won’t be the money around to sustain the pension. Now we are being told that those on lower levels of income shouldn’t contribute to super at all as the low level of contributions won’t provide sufficient for these folk to retire on anyhow.

    I don’t remember seeing the rationale for this in Morrison’s Press Club slide-show.

  8. Sally K

    Perhaps the intention is to leak these ideas so that what the LNP finally do appears moderate and acceptable by comparison. The worst of it is that there is evidence that Turnbull does understand that the property bubble is destroying the future of Australia’s young but he makes a choice to serve the LNP donor base.

    From this article:

    Turnbull’s recipe to ruin the Australian economy

    “In his 2005 tax policy paper, Turnbull described negative gearing and the CGT discount as a “sheltering tax haven” that is “skewing national investment away from wealth-creating pursuits, towards housing”, and has caused a “property bubble”. Turnbull also acknowledged that “Australia’s rules on negative gearing are very generous compared to many other countries” and that “the normal deductibility principles do not apply to negatively geared real estate such that the taxpayer is not obliged to demonstrate that the negatively geared property will generate positive cash flow at some point in the distant future”.”

    Great metaphor in this article:

    Tony Barnbull spawns

  9. astra5

    Your piece illustrates the overriding problem with the Turnbull government. It seems trapped in a time warp, uncertain of what to do, spinning ideas to see how the public reacts, indecisive about almost every aspect of policy (except stopping the boats, which seems to be its one inviolate principle).

    Trapped by his conservative overlords, burdened with an incompetent treasurer (seemingly even worse than Hockey), entrapped by Morrison’s obsession with cutting taxes and reducing spending to pay for them, and embarrassed by shonky ministers, Turnbull is now seeing the fruits of his flawed judgement and stifling inaction: falling popularity and narrowing polls.

    What a disappointment he has been after such promising, and promise-filled start.

  10. Kaye Lee

    Speaking of shonky Ministers…..

    Immigration Minister Peter Dutton says the government has a lot of work to do.

    “We’re 50-50 and Australia faces the prospect of a union-dominated government under Bill Shorten,” he told ABC radio.

    “We need to make sure we work harder to keep our country safe.”

    Does he mean from unions or he is he reinvigorating the apocalyptic death cult?

    How about working hard on some policies to protect the environment and to provide a safety net for those who need it most? How about working hard to find homes for the people we have illegally incarcerated on Pacific Islands and for the over hundred thousand Australians who are homeless every night? How about working hard on economic reform? Is the election going to be based on union corruption and terrorism? Are they really our highest priority?

  11. mars08

    The relentless barrage of threats to the vulnerable, the old and the working/middle class is astounding.

    If a government in Europe or South America tried the same thing, there would be rioting in the streets. In Australia we hear the odd muted grumble. Could it be that the average Australian is financially far more secure than we imagine?

  12. Kaye Lee

    and of course we have Barnaby….

    New Deputy Prime Minister Barnaby Joyce has said low income households would benefit greatly if they were allowed to opt out of making compulsory super contributions.

    Mr Joyce said they would be better off using the extra money to buy their own homes.

  13. Terry2

    The government are very keen to rein in spending but have a problem explaining what spending actually is.

    As soon as you mention the $5 billion a year that we gift to private health insurance companies they seem to get tangled up in definitions ranging from ‘subsidy’ to ‘rebate’ but it’s still spending although we are encouraged to see this rebate as a concession to us ( the taxpayer) rather than a subsidy to the health insurance company.

    Clearly, if the subsidy goes straight to the supplier, the insurer – as it does – then surely it is a subsidy and thus spending.

    When it came to the automotive industry ‘co-investment’ it was condemned by conservatives as a wasteful subsidy to a greedy industry, even though the Labor funding allocated to the auto industry had been $5.4 billion over 13 years, 2008-2013 or a modest $415 million a year. What we got in return from the auto industry was technical innovation and design training capabilities for our youth and substantial employment for communities in Victoria and South Australia. We also got to make things that will now be made for us overseas.

    Sometimes it seems that conservatives confuse terminology for their own ideological purposes and to the long term detriment of the broader community.

  14. Neil of Sydney

    even though the Labor funding allocated to the auto industry had been $5.4 billion over 13 years, 2008-2013 or a modest $415 million a year

    There is something wrong with your numbers. 2008-2013 is 5 years not 13.

    Conservatives are not against subsidies if they work. We lost our car manufacturing for the same reason we have lost most of our manufacturing since the 1970’s. It is too expensive to make things in Australia. Back in the 1970’s we used to make everything and now it is mostly gone.

    And auto subsidies were legislated until 2020. When Ford left under Labor that was the final nail in the coffin.

  15. Sally K

    Kaye Lee, re “Mr Joyce said they would be better off using the extra money to buy their own homes.”

    Indeed the extra money would feed into higher property prices in the tradition of the First Home Buyers (Vendors) Grants. The Property Council of Australia probably came up with the idea

  16. Neil of Sydney

    And from your link which is dated 2013. So from 2003-2013 the auto makers got this

    Over the last 10 years or so, Holden has received $A1.8 billion – $A150 million each year from a potential $A2.17 billion pool – while Ford has obtained an estimated $A1.1 billion.

    Toyota will not comment officially on subsidies, but it is estimated the Japanese company received about $A1.2 billion in the last decade.

    The Coalition is not against subsidies if they work. But they worked indirectly. The more money Rudd/Gillard gave the car industry the less Australians wanted to buy aussie made cars. Local car sales crashed to only 10% of the market in 2013. It was dead long before the Coalition won govt.

    The subsidies should have been linked to performance. The more local sales the more money you get. But Unions and management just gorged themselves on taxpayers money voting for themselves higher wages and conditions. They deserve to lose their jobs.

  17. Peter F

    The main reason for our exports ( cars included) becoming unsustainable was the high $A. You will have heard that the Pt Kembla steel works have benefitted from the 30%+ lower dollar in recent months, with their products no competitive overseas. The same happened to all labour intensive exports, but it was easy to blame high labour costs rather than accept the overvalued Dollar as the main contributor.

  18. margcal

    I was wondering where the Liberal Troll Team Collective (aka NoS) was. An unwelcome return.

    Could we please have your personal take on the benefits of “not” allowing asylum seekers to accept NZ’s offer of resettlement.
    References to humanity, decency and compassion are compulsory in answering this question.

  19. Wally

    Neil of Sydney

    “It is too expensive to make things in Australia.”

    Because we have too many executives who do SFA and earn millions of dollars a year thanks to John Howard giving them a license to steal.

    How can you justify public company executives paying themselves as much as they want without shareholders approval or agreement?

    Shareholders own the company, executives should be paid what the business owners agree to pay them not what they demand.

    And the LNP say that unions are corrupt. FFS

    Neil we have heard your waffle over the car industry every second week since 2013, how about we change the subject and you attempt to justify the changes Howard made to the corporations act that legalised corporate theft.

  20. Michael Taylor

    Wally, you’re dreaming mate. ?

  21. Wally

    Michael Taylor

    I never give in, always live in hope. 🙂

  22. cornlegend

    I don’t know where this went, but you with your intimate knowledge of all things LNP might ,
    Not a good look though mate

    Prime Minister Malcolm Turnbull’s investments is under scrutiny, with revelations he has a financial stake in the global parent company of the scandal-plagued 7-Eleven empire.
    There are thousands of workers, past and present, who suffered wage exploitation at 7-Eleven, with some estimating the wage fraud bill could be as high as $300 million if enough staff come forward. 7-Eleven billionaire and co-founder Russ Withers set up an “independent panel” headed by Professor Fels to review claims of wage fraud. Professor Fels told Fairfax Media the panel had received 1000 claims, which is double that of a few weeks ago”
    It’s up your alley, sort of car industry related
    you pull in for a fill up and a feed if you don’t mind being served by bloody slaves

  23. Glenn K

    For the benfit of NoS. as far as the car industry is concerned, all advanced western countries with a car industry subsidize them. Do some hoemwork on it; audi, bmw, ford, peugeot, etc all recieve government subsidies ranging from the low teens to as high as 35% of the net cost of a car. You really think German workers are that much more efficient that they can compete with Korean or Thai workers? No chance. Difference is the German government recognises the INVESTMENT they are making in ensuring their domestic car industry thrives.
    But of course, you are a right wing wingnut and wouldn’t understand the bigger picture ……
    And no, i won’t bother to back my statements up with link references. Google it yourself and do some homework. and if you are some uni student in a backroom hoping to build a career in the LNP party by being a good little busy bee….well, you’re onto a losing wicket….

  24. jim

    So the country is sliding into a recession and I cannot understand why?, we have “adults” in charge they have clearly saved us all from a much, much, worse fate, you know if they didn’t bring in that policy,,, um … policies… that saved us from having a really bad unemployment rate instead of 800,000+ unemployed we would have 1.8 million unemployed if Labor were in charge,just ask any right wing Liberal mp or Murdoch’s ch9 yep,they’ll say what they,ve been told to say.What most of the plebs don’t know is that the Liberal party squash’s the little pleb, even kills them, no true it’s how the LNP roll,ie.

  25. keerti

    negative gearing…that’s where I write the cost of running an investment house (secondhand house, doesn’t have to be new stock , no incentive to build) against my income from salary. At the end of some unspecified period I sell said house for a profit and pocket the cash! I make money by paying less tax for twenty years then make even more by selling it. There is little or no benefit to the economy in general…no new houses bulit, nothing is produced apart from a new coat of paint perhaps because a large proportion of buyers are near retirement age with more finance the price of housing goes up so new entrant buyers are priced out.Sounds like middleclass welfare.

  26. Wally


    “I sell said house for a profit and pocket the cash! I make money by paying less tax for twenty years then make even more by selling it. There is little or no benefit to the economy in general”

    They currently pay capital gains tax on 50% of the profit when selling, Labor propose to lift it to 75%.
    Everybody is squealing about housing but they also negative gear shares.

  27. win jeavons

    I too am sick of Kate Carnell’s pontificating . I’d have more interest in her pronouncements if she was living on a low, part time, casual wage. with no real job security.

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