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Bigger Surplus And Working More? Just What IS Morrison’s Plan?

“FLATTER TAXES AN INCENTIVE TO WORK MORE” screams the headline in The Financial Review.

It’s always intrigued me how people argue that tax takes away people’s incentive to work. It makes some sense… But only if you ignore the reality for most people. Take, for example, the CEO of a company on three million per annum: Is the idea that he or she will go and pick up a couple of shifts at KFC, if the tax rate is just a little lower.

Then, of course, there’s the reality that many people don’t have a choice about whether they work overtime or not.

However, even if you look at the situation where people can choose to work less. Do we really want to encourage people to work 60- 80 hour weeks and not see their families? Or would it be better if the work they were taking was going to someone unemployed?

Ok, I do admit that doesn’t work for some jobs. Even though a surgeon may be overworked and tired, I’d still rather they had the incentive to work.  I mean if someone was going to perform brain surgery on me I’d rather a qualified surgeon even if I was running the risk that they’d make a mistake through exhaustion and I could end up like a Liberal frontbencher, than someone doing work experience where I could end like a National Party leader.

But it’s the whole concept that a Budget surplus is always a good thing that I object to. We’re encouraged to associate it with ideas like thrift and frugality and a good work ethic and living within your means…

Ah, “living within your means”. It makes sense when you apply it to a household but not when you apply it to a government. In some ways, governments have almost unlimited means. If they train more workers in jobs that have shortages, then sometime down the track, there are more taxpayers. If they spend more on health programs, they may save when people don’t need more expensive options because of delays in their treatment. If they spend more on education, then people are more likely to realise what absurd justifications politicians put forward.

A Budget surplus means that the government is taking more in revenue than it’s giving back in services. That’s it.

Just think about that for a moment.

While the Liberals are quick to accuse Labor of being a party of “high taxes”, the truth is that if we have a deficit, at least we’re getting something for our money. It’s a bit like being given a choice between two restaurants. One charges more money but gives you a substantial meal with table service. The other tells you that people should choose it because not only are we charging a few dollars less, but the Coalition Restuarant will encourage everyone to find their own food, which they then take home and cook because there’s no such thing as a free lunch so why are you expecting us to do it for you? Besides, the reason there’s nothing to eat is because the other restaurant keeps feeding people.

Of course, the Liberals have managed to frame the whole idea of a Budget surplus in totally ridiculous way. If we forget any discussions of modern monetary theory for a moment, and just go to the basic idea of a household budget even though it’s a ridiculous analogy. Let’s imagine for a moment that you were living with Kevin and he was a spendthrift. He argued that we need to extend the mortgage because we need a new car and new clothes so that we can keep our jobs and this will be worth the extra interest we have to pay. And while everyone does manage to keep their job, some members of the house tell us that we’re now in an emergency. Tony says that we should give Joe a go at managing the budget, because unlike Kevin, he’ll get it back under control.

Now, I could go on with this analogy but I’d have to swap Joe for Scott after Joe sold off the car because we poor and we don’t need to drive. And there’d be all that stuff about how anyone who knocked at the door asking for help was locked in the chook shed and we were told not to ask about them. All that and I haven’t even got to Malcolm moving out because nobody liked him even though he promised not to express an opinion on anything and all the arguments about whether the solar panels were actually saving money when Tony and Barnaby kept covering them up with tarpaulins so that we’d be forced to use the old briquette heater even though the chimney was blocked…

The fundamental point is this: Even if you accept that Labor created an enormous overseas debt and that the doubling of this by the Coalition was all Kevin, Julia and Bill’s fault, then the fact remains that the only cost to the Budget bottom line is the interest on that debt. At $500,000,000,000 dollars the interest would be about $15 billion.While $15 billion is even more than Julie Bishop’s shoe budget, in the scheme of the Budget, it’s small potatoes. The projected revenue in the Federal Budget, for example, is 3.3 trillion dollars.

Just as with the household analogy. Joe and Scott’s inability to create a surplus has very little to do with the alleged debts of Labor; it’s more like their inability to actually balance their own spending relative to revenue. Just as the household could have got their yearly budget back into surplus with a bit of sensible decision-making, it was never the debt that stopped this, any more than it was Bronwyn’s helicopter flights… Although the later may have had more to do with it.

Billions of dollars of tax cuts to big businesses sound good, but they would have taken even more from the bottom line. As for the idea that they’d stimulate more economic activity, I’m yet to read of any CEO announcing that they would have invested more, but the idea that they’d be taxed at 30% rather than 25% if they made an extra billion, so they decided it wasn’t worth it.

No, when someone tells you that the Liberals are good economic managers, you can remind them of the re-opening of the Christmas Island detention centre, only to announce it’s closure a few months later. Although anyone who still believes the old line about the Liberals being good economic managers will probably reply:

“But they’ve saved over a billion dollars by closing it! Imagine how they’ll be able to spend that…”

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21 comments

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  1. paul walter

    There it is. Politics has forced people onto the never-ending treadmill that forces greater dependency on financing and long hours to pay for their lifestyle, which they fear being taken off them if they rebel.

    The current government, in particular, has a monstrous cheek in blaming people for realising their rat race lives are driven by debt since they foster the use of debt as a legitimate means of developing life management in a certain way. But it is really like heroin addiction, where you must continue with constant doses to avoid the consequences of taking on lifestyle in the first place. The LNP know full well that revenue is necessary to fund the Australian way of life but creates fear in a similar way to the way it does with the threat of asylum seekers coming to take jobs.

    We have seen through privatisations that user pays ensures that there is no gain and only pain for ordinary people when revenue raising is attacked as an imposition, for essentials that have to be paid for, but not when consumers have to finance the debt incurred for the lifestyle and resent taxation as the problem when it comes back ultimately to the “designed” economy that people like Corman have spoken of that is also a means for social control. Consumerism is what drives hardship, not taxation for infrastructures and the government is totally dishonest in blaming taxation rather than conspicuous consumption for debt individual and national.

    Much of national debt is actually driven by corporations borrowing for speculative ventures anyway with the socialisation of debt and privatisation of gain enabled through accountancy tricks. All countries suffer from debt accumulation because politicians are controlled by TNC’s who are not going to allow politics to hold them accountable or trace their money garnering habits back to their own behaviors… as Rudd found out at Copenhagen a decade ago. No Tobin tax and the overburdened public purse is never-nevered into an even worse state while $trillions disappear offshore.

  2. Alcibiades

    Surplus = Selectively Imposed Austerity

    100% employment, no Newstart at all, without all the associated harm, can be achieved with the mere stroke of a pen.

    ~5% enforced & imposed Unemployment is a neoliberal policy choice, to enable sustained societal wealth transfer & accumulation to the 1% & minions of the 10%, whilst also protecting the real value of ‘their’ wealth. (True unemployment as opposed to the ABS farce is likely closer to ~8.9%+ (lookin’ at you John Howard) Let alone underemployment & forced casualisation/insecurity)

    Re-Nationalising essential services would be a damn good idea too.(A referendum to keep ’em that way, including operation on cost neutral basis ?)

  3. Kronomex

    Plainly and simply? Morriscum’s plan is to try and keep Scummo as PM and Leader because he backstabbed his way to the leadership and can’t let go and Peterito Dunceolini is always lurking in the background like a slowly growing and unpopped haemorrhoid.

  4. Alcibiades

    Kronomex,
    Shouty McShoutyFace has only ~12 actual supporters within the ‘partee’. One more than Jules Bishop had. His ‘plan’ such as it is, is the result of the cacophony of Members voices shouting all at once, with one objective only. Trying to save their own seat, & the Coalition be damned. The whole budget, in my view, was a taudry attempt at wooing back at least some of their ‘base’, which has deserted them in droves, closing their wallets & purses re ‘donations’, hence why the Coalition has been essentially bankrupt, since the start of 2015, and the pre-downfall of Mr Red SpeedoPanties (Lost a vote against an empty chair ?).

    Dutts is highly probably done fer, along with Abbott, Josh is in dire straights, the Notionals will be probably gutted, and likely become a mirage, as opposed to a previously ever diminishing shadow of, as a ‘partee’.

    They will in all probability be gutted in Victoria, Western Australia, Queensland, and to a lesser degree in NSW & SA, based on all available data.

    And they start not with a -1 seat minority, but come polling day, a virtual -7 seats starting point.

    Has anyone else noticed Scott NoMoralsNone hair is shit scared to death ? Has turned ghost white in less than 5 months ?

  5. New England Cocky

    As an undergraduate we looked forward to a future where the working week was reduced to 20 hours due to automation and computer replacement of menial mind-numbing jobs. So, when we got 60-80 hour working weeks with mandatory private sector overtime, often unpaid, “we wuz robbed” while the salary packages of corporate executives and Senior Executive Service public servants sky-rocketed with corporate dividends frequently to foreign shareholders benefitted from so-called productivity gains.

    ““But they’ve saved over a billion dollars by closing it! Imagine how they’ll be able to spend that…”

    Sadly the above quote merely demonstrates what is now common knowledge; that the Liarbral Notional$ have no idea about finances, financial management or the best interests of Australian voters.

    VOTE ANYONE BUT NAT$ & FORM BETTER GOVERNMENTS

  6. Kronomex

    And completely off politics: I was ratting through a box under my desk looking for an old notepad and to my surprise found a CD that I purchased years ago:

    Jon and Vangelis – The Friends of Mr Cairo.

    Just as good now as it was the first time I heard it in 1981. I rate it as my second favourite Anderson solo (sort of) album with Olias of Sunhillow being in first place.

  7. Kronomex

    What the fuck! Is this bloody cretin kidding?

    “At the same time, Morrison continued to sell his “fair go” Australia campaign – a vision he claims the multimillionaire owners of champion racehorse Winx personify.”

    So multimillionaires and the 1% are the LNP exemplars of a “fair go”? (insert lots of swear words here) hell!!

    https://www.theguardian.com/australia-news/2019/apr/07/morrison-dismisses-concerns-over-taxpayer-funded-ads-as-election-date-delayed

    The first half of that article was a brown nosing, arse licking, cheek spreading sycophantic piece of shit. Ah, he must be after donations that why all but got on his knees and opened his mouth.

  8. Alcibiades

    Ha! Beat ya by five minutes in the Oink Oink thread.
    Your commentary was far superior than moi though, by a coupla furlongs, at least. 🙂

  9. Alcibiades

    Breaking: Ipsos Poll ALP v LNP 53-47 post budget

    Morrison government on course for major election defeat

    The Coalition had a primary vote of 37 per cent, down from 38 per cent in the survey published in February and substantially below the nationwide result of 42 per cent at the last election.

    Low-ball a national swing of 3%+ 2PP. With a virtual start point of ~-7 seats for Coalition on a 0% 2PP swing compared to 2016 election.

    If this keeps up the real swing will be under-represented. Looking at minimum probable 90+ Labor seats, probably 6-8 Independents, and a Coalition rump of ~54 Coalition seats, or less, in a 151 seat parliament.

    PS ‘Shorten wants to end the weekend’ ‘He’s running a scare campaign on his policy which is our policy’ ‘ He’s out of touch’: Morrison attacks … Labor

    Scott NoMoralsNone AKA Shouty McShoutyFace, rehearsing for a future career, whilst on our dollar, as a political satirist ?

  10. Bruce Winchester

    Millionaires splurging millions of surplus dollars on a racehorse that has already proven herself to be a champion racer falls short of Morrison’s challenge of getting out there and having a go. Sounds more like a reasonable investment plan.

    It doesn’t really excite or fully illustrate what Morrison might have hoped to be a winning campaign slogan or a successful plea for election donations. Can’t help but wonder what the person who shovels out Winx’s stall thinks about where all the money goes. And old Winx only has being sired to look forward to in her retirement in the hope of producing another money making Boxer.

    Morrison has failed to make an honest effort to get out there and have a go himself with this antiqated piece of jingoism. It certainly doesnt look to have the legs or stamina to get the Liberals past the finishing post.

  11. whatever

    I thought Scotty was saying we should emulate Winx and just be noble Beasts of Burden and maybe you will get a nice carrot.

  12. Alcibiades

    MöbiusEcko.
    Dated 11 Mar 19 ? Though the margin was ~8% 2PP. The Coalition has lost every Newspoll for the entirety of this term. With the average being a 2PP margin of ~6%, but periodically even out to ~10% 2PP.

    The real news now Sunday evening is the punters, after leisurely viewing all the form guides post budget, without any manipulated polling questions, have freely jumped ship by 100 basis points.

    Prior to and post ‘Budget’, as at this afternoon, was still :
    Labor 1.18
    Coalition 4.50

    As at late evening that has dramatically shifted, with Morrison having delayed calling the expected election, to :

    Labor 1.13
    Coalition 5.50

    That is a considerable 100 basis point jump.

    Probable makeup in the 151 seat parliament now Labor ~94+ seats, Independents & Others ~7, Coalition rump on ~49-. And that’s ‘conservatively’ low-ball. To put it in perspective, a third term Federal government win which is always an ask, on only a ~1.1% 2PP swing Labor attains Majority. The previous quarterly State by State Newspoll in Feb-Mar 19, traditionally the most accurate national 2PP predictor, was a Labor swing of ~4.4%.

    For Morrison to recover even 2% 2PP in a notional poll tightening as the day approaches, therefore a minor ~2.4% 2PP swing against a sustained consistent 3 year poll trend, would still result in Labor ~84, Coalition ~59. Thinks that make ya go … hm ?

  13. Lambert Simpleton

    Too chicken to go to the polls. The people will see through it and laugh.

  14. Michael Taylor

    Either that, Lambert, or he wants more time to use our money to spend while he still can.

  15. Alcibiades

    Breaking : Newspoll to be released tonight

    … An exclusive Newspoll conducted for The Australian shows a significant four point turnaround for the Coalition as Scott Morrison prepares to call an election as early as this coming weekend.

    With the budget forming the platform for the Coalition’s election campaign, it is now in competitive territory trailing LNP 48 v ALP 52 2PP on a two party preferred split, having been behind LNP 46 v ALP 54 a month ago when the last poll was conducted … (Paywalled)

    Hm, a fortnight late, and a dollar short. An anomalous, isolated, unexplained by events full 4% 2PP tightening from a margin of 8% to a now supposed 4% margin. Murdochs working that Margin of Error(MOE) … to the max … and beyond ? In reality, it only just barely a supposed ~0.4% improvement on the far more accurate Quarterly State by State Polls, referenced above, also only just a month ago.

    Speculative: Manufactured for ‘dramatic’ effect ?

    Will Morriscum now visit the GG tomorrow, Monday, on the ‘against trend‘ manufactured(?) ‘wave’ of tonights anomalous NewsPoll ?

  16. Kronomex

    I’d like to whose rectum Mr Arsey McArsesphincter pulled those figures from –

    “…So the cheapest car you can currently buy, as an electric vehicle, presently, my understanding is, including all on road costs and the rest of it, is about $45,000 to $50,000 a year.”

    Ah, that answers that question, he got them from his rectum which I suspect was pumped full of “facts and figures” from the fossil fuel lobbies.

    https://www.theguardian.com/australia-news/2019/apr/07/shorten-wants-to-end-the-weekend-morrison-attacks-labors-electric-vehicle-policy

    Can you delete the possible double entry, didn’t notice the email address error until it was too late. Been up since 5 AM, so I guess I’m getting a tad tired.

  17. Alcibiades

    Kronomex,
    According to Scummo, everyone but him, just lies, & lies & lies. Some serious projection issues.

    Designed & converted a purchased then late model ‘coaster'(blown engine) vehicle to 100% electric ~11 years ago, including purchasing & all on road costs for <$12,000 AUD. Paid for itself in running costs in less than 18 months. Routinely towed with the towbar. No annual maintenance, servicing & parts expenses of ~$1,500+/pa. 100Km travel for ~$1.60 in electricity, less in fact when nicking someone else’s supply at destination for a top-up. Even today that’s slightly more than a Litre of petrol per 100Km, less the pollution, waste oil, etc.

    Scummo is a narcissistic cultist man child ignorant & willfully serially lying idiot.

  18. Rossleigh

    Polls are like watching the highlights of ab AFL game for one quarter and presuming that tells you the score.
    I fail to see how anyone can take a poll with a margin of error of 3% and treat differences from the previous poll as though they’re definite and exact. In simple terms, the margin of error means that 54-48 in one poll and 56-46 the next followed by 55-45 are all within the margin of error and we’d have no idea if there’d actually been a change. The media, however, treat evey poll as though every person in Australia was asked their voting intention and nobody said they were undecided!

  19. Johnny

    I have the answer. Closing Christmas Island gives the government 1 billion dollars extra to play with. But opening it costs only 180 million ish. Obviously if the government opened and closed the island say once a week that is an extra 50 billion a year!
    What’s wrong with these people?

  20. helvityni

    Alcibiades, yes ,I certainly noticed Scomo’s hair-thinning of late….and I suspect too many trips to KFC , worry makes some people eat more…and the waist-thickening is the proof of the pudding..

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