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Blind ideology and political cowardice hamstring the government

The Coalition’s inability to address taxation reform is as exasperating as Dutton’s refusal to address the plight of those incarcerated on Manus and Nauru. The answers are there but blind ideology and political cowardice are stopping the government from adopting them.

Malcolm Turnbull has stated that taxation should be used to encourage desired outcomes and, in that, we agree.

Unfortunately, the current tax system offers us the wrong incentives. It punishes mothers who return to work, encourages us to retire early, overtaxes bank deposits while rewarding debt with unlimited deductions, and encourages us to invest in driving up house prices rather than fostering start-up enterprises or investing in infrastructure.

Only wage and salary income remains fully taxed; the system offers investors many ways to dodge tax on their earnings, and offshore tax havens are adding to the options for corporates. Until we plug the tax avoidance loopholes, talk of where the company tax rate should be set is irrelevant.

Basically all experts agree that any reform package that didn’t tackle the sacred cows of Australia’s tax system, such as negative gearing and the privileged tax treatment of superannuation, capital gains and family trusts, is unfair from the outset.

These are luxuries we can no longer afford, not only because of the cost to the budget, but because they skew investment into unproductive areas and contribute to inequality by driving up house prices.

Average wealth for households who are renting is about one-eighth of owner-occupiers who own their home outright and about one-fifth of those who have a mortgage.

It isn’t the wealthy who need tax cuts.

The top 20% of households owned 62% of total household wealth in 2013–2014. By comparison, the bottom 20% of households, owned less than 1% of all household wealth.

Malcolm Turnbull already has the Sword of Damocles hanging over his head. A true leader could grab this opportunity to work with Labor and outsmart his internal opponents. He could choose an honest, moral, fair minded approach and cut Murdoch out of the equation. He and Bill Shorten could work together to make public sentiment snowball until other politicians and interest groups dare not stand in its way.

Instead of wedging each other, why not wedge the ambitious right-wingers, the self-serving lobbyists and the extremists by actually working together to implement change. If they did that, threats to cross the floor and demands from crazy crossbenchers become irrelevant.

You have a choice Malcolm, to go out with a whimper or a bang. I so wish I thought you had the courage to surprise me.

 

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27 comments

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  1. Fedup

    I doubt if I will ever be able to retire. You just don’t know what the Government is going to take away from you next. May as well work until I drop dead I guess. It’s okay for some who are wealthy but when you’re not wealthy you matter little to this mob. As far as refugees in Nauru, they were deemed not to be legal refugees so why should they be allowed into this country and I for one am fed up with people going on an on about these people. Most of any abuse being done over there is probably done by their own people. There is no proof as to who is doing the abusing. They will do or say anything to get sympathy from people like yourself. It’s time someone stood up for Australians not wanting these people settling here especially when they have lied and lied about their status as genuine refugees.

  2. keerti

    One thing turnpuke doesn’t have is courage! If he ever had any he left it in the same place as his integrity!

  3. lawrencewinder

    Hmmm.. the social dislocation from this right-wing/IPA agenda is going to have terrible consequences…. I only hope that chief clown, John Roskam and the rest of his circus troupe suffer from some of it, too.
    Truffles-in-a-Muddle is no leader and his Ruling Rabble MK2 is, if anything, less competent than the previous incarnation.
    What a shambles these Liarbrils have made of the place.

  4. Fedup

    Just who are you referring to as “Crazy Crossbenchers” Kaye? Or need I not bother guessing? We would also save billions of dollars if we stopped spending on refugees as well! Have a nice weekend!

  5. fridaytrain

    The concept, “taxation should be used to encourage desired outcomes,” has always struck me as flawed. In my view, taxation should always be used to raise funds and spending should be used to encourage desired outcomes. That makes designing an equitable taxation system relatively straight forward. And a government’s motives and policies would be decidedly more transparent if they had to be driven by spending choices.

  6. Jaquix

    Great article Kaye, written in simple, strsightforward language.

  7. Andreas

    Good on you, Kaye. Brought it down to a consumable level one could not argue with. Why not rise up now, folks?

  8. diannaart

    Just wishing property investors would understand they can still invest in property without negative gearing. It is as if there is no other way any more.

    Not so long ago, one property investor, who posts here regularly, was arguing that s/he couldn’t invest in property any more if negative gearing was stopped. This was regarding Labor policy which meant that existing investments would be left as is, only new investments would require … actual investments.

    Not only does our taxation system require a good overhaul, but the very language surrounding investments needs a reality injection.

  9. John H

    Kaye So you still think Malcolm Turnball has really any idea what he is doing? We live in terrible times politically. The loonies are in power.

  10. fridaytrain

    As far as refugees in Nauru, they were deemed not to be legal refugees, etc. etc.

    Don’t know where you are getting your facts from, but as of May here are some real numbers: On Nauru, 488 (85.3%) of the 572 refugee determinations have been positive.

    Stop drinking the kool-aid and start doing some real fact checking.

  11. Terry2

    Last week Turnbull tried to harangue the Labor party into backing his “Omnibus Bill” of savings but failed, as promised, to “reach out across the aisle” to Labor leader Bill Shorten and at the very minimum discuss with Shorten what was in the Bill and try to accommodate Labor and gain their input and support.

    We still haven’t seen the Omnibus Bill and clearly no discussions have taken place with labor but plenty of rhetoric from Morrison and O’Dwyer. So, we must assume that there are some nasties in there from the 2014 Budget which have already been rejected by the Senate : is it being set up to fail ?

    If nothing is done about negative gearing and CGT concessions at the very least we will know that the government are not serious and just want to play politics : what a missed opportunity.

  12. jimhaz

    Turnbull is too busy playing cards.

    “What you’ve got to do is recognize that you don’t control everything for a start, you’ve got to play the cards you’re dealt, the hand of cards you’re dealt, as best you can, and that’s what I always seek to do. To Belinda Hawkins on ABC TV’s Australian Story in 2009”

  13. Michael Taylor

    He borrowed that from an old saying I first heard about 35 years ago: “Life is like a game of cards. You can’t help what hand is dealt to you, but you can play that hand the best you can”.

  14. Kaye Lee

    fridaytrain,

    I think taxation has a real role to play in determining behaviour.

    Carbon tax to make people conserve electricity and polluters either clean up their act or pay for the damage.

    Financial transaction tax to make short term transactions less attractive providing more stability.

    If you want the banks to have more liquidity, tax interest at a lower rate.

    If you want to stimulate construction and increase housing supply, restrict negative gearing to new dwellings.

    There are many more examples.

    Perhaps a tax concession in return for increasing total employee hours?

    Or extra deductions for using Australian supply materials?

  15. jJack

    Liberals want the rich to be taxed less and the poor to spend more..

  16. guest

    fedup,

    I find your initial comments very interesting and i will tell you why.

    You say the people detained on Manus and Nauru are ‘deemed not to be legal refugees’. I am not sure how true this is or whether they are really refugees but deemed not to be by legal arrangements which deny their refugee status because they came by boat.

    You are ‘fed up with people going on about these people’, but you are doing that. I am fed up with those people who cannot see that what is happening on Manus and Nauru is inhumane and is condemned by the UNHCR, Amnesty International and world-wide condemnation.

    You suggest that the abuse being done to them is ‘probably done by their own people’ and ‘there is no proof who is doing the abusing’. There have been 2000+ report leaked, made by official people in the camps. Do you know how many of those reports are saying the abuse was done by their own people?

    You say they ‘will say or do anything to get sympathy’. The opening of your post does exactly that, seeking sympathy for yourself, but then no sympathy for refugees.

    The idea that ‘they have lied and lied’ is not something you would know. How could you know?

    As for ‘time someone stood up for people not wanting these people settling here’ , the Government is doing that and so are many others such as supporters of Pauline Hanson.

    On the other hand, there are also people who oppose Manus and Nauru. The New Guinea Government has declared Manus to be illegal and unconstitutional.

    You can express your opinion – ‘free speech’ is allowed – but then I can also express my opinion, too. I just ask you to look again at what you are saying.

  17. Gangey1959

    Lets start with some things that will stimulate the local economy, and screw any of the fta’s that are in place .
    1 Raise the minimum wage for a 457 visa worker up to $1750 per week and set up a specific industry superfund for their superannuation.
    2 No GST on Australian Made materials used in major projects, and increase the gst on imported crap.
    3 On residential developments, change the rules so that Australian Made appliances have to be installed. No gst on Australian Made materials for the construction,
    4 Buy Holden from GM and keep making cars, with no model change and just for the local market for 3 years. Re-open Southern Tyres and change the rules so that ALL cars have to have Australian Made tyres and batteries. Put a limit on the number of models that any foreign maker can import, and have a clear ”Country of construction” label attached, next to the VIN.
    5 Workers on Major construction sites MUST wear Australian Made safety wear and boots. (We still make both so far.)
    6 Tax foriegn companies like nike and mcdonalds at the point of sale and time of sale, instead of allowing them this bullshit of ”booking” the sale through singapore and avoiding tax. Their shit still gets carried on Australian roads.

    That should do for now. Anyone else, feel free to add.

  18. Jack

    Gangey 1959 It’s all too late mate. We are dealing with a fundaments’ war ideology! The only thing left now is for people to go protesting, marching in the streets. Get angry The liberal masters are big business and they call the shots. That includes China.As they are one Big Company.

  19. stephentardrew

    Mr Snivels will cry into his soup and blame everybody but himself. Mr Big time operator thwarted by small time bullies. What a mincing whiner Turnbull has become. Business superman without the super or the man. Back down the rabbit hole coward.

  20. Hotspringer

    @ Fedup – Yes, you will be expected to work until you drop dead. On the bright side, with the regime’s health policy, this will not take long.

  21. TuffGuy

    And then I turn on the TV today only to see Turdball playing his little hoodwink the public games yet again. Telling the public about the deep shit the country is in (obviously without stating they are the ones that put us there) and how all their budget measures must pass through parliament to save our children and grandchildren. So they came to power with a $19 billion deficit, have already tripled that in 3 years and apparently in another 5 years (I assume of LNP government) it will be $350 billion. Of course this massive legacy for our children and grandchildren will all be the ALP’s fault because they will not pass most of their horrendous budget, including Abbott’s zombies. Turdball says all his and Abbott’s budget measures will magically put us out of deficit.
    Seriously how can this mob keep a straight face when, after 3 years in power, they keep on playing the same blame game on Labour??? I was going to say how stupid do they think we are but they are 100% right since they are still in government.

  22. Kaye Lee

    It’s kind of hard to take Malcolm’s return to “debt and deficit disaster” rhetoric seriously when they intend spending $195 billion by 2020-21 on war toys. Forget the corporate tax decrease…there’s another $50 billion. Stop paying hundreds of millions to so many media monitoring companies to find out what we think about you – read the Guardian.

  23. johnlward010

    To act in abuse of Authority of office, with the intention to dishonestly gain a benefit for another person or cause a detriment to another.

    My concern regarding deceptive and misleading conduct was increased by Members of Parliament such as Prime Minister Turnbull, Deputy Prime Minister Joyce, Former Prime Minister Abbott, Ministers Pyne, Hockey, Cormann, and Hunt, attempting to convince the public to “understand” (recognize) uncertainties in climate science, till recognition of uncertainties becomes part of “conventional wisdom” and the media and Industry, also ‘convinced that they and cabinet could ‘re-purpose and re-direct’ the Clean Energy Finance Corporation without going back through all that tiresome palaver in parliament.
    Unfortunately, for the Abbott Government, the previous parliament had foreseen the use of trickery to achieve a political, financial, or legal purpose inimical to the purpose and objects of the Act was more than likely. The Government that created the CEFC wrote a clear investment mandate to set a certain direction for the CEFC Board, wisely also in mandatory language wrote a clause which, in confining terms strictly forbids changes which can be made by the responsible ministers in the terms of the ‘Limits on Investment Mandate’. The CEFC is an incorporated body at arm’s length from the Government, it is not a bucket full of money for a treasurer to dip into every time he needs to spend money she or he does not have. A responsible Minister must take care not to act as a Defacto or a Shadow Director of the Board lest she or he transgresses the provisions of the Corporations Act.

    Before a treasurer decides she or he may be inconsistent with the Act or the object of the act, she or he must read the act in the context of the ‘whole of the Act’. In this case there has been an error in the reading of the law or a deliberate disregard of the limitation imposed on the Minister’s authority to act. The Treasurer and the Finance Minister have broken the law.
    The Government has been looking for a loop-hole to by-pass the parliament by chicanery, so far they have amplified confusion in the market place, and brought the clean energy industry growth to a crawl. If this grosse ideological interference had not happened, the growth and jobs in this industry may have delivered some balance to the down turns in other parts of the economy.

    The key, is they have deliberately ignored the Law (CEFC Act 2012) Section 65 of the Act, does clearly, and in mandatory Language forbid that any direction or mandate which has the purpose, or has or is likely to have the effect, of directly or indirectly requiring the Board to, or not to, make a particular investment.

    Is not within the power and authority of a responsible Minister. He most certainly cannot act as a Shadow Director committing to shut the enterprise down because the IPA has given him a list of targets: As a Director with some authority he owes a duty of care for the person he is responsible for, the CEFC, and to undermine the corporation because his parliament won’t allow him to abolish it Is repudiating his duty as a leader and director of a legal entity under his care.

    I want to point out, that Treasurer Morrison continues to tell us we can’t spend money we don’t have. While he and his bunch of thieves are robbing the Green bank that is still under protection of the law of the land.
    They are running a huge bluff and just to make sure you understand this is urgent they imply that most of this money is available to them on the first of July, in the Caretaker period and 24 hours before the people vote.

  24. Harquebus

    The era of economic growth is over and debts are not going to be repaid. There is nothing that can be done to save the economy. We can only worry about saving ourselves and the first best step is to abandon the absurd quest for infinite growth.
    It is the ignorance of the exponential function and the laws of physics that has brought us to this point. No amount of taxation reform can overcome the laws of mathematics and no amount of legislation will override the laws of physics.
    Diminishing returns in energy and resources, a one way street, combined with compound growth in populations and consumption are the root causes of our soon to be dead economy.

  25. wam

    neither shorten nor turmball has the guts to start reform at the politicians tax avoidance. QED
    The rich who can avoid the medicare levy would make health care free if the levy was on GROSS cash.
    johnlward: Check the reckless attitude to governance by the probably outgoing clp mob in darwin.

  26. Jaquix

    If Fedup is a real person and not just a troll, he or she needs to get their facts right. 98% of the men on Manus have been assessed as refugees (yes, assessed by Australia). So that means about 16 men out of 800 have not met the criteria. Yet they are all kept in their Pacific prison by Australia – and not cheaply either. Many are well educated, young, and with the right support will make good citizens of this country. The 400 odd on Nauru are at the mercy of the corrupt and thuggish Nauru government, aided and abetted by the Coalition’s odious, punitive and secretive legislation. The charging of $8000 as a “visa application fee” for visits to the island (non-refundable if visa not approved!) – what is that but corruption? Prison terms for doctors, nurses, social workers who tell the truth about conditions on the island. Turnbull claims to love his grandchildren, yet has no compunction to allowing other grandchildren to be abused, have lights shone on their bottoms when they go to the toilet, be told to let the guards watch the women in the showers – probably young children too, by paedophile guards. Its wrong, wrong, wrong. The Coalition has shown no evidence of attempting to find another location for these people and I believe its time for Turnbull to stand up and grant them all an Amnesty. With suitable extra precautions involving a few. Im dreaming of course.

  27. jim

    Talk about Nero, here he is worried about our right to insult someone, or if someone has the right to be happily married all the while a recession is just around the corner….. oh well another day another astounding inept leader in another stupid stupid STUPID Liberal inept government.
    Turnbull defended going ahead with the vote claiming it was “a bit of a lark” and that “sometimes it’s just fun to piss away $160m dollars.”

    “Honestly, how many chances are we going to have to do this in our lifetime? The very thought that outside of an election day I will, on a whim, be able to force people to all go to their local polling stations to put a mark on a piece of paper that will be utterly meaningless to me and the other people making the decisions – I mean, that’s power, baby.

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