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Tag Archives: Scott Morrison

Shorten’s New Class War!

Yep, I was mightily confused when I saw the headline today:

“SHORTEN’S NEW CLASS WAR!” it blared.

And I really wished that the sub-editor was around so I could ask him when the old class war ended. Surely you can’t have a new war when you haven’t called off the old one.

Of course, the Liberals were a lot more restrained. Scott Morrison accused Labor of “stealing” from retirees…

Before I go on, I guess that should make sure you all understand what’s actually being proposed by Labor.

Ok, companies pay tax. No, really. Some of them actually do. Anyway, the theory goes that if the dividends from any shares you own have already paid tax, then you get a tax credit so that you’re not taxed on this income twice. I won’t go into all the detail about fully franked and partially franked shares, because it’s enough for you to grasp what’s being proposed by Labor if you grasp the concept that the franking is simply a way of stopping the money being taxed both as income made by the company in which you own shares, and by you personally, as income tax.

While some rabid socialists may tell you that any income earned by companies should be confiscated and distributed to the Society for the Promotion of Non-Trotskyist Communist Thought In Schools, the average person in the street would see that taxing the same income twice is a little unfair.

Whatever your feelings on this concept, however, Labor aren’t proposing to get rid of franking. Under John Howard, people who were earning an income below the tax-free threshold, could convert their franking credits and receive a cash refund from the government. While this is similar in concept, there’s an important difference, and the best way to understand it is to look at how negative gearing works.

You buy a property (or shares) with the idea of producing an income. However, in most cases, when you borrow money to buy a property, the interest you pay on your loan will be more than the income you receive from your investment. Because you are making a loss, you can claim this loss against the rest of your income. Why this is a good investment plan for some people is that they can claim the loss against a high income, but as time goes on, the difference in interest in rental income and interest becomes smaller and eventually the property is positively geared. Not only that, but there’s a capital gain which doesn’t get taxed until one sells.

The important thing to realise with negative gearing is that there’s not much point in doing it if you’re not on a high rate of tax. And, there’s no point in doing it, if you’re paying no tax, because the government doesn’t give you a cash refund for the money you’ve lost. In that case, if you don’t pay tax and you’ve negative geared properties or shares, it’s just bad luck. In other words, it’s completely different to the franking cash refund for people who own shares and pay next to no tax.

Now, some would argue that this is a bit of an anomaly and why should people in similar situations be treated differently. They are not being taxed twice as the Liberals want us to believe. They’re being taxed once. They just don’t have the sort of income to offset the franking credit, like someone with an investment property.

So who would own shares and not be getting a big enough income?

Ok, Nanna might miss out on twenty bucks a year from her hundred Telstra shares, but if you add a couple of thousand dollars to the aged pension with the billions you save from the cash back scheme, she should be no worse off. It’s the people with the self-managed super schemes who’ll be most likely to be hit, and given that these people are arranging their affairs to minimise their tax, then who could have a problem with ensuring that they haven’t taken advantage of the system to pay almost none at all?

Well, obviously the Liberal Party could. See, according to them, this is stealing from retirees. I was waiting for an interviewer to ask Scottie if he was going to report the Labor Party to the police and have them charged with theft.

Yep, Mr Morrison was in Michaelia Cash-like form. He was complaining that Labor already planned to tax everybody and that they were the party of high tax and they couldn’t get their spending under control and just when we’ve got the Budget back into… well, anyway, just when we’ve got the Budget back into a position where we can give away $25 billion to multinationals and add $200 billion to Defence, why we can even give an extra couple of billion to schools… Just when we’ve done all the hard work, Labor will come along and tax all these people and so they can spend on things that aren’t Defence related.

I hadn’t seen a performance like his since Barnaby told us about the $100 lamb roasts and we were being asked to say good-bye to Whyalla. It was almost like when Labor proposed asking people to keep a log book to prove that their leased cars were actually being used for work.

That, we were warned, would mean the end of the auto industry in Australia. How fortunate that the Liberals got in, and we had to wait an extra year or so.

 

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Jobs And Grr… Sorry, I meant to say Jobs and Gr…

Sorry, that was meant to be “growth” in the title but for some reason “growth” just stopped, and I think we all know the reason why it’s so hard to have any sort of gr…

Gro…

G-G-r-r-o…

Oh dear, it just won’t appear.

Anyway, I think we know the reason. It’s because of you.

Well, you all complained. You all ridiculed them about “Jobs And Growth”, so it’s your fault that the last quarter didn’t have any growth. It ran away because it didn’t like have to appear after “jobs” all the time. It couldn’t put up with the humiliation any more.

After all, it can’t be Scott Morrison’s fault that we don’t have “jobs and growth”. Couldn’t be. Ok, ok, maybe it’s not totally your fault. Actually when I think about it, like everything else, it’s Labor’s fault for blocking those company tax cuts. Now, I know Tony said that they were going to be a “no excuses” government, but this isn’t an excuse, it’s a reason. Besides, Tony’s not the Prime Minister any more…

Well, not at the time of writing, anyway, but if that changes before I hit publish then the rumours about him not launching a challenge until Malcolm’s approval rating goes so low that installing Ivan Milat as leader would give the Liberals a boost were wrong.

So, after giving the matter consideration, I think that we can safely say that the lack of growth can be put down to Labor’s decision to block the company tax cuts because reducing the government revenue from profitable companies would encourage all those unprofitable companies who pay little or no tax and the economy would get a boost somehow. I mean, remember the boost cutting the mining tax gave to the miners! Look at how cutting the carbon tax has the economy growing in a way not seen since the GFC!

And speaking of the carbon tax, thank goodness the Minister for Saving And Wrecking The Environment, Mr Frydenberg was able to clear up the confusion about an emissions scheme. Apparently when he said:”We know that there’s been a large number of bodies that have recommended an emissions intensity scheme, which is effectively a baseline and credit scheme, we’ll look at that,” he meant that they’ll view it, shake their heads, before announcing that they can’t consider it because not only is it the most cheap and effective way of reducing emissions but they can’t consider it because it was never on the table, unlike so many of the things that were on the table earlier in the year like the GST or the states having their own income tax. By “look at it”, many of those institutions peddling fake news like the ABC and Fairfax tried to imply that “look at” means the same thing as “consider”, in much the same way that they tried to imply that when Abbott said that he and Labor were identical on Gonski that it meant that they would both implement it, when Abbott merely meant that they had the same election policy. Really! Next they’ll be trying to ask us to believe that the jobs from the “jobs and gr…” slogan were meant to be jobs for people already living in Australia, which is the sort of xenophonic, racist nonsense that Labor and their union mates try to push…

Of course, if One Nation say exactly the same thing we should listen to them because they received nearly five percent of the vote in some states and you can’t ignore with people scoring that many votes in a democracy. In fact, you’re even allowed to disagree with them… but only after acknowledging that they have a point and maybe it is time that we replaced the High Court with the judges from “Masterchef”.

Anyway, it’s good to know that young Josh has come out and explained that on Monday he was misquoting himself when he talked about an energy intensity scheme and as our fearless leader, Malcolm Turnbull pointed out, there was nothing about an emissions intensity scheme in the review and that Josh Frydenberg was clearly being confused with someone who speaks on behalf of the Liberal Party when only Cory Bernardi is authorised to announce policy without checking with anybody on planet Earth.

 

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The profound nastiness of the Turnbull government

It was inevitable that any opposition by the ALP or Greens to Abbott’s reeking legacy, the proposed plebiscite on marriage equality, would provide the Turnbull government with the ammunition to claim (with confected indignation) that both parties are creating an obstacle that thwarts an opportunity for same-sex marriage.

There are bound to be those who accept this warped inversion, however they are likely to be the same groups and individuals that reject marriage equality anyway.

What this situation reveals yet again is the profound nastiness of the LNP. This nastiness (there really isn’t a better word for it, their attitude towards their fellow humans is as base as that) has been evidenced in Treasurer Scott Morrison’s decision to deprive the unemployed and pensioners in order to fix his budget, and the vengeful exercise of raw power as illustrated by Peter Dutton’s ongoing implacability over asylum seekers and refugees. It’s reflected in the image that heads this post: even the dead are perceived as new sources of revenue for the LNP.

I don’t need to go on, the evidence of their nastiness is everywhere we look, and it multiplies as we sleep.

Nastiness is the Turnbull government’s default position. From the apparent banality of nastiness all manner of evils flourish, and if you ever doubted that it is being enacted daily, for you to witness, in our parliament.

Though the Northern Territory can’t be ever be taken as typical, the carnage wrought on the CLP this weekend gives me small hope. Citizens can become sickened by nastiness, and they can wreak havoc on the party of nasty when they’ve had enough.

There is not one rational reason to deny marriage equality. We are a secular state: religious arguments ought not to influence our decisions. The unholy alliance of religion and nastiness currently hold sway.

It’s my hope that the ALP hold out against a plebiscite. No Liberal MP has any obligation to honour a yes result. Those who touchingly believe a plebiscite = marriage equality need to disabuse themselves of that belief, because it does not. We could well go through the torturous process and still have necessary amendments to the Marriage Act blocked by MPs who are not bound to accept a ‘yes’ vote.

At the heart of the demand for a plebiscite is nastiness, and a poisonous hatred for anyone who doesn’t fit a narrow definition of ‘normal’. The influence of pure nastiness has been overlooked in our arguments yet it is a powerful driver of irrational behaviour and you’d have to go a long way to find behaviour more irrational than that of Turnbull’s government in just about any area you can name.

There are rumours again that Abbott is preparing himself to challenge Turnbull’s leadership. Not only are they nasty to citizens, they are exceptionally nasty to one another. I would take great pleasure in watching the LNP continue to cannibalise itself. I doubt it would affect our governance to any great degree: they aren’t doing much of that anyway.

It’s my hope that the fate of the NT CLP is the Turnbull government’s future. Barely enough seats left to form a party? I’d go for that.

This article was originally published on No Place For Sheep.

 

Dutton’s message: torture works

Yesterday I had a Twitter conversation about Kathryn Bigelow’s movie, Zero Dark Thirty, which was shown on SBS last night.

Many angry critics have described the film as CIA propaganda advocating torture, and accused Bigelow of making an immoral argument that torture works. That wasn’t my reading as I argue here.

This revisiting of the film and the arguments surrounding it made it obvious to me that the message “torture works” is precisely the message the current Prime Minister Malcolm Turnbull, Immigration Minister Peter Dutton, Scott Morrison before him, and several former Prime Ministers including Kevin Rudd and Julia Gillard have sent to the world since the indefinite detention, off-shore and previously in the hell holes of Woomera and Baxter, of waterborne asylum seekers began.

They are not even particularly subtle about conveying this message: forcing women, children and men to live in circumstances in which they are tortured will deter others from attempting to seek asylum in Australia. It’s that stark.

To dissuade attacks from rusted on ALP supporters: Paul Keating built Woomera. I went there. It was one of Dante’s circles of hell. So please don’t come at me with the usual defence of your political party’s position on asylum seekers. There’s a bee’s dick of difference between the major parties.

Every time politicians insist that bringing refugees from Manus and Nauru to Australia will “start the drownings at sea again”, he or she is arguing, to the world, that “torture works.”

Frank Brennan, John Menadue, Tim Costello and Robert Manne have here proposed a solution to the current ghastly impasse. Their proposal retains the turn-back policy:

We believe there is no reason why the Turnbull government cannot do now what the Howard government previously did – maintain close intelligence co-operation with Indonesian authorities, and maintain the turn-back policy, while emptying the offshore processing centres and restoring the chance of a future to those we sent to Nauru or Manus Island three years ago or more by settling them either in Australia or, if any are willing, in other developed countries. Like Howard, Turnbull could maintain the offshore processing centres in case of an emergency.

Boats are to be turned back to their point of departure, usually Indonesia or in the case of Sri Lankan refugees, southern India where they continue to live as stateless people with few, if any rights.

The proposition put by Brennan et al would at least thwart the message that torture works, to which our politicians seem alarmingly attached. It’s by no means an ideal solution, but it could be our next step in addressing a situation that in its current manifestation is hideously wrong in every possible way.

Critiquing their proposition is a post in itself, and I won’t do that here.

As I argue Bigelow’s film demonstrated, the proposition that torture works is in itself a terrifying premise for debate. Who are we, that we would engage in such a debate in the first place?

It isn’t about whether or not torture works. It’s about torture even being considered, and then implemented as an option. You might argue that no politician foresaw or planned the circumstances that have evolved on Manus and Nauru, and you’d likely be correct. So we have come to torture by accident, rather than by design. Having arrived at that point, even accidentally, we are culpable and every day we reinforce the message that torture works, we add to our burden of culpability. What was initially accidental, thoughtless, ignorant, uncaring, politically self-seeking becomes, in the maintaining of it, deliberate.

Which puts us in the company of the CIA and its propaganda, does it not? Not to mention Donald Trump.

This article was originally published on No Place For Sheep.

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Labor’s Scurrilous Lie On Medicare!

Ok, we all know that if Labor is elected that our borders will be weaker, the deficit will blow out, the tax cuts for companies won’t go through, it’ll rain all day except in drought areas and the chooks will stop laying. Not only that, we won’t have the stability that we now have because Labor changed Prime Minister twice in six years and the Liberal have only done it once in three years.

However, it’s the Labor Party who are running a scare campaign on Medicare. The Liberals have no plan to privatise it. Didn’t Malcolm say “never ever” and while some people are reminded of John Howard’s “never ever” on the GST or Tony Abbott’s “ironclad guarantee” on the Medicare safety net before the 2004 election, that’s rather unfair on Mr Turbull. He’s not the sort of man to say one thing one moment, and another the next. He said that he supports same sex marriage and the Republic and action on climate change, and he still supports all those things. Ok, he may not do anything about them but that’s because he’s been busy with the job of being PM. It’s a big job which involves working very, very hard to ensure that Labor isn’t elected because they’ve promised action on all the things that Turnbull supports, and if that happened there’d be nothing left for Turnbull to do if he ever actually gets into power instead of just being the figurehead.

Some people have unkindly suggested that the Brexit vote should be good for Labor because it should show the people the consequences of not thinking before you vote and just blindly taking your lead from the Murdoch papers. Only after the vote to leave the EU, the argument goes, did Rupert’s papers start to explain what the consequences of leaving would be. Surely it should be a wakeup call to the people of Australia. However, this overlooks the fact that most people who read Andrew Bolt will hardly be aware that the vote took place, let alone the fact that many of the “Leave” voters are rather unhappy now that they’re discovering that it may have consequences that they hadn’t considered. Not only that, but the leaders of the “Leave” campaign, such as UKIP’s Nigel Farrage now saying that they never promised that there’d be oodles of extra cash for spending on Health… Somebody else painted that “promise” on the side of buses.

But let me be quite clear here. Labor’s suggestion that just because the Liberals have a Medicare Privatisation unit set up is no reason to think that Medicare would ever be privatised. If you’ve still got doubts I suggest that you read this article from “The Guardian” written last year:

There now, what could be clearer than that. They don’t want to privatise anything. They just think it would be better if the whole thing were opened up to competition from the private sector. I mean, look how long you spend waiting to speak to someone at Centrelink, whereas when you ring any private company, your call is answered by the next available operator.

No, there’s no doubt at all. The Government has given us their assurance and they know that if they lied to us, there’d be consequences. Why just remember how people over-reacted when Tony Abbott’s “No cuts” statements were misinterpreted as meaning that they wouldn’t cut spending. People got very cross and they had to change Prime Ministers. If Turnbull was lying, why the Liberals would just have to change leaders again to appease people. And Malcolm certainly doesn’t want that. As he keeps saying, “It’s a very exciting time to be Australian now that I’m PM and anybody who isn’t saying how lucky they are is just an ungrateful whinger!”

So vote Liberal this Saturday. You know that Medicare is safe and will “never ever” be privatised and that the plan to let Telstra manage the data has been shelved and was never a real plan like the one where they support jobs and growth. You know the one; if we create enough jobs at $4 an hour then there’ll be a really big growth in the bank balances of the people employing them.

 

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Day to Day Politics: The TRUTH about Negative Gearing

If ever an Australian politician scored an own goal it had to be Scott Morrison this week. Of course he was ably aided and abetted by The Australian Newspaper. The official newsletter of the conservative parties.

From the time Labor introduced its policy on Negative Gearing, Malcolm Turnbull and Scott Morrison have sought to conduct a scare campaign on the issue. Morrison could have had a calm, sensible debate as he indicated he wanted to do when such matters arose but political expediency trumped good governance and hypocrisy won the day.

Frankly, Morrison, a co-founder of Christian Church Hillsong, is telling so many lies about Negative Gearing that as a Treasurer he makes Joe Hockey almost sound saintly. Turnbull, a Catholic, is doing the same.

It doesn’t seem to matter that a central tenet of the Gospel is ‘truth’.

So The Australian on Thursday publishes a report by BIS Shrapnel that Morrison says paints Labor’s policy in bad light.

The report has nothing to do with Labor’s proposition but Morrison arrives like a lone star cowboy in Question Time with two Colt 45 pistols rapidly exhausting both barrels before reloading. He does have a quick tongue.

The Australian withdraws the article from its online site. It often has to. It has no credibility and the BIS won’t disclose who commissioned the report.

Morrison rejects all the wrongs, inconsistencies and outright lies and both he and Turnbull in Question Time robustly, in spite of the reports lack of credibility, continue to say that if adopted, Labor’s policy would cause significant damage to the housing market and to our economy. Yet another Clayton’s crisis.

Grattan Institute chief executive John Daley says the report and its underlying assumptions:

‘did not pass the giggle test’ and were ‘manifestly ridiculous’.

He added:

‘Voters should be asking themselves whether a responsible government would rely on this sort of nonsense in a public policy debate. ‘ Late on Thursday the Prime Minister was still defending the report describing it as ‘thorough analyses’.

Other comments came from Board of Taxation chairman Michael Andrews who told a tax conference in Melbourne that the debate about tax was highly politicised, and regrettable:

‘The Australian Financial Review said that the Government has abandoned plans to make changes to negative gearing. The issue has proved to be divisive and it would be politically risky to proceed with the changes. The Government is now likely to focus on the changes to negative gearing proposed by the Australian Labor Party.’

In other words a scare campaign.

Besides the ridiculous assertion that house prices are going to go through the roof under Labor’s plan. Morrison also contends that:

‘Two thirds of those who use negative gearing have a taxable income of $80,000 or less. Seventy per cent own just one property, and 70 per cent have a net rental loss of less than $10,000.’

ABC Fact Check investigated this claim and found that those with taxable incomes above $80,000 have a proportionately larger share of the net rental losses.

Now the point of all this follows on from my Day to Day Politics yesterday when I posed this question: What resources does the average punter have to access the truth? If we have the time we can do some research? Look up the facts presented by fact checkers. Pay for FOI documents. Who has time for all that?

This scare campaign being waged by Turnbull and Morrison in light of what the PM said about fair, reasoned, transparent and open debate illustrates my point.

The truth is that in the absence of readily identifiable evidence we all use what is generally called ‘the pub test or common sense test.’ In other words we digest all the available information and ask ourselves the question ‘is it plausible?’ Does what I am being told have the ring of truth about it. We make judgements based on our life’s experience. Unless your personal bias clouds the ’Pub test’ your inner conscience dictates your judgement.

Now I’m not wanting to confuse the issue here because I thought I had my general principle of the ‘Pub Test’ sort of philosophically in order. Then a Facebook friend by the name of Phil Rudkin sent me this to ponder:

‘Unfortunately we are all subject to what is known as ‘confirmation bias’. That is, we believe what will confirm our beliefs and disregard that which runs contrary to our beliefs. This is a human failing found in us all. So, a lie that matches what we believe will be used to reinforce that belief. I am very aware of the potential for confirmation bias in myself and always try to seek evidence to support things that I hear from sources as unreliable as politicians but know that I will often fail. Confirmation bias is often confused with common sense and so will cause the pub test to fail.’

Now you don’t have to take my word for it but I found a piece headed.

‘Morrison painting a false picture of negative gearing.’

It’s by Rob Burgess. It passed my pub test (revisited) because it cut through the bullshit and presented a clear view of just where and why Turnbull and Gunna Morrison don’t have a leg to stand on. They are telling confirmation bias lies.

My thought for the day.

‘Never confuse what you want with what you need’

One house is enough.

PS. With degrees from the finest learning institutions in the world dripping from the walls of their Ministerial offices, after two and a half years the Abbott/Turnbull government still needs more time to formulate a tax plan.

That’s a fact. You can check it.

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Day to Day Politics: The Abbott/Turnbull Government – give credit where credit’s due

Friday 26 February 2016

1 Its only fair, regardless of one’s political ideology to give credit where credit’s due. The Abbott/Turnbull government has done something truly remarkable. At the last election it accused the Labor party of being the worst financial managers in the country’s history. The budget was in crisis. Something had to be done to arrest it. Spending was out of control. We were an economic cot case and if nothing was done we would end up like Greece.

Two and a half years later after doubling the debt amid a debate about the need for major tax reform they have managed to find 30 billion dollars to spend on defence. What makes it even more remarkable is that they have not been able to get the senate to pass legislation for cost savings in the past two budgets.

So credit where credits due. That’s almost the equivalent of Jesus walking on water.

But not to finish there.The Magician is now, according to the AFR signalled his willingness to arrange a funding deal with the states to relieve pressure on their health and education budgets.

Remember Abbott took $80 billion away from them.

Treasurer Scott Morrison maintains at the same time that the states should deal with funding shortfalls on their own. Turnbull would like to resolve the issue and repair the Federal Government’s relationship with the state governments before the May 2016 Budget.

Wow, I wonder what miracle they will perform when we get the ’real’ bill for Direct Action on climate change.

And there are also going to cut your taxes. The miracles will never cease.

2 It seems that the Prime Minister has decided to walk away from his much promised Tax Reforms. Reforms that might have achieved some budget repair. And not because they may have brought some equitable redistribution of the wealth of the country. Some fairness. No simply because tax reform might have hurt the pockets of those who vote for him.

It seems he has also decided to walk away from the transparent, truthful, and reasoned and policy explanation politics he also promised.

In deciding to take the path of Abbottism politics he has turned his back on all those who had hoped for a new era in politics.

Seeing him in parliament this week mounting a scare campaign against Labor’s proposed changes to Negative Gearing disclosed him for the fraud he is and people are entitled to ask why they changed from a blatant liar as leader to a hypocrite of titanic comparison.

3 Cory Bernardi said that Bill Shorten had had a Mark Latham moment when he said Cory was a homophobe. By saying that was Cory elevating himself to the position of a Prime Minister?

Victorian Premier Daniel Andrews summed him up rather well:

’I’m sick of Liberal politicians telling our kids that there’s something wrong with them – when there isn’t’.

‘I don’t think these extreme Liberals are actually offended by the structure of the program, or the teachers who lead it. I just think they’re offended by the kids who need it’.

‘The Liberals now plan to “investigate” (meaning: ultimately shut down) the Safe Schools Coalition, a program that looks after teenagers who are getting bullied at school’.

There is nothing worse than a Clayton’s leader. Grow some balls, Malcolm. Stand up to the ferals in your party. Saying it is a broad church doesn’t gel anymore.

4 When on earth are we going to get the report on parliamentary expenses? It was promised earl in the New Year.

5 Is it just me or are there others who are finding the ABC’s political reporting rather bland? Almost like they are frightened of putting their foot in it.

6 This almost went under the radar but according to The West Australian, retiring Senator Bill Heffernan told Parliament on Wednesday that the child abuse royal commission should be extended to investigate sex abuse in judiciary ranks, producing an alleged list of pedophiles he says includes senior judges and lawyers, as well as a former prime minister.

He says Australia needs a federal judicial commission and he will seek senior legal advice on the matter.

My thought for the day.

‘The young celebrate their youth and the old get their satisfaction by dreaming of the way things once were’.

Day to Day Politics: The table’s a mess. Clean it up, Malcolm.

Wednesday 24 February 2016

1 Malcolm Turnbull came to power promising much-needed tax reform. He placed everything on the banquet table. The GST pie. The outrageously immoral tax concessions on Superannuation to the wealthy and privileged. Negative gearing and capital gains tax. He has promised tax cuts to business and taxpayers in general. On top of these he has floated various recipes of other culinary tastelessness totality out of flavour with the public.

So badly received has the menu been that each day the chef needs to come up with another one.

Take Monday in Question Time.

‘Increasing capital gains tax is no part of our thinking whatsoever.’

He said so while launching into a stinging attack on Labor’s policy. A policy to limit tax deductions on investment properties to new homes and to halve the capital gains tax discount on assets held for more than a year from 50 per cent to 25 per cent.

What a bloody mess the table is in. The following day we find out that there was an error in the printing of the menu. The Government is planning to halve the capital gains tax discount for Superannuation funds.

This has totality thrown a new ingredient into the mix and is at odds with his statement in Question Time. Yesterday I said his right hand didn’t know what his left was doing. Frankly I don’t think he knows the difference between a Carp and a Flounder. Well he may know what flounder means.

Adding far too much pepper to the recipe, the Prime Minister’s office said he was only focusing on tax options proposed by Labor, which concentrate on property. In other words his defence is that he was misunderstood. What absolute crap.

Changes to superannuation tax concessions and tax deductions for work-related expenses are among the few tax reform options that are still available to the Government.

Chris Richardson from Deloitte Access Economics said:

‘We’re now in a world where some of the bigger options in tax reform have been ruled out’.

They have some serious washing up to do. After the clean up when there is nothing left but a blank canvas of white tablecloth the Government will find that real Tax Reform is still whirling around in the dish washer. It’s all starting to remind me of that wonderful song from Les Mis. Empty Chairs and Empty tables.

Probably the only real way to get tax reform ‘for the common good’ in this country is to take it out of the domain of politicians and place it in the hands of an independent body similar to the Productivity Commission.

An observation.

I think the possibility of young people being able to afford a new home is far more important than anyone making a profit from negatively gearing one.

2 Mathias Cormann was out and about doing his inevitable repair job. You have to admire his tenacity. That’s if you can understand what he is saying. The Government has some exceptional talkers but for waffling speed Mathias takes the cake.

‘It’s a matter of public record that we have been looking right across the whole of the tax system to assess opportunities for improvements’.

He said this so quickly that I thought the blender was over taxed while mixing up company tax reductions with pay no tax deductions.

3 The latest Morgan Poll, which uses both face-to-face and SMS interviews, has found that support for the Coalition on a two-party preferred basis is steady at 52.5 per cent. In contrast, the latest Newspoll suggests that support for the Coalition and the Australian Labor Party is tied at 50 per cent apiece. However, the Newspoll is now conducted by Galaxy Research, which uses a combination of automated “robo-polling” and online surveys rather than telephone surveys.

4 Some politicians unfortunately have physical characteriistics that arouse a judgement of nastiness. Former policeman Peter Dutten is one. He reminds me of the copper you would hate to have you cornered up a dark alley on a pitch black night. His sour facial expression gives rise to a judgement of someone with not an empathetic bone in his body. A nasty bastard as Australians are apt to say.

It makes the accusation that he deliberately leaked details of an investigation by Queensland Police into baby Asha believable.

He is not the only one of this ilk in the Government.

An observation.

‘I don’t judge people but I do form my own opinion of course’.

5 Malcolm Turnbull came to office grandiosely promising a new era of politics. An era of politeness, of transparency, of openness – a contest and exploration of ideas. He removed Abbott pledging to transform the Liberal Party. Instead they transformed him.

My thought for the day.

‘I think we can often become so trapped in the longevity of sameness that we never see other ways of doing things’.

Day to Day Politics: When action is needed we get waffle

Thursday 18 February 2016

1 Gunna Morrison was at the Press Club yesterday spruicking about what the Government is gunna do with the economy. It was highly anticipated that he might make a policy announcement on negative gearing but surprised no one when he didn’t. They need more time to talk and plan. A blueprint perhaps.

They came into government two and a half years ago on the back of a concentrated campaign of the need for action. Remember, there was a budget emergency. Unprecedented in its depth. The country was in a situation as bad as that of Greece. The sky was about to fall in. Day after day Hockey and Abbott told us that we were in dire straits.

Yet two and a half years after being in government, knowing all too well that aspects of the economy needed attention, they decide to formulate a plan. But it is a plan remarkably short in detail. If the strategy, or the answer is in savings it didn’t make sense that he had saved 80 billion but allocated 70 in new spending. What he didn’t say was that without the spending we may very well have had a recession.

The only thing we got today was journalists shaking their heads at his answers to their questions.

Where is the much vented real structural tax reform that Turnbull has been talking about? The sort a treasurer of the ilk of Keating might deliver.

Like Hockey and Costello before him all Morrison did today was give himself a big pat on the back.

He’s going to fund tax cuts from savings on future spending. The look on Peter Martin’s face was priceless.

I told you he could waffle. ‘Assembly of God’ men can.

The punters really need to ask themselves what this government been doing for two and a half years.

2 Quoting Peter Reith:

The pity was that the Abbott government did little to address the longer term reform issues. Now people like Andrew Bolt expect Turnbull to rearrange Australia virtually overnight.’

It seems Turnbull had always had a long-term plan to displace Abbott but not one for the country. You might recall when he took over the leadership he gave a pungent appraisal of the Government’s performance. He said the country faced challenges that required a more developed conversation.

‘We need a style of leadership that explains those challenges … and sets out the course of action we believe we should take and makes a case for it. We need advocacy, not slogans.’

So the question is: Where and what are they?

3 Essential Poll Tuesday has the Coalition on 51% and Labor 49%.

4 Steven Ciobo is the MP who once implied that Prime Minister Julia Gillard should have her throat cut. He was back on Q&A on Monday night. A huge supporter of Malcolm Turnbull I think he was hoping that his Government’s efforts in silencing the program last year wouldn’t be mentioned.

Tony Jones wasn’t going to let it pass. Ciobo wouldn’t take the bait. Talking about free speech:

‘I’m attracted to the classic liberal freedoms as a starting point but it doesn’t apply carte blanche’, he began.

Jones: ‘Didn’t apply to Zaky Mallah, for example.’

Ciobo waved the interjection away, as he did sniping from other members of the panel. ‘I am attracted to the principle but there does need to be limits on it. I think that’s a reasonable position.’

I was left wondering how a Turnbull government might have handled the matter just a few months back. It might have been an interesting avenue to pursue but Jones, perhaps wisely, didn’t pursue the matter.

An observation:

‘Until you are a victim of free speech you will truly never understand what free speech means.’

5 The request by the Australian Christian Lobby that existing laws pertaining to anti-discrimination be suspended, held over, over ridden or shelved for the duration of a plebiscite on equality in marriage would only serve to make a mockery of why they were legislated in the first place.

6 Every time you think the Republican Party has reached the zenith of its stupidity if finds another way to look ludicrous. By intending to vote against a new justice nominee put forward by President Obama (his constitutional right) it is doing enormous damage to the prospects of re-election of its incumbent senators.

On top of that we have Donald Trump suggesting that there are unusual circumstances behind the death of a Supreme Court justice.

Only in America!

7 It seems that New Zealand is set to again offer to take our refugees. On the surface you might say that the offer is compassionate and a way out for the Government.

It won’t be accepted for two reasons. Firstly we need to keep men, women and children incarcerated for life, no matter the human cost, so as to send others wanting to escape their hopelessness a message. Secondly giving them safe passage to a country more humane than us might encourage others to come. And we wouldn’t want them to become NZ citizens with rights to visit us.

My thought for the day

‘Everyone has a choice. You can either whinge about the issues you have or do something about them.’

 

Day to Day Politics: Just Talking Heads

The Coalition regrets having to announce that good government has been further delayed. At least until after the next election. Circumstances beyond my control.

I wrote this in jest just a few short days ago. But sadly for the Australian people it is a fact. During his tenure as PM Tony Abbott promised on many occasions to give us good government. Malcolm Turnbull, his replacement, it seems is also incapable of delivering. So with just a few months until the election it seems that for the term of this Coalition Government, good governance will have taken a vacation. It will have been on hold for three years. It was just an illusion.

But who is Malcolm Turnbull. He is a Republican leading a party of Royalists. A Prime Minister of Australia in which all state Premiers (except WA)and Opposition Leaders are republicans makes it more absurd. He is, despite his current utterings, a believer in doing something about Climate Change but the leader of a party that has many influential climate deniers in its ranks who think more about capitalist greed than the future of our children.

He is a committed believer in marriage equality leading a coalition of homophobes. He also leads a government intent on imposing its own religious values on a society rapidly backing away from religiosity.

Malcolm Turnbull is in effect an enormous contradiction.

He came to the job promising much. After Abbott’s calamitous period marked by ‘wars’ on everything he seemed like a breath of fresh air. He told the public everything they wanted to hear. No more slogans. Transparency, optimism and fairness would be the order of the day, he would respect the people. Things would be different. The public loved his enthusiasm.

However, after six months of heavily overdosing on syrupy over saccharised sweet talk he still remains in the concept of old politics. He gave promise to a new paradigm but other than style the prototype is still the same.

Lenore Taylor got it right when she said:

“He promised to “respect the intelligence of the Australian people”, to end the three-word slogans and instead advocate and explain policies he believed in.”

“But Malcolm Turnbull’s great dilemma was obvious as soon as he became prime minister. The public liked him for promising to be different, but many of his colleagues only voted for him because he told them he’d be pretty much the same.”

“If he can’t begin to resolve this dilemma quickly, Turnbull’s perceived authenticity – the view that he is a man true to his convictions, a different kind of politician – could quickly turn into a perception that he is an opportunistic fake, just more of the same.”

And it has. After 6 months of repetitious talk about coloured papers, taxation reform, proposals plebiscites and lectures about there’s never been a better time to be, well you name it, he has been a most indecisive leader.

The lack of any policy difference between him and Abbott is startling. The reason for this is probably contained in Lenore Taylor’s words:

” … his colleagues only voted for him because he told them he’d be pretty much the same.” As Abbott.

He has shown little desire to be his own man. Unlike most incoming leaders there has been no inclination to put his stamp on the party, instead allowing members free rein to run with their own ideas. Abbott, Andrews, Barnardi and others seem to be determining policy.

People are now questioning what they got. He has done an about-face on policies he once championed. He seems to be a leader captive to the extremists of his party?

Yesterday it finally dawned on him that the electorate have woken up.

All talk and no action’ rings the accusation. So he meekly fronts the cameras and tells us that all the talk and talk and talk about economic, and in particular taxation reform, will be revealed in the May budget with the door open, after more talking to other announcements before the election. The GST is being talked down. See what too much backbench talking can do.

It is all very mystifying because since day one they have said they had a plan. It seems like the original plan was to open a discussion to talk about creating one to replace the existing one. Now the plan has become a blueprint.

At least they will be able to skite to their tea party friends of the longest filibuster on record.

So we will have more talk about things that may or may not be included in tax reform. Around three months of it actually. I wonder if all the repetitive talk about what you may or may not do is sustainable without losing credibility. I mean they won government on budget crisis spin but after two and a half years need more time to talk about it. Perhaps they didn’t get their point across.

We will hear much more talk about what is on the table, what proposals will be talked about more than others. There will be talk about what will be ruled in or out together with discussion on the fairness of it all and how it will affect the future. They might even talk about delaying any decisions to give themselves more time to talk the issues through. Even a series of conferences titled ‘Talk Fests for Better Decision Making’

‘Gunna’ Morrison could give the keynote address.

My thought for the day:

The ideas of today need to be honed with critical reason, factual evidence and scientific methods of enquiry so that they clearly articulate the currency of tomorrow’.

 

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Dutton has lost control

Immigration Minister Peter Dutton has well and truly lost control of his portfolio. The past year alone provides a rich field of examples of Dutton’s incompetency. There are many instances which highlight the absurdity of his excuses, claims and justifications for the Coalition’s appalling policies. Yet despite a growing list of clear failures, there is a noticeable absence of demands for accountability. Dutton continues his awful attempts to defend the indefensible and the general public laps it up, convinced by the Government’s lies that it is all for the greater good.

Dutton has demonstrated many failures. A man with his level of ineptitude and incompetency in the private sector would have been fired a long time ago. A man in his position in any other institution, would be loudly condemned, and subject to a fiercely independent investigation at a minimum.

The latest in the string of absurdities must be Dutton’s reaction over the recent death of a person under his care and the following riot on Christmas Island. Dutton brushed off the seventh known death of an asylum seeker since early 2014, with little more than a ‘meh’, followed by loud accusations of violent, hardened criminals causing trouble for no reason at all in the remote prison. Not only does Dutton fail to recognise or even faintly appreciate the duty of care he owes to asylum seekers detained under this watch, but he loudly refutes the provable fact that violent criminals, minor offenders and asylum seekers have all been mixed together and none would be there at all if it wasn’t for him and his party’s policies.

The totally preventable death of Fazel Chegeni is the doing of Dutton. The riot, which looks to cost the Australian taxpayer $10 million dollars, on top of the $100 million dollar blowout in the billion dollar cost of offshore detention, is the doing of Dutton.

Dutton is responsible, and in being responsible, must be the most incompetent Immigration Minister since the equally appalling performance of former Minister Scott Morrison.

If Dutton was an employee in any private organisation, he would have been sacked long ago for gross incompetence. If any individual person was paying Dutton’s remuneration, he would have been sacked long ago. Yet the Australian public, every individual tax payer is paying for Dutton, and yet he continues, unchecked, with calculated, deliberate lies to try and cover up his incompetency. And Australia does not hold him to account.

The mysterious death of Fazel Chegeni, a refugee whose body was found after being chased through the Christmas Island jungle by guards, follows other preventable and inexcusable deaths. In October, out of fear of being returned to detention and dying a slow death at Dutton’s hands, Khodayar Amini doused himself in petrol and self-immolated. Leo Seemanpillai did the same last year. Asylum seeker ‘Reza’, fearing deportation on Dutton’s orders, was found dead at Brisbane airport. Earlier, Nasim Najafi was attacked while under Dutton’s care, placed in solitary confinement, and committed suicide.

Dutton is responsible for these deaths. Just like former Minister Scott Morrison was responsible for Reza Barati’s murder on Manus Island, and for Hamid Kehazaei who died from a septicaemia after a treatable infection on his cut foot was ignored.

Dutton holds the power to giving these people hope, freedom and a chance of a life. Dutton refuses.

Dutton, whose actions are slowly killing the people under his care, is doing his best to convince asylum seekers that it is better to return to their own countries and risk death in a warzone, than die a slow and lingering death under his watch. ‘Khaled’, who saw his own father murdered after they both worked as military interpreters for the US, was coerced into returning to the very city he fled from in Iraq. Officials from Dutton’s Department coerced another man, Eyad, to return to Syria, where he was tortured for twenty days by government officers, before finally making it to his home. A short time later he was injured in a shell attack, which killed his father on the spot. Dutton is responsible for this.

If any other person was responsible for so many deaths, so many atrocities, so much harm, they’d be imprisoned themselves. Not Dutton. No, he is being paid by the Australian tax payer to continue his torturous regime.

Who can forget the boatloads of Tamil asylum seekers Dutton returned to Sri Lanka, despite being subject to persecution? And his refusal to help rescue Rohingya refugees stranded at sea? Or the Vietnamese asylum seekers who were returned by Dutton, some of which were arrested and detained immediately on their return to Vietnam?

And of course there is Dutton’s implied admission that his Department paid people smugglers, in a clear breach of international law, backed up by an Amnesty International report finding enough evidence that it happened.

Dutton is determined to continue to expose children to sexual abuse, assault and torture. The Government-commissioned Moss Report, the Forgotten Children Report from the Australian Human Rights Commission, and a Senate Committee Inquiry found that offshore detention is not safe for families and children. Earlier this year Dutton ordered the transfer of a five month old baby, Asha, to Nauru, where her desperate mother is still gravely concerned for her health. Fully qualified, professional Australian doctors have labelled the Government’s treatment of asylum seeker children as torture. Dutton is unrepentant. Instead of addressing the shocking claims, he made it illegal for ‘entrusted people’ to report the abuse, threatening doctors, nurses, councillors and teachers with two years jail.

The Australian tax payer is financing this abhorrent situation. Every Australian is paying for Dutton to put in place laws to incarcerate anyone who tries to hold Dutton to account.

Dutton refused for months to help a woman who had been brutally raped while under his care. Abyan, another refugee who fell pregnant after being raped, was also denied treatment in Australia until a mass public outcry. Dutton, insistently lying to the Australian public and the world about the poor woman’s situation, despite even the Coalition’s biggest supporter, Chris Kenny, backing up her advocates, has not been held to account for his lies. Dutton only acted after a scathing press statement from the United Nations, yet he still insists that denying a traumatised woman access to a counsellor and expert medical care is appropriate treatment.

Dutton deliberately seeks to expose vulnerable men, women and children to further harm.

According to Dutton, pregnant women under his care who request to give birth in Australia are trying to blackmail him, are taking him for a ‘mug’, and are partaking in a racket to get to Australia. According to Dutton, it is acceptable to force women under his care to give birth in a third world hospital on Nauru, where a newborn baby is seven times more likely to die at birth, and the mother is fifty times more likely to die during childbirth. Dutton has ignored medical professionals and the Australian Medical Association who insist Golestan, a diabetic woman, must be immediately flown to Australia to give birth. Golestan is suffering a complex pregnancy, and despite medical staff expecting her baby will require specialist care, Dutton insists on risking the baby’s life. Will Dutton sacrifice the life of an innocent baby in his race to provide crueler conditions than those which the asylum seekers have fled from?

It is not just asylum seekers Dutton treats with loathing and contempt. A freedom of information request by Fairfax media revealed that Dutton deliberately misled the public when he said there was no way his Border Force agents would be doing random spot checks on unsuspecting and law-abiding Melburnians in August this year.

Spooked by a backlash to the press release that Government agents would stop and speak with anyone they came across during Operation Fortitude in Melbourne’s CBD, Dutton’s kneejerk response at the time was to deny all knowledge of such a planned venture.

What kind of Minister thinks it’s acceptable and lawful to expect people to carry, and produce on demand, their ‘papers’ while out shopping on a weekend? What kind of Minister then lies to say it was never planned? Obviously one who mistakenly thought Australia was a police state, or one who is grossly incompetent. Dutton forgets he is an elected representative paid for by the Australian taxpayer to represent the Australian people, not treat the very people who elected him as criminals.

Speaking of taxpayers, voters, and Christmas Island, Dutton demonstrates yet again his inability to tell the truth. Despite deliberately, unrepentantly and viciously detaining and deporting any non-citizens who have suddenly become socially undesirable, no matter how minor their wrong-doing, or the absence of any actual offence at all, Dutton is adamant only the most violent and hardened criminals are subject to section 501 of the Migration Act. Many of these people have lived in Australia for their entire lives. They have voted in elections. Many have paid their taxes and contributed positively to the community for decades. They have families, wives, husbands, partners, siblings, parents and children in Australia.

According to Dutton, a decorated New Zealand soldier, Ngati Kanohi Haapu, known as Ko, must be banished forever, despite having no criminal convictions whatsoever. Ko’s ‘character issue’ is that he is allegedly a member of a one percent motorcycle club. Despite no motorcycle club being proven to be a criminal organisation, and police and law enforcement agencies being unable to produce sufficient evidence of such, Ko has been detained and set for deportation.

Ko has committed no crime. Not like Dutton, who has paid people smugglers, enabled and condoned child abuse, rape, and torture, and is responsible for at least five of the seven known deaths of asylum seekers.

According to Dutton, a New Zealand born mother of six, who has served her time for minor drug offences is a violent, hardened criminal. If this woman had been born in Australia she would serve her time and move on with her life. But no, according to Dutton, she must be banished from Australia, despite serving her sentence, because a faceless bureaucrat has applied a mandatory provision enacted on Dutton’s command, that she be deported.

According to Dutton, a single mother of two, charged with shoplifting is such a threat to the Australian public, she should be incarcerated, away from her young child and teen daughter – banished forever from Australia, because of Dutton. There is no such thing as rehabilitation or having ‘done one’s time’ under Dutton’s watch.

According to Dutton, a quadriplegic man, who served time for self-medicating with painkillers, is such a threat to the Australian public, he must be deported, never to return to the land he called home.

According to Dutton, a British man, who has lived in Australia for fifty of his fifty-one years, who in a moment of stupidity lit a scrub fire in which no people or property were harmed, is a violent and hardened criminal. Because according to Dutton, only violent and hardened criminals are being held on Christmas Island.

Where are the cries for Dutton’s resignation? Why is the Opposition silent? Why is Bill Shorten not calling for Dutton to stand down or be sacked? Why is the mainstream media not demanding more answers?

No person in anything other than a criminal organisation, a fascist, police state or dictatorship would get away with such criminal behaviour, and wilful and deliberate lies to the domestic and international community.

How many more families will be ripped apart by Dutton’s arbitrarily applied laws? How many more people must die a violent, painful and preventable death under Dutton’s watch? How many innocent children will lose their parents, and how many parents will lose their children at Dutton’s hands? The Government and the weak opposition, the detention centre contractors, and all the faceless bureaucrats, are complicit in the deaths, torture, and inhumane treatment of people under Australia’s care. Every Australian who does not make a stand against the cruel regime, is complicit.

Enough is enough. Rape, murder, suicide, torture, child abuse, violent assaults, death from medical neglect, and wilful destruction of families is all in a day’s work with Dutton in charge. And every Australian is paying for it.

 

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Don’t open the champagne just yet

Today saw the release of what, at first glance, seem promising improvements in employment in Australia.

The headlines are saying that unemployment has dropped from 6.2% to 5.9%. Supposedly 58,600 jobs were created in October, 40,000 of them full time, with monthly hours worked increasing by 19.1 million hours.

Those are, of course, the seasonally adjusted estimates, which are subject to a great deal of volatility. Trend estimates are considered the best indicators of the underlying behaviour in the labour market.

If we refer to the trend estimates we get a slightly different story which shows the unemployment rate remaining steady at 6.1% with 18,800 jobs created and monthly hours worked increasing by 5.7 million hours.

Since October 2014, trend employment has increased by 260,500 persons, while the civilian population aged 15 years and over grew by 288,200 persons over the same period, so job growth has fallen short of population growth by some 27,700.

The Labour Force Survey is based on a sample of about 26,000 dwellings and covers approximately 0.32% of the civilian population of Australia aged 15 years and over. Extrapolating from these figures is therefore subject to sampling variability.

The ABS acknowledges this and publishes, under the heading sampling error, a 95% confidence interval ie there is a 95% chance that the true value of the estimate lies within that interval. These figures highlight just how wrong the headline figures could be.

We can be 95% sure that employment went up by somewhere between 400 and 116,800 in October. That’s a hell of a range, 58,600 +/- 58,200, and there’s a 5% chance that the real figure lies outside even that very large spread.

Likewise for the number of unemployed people. We can be 95% sure that it ranged anywhere from decreasing by 71,600 during that month to increasing by 4,800: 33,400 +/- 38,200. The unemployment rate could be anywhere between 5.5% and 6.3%.

So when you see Scott Morrison and Michaelia Cash preening at the various press conferences today, keep in mind that these figures are likely statistical noise with trend figures presenting a different picture. I hope the trend will eventually bear out these improvements but I certainly wouldn’t put money on it.

 

Confusion in the Turnbull Government

Much about the Turnbull Government confuses me. Either I don’t know what they’re talking about, or they themselves have no idea what they’re talking about.

I’m convinced it’s the latter.

They say one thing while clearly meaning something else. I could write a book about the subject, but for the sake of a talking point I’ll limit it to the few examples below:

Shortly after being installed as our new you-beaut Treasurer, Scott Morrison says “we had a spending problem, not a revenue problem, and that he wanted to cut taxes further”. Yet his boss Malcolm Turnbull wants to raise the GST by five percentage points (effectively raising it 50 per cent). Malcolm Turnbull also wants to raise the revenue the government needed to provide services but it in a manner that “backs Australians rather than holds them back”.

One of them has no idea what they’re talking about. One of them is lying.

But of course we have an unfair tax system. That’s why Malcolm Turnbull has money invested in the Cayman Islands, where companies and individuals pay no direct tax.

If only our tax system was fair. No wonder he wants a tax reform that “backs Australians rather than holds them back”. Don’t hold back, Malcolm.

Speaking of Malcolm, and speaking of investments, it was he who was the most vocal critic of Labor’s fibre to the home NBN yet “it was revealed … that Mr Turnbull owns shares in France Telecom, which plans to connect 60 per cent of French households to fibre by 2020”. Yet he still tells us that Labor got it wrong. So he destroyed it. Fortunately the French have a good NBN.

We are told ad-nausem by the proud and boastful government that they have stopped the boats. So why has Transfield – who operate the Manus Island and Nauru detention centres – had their contract renewed for another five years? One would expect that if the boats had stopped then all of the detainees would shortly be either settled in Australia (unlikely) or sent to some miserable hell-hole elsewhere in the world. (Oh, I know, if Labor wins the next election then all the boats will start again. Good forward-thinking by the government).
And of course there’s the obvious: if the boats have stopped then why have detention centres!

Confusion reigns supreme in the Turnbull Government, and the Turnbull Government confuses me.

Let’s have some truth

If we are going to have a conversation about taxation reform it would be useful if our Treasurer told the truth.

When asked about using the GST to fund tax cuts, Scott Morrison said “When you have the average wage earner in this country about to move into the second-highest tax bracket at $80,000 next year, you’ve got a problem with the incentives in your tax system.”

The most obvious reaction to this statement is wouldn’t it be easier to just change the bracket thresholds?

But beyond that, Morrison’s statement is misleading for several reasons.

Moving into the next tax bracket means you only pay the higher rate for the portion of your income over the threshold so if you if you are just above the limit it will make very little difference to the amount of tax you pay.

Moving into the second top tax bracket means you would pay an extra 4.5c for each dollar over $80,000. Because of the generous tax free threshold, the effective tax rate for this bracket ranges between 21.9 – 30.3%. This is never taken into account when making international comparisons.

Annual income of $80,000 gives weekly earnings of $1538. According to the ABS, in August 2014, the mean weekly earnings of employees and owner managers of incorporated enterprises in all jobs was $1,189 compared to $1,156 in 2013, nowhere near the $80,000 limit and unlikely to get there any time soon.

What’s more, there is a glaring gender disparity. For males the mean weekly earnings in all jobs was $1,410 and for females it was $948.

It is not until we take the specific subset of ‘males working full-time’ that Morrison’s statement comes close to being true. Mean weekly earnings for full-time workers in all jobs was $1,448 ($1,592 for males and $1,264 for females).

But is using the average even valid?

As any high school maths student can tell you, when you have a skewed distribution, as is the case with income, the median (middle score) is a far more reliable measure of central tendency.

The median weekly earnings in all jobs in 2014 was $1,000 ($1,185 for males and $838 for females) ie 50% of employees earned less than $52,000 a year.

Part-time workers represent 32% of the workforce and understandably, their earnings are lower. Median weekly earnings for full-time workers was $1,200 compared to $467 for part-time workers.

The difference between the mean and the median demonstrates the asymmetric distribution of earnings, where a relatively small number of employees and OMIEs have comparatively very high earnings with some 400,000 earning over $3000 per week.

At August 2014, 10% of people had weekly earnings in main job below $300, while the top 10% had weekly earnings in main job over $2,143.

earnings

Income tax has become less progressive in recent times, due mainly to the succession of income tax cuts during the Howard boom years. According to The Australia Institute’s Matt Grudnoff, only 3 per cent of taxpayers are in the top tax bracket now, compared to 13 per cent 10 years ago, so any bracket creep is just redressing the profligacy of Howard’s vote buying.

Whilst progressive taxation goes some way to addressing income inequality, the rapidly rising wealth inequality in Australia is taxed very lightly.

On the latest figures available, the median net worth of Australian households – that is, their assets minus their liabilities – was $1.59 million for the top 20 per cent and $29,600 for the bottom 20 per cent in 2011-12.

The capital gain on the family home is not taxed at all, while that on other assets is taxed at half the rate of savings such as bank interest. Superannuation is taxed at a concessional rate that provides the largest benefit to higher income earners. The combination of the 50 per cent capital gains tax and negative gearing makes investment housing an attractive option for many, particularly higher income earners, while lower income earners are increasingly shut out of the market.

Unlike other developed countries, Australia has no wealth tax, inheritance tax or gift duties, although they potentially provide the most direct means of curbing rising wealth inequality

Most capital investment or entrepreneurship faces a substantially lower rate than the personal marginal rate – either through the CGT 50 per cent discount, or the company tax rate of 30 per cent or 28.5 per cent for small companies. If you sit at home and make $50,000 on trading shares you will be substantially better off than someone who works hard all year to earn the same amount.

The Coalition like to point to New Zealand whose top marginal rate is only 33% (ours is currently 45%+2% medicare levy+2% temporary surcharge) but what they fail to point out is that there is no tax free threshold in NZ – you pay tax on every dollar earned – and the top rate kicks in at $70,000 instead of $180,000.

NZ has a 15% GST, another fact Morrison like to point to, but they have no general capital gains tax (although it can apply to some specific investments), no local or state taxes apart from property rates levied by local councils and authorities, no payroll tax, and a 1.45% levy for New Zealand’s accident compensation injury insurance scheme. They have chosen a higher GST rate to fund government services.

Modelling from the Parliamentary Budget Office has shown that increasing the GST to 12.5% or broadening its base would raise the same amount as a carbon price of $28/tonne but cost households about three times as much hence requiring much greater compensation for low income households.

The solutions seem so obvious but conservative ideology will blind this government to what must be done and once again, those least able to afford it will bear the brunt of the Liberals ‘lower taxes’ mantra.

 

Morrison’s Approaching Waterloo

It may be early days but Joe Hockey’s second and final attempt to bring down a credible budget appears to be unravelling already. Even on the night of his budget speech in May it was clear that his growth projections were far too optimistic.

It makes one wonder if the whole budget process was one started first by establishing a bottom line and then working backwards, fudging the figures necessary to substantiate it.

Is that how they eventually arrived at a growth estimate of 2.75%? Perhaps it was a case that if it sounded unattainable, to hell with it, that’s what it was going to be.

And then they made it 3.50% all the way out to 2019/20?

The Reserve Bank announced on Friday it was downgrading its growth estimate to 2.25% for the current fiscal year. Surprise, surprise! If correct, that has the potential to blow out the deficit by a further $11 billion.

Not that we should be concerned about deficits. It’s the ability to manage them that should have us concerned; particularly when our current treasurer thinks we only have a spending problem.

The fact is, deficit spending is what we need right now, but it has to be targeted. It has to be value adding, creating employment and making a positive contribution to our GDP.

The current deficit projections cannot be attributed to anything positive because they are essentially caused by over-optimistic estimates, not excessive spending. While revenue for the first three months of the May budget is on track, giving Scott Morrison some breathing space, it is based on reduced earnings that are likely to continue declining.

Peter Martin in ‘The Age’ says, “The charts in the budget that predict a return to surplus by 2019-20 were built around an assumption of fast economic growth of 3.5 per cent in the five years to 2021-22.

That growth estimate is simply unreasonable and based more on hope than insight. That means revenue projections over that same period cannot be achieved without significant tax increases. Realistically, a surplus is not on the horizon any time soon.

How long Morrison will continue to kid himself about his perceived revenue/spending problem remains to be seen but sooner or later he will have to face the reality of a slower China and a population not growing as fast as expected.

He has also stated that any increase in the GST would not be used to boost the overall tax intake. How could it not, unless it is all given away in compensation. If that’s the case, why bother increasing it?

Thus far, Morrison has given no indication that he understands how to manage a national economy any better than Joe Hockey. I have no doubt Malcolm Turnbull has a better idea but he is hamstrung by a neo-classical mindset that suffocates his extreme right wing colleagues.

This situation, therefore, foreshadows a difficult time for both men. Sooner or later, unless some Chinese miracle occurs, there’s going to be a clash of ideologies, a seismic shift that will see one of them emerge triumphant, while the other goes the way of Joe Hockey.

If it’s Morrison that survives, the economy and by extension, the Australian people, will be the big losers. However, the spin merchants within the Liberal Party will camouflage it such that it is not likely to be apparent until after the next election.

Without a radical change in strategies along the lines that Italy and Canada are starting to entertain, we will continue in decline for some time yet.

And we should not expect Andrew Robb’s Trans Pacific Partnership (TTP) to come to the rescue either. The news from Hilary Clinton is not good. It is unlikely that, in its present form, it will achieve the 85% GDP target of member nations it needs, for approval.

I suspect Scott Morrison is about to meet his Waterloo.

 

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