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The Great Hoax, Climate Change or the GST?

Personally, I think that maths is overvalued in schools. Now I’m not talking numeracy, I’m talking trigonometry, surds, quadratic equations and a whole range of things that most people won’t use past school. Fine for those who are going on to particular fields but a large number of students would be better off if they’d never had to struggle through them.

Of course, if you disagree with me, it’s not because you have a different perspective. It’s not because you think that maybe it’s a good idea to expose all people to maths because it’s good for them to be challenged. No, it’s because you’re gullible and a victim of the gigantic hoax that the maths teachers have invented. For a start, numbers aren’t even real. As for Pythagoras, not only did  he believe that beans were souls migrating from one life to the next, he and his followers believed that numbers had magical powers. So, if you want to disagree with me, don’t cite a maths teacher or anyone who believes in maths teaching, don’t trust academics, they’re all part of the conspiracy. The best people to trust are your friends and family.

Yep, I sound ridiculous. While there is an argument to be had about how maths should be taught and whether it needs to be compulsory past a certain level, the idea that it’s a “hoax” and that you can rely on information from your friends and family makes me sound well, at least a little unbalanced.

Yet, this seems to be what the CSIRO’s survey on climate change revealed. People who didn’t believe in climate change found their friends and family their most trusted source. While I can support a degree of sceptism about what experts tell us, it strikes me that there are certain areas where the average person won’t have the necessary skills to be able to make an informed decision. Nobody says that they took their X-ray home and after everyone they know had a look at it, they decided that the doctor’s interpretation was wrong. In the case of climate change, many are arguing that they don’t even need to see the X-ray.

OK, there are “experts” on both sides of the climate change debate and it’s interesting to see how the media presents them. It was fine when Cardinal Pell gave his opinion, but Pope Francis should stick to religion. Anyone with a science degree or a couple of years at university hanging around the cafe is presented as an expert on climate change without much sceptism by the media and there’s no attempt to evaluate their credentials. . We have the absurd scenario where we’re asked to believe that a group of scientists decided that they’d find it easier to get funding to investigate something invented, and that rather than make actuall discoveries, they’d rather just take this funding and spend their time making stuff up. However, thanks to some intrepid physicists and geologists – often funded by fossil fuel companies – this hoax is being exposed.

Now, I’m not saying that the prevailing wisdom on climate change couldn’t be wrong. I’m simply saying that when one suggests that scientists have dishonest motives, one should be prepared to have one’s own motives scrutinised. Why climate scientists are supposedly part of a “hoax” and not just simply wrong is what gets me. For years, the cause of ulcers was misunderstood, but we don’t suggest that was because of some conspiracy to stop people stressing or eating spicy foods.

But speaking of hoaxes, how do you like this GST?

Remember when it came in?

No, I’m not talking about how “never ever” simply meant not until after the next election – although I suppose if that’s the case, then the assurances by Howard and Costello that it could never go up because, well, all the states had to agree and could you ever see a time when all the governments would agree to receiving more revenue, lasted a lot longer than we could have expected. That was “never” and not “never ever”, so I’m surprised that it’s taken so long before someone put it on the table.

Mm, I guess it’s easy to see why people don’t trust the “experts” and would rather listen to Uncle Frank and the guy next door.

Now, ignoring the politics, I can see an argument for putting up the GST. While the converntional argument is that it’s regressive and hurts the poor more than the rich, this needn’t be the case.

In the first instance, the poor have a limited amount to spend and so any increase in the GST won’t hit them in total terms as much as someone who spends more. If someone only spends twenty five thousand in a year, then a five percent increase can’t cost them more than $1250, whereas someone spending $100,000 could be hit for $5000. If the current exemptions on fresh food, education and health are included then it’s even less than the $1250. If you raise pensions and allowances by enough, as well as increasing the tax free threshold, you can compensate those who the five percent increase will affect.

Secondly, while income tax can be minimised by various accounting tricks to minimise one’s income, the GST is more difficult to avoid. I may have used the Cayman Islands to avoid the tax on my business, but when I buy my Jaguar, I’ll be hit for an extra five percent.

And finally, the extra revenue should enable the states to continue to provide services from which should benefit those who don’t have private health insurance or go to Xavier where they learn to be grateful that they don’t go to some “povo” school in Pakenham. (Hey, I know it was just one individual and private schools don’t really encourage that sort of class warfare thing. They just constantly tell you what a great education you’re getting and how their school is the best in the world. Why a student would think that government schools are “povo” is a mystery to them …).

So, I can see that a rise in the GST could be a good thing all round  – even if it is the Liberal Party proposing it.

But then, I’m also gullible enough to fall for the climate change hoax.

 

16 comments

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  1. CFB

    Not really … I will escape the GST on my Jag by making it a business expense

  2. Rossleigh

    But your business will still have to pay the GST even if you reduce your income by the extra five percent and given you’re not paying any income tax anyway because of your Cayman Island based accountant that won’t help you. 😀

  3. Florence nee Fedup

    I am sure the plumber and most tradesman will still give decent discount for cash, as they do now.

  4. Terry2

    Florence, I imagine that the discount for cash will go up to 15%.

    However, I just can’t see them expanding the base of the GST to include Health (i.e. private health insurance) and education (i.e. private school fees) as this would strike at the very heart of Liberal voters and that would severely impact Turnbull’s political capital unless they were able to offset with personal income tax deductions.

  5. i have a nugget of pure green

    a rise in the GST is not needed. they just need to stop welfare for people earning over $100k, wind back super and cgt rorts and make companies and multinationals pay tax rather than “off-shoring” it.

  6. Stephen

    Instead of raising an increasing an existing tax they could look at foregone taxes. Revenue lost through avoidance, offshoring etc. Evasion, such as trusts personnel expenses written off as business expenses travel and so forth., Allowances given for political reasons to shore up the vote such as Superannuation, rorts reverse gearing on property, diesel fuel rebates, company cars for staff Health funds paid for staff Private School fees as a staff perk.

    If we took a serious and honest look at the system we could make a huge differnce.

    If we do raise it we have set a precedent how long to the next one. It will become a easy fix to mask and avoid other problems.

    And finally if we do Raise the G.S.T. it will go to the states which is right, but how long will it be before the Federal Government starts reducing it’s payments from general revenue to the states, and some-where down the track winds back the compensation for the raise by not raising the allowances using inflation to wind them back.

    Stephen

  7. Kaye Lee

    Rossleigh….

    “But your business will still have to pay the GST”

    Businesses can claim back the GST on business expenses. GST going up won’t make one iota of difference to business due to input tax credits.

    Small businesses are also allowed to buy as many items (capital expenditure) up to $20,000 as they want and instantly write them off.

  8. JeffJL

    I don’t think that putting up the GST will result in the upper end of town paying more tax overall. Now am I being cynical or just being the mate down the road?

    An acquaintance of mine has just got himself a notivated lease. One of the reasons, to pay less tax. Will only be used for private purposes.

    There is no need to increase any taxes, just make deductions directly related to business and not some second or third or fourth order affect (boozy lunches).

  9. Tony Rabbit

    The loopholes used by tricky accountants could be abolished. That would make the ‘direct’ tax much more efficient than raising an already inefficient indirect tax.

    You also fail to see that if you need to compensate someone for a rise in a tax due to unintended consequences, then that is a really poorly targeted tax!

    Increase income tax – it’s far better (efficient) to tax 15 million pay packets than tax billions of transactions – surely?

  10. Zathras

    Some basic observations –

    Although they may spend their money differently, CEOs on 300 times the average wage do not consume 300 times as much. Therefore the CEO pays proportionately less of his/her income in GST.

    If you give somebody on the average wage $1000 they will probably spend it all.
    Give the same amount to a very wealthy person and it will likely end up in a savings account or be spent on an overseas trip.
    One case keeps money moving through the economy and the other doesn’t.

    Self-funded retirees cannot be compensated and effectively lose a further 5% (if that’s what’s expected) from their savings in a single stroke. A possible result is that they deplete their savings quicker and become eligible for the pension much sooner than expected.
    The incentive to save for Superannuation is being progressively eroded.
    As well as being a regressive tax, it’s also applied retrospectively on income already earned and taxed.

    To follow this soft path and ignore the already-discussed huge Multinationals tax avoidance industry is both cowardly and cruel.

    Everything else about the debate is just window dressing.

  11. Glenn K

    spot on Zathras. You have also clearly explained the logic and benefits to the economy of increasing the minimum wage (CEO’s on 300 times….. etc). More money flowing through the economy…

  12. David

    I am very disappointed in reading here supposedly caring persons putting the boot into those who have already been booted for the last 2 years. If anyone here believes those earning less that 20,000 dollars wont be effected by the 5% rise in GST which is a 50% tax increase then I am in the wrong place. Do you not think these Australians are struggling day to day now? I am beginning to think slome here do not have a clue how the less fortunate are living.
    They should not be paying another one bloody cent more in their twilight years years, nor should job seekers, or the homeless etc etc.

  13. Wally

    Rossleigh

    Business owners who rort the system can do quite well out of GST, giving people a discount equal to the GST is an easy way to earn some cash, GST input credits on the materials means there is no liability from receiving cash, anything at all that can be considered a business expense ends up being GST free and it is very hard to prove the fuel (or whatever else is claimed) was not used in the family car. GST is a boon for business, so much better than sales tax that could only be exempted for government work.

    As David commented above there are many people who will not be compensated for the increase in GST, these people are those who pay less than 5% of their income in tax and/or those who do not receive any government welfare payments like self funded retirees..

  14. DC

    A gst isnt needed to save this country. Its only needed to save a lot of priveidged industrialists who were born into ‘old money’ from the accelarated inevitable shake-up of industry that would have resulted from a carbon price!

  15. philc

    Rossleigh, I see from a couple of comments that some people struggle with your mordant wit. This once again was an enjoyable article which managed to make me smile about something that is very annoying. People do struggle with numbers, and with logic, which is why 97% of the scientists are being drowned out by a handful of loopy demagogues.

    Of course numbers can be very confronting, particularly those from the CSIRO survey. It is unsurprising that 78% of National voters can’t accept reality. It is slightly less unsurprising that 72% of Lib voters are similarly silly. It is a little bit disturbing that 41% of ALP voters are equally deluded and it is almost mind boggling that 24% of Green voters don’t accept the science.

    Another set of confronting numbers are contained in the National Oceanic and Atmospheric Administration monthly reports and the IPCC reports. I guess that is what is wrong. People would prefer to listen to fools and charlatans saying something comforting than to face up to the scary truth. It has been ever thus. That is why there are religions.

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