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What are they saying today?

Trying to work out the Coalition’s message is proving a job too hard, even for them.

Scott Morrison’s budget focus seems to prioritise income tax cuts, arguing that inflation and wage growth are pushing taxpayers into higher tax brackets.

But then Mathias Cormann reminds us that inflation is at record lows and wage growth is the slowest it has been for fifty years so bracket creep is “not there to the same extent as to what it might have been in the past.”

The finance minister said “that gives us a little bit of room to re-calibrate in a more affordable fashion our ambition in this area.”

Is that the sound of income tax cuts sliding off the table?

Then there is the GST which is definitely on or off the table depending to whom you listen.

Less than a week ago, Cabinet minister Michaelia Cash told Skynews that a 50 per cent rise in the GST was still on the table of tax proposals being considered.

“We haven’t taken it off the table completely, not at all,” the Employment Minister said on February 15.

The next day, Malcolm Turnbull said “I can assure you the government will not be taking a proposal to increase the GST to the election.”

What of negative gearing?

In July last year, Tony Abbott said “Another thing that we are not going to do, we are not going to fiddle with negative gearing because the last time a Labor government fiddled with negative gearing it destroyed the rental market in most of our major cities.”

But Joe Hockey, in his valedictory speech said “In particular, tax concessions on superannuation should be carefully pared back. In that framework, negative gearing should be skewed towards new housing so that there is an incentive to add to the housing stock rather than an incentive to speculate on existing property.”

After Labor announced just that, the new Treasurer weighed in criticising the efficacy of the Opposition’s plan to scrap negative gearing on established houses, arguing it will not help the budget bottom line as much as Labor is claiming it will.

“Like their famous mining tax, Labor’s proposed change to negative gearing promises big, but raises very little revenue,” Mr Morrison wrote in an opinion piece published in News Corp newspapers.

“It could also have some very nasty consequences for everyday mum and dad investors just trying to get ahead.”

Apparently, Morrison wants mum and dad investors to borrow lots of money to invest because that is the only way they can build their wealth. Unlike a government who cannot spend more than it earns and who should never borrow and who must live within their means. Private debt good, public debt bad.

But his focus on rewarding and protecting wealth creation is at odds with recent papers produced by the IMF which show that widening income inequality has become so bad in advanced economies that policymakers need to focus on “the poor and the middle class” if they want to boost economic growth globally.

It advised policymakers to reinforce their fiscal policies with “greater reliance on wealth and property taxes”.

It said reducing tax expenditures that benefit high-income groups the most, and removing tax relief – such as low taxation of capital gains – would “increase equity and allow a growth-enhancing cut in marginal labour income tax rates in some countries”.

Morrison has his new slogans all ready to go – they are the party for “jobs and growth”, Labor are for “tax and spend”. All we need to do is “work save and invest” and Scott will “back us in”….somehow.

And it is not only economics where the Coalition’s message is all over the shop.

In 2011, then Opposition immigration spokesman Scott Morrison said he was shocked by the treatment of refugees in Malaysia and that if we sent people there they would face the real prospect of being caned.

Mr Morrison reiterated a Coalition guarantee that asylum seekers sent to Nauru for processing would not be mistreated. But the prime minister could not do the same for Malaysia, he said.

Now we hear that the government is negotiating with Malaysia to take refugees from Manus and Nauru.

New Zealand has offered to take 150 refugees but the government says no because that would “put the sugar back on the table”.

Apparently our aim is to settle them somewhere inhospitable, preferably where caning is legal.

What of marriage equality?

We must have a plebiscite to allow the people to decide but we won’t be bound by their decision?

Then there is climate change.

Our current Prime Minister once said he would not lead a party that was not as committed to action on climate change as he was.

At the Paris climate change talks in December, he said “We do not doubt the implications of the science, or the scale of the challenge,” adding that the impacts of global warming will continue to be felt “even after we reach global net zero emissions” and that Australia is “not daunted by the challenge”.

Meanwhile, at a side event in Paris, Greg Hunt was challenged by a questioner about why the government had approved the Adani mine given the huge quantity of emissions its coal would create.

“This is not an Australian government project, it is a private sector firm from India and … I thought we were over neo-colonial moment where the wealthy decide what happens to the poor,” Hunt countered.

Turnbull said he has “great optimism and faith in humanity’s genius for invention” as Josh Frydenberg tells us that coal is the future that will save the world’s poor and Malcolm tells us that copper is fine and dandy for our future telecommunications needs.

Turnbull says that science and innovation are crucial to our future prosperity as they slash funding for education, try to increase the cost of tertiary education, decimate our premier research body, and use future research funding as a threat designed to gain compliance. Pure research will give way to research with quantifiable commercial potential, which apparently excludes climate studies.

Dealing with the Senate may be like herding cats, but Turnbull is trying to corral dinosaurs in an open paddock using his smile. They keep running off in different directions bellowing and sniffing for the trail.

 

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16 comments

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  1. Terry2

    Morrison seems to live in a world swirling with confusion and populated by “Double Dippers”, a species that he detests and, having taken on the greedy new mums in our society he has now turned his scrutiny to those avaricious senior citizens who want to stay in their own home during their retirement : a home that many of them have scrimped and saved for all their working lives and whose mortgages were costing them over 12% in the heady days of the 1970’s and 1980’s.

    Morrison is alarmed that some of these old folk are receiving a pension in addition to owning a home. As far as he is concerned that is yet another element of double dipping and he is going make sure that they sell that home and use the proceeds to fund their retirement without recourse to the public purse that he is clutching to his miserable bosom.

    Morrison doesn’t care whether these oldies go out and rent a flat – as long as they don’t ask for a rental supplement – or if they down size to a smaller dwelling in Woop Woop, the main thing is that they don’t stay in the family home AND expect the pension : the same pension, I might add, they have been told for the last 70 years is their entitlement and right as an Australian citizen.

    But, of course, like his Leader, Morrison is very keen to see his mates accumulating houses and apartments which they mortgage to the hilt and then can’t cover their outgoings from the property income. That’s alright, write it off as a loss against your taxable income and you get a nice subsidy from the tax payer. But whatever you do, don’t become a pensioner and expect to live in your own home and get the pension to which you are entitled.

    Morrison is all for reverse mortgages and it is even suggested that the old age pension will be treated as a loan just like HECS and when you die, the loan is repaid from the equity in your house : Morrison is just a whisker away from reintroducing death taxes although I’m not sure that he has the Constitutional power to do this – previously very much a province of the states – but don’t underestimate this bloke, he has form.

  2. flohri1754

    Grand summation, Kaye Lee, of the confusing state of play with this government. IF they continued going this path, they will defeat themselves at the election. Utterly uninspiring …..

  3. Shaun Newman

    Kaye we don’t need a tax cut, all we need is to have the taxation brackets float with CPI or inflation, the taxes we really need collected are these
    http://www.abc.net.au/news/2015-12-17/almost-600-companies-did-not-pay-tax-in-2013-14/7036324 Hillsong continues his waffle but never reveals how the government is going with either collecting back taxes from these corporate tax dodgers or “cutting” some of their deductions so that they pay at least as much as the 5 million Aussies who survive on $37,500 p.a. This is what requires urgent attention.

  4. Kaye Lee

    Bracket creep is code for cutting high-end taxes

    “I’ve never complained about being pushed into higher tax brackets. In fact I’ve been quite pleased.

    I’ve seen it as a sign that I’ve made it, that I’ve moved up another notch.

    Many of us would welcome bracket creep if it meant actually getting a pay rise.

    And it has never meant that I’ve paid much more tax.

    Work it out for yourself using the $80,000+ tax bracket. Put to one side the Medicare levy. If you had been earning $79,000 and then got paid $81,000, the tax rate on the last few dollars you earned would climb from 32.5 to 37 per cent.

    But that doesn’t mean you would pay 37 per cent of your wage in tax, or anything like it. It would mean your total tax bill would climb from $17,222 to $17,917. As a proportion of your (higher) salary it would climb from 21.8 per cent to 22 per cent.

    It would be barely noticeable but it would give you bragging rights.

    And the strange thing is it would happen whether or not you moved into a higher bracket. Imagine you had been earning $75,000 and then got $77,000. You wouldn’t change brackets but your tax bill would climb from $15,922 to $16,572. As a proportion of your salary it would climb from 21.2 to 21.5 per cent. Tax rates go up as your income climbs whether or not people switch brackets. The phenomenon shouldn’t even be called bracket creep.

    It happens because the more we earn, the more the proportion of our salary in the tax-free zone shrinks. “Crossing the threshold” matters symbolically but not practically.

    But don’t tell the Coalition, or talkback radio.”

    http://www.smh.com.au/comment/bracket-creep-is-code-for-cutting-highend-taxes-20160218-gmy34r#ixzz40lbNGL60

  5. gee

    anyone else notice that they tell you exactly what they are really up to if you apply these two filters:

    1) what ever they say, the opposite is true

    2) what ever they accuse others of, this is what they have done.

  6. Marilyn

    Of course no-one ever mentions that people only go into a higher bracket after they reach $80,000 a year

  7. Anomander

    The front page of the Daily Terrorgraph – “You could soon spend your super now”.

    Plans by the LibLoons to allow low paid workers to “opt out” of compulsory super, which will give them “up to $63 per week” to help with “cost of living expenses”.

    This is the very same government who has announced that workers should not expect to get a pension when they retire, but who themselves enjoy the most generous pension scheme in the nation. Besides, by the time most of these workers retire, the pollies will all be gone and they won’t have to worry about any backlash.

    Imagine too the glee on the faces of the employers, who know they will get a decade of value out of this one policy. With the super money going straight into the hands of workers, they will be far less inclined to demand a pay increase. And since most lowly paid workers would be putting their super into industry funds, the government deal another blow to those funds.

    And it’s a big winner for the Libs, who rely upon the vapid stupidity of these people, who will look more favourably upon the Libs for giving them a few extra bucks in their kick, without once recognising that it is the Libs and their wealthy mates who are destroying their jobs, attacking their entitlements and ruining their future.

    Give me strength.

  8. Kaye Lee

    The thing Scott Morrison neglects to mention is that three quarters of us earn less than the “average” wage which is distorted by the megawages of a comparative handful of people. The median wage is a far better indicator and it is about $65,000 for a full-time employee let alone the many people working part time.

  9. margcal

    The Liberal Loons never follow through to its logical conclusion their suggestion that pensioners should sell their homes and live off the proceeds.
    We have to live somewhere – or do they really mean the streets are good enough? – which means we would be competing in the same market as first home buyers or younger renters. Being cashed up (temporarily!), we would win every time.
    So what would happen to those young people, both now and in their future old age?
    None of that is a pretty picture.

    Prior to retirement, my final full-time wage, working (qualified) in a library, was $40,000 pa. Not a lot of retirement savings – or super – at that level.

  10. Wally

    This is so absurd I am lost for words.

    “MUMS, part-timers and casuals will secure a pay rise of up to $63 a week under a proposal to allow low-income workers to “opt out’’ of compulsory superannuation.

    The radical option could deliver hip pocket relief for thousands of part-time and casual workers earning less than $37,000 year, effectively giving them a 9.5 per cent pay rise, that being the amount paid into their superannuation by employers.

    The Turnbull government is being urged to consider the “opt-out’’ super idea in pre-budget submissions from ­industry groups.

    Senior cabinet ministers said Treasurer Scott Morrison should consider the idea, arguing many low-income workers will never save enough to avoid reliance on the aged pension in retirement.

    For workers earning under the tax-free threshold of $18,200, the plan would also prevent them facing a $500 tax penalty on forced super contributions from next year.

    They face the prospect of being forced to pay more tax on their super contributions than their take-home pay

    “Whether it’s $60 a week or $32 a week, for people on very low incomes that’s ­important for them,” a source familiar with the submission said.

    “The super system has never worked for them. We’ve asked the government to consider allowing them to take that money home.”

    For a part-time worker earning $35,000 a year, opting out of super would deliver a $63-a-week increase to their pay — or a $3324 annual bonus.

    For a worker earning under $18,200, the current tax-free threshold, the plan would ­deliver a $32-a-week pay rise.”
    http://www.heraldsun.com.au/news/superannuation-idea-for-lowincome-earners-would-deliver-cash-bonanza/news-story/7b684434ae5a0413b9e8686de629e378

    I wonder what brilliant idea the clown who devised this scheme has for low income people when they reach retirement and have no superannuation at all? If the source familiar with the submission is so concerned about the importance of a few dollars to low income earners maybe they should be lobbying to increase the minimum wage instead of supporting crap like this.

  11. Kaye Lee

    Wally,

    What a nightmare that would be for many reasons. It would put people on different hourly rates. Doing the payroll would suddenly get a lot more complicated.

  12. Jennifer Meyer-Smith

    I love your final paragraph, Kaye. It adds up just how confused and confusing this bunch of dinosaurs aka LNP are.

    What a bunch of idiots!

  13. cornlegend

    Jennifer Meyer-Smith
    Good luck on your Canberra expedition
    I will now be there 23rd/24th

    Have fun, I always do

  14. Jennifer Meyer-Smith

    Thanks cornlegend,

    I won’t see you there this time. My one and only meeting opportunity has been changed to a telephone discussion. Thanks to Rachel Siewert of the Greens’ strong Australian community commitments and consideration of my limited resources.

    She didn’t try to excuse herself with excuses of why she could not speak with me. I look forward to speaking with her on various issues just as I would have liked to discuss them with various Labor ‘left’ people and Independents.

    I also welcome a Parliamentary parlance in Canberra with yourself and any other game AIM Network devotees, when I think my finances can allow me!

  15. flyboy48

    The low payed were afforded a government payment into their super at one stage … I just forget under whose stewardship this was abolished. It was not as good as it sounds as it merely compensated for the greater tax they were paying inside super (15%) as opposed to the tax they payed outside super (near zero).
    Perhaps this option needs to be reconsidered if there is such concern that the lower payed will not have enough super at retirement.
    In any case accessing super before retirement for whatever reason is another brain fade LNP policy on the run …

  16. Wally

    flyboy48

    Super co contribution is what it is called and it still available but it has been slashed from what it was a few years ago. From memory if you met the conditions and contributed $1000 the government added $1500 to your super. I think Rudd or Gillard dropped the government contribution to $1000 and Abbott cut it back to $500.

    Voluntary super contributions made after tax are not taxed but employee contributions deducted before tax is calculated are taxed at 15%.

    https://www.ato.gov.au/individuals/super/in-detail/growing/super-co-contribution/

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