Joni at Blogocrats has an anecdote about the ridiculous FBT exemption for company cars which actually encourages driving. It’s been discussed quite a lot in the media and the blogosphere – for instance, Peter Martin reproduced a Deloitte press release actively encouraging employees to drive. As well as the anecdotes, there’s this research paper, which conducted a survey suggesting a substantial proportion of salary-packaged cars are deliberately driven just to ensure that distance thresholds for FBT concessions are met.
The press gallery consensus seems to be that there’s likely to be a fair number of cuts in the federal budget this year, as the government tries to fund its various promises without expanding the budget deficit further. As such, it might be a good opportunity to kill off some badly-designed expenditures, subsidies, tax exemptions and whatnot, like this ridiculous FBT exemption, a long-time target of green groups.
While it’s unlikely to be taken up, killing off the private health insurance subsidy is one that comes to mind. And, while it’s small change in the context of the budget, I’d love the chaplains in schools program to go just on principle.
What else?
Indeed – it is ridiculous that people drive for no other point than to reduce their tax.
Is the school flagpole funding still around? If so, that should die.
Please see my well informed and articulate comments on this subject at blogocrats, but make sure you ignore the nonsense that Miglo posts.
Good idea for a post.
I think the ACF provided a reasonable summary of perverse incentives available to the mining industry for the previous budget, all in all it added up to several billion dollars a years. That would be a good start.
Baby bonus should go.
Family Tax Benefits A and B should be massively restructured, and downsized.
I can’t agree with you on the private insurance subsidy until the public system is improved. A recent colonoscopy I had revealed some dangerous polyps which were removed at the time. The waiting time at my local public hospital for a colonoscopy is 12 months, the local private hospital a day or two. That 12 month wait could have been the difference between life or death for me, or at the very least, some very serious cancer treatment.
This is just one instance in the past few years where private insurance has probably saved my life. We struggle to pay it now and without the rebate we probably couldn’t afford it.
And without it forget dental work, glasses etc etc
the baby bonus should DEFINITELY go.
Let the breeders pay their own way without hogging the tit of the public purse!!
And definitely no paid maternity leave. Having a baby’s a lifestyle choice. Why the heck should it be subsidised by employers/taxpayers?
And before the usual crap about the next generation of taxpayers etc., the proportion of welfare given to families is already huge.
Paid maternity leave is a case of having your cake and eating it too.
Do we still have the concessional tax on 4WD vehicles? If so, that should go.
I’d like to see the Baby Bonus means tested. I see no reason for poor childless people to financially support very prosperous people who choose to have a child. This seems regressive to me. I’d like to see maternity leave get up, but do people think it’s a long shot? I’d also like to see the unemplyment benefit increase. The other side of this equation is – what should be taxed more highly? Four wheel drives? I’m sure there’s heaps of rorts that people aren’t aware of.
F88k me, people are getting rid of maternity leave even though we don’t have it yet. I thought this thread was for things we already have. This is not just anti-parent, it’s anti-women, and also extremely shortsighted. If a woman loses her job then becomes de-skilled and contributes a whole lot less to the public purse, indeed is forced to claim more from it, then I hope your warm fuzzy feeling of having denied the dreadful wimminists something can see you through. But some people can’t see past their immediately jerking knee.
Negative Gearing.
In general, I believe they need to remove a number of uneccessary tax exemptions, benefits and deductions. That could save billions of dollars to the bottom line. They may want to wait for the Henry Review before making any significant tax changes. With the budget going into significant deficit, the currently legislated tax-cuts ought to be reconsidered. However, I don’t think they’ll touch that politcally sensitive issue.
The $580 million to expand coal export infrastructure in the Hunter valley is at the top of my list.
I’m not sure, but I think the concessional tax goes away in 2010 when the duty on passenger cars is cut.
But that’s from trying to interpret customs schedules myself; they’re not the easiest documents to make head or tail of.
Helen, surely it’s fair for a woman to decide her priorities: motherhood or career? And if she chooses motherhood but still wants a career. then it’s up to the father to be mother.
Sans Blog: the fact is that a majority of women (and men) want both.
The arguments for things like maternity leave and subsidized child care (and there are good questions as to exactly how you structure these things) is that they allow families to combine parenting and careers to the benefit of themselves, their children, and broader society.
Maternity leave is also there to allow women to recover from the physical duress of pregnancy and labour. This is one area where father can’t become mother.
RIP First Home Owner’s Grant. Let it die a natural death as planned and then never ever bring it back.
Also in my firing line:
1. Private health insurance rebates. I can see where you’re coming from on PHI Sans Blog, but it’s the States at the moment who do most of the heavy lifting in administering and funding the public health system. The Commonwealth contributes Medicare which has suffered from the ridiculous rebate; if the Feds want to be involved in Health they should do it in capacity-building to Medicare, not subsidy to an unsustainable market.
2. Diesel and other fuel rebates.
3. CGT exemptions especially the “family home”.
“Maternity leave is also there to allow women to recover from the physical duress of pregnancy and labour”
Oh Puleaze. Why should the taxpayer subsidise what is essentially a lifestyle choice to have children? If you can’t afford to have them, then don’t have them..
My revised version:
If
youthe economy can’t afford to havethemskilled women in the workforce, then don’t havethemskilled women in the workforce…I’ll ignore the dingbat repetition against paid maternity leave, and quietly ask, “research for carbon sequestration, anyone?”
Hrgh: we’ve argued about this one on other threads, but…
Aside from anything else, to do emission-free steelmaking we’ll need carbon sequestration. Given that we’ll need to keep making steel, that implies we need the tech anyway.
Combining biomass energy with sequestration also provides an option for going carbon-negative later on.
For those reasons, I think defunding CCS is shortsighted, even if you don’t like the coal industry.
Not the family home, Liam. That’s my super.
Fair point, I had only considered carbon sequestration for power plant rather than steel mills.
Fine: everyone else’s super is taxed. Why wouldn’t you expect to pay tax on the sale of a very valuable asset?
The rich-bastard Superannuation tax breaks.
Capital Gains exemptions for the family home.
Means test the baby bonus and both bits of the family benefit.
The 30% private health subsidy.
Car industry subsidies.
Diesel rebate.
Are children really better off being raised by minimum wage strangers rather than their own parents?
If a parent cannot earn enough money to make it worthwhile taking up work and putting their child(ren) in childcare, why should the government push an obviously inefficient choice?
Liam, just joshing. But I need it the way the way my stocks are going.
Reducing all forms of middle class welfare incrementally over say, three budgets would be a step in the right direction.
I suspect there won’t be that much trimming of pork until after the next (March?) election.
If I was the government I would take a deep breath, reflect on all the events and formulate proactive policy…the goalposts have moved quite a long way since the last election and promises should make way for priorities.
I support removal of CGT exemption on the family home. It would help reduce speculation and obsession with investment on just one type of asset. I don’t see this change happening anytime soon though.
Yeah, the 30% rebate on private health insurance has got to go. Let so-called private markets have all the medicare rebates everyone else gets – and otherwise, lets see you be, well: private.
What I imagine would happen is the unviable operators would go belly up – and the market would concentrate in a smaller number of larger ones. I dont have a problem with any of that – as it reduce the overall shaare of inefficient private health bureaucracies.
Also time to shake up the stupid SES school funding model. Fund on basis of need instead.
“inefficient private health bureaucracies”
Of course, there are no inefficient public health bureaucracies that need severe pruning.
I usually find those who argue against private health insurance (which we wouldn’t need if we had efficient public health services) are usually young and/or haven’t faced a major health crisis in their or their immediate family’s lives.
Liam
The diesel fuel rebates are premised on the fact that the fuel isn’t used on roads but on private properties and mine sites; thus the use of the fuel doesn’t contribute to demand for increased road infrastructure/ maintenance etc. Of course not all of the excise gets used on these things anyway so any rebate on diesel etc should only be limited to that levied against road works etc.
My budget canning would be the Wine Equalisation Tax with it being replaced by an accross the board volumentric alcohol tax (all types) with a slightly higher rate on alcoholic products with added sugar, energy supplements or nutrasweet (or equivalent sweeteners). Of course this would mean the good wine I like to drink will come down in price and cask wine up but I offset this by saying that I might need to pay more for good scotch and carribean rums
IMHO, given the state of the world, and its probable future, people should be actively discouraged from having children.
I probably wouldn’t go as far as compulsory sterilisation, but to actively encouraged childbirth is akin to environmental vandalism.
The Department of Defence has it coming.
Well, I must be continuing my habit of being a statistical anomaly that doesn’t really exist, because I’m no longer young, have experienced not one but several life threatening health crises in my immediate family and am vehemently against propping up an industry run by spivs and shysters offering a piss poor product at a premium (sorry) price.
To go against the grain here, though, I have no problem with retaining the CGT exemption on the family home. Not everybody sees it as an investment and not everybody sells up purposely to realise a gain. In the property investment area, I’d far rather see some restriction on negative gearing or, better yet, a comprehensive review of policy and taxation arrangements around investment properties.
On a lighter note, I’d be quite keen to see parliamentarians’ salaries docked say $50 every time they are heard to utter such phrases as “working families”, “Rudd recession”, “cash splash” or any other cliche du jour I’ve decided I’m sick of hearing.
Yeah, let’s take a cannonball to that one.
Hmmm…. I assume you mean negative gearing associated with rental property investments. The effect of not allowing negative gearing is to say to people that it is impermissible to borrow money to make an investment, in anything. For the purposes of consistency, you would need to disallow interest deductions, full stop.
The better thing to do might be to ringfence rental property tax losses, and allow them to be offset against future rental property tax gains, including capital gains, but not against other income.
Purses have tits now? Add in a search function a DELETED IN THE NAME OF GOOD TASTE and maybe some MY GOD THAT’S JUST NOT FUNNY FDB, and you’ve got yourself an attractive package!
What about a 5% ‘efficiency dividend’ on the Defence budget?
Oh yeah, there’s some serious money to be saved in defence capital procurement. AWDs, first up. Next, JSFs.
It’s a smallish thing, and I can’t see it happening, but I’d like to see citizenship tests go. A waste of money. Overwhelmingly immigrants and their kids integrate, form a strong attachment to Australia, want to absorb its history – all without a silly test. In fact, the pressures to fit in with the the majority culture in nation states – for economic if for no other reason – are almost irresistible (it’s why almost all French citizens speak French, or UK citizens English). That money would be better spent on more language services – it would speed up settlement and help the productive capacity of the economy, too. I suspect it was really about frustrating attempts by immigrants to join the electoral roll (and vote Labor). We don’t want a large pool of dienfranchised immigrants in this country.
Tough times do give us lots of opportunities to get rid of Howard-era rubbish.
P.S. I haven’t read a post by Labor Outsider for a few days. I got a little narky as a thread progressed a few days ago, and I hope I didn’t cause you to stop blogging at LP. Though we disagree on much, it doesn’t mean I don’t think you don’t have interesting and intelligent points to make. Blogging can sometimes bring out the worst in us – me included.
Don Henry says tax aviation fuel…
I couldn’t agree more.
Why means test the Baby Bonus? If it makes sense for us to encourage people with bribes to have kids in order to produce future taxpayers or whatever, then what does it matter whether the baby’s parent is rich or poor? If it doesn’t make sense to do that, then why have the thing at all? I reckon abolishing it would make far more sense than means testing it.
On top of which the bonus is now big enough to create some strange behaviour as to how long mum-to-be continues in work, etc for those near the threshold. Plus unless you put the threshold at income levels where we already have incentive problems (that is, just above poverty levels) then it will save bugger-all money anyway.
Those keen on means testing everything in sight generally don’t understand the reason for programs, plus they don’t understand what an incredibly blunt instrument real life means tests are (measured income is far, far easier for some people to manipulate than others).
Yes, Sans Blog – inefficient private health bureaucracies spend 14% on admin compared to 4% for public. Plus they double up for every new fund.
Id invert your comment – if we werent spending so much public money propping up health funds (which are after all ,insurance companies, not health service providers) our public systems would be much better.
I actually have nothing at all against private health – I just wish it actually was private. Even then, as I say, have all he medicare rebates you need – like we all get. But dont then come hunting for for 30% from taxpayers who cant even use those services unless they ALSO pay a separate set of insurance premiums . When you think about it, its totally outrageous!
Gotta agree that private health insurance shouldn’t be necessary, but it bloody well is. Four examples: about 8 years ago my gall bladder started giving me trouble. Not all the time, but even after I’d isolated the foods that really irritated it I was still in pain a lot of the time. Had it out when it suited me – I would have had to wait over a year, possibly two, in the public system. Second, after increasing trouble with sinus infections, and a ridiculous amount of time off work over several months, it was discovered that one of the passages in my nose had narrowed a lot. I had surgery for this, and have not had a sinus infection since. This is one that would never have been done in the public system, as it is considered ‘elective surgery’, but it has made my life much more livable. Third and fourth, due to a genetic condition cataracts developed in both my eyes in my fifties. I was (am!) still working full time, and the wait in the public system would have meant that I would have had to stop work before either eye had got to the point where the ops were approved. I’m sure that at my age I would never have been employed again – certainly not in as interesting work as I do. By having this work done in the private system I have been able to continue in employment without a problem.
So, for my money, unless the public system could be considerably improved, intelligent use of the private system seems to be the answer for many of the issues that frequently arise in middle age, that could stop you working, and that can’t be fixed in good time the way the system works now.
Forego the promised tax cuts? {Ducks for cover.)
“Why means test the Baby Bonus? If it makes sense for us to encourage people with bribes to have kids in order to produce future taxpayers or whatever, then what does it matter whether the baby’s parent is rich or poor? If it doesn’t make sense to do that, then why have the thing at all? I reckon abolishing it would make far more sense than means testing it.”
Agree with your conclusion* DD, but you could put the argument more strongly. Means-testing the BB should, according to the stated aim of encouraging breeding, result in a regressive scale. Why should a millionaire give two hoots for a few grand? Wouldn’t a dole bludger be happy with a couple of hundred?
*self-interest aside [makes mental note to buy folate]
Geez, have none of you heard of a little thing called global warming and our contribution to it?
We’ll just ignore that and encourage everyone to have as many children as possible. Too bad if there’s no actual planet for them to live on.
I quite accept what you say about those treatments M-H, and Sans Blog made a similar point too.
What I don’t get is why the public should be forking out for a 30% rebate on private health insurance!
You’re all neoliberal scum. Cutting taxes and middle class welfare. Traitors to your class, all of you.
From joe 2
“The Department of Defence has it coming.”
Bloody overdue in fact.
I hope defence spending is maintained (I’m almost certain it will be). There’s the potential to waste a lot of money in defence – like on Seasprite helicopters – but surely one of the lessons we learnt from last century is that there’s a big cost to unpreparedness, too.
I’d guess most people here supported what we did in East Timor. What would have happened if we didn’t have the ships or the helicopters or the troops in that situation?
And there’s a lot of talk about executive salaries at the moment. Would it be outrageous to ask for a bit of shared sacrifice, that we have at least a modest tax increase for those on the very highest incomes? The GFC should be an opportunity to restore at least a modicum of equality to our societies – in much the same way as a strong post-war middle-class society grew out of the reforms made by Roosevelt during the Depression in the U.S.
Lefty E
Can only agree. It’s a disgrace. Just like subsidies for universities, public and private schools, roads, railways, libraries, rural communities, the unemployed, etc are also a disgrace. Lol.
But if you want to remain in government, don’t even consider touching it. Now a political ‘sacred cow’. For better or worse.
All Sociology departments at all universities
( Sorry couldn’t resist)
Prune the A.F.P. The empire became huge under Howard and money has obviously been wasted, by them, chasing down threats that never existed.
- What about altering the superannuation taxation so it functions similar to a progressive income tax?
- Defence procurement slowed down for next ten years. A big look at the performance of the civilian aspect of the DoD – more fighting men, less desk jockeys
- Baby bonus gonesky
- SES Education Funding model altered
- RPG subsidy
- School chaplains – not a big item, but mostly a private-school topping up that could be fund-raised by parents
- Family tax benefit (upper-middle class segment excluded)
- Indirect taxation on the purchase of vehicles with poor gas mileage
- Clampdown on family trusts
- Some of the excessly generous tax treatment of self-funded retires (this could pay for pension increase)
- HECS system for elite athletes and for some farm assistance loans
Some like family tax benefit, superannuation and self-funded retirees will be politically risky, others should be achieveable with minimal political capital expended
Close down Job Networks ….the parasites on the unemployed.
Maternity leave shouldn’t be about supporting ‘skilled women’. That’s the welfare mentality of the professional class speaking. (For the record I’m part of that mob).
Maternity leave only arises in societies with low birth rates. It must be about balancing family incomes with avoiding disincentives to have children.
Surely cuts in defence should come first?
Chaplains? Sadly it’s the poorest schools who embraced them most readily. By all means transfer the funding to more efficient educational uses.
Flaggpoles? Tear em down. But they were part of Nelson’s ‘National Values’ mandate. Not a bonus paid but a threat of lost funding if not adhered to.
joe2: strongly agree on the AFP, would also question whether the intelligence agencies really need the levels of funding they currently have (bored spooks with not enough real bad guys to chase really worry me).
Alter the payment structure for the job networks so there is less incentive to force their clientele into turnstile jobs, the “outcome” payment drastically reduced until nine or twelve months in the job.
Also examine ways of discerning whether the “outcome” payment was based on work of the network provided or the client. This would be hard, and may cost more in enforcement than it will save – still I find it strange the job networks can claim payment on unemployed that they have effectively offered no service.
Quality certification of job network “training programs” – are the programs helpful – should other g’ment agencies or service providers be allowed to tender or compete for these on basis of cost and effectiveness. This may also be used to empower the client to utilise different services, not every unemployed person needs to know how to write a resume, why the one-size-fits-all model?
Well, wpd, its not like the other things in your list (which are not private services), but I concede the politics of it are tricky.
I’d certainly remove the penalties for not having it – and push extra tax the even higher up the income chain. Then it might be at least considered pointless churning – as it stands, it is an outrage. Every taxpayer dollar spent there should be improving the public system instead.
Lefty E Apr 21st, 2009 at 10:03 pm
Indeed they are. And Rudd and his advisers would be very conscious of same.
As for
Most of the ‘bludgers’ I know accept that their ‘freeloading’ over the years (members when it suited and non-members when it wasn’t – gamblers all) is now fair and under the current arrangements (by the way) is that their ‘lifelong’ penalty is now reduced.
Bad policy then? Can only agree. But make radical changes now at your peril. Subsidies for private health are very much like subsidies for private schools and like so many areas of public policy they are virtually untouchable for those who want political longevity.
What’s good or bad. Or what’s right or wrong can only be hammered on out the political anvil.
Stephen Hill@61 I cannot share your hope that Job Networks can be fixed. The profit motive that it is based on is all wrong. You might wisely have people employed to help the unemployed out but not on a job found/payment basis. That model may have a role for executive placements but it has proved a complete failure elsewhere.
While we are cutting things, the funding for universities should most definitely go. If someone wants a fancy degree, let ‘em pay for it.
Likewise single mother benefits. If a woman wants a child (lifestyle choice) let her pay.
Unemployment benefits reduced, so that unemployment is no longer a viable alternative to work.
Remove the subsidising of urban public transport, if someone wants to ride, let ‘em pay the full cost.
Gee, the list of rorts just goes on and on!
“You might wisely have people employed to help the unemployed out but not on a job found/payment basis.”
You might be right, but such an overhaul would be very hard to execute, which was why I was thinking more of a tinkling around the edges to try and get rid of the most obvious forms of rorting – it would at least force the organisations to consider the long-term interest of their clients and not force round pegs into square holes.
Also interesting to note the very high job-turnover in JN staff, low pay and minimal autonomy, I doubt such a model will ever succeed in retaining good staff (I hear a lot of the more experienced staff left about five years ago when the desire for churn intensified).
Sorry Steve, unemployment benefits look more likely to be increased, as the rate is so low due to shoddy indexation over the last decade or so.
The dole is less than the pension and politicians say you can’t live on the pension, ergo you can’t live on the dole either.
Steve at the Pub, I dunno if I should bother to respond, but has it ever occurred to you that blokes are involved in procreation? Maybe blokes are making “lifestyle choices” to be absent fathers? Sorry, PC gone mad!
Or maybe that we’ve made life pretty uncomfortable for the unemployed as it is? With the way the world economy is going, you might even find yourself down at the Centrelink office soon.
Or that road transport is heavily subsidized, too?
What a great thread to get some of the small government types going. I would think that a good place to start cutting would be upper class welfare in the form of super tax rates and lax pension means tests. Defense should also be made to come in around budget like any other department. See Brian Toohey’s writing in the AFR for more on these.
But back to the right-wingers…
Well hay, while we’re getting serious why don’t we get rid of funding for any schools. If someone wants a fancy education, let ‘em pay for it. Funding for health care, meh, if someone wants a fancy body, let ‘em pay for it. Bugger it, roads, sealed plumbing, national defence, everybody now, LET ‘EM PAY FOR IT. I suggest Lefty E may have another addition to his thread.
I have deliberately ignored any other posts to avoid getting bogged down into shades of grey over the importance of one program or “scheme” over another. But I think the government should really consider how to maintain economic activity rather than consider more “one-off payments and industry support” packages. These are inflationary in the long run providing false positives (IMHO).
Maybe money saved from buying one less fighter plane and/or ending the “baby bonus” can be used to fund paid maternity leave. It has backing from the Productivity Commission and more recently the Australia Institute declared it was affordable. Even Marie Claire magazine supports paid maternity leave and gathered a few thousand signatures to a petition it organized.
Just my two cents worth. Or should that be a few millions cents worth?
“Well hay, while we’re getting serious why don’t we get rid of funding for any schools.”
thewetmale@69. A dangerous suggestion within a certain earshot.
SATP will likely agree with this proposal as his general thrust is for government to help provide, by walking away from previous community responsibility, unempowered and poverty stricken fodder for the hospitality industry; as if there aren’t enough casualised slaves already.
‘ridiculous FBT exemption for company cars which actually encourages driving.’
The reason this statement is absolute nonsense is because for sales reps and executives which are the majority users of company cars, public transport is not convenient and not efficient. And anyone who disagrees should get a job in the real world.
That’s assuming a low birth rate is a bad thing.
Heh. I wish the Commonwealth was involved in subsidies to urban public transport. Maybe they’ll take the border towns and Albury-Wodonga?
Anyway, anytime you’d like, Minister for Infrastructure.
My only problem with too much budet cutting is that it plays into the right-wing belief that government deficits should be our main concern at this time. Or that in some unexplained way government deficits caused the GFC. Although rejigging the budget to suit Labor’s priorities is fine by me.
Could some kind soul who knows computers provide a link to the IMF’s World Economic Outlook (WEO) report?
It seconds Rudd’s policies completely – and puts all the Coalition’s nitpicking about letting monetary policy do all the work to rest.
OK. I’ll bite.
SATP ” 65: “While we are cutting things, the funding for universities should most definitely go. If someone wants a fancy degree, let ‘em pay for it.”
I see. So it is of no benefit to anyone else to have graduates with ‘fancy’ degrees working as doctors, engineers, scientists, lawyers, etc? After all, anyone who wants to can just do these naturally, can’t they, Steve? Just like you or I could join the Australian Olympic team any time we wanted.
And who exactly is going to pay the salaries of those who teach the wannabe fancy graduates, if the Universities don’t have any money? Where will the classes be conducted? Who decides whether the students did well enough to have actually earned a degree or not? Whether international standards are maintained?
If University teaching were a freelance, spare time activity, how much effort and coordination would go into course development? If up-front fees paid to private tutors had to provide their full salaries, and there were no scholarship programs, would anyone except the richest few ever become a student?
And I haven’t even started on the long-term, fundamental research that is best done in Universities, since industry won’t do it.
After over a decade of slashing and grinding down, the University system needs a major funding increase, unless your vision for the future of Oz is as a gigantic relative of Pol Pot’s Cambodia, with all the erstwhile dangerous intelleckshuls toiling in the paddocks. The rest of the world is not terminating their academic endeavours, so neither should we unless we actively want to become a washed-up backwater.
“……. a link to the IMF’s World Economic Outlook (WEO) report?”
I hope this is the gateway-then you get to download-to report you wanted Ginja@75.
http://www.imf.org/external/pubs/ft/weo/2009/01/index.htm
Thanks joe2. I will learn to do links one day. Hope others read it.
Just copy and paste the http address of the page you want, Ginja. It is that easy, even I can do it. And I will read the summary.
Jamo: the trouble with the FBT exemption is that the way it is structured, the more you drive the car, the bigger the tax savings, and there’s no requirement that those extra kilometers get clocked up for business purposes. Furthermore, the savings kick in at particular thresholds of 15, 20 and 25 thousand kilometers, so doing 1,000 or 2,000 more kilometres can save you thousands.
So you get people driving to Canberra just to clock up the mileage target for the FBT exemption.
If that doesn’t meet your definition of ridiculous, I dunno what threshold you set.
And don’t lecture me about sales reps. My Dad’s business used to employ plenty of them. Invariably, the car they chose to get was much, much bigger and thirstier than they actually needed for the job.
The other reply is: if getting a job in the real world means being an executive with a company car, I’ll have a job in the real world immediately, please.
Have ties, will travel.
#1 GET RID OF THE FIRST HOME BUYER’S GRANT. I am a potential first home buyer at the moment and this thing is making life hell – ridiculous demand, and prices which are massively over-inflated by hordes of 20-30 year olds slugging it out to get their bonus. Meanwhile the cynical, cheating, lying real estate industry merely raises prices by at least the amount of the grant and pockets it directly, and the baby boomers sit back smugly secure in the knowledge that their various investment properties are staying nice and valuable. Buying a house in 1980 = 3x your annual salary. Buying a house in 2009 = 7x your annual salary. Do we really need to make this worse by artificially overheating the market to protect property development cartels and people who own 3-4 houses already?
#2 No more money for roads. We need trains and trams, not roads. Roads = cars = congestion, pollution, waste.
#3 No more middle class welfare at all. Lower the lowest tax brackets if you want to rebalance the money in society, then let people spend money as appropriate. Stop rewarding people for laziness and stupidity (e.g. having kids when you can’t afford it).
#4 No more funds for private schools. Many of these are religious, which makes giving them my tax money doubly offensive.
Well, I’ve thought about it, and I think that Kevin Rudd should get canned in this budget. Julia Gillard should step up to the plate, and Penny Wrong should take a walk. Anything is else is just re arranging the deck chairs.
I’ve also decided that I am prepared to sign a 10 year power supply contract with any power supplier who is prepared to install a 1 gigawatt CSP trough solar power facility, with a 10 year rollover based on the aggregated power price. This will cover my domestic, business and vehicle electricity needs.
This government was a mistake. They can only be seen as a caretaker government until someone with real vision steps up to lead this country into our very difficult future.
- Negative Gearing should go
- Baby Bonus should go entirely
- First Home Buyer’s Grant should go
- Superannuation salary sacrificing should be limited
- Salary Sacrificing Schemes should be geared towards green transport – i.e. bikes (why I can’t salary sacrifice a commuting bike I have no idea!), efficient cars, public transport passes etc
- Australian Film Scheme needs to either be cut or reigned in
and we need paid maternity leave to be introduced as it is cost effective and assists women to stay in the workforce, maintain their earning capacity and independence – as well as lifetime earnings (and retirement income). I think it would result in a net gain for the nation.
Yes. Cut middle class welfare. And the baby bonus. (If you can’t afford to raise kids, don’t have them.)
There’s a lot of genuine policy wonking here, some slightly Green biased policy wonking, some anti-middle class social engineering wonking—but not enough base Keynesian digging-holes-filling-them-in wonking for my tastes.
Anyway, I heard the budget won’t include another $900 handout, the money that might have been used for that is going to infrastructure apparently. Others pointed out last week that the broadband upgrade is very much a shovel ready project. So I think I’ve got my digging-holes-filling fix, even if it’s not quite a Snowy Mountain Scheme…
Think the Libs have scared them off from giving another handout.
Jamo, a hell of a lot of well-paid professionals get a car on a novated lease, complete with salary sacrifice. It’s a nice dodge for evading tax quite legally, and the lease generally includes running expenses as well.
BUT. If you don’t drive the bloody thing enough, you end up with a huge tax bill, so it’s a perverse incentive, if you will.
How about we combine the Green-biased policy wonking with Keynesian holes-digging wonking?
Rather than hand people $900 to either pay off debt or splurge on some imported consumer electronics, we could throw money at home insulation, replace all the electric hot water heaters with gas or solar, and subsidise the purchase of super-efficient heaters, ACs, washers and fridges like this one (420L and just 349kWh/year!).
Rather than funnelling money to retailers and overseas manufacturers, think of the advantages:
- Installing insulation and appliances employs Australians
- We still make hot water heaters in Australia (I think)
- We still make some appliances in Australia (I think)
In short, more of the money stays in Australia and we employ Australians in worthwhile jobs, designing, installing and perhaps even manufacturing green technology.
The clean tech bubble can’t happen soon enough.
Paul @ 23 is spot-on, particularly points 2, 3 and 4. None of these will happen of course because we live in an irrational society.
BilB, I don’t know where you think this visionary government will spring from, certainly not the opposition. And Australians don’t particularly care for vision as the recent thread on the broadband plan on this very site demonstrates.
Make that Paul @ 82.
The FHOG is Aussie sub-prime in the making. Inexperienced home buyers handed cash, buying at the bottom of the interest rate cycle and signing up for 30year variable loans, with the very real prospect of mass unemployment and lower house prices just around the corner. Its a ticking time bomb. No wonder the banks are increasing their LVR requirements.
BilB @ 83: All true, and Penny Wong is probably an android, but there’s no better alternative, and Rudd knows this. Those of us hoping Turnbull might be Australia’s David Cameron (and out-green the ALP) have been very disappointed.
“…..we could throw money at home insulation,….”
They are carbonsink from July 1st.
http://www.environment.gov.au/energyefficiency/
Sure, but that’s $4 billion in the second half of this year, when they’ve thrown $50 billion plus at other “stimulus” programs already, much of which has gone to the banks or gone overseas.
“the baby boomers sit back smugly secure in the knowledge that their various investment properties are staying nice and valuable”
That generational shit pisses me off. Get off your arse and work and save to buy a home just like i did and which I couldn’t afford to do until I was in my 40s in the mid 90s.
I don’t know a single baby boomer who owns an investment property.
Adrian and Carbonsink,
True, I am not seeing an Australian Barrack Obama either. Julia Gillard has the potential I believe, but she doesn’t seem to have formed an imaginative vision for Australia so far. Christine Milne has the ideas, but she is in the wrong sphere.
Waiting, waiting…
Flat tax rates should be in, so that people are enticed to work harder if they so wish.
No more cash handouts. Spend the money on something useful (fibre to the node not included – will be superceded before it’s finished being built), like maybe some railway lines, roads, dams, or best of all, maybe some sort of renewable energy project to reduce our reliance on coal fired power generation. Spend it opening up agriculture in Northern Australia where the water is, maybe tax breaks for people setting up business outside major urban areas. Australia needs to decentralise to take pressure off water and environment.
If you can’t afford to raise your own children, Madonna, Mia Farrow and I have set up a foundation to provide you condoms or de-sexing. If you already have kids you can’t afford, tell us where you live. Hehehheheheh.
I don’t get the sense that Gillard cares deeply about climate change or environmental issues generally.
Milne could join the ALP if she really wanted power and influence, but look what the ALP machine did to Garrett — completely extinguished whatever passion he had for the environment, and put an android in control of climate change policy.
It’s all very sad, isn’t it?
By the way I thought that the solar water heater angle was a very good thought for the economic stimulous. That is actually do-able, apart from the fact that many of the systems come form overseas. But that industry could be cranked up in a very short period, because the hardware is industrially fairly simple. The beauty of it is that there is a long term benefit with an automatic on going saving for most consumers.
Well, I know dozens who do.
Sorry, but the numbers speak for themselves. It’s not about “getting off our arses” – we’d love to, but we’d have to work several times harder than previous generations. Housing affordability has dropped massively in Australia in the last 30 years. It will cost me nearly 2.5 times more out of my salary than it cost my parents out of theirs to buy the equivalent property. Even compared with “the mid 90s” houses today are significantly less affordable. Put more simply, house prices have gone up a hell of a lot faster than incomes.
More significantly IMHO, Australian housing affordability is amongst the worst in the developed world. As a percentage of average annual earnings we are miles behind the US, UK and basically everywhere else in terms of housing affordability. Have a look at this – what’s that on page 6, a table entitled “severely unaffordable housing markets”? And what do we see? Every major Australian city mingled with the most expensive cities overseas. And look, there’s Adelaide: less affordable than NEW YORK and LONDON. This is a clear sign that we have fundamental structural problems in our property market.
Further to my last post – have a look at the graph on page 13 of the same report, and the comment on Australia on page 12:
Yes, but I’d advise anyone worried about our housing affordability relative to, say, the UK’s to go and look at what you can actually get in the UK for your “median house price” and the sort of area it’s likely to be in, before getting too upset about what we have to pay in Oz.
Hint: Visualise a shoebox in a septic tank and you’ll be pretty near the mark.
Sans Blog @95, actually I own an investment property. However, I should qualify that statement by saying that I didn’t buy the place, it’s the family home and as I’m an only child, I ended up with it. By sheer chance, it’s now in a very desirable location-50 years ago when they built it, it wasn’t.
Paul @82, brilliant idea having no roads. How would you suggest city people get to railway stations and tram stops from home? How much time should they allow to walk to the nearest station or tram stop and should they take a cut lunch and a machete to clear a path? What about emergency vehicles, mail deliveries, goods deliveries, and repairs and servicing public utilities like electricity and water etc?
If you bought a frig, a lounge suite or another large item, how would you get it home? Well, I guess you wouldn’t, because you wouldn’t have a house to live in. No roads, no bricks and mortar.
What about rural Australia? How would you propose goods be delivered to railways for transport to distribution points? Tata mining, fishing, agriculture and viticulture, to name just a few.
Problem solved, we could turn into a third world country in a trice.
Paul @ 101:
Yep, Australian houses are stupidly overpriced, and Kev’s working hard to keep it that way. Economists will tell you it would be a catastrophe if house prices fell to affordable levels, and besides, the economists* say its not the price-to-income ratio that matters, its the debt-servicing to income ratio that’s important.
Not much comfort to you I’m afraid.
OTOH, I see a lot of GenY’s spending all their money on clothes, entertainment, phones, iPods and other gadgets … and GenY has never needed to worry about job security, until now. A thumping recession might teach GenY how to save and deliver housing affordability.
* Except Steve Keen.
In the 1990′s they got rid of negative gearing but had to reinstate it because the supply of rental properties dried up. For this reason, I don’t think it’s practical to stop negative gearing.
I’m all for the means testing of any welfare, including the baby bonus.
I think they should get rid of the 50% discount for capital gains made by individuals on assets owned over 12 months. I think that is an unfair law. Income from all other sources is taxed at the full rate. Why should capital gains be concessionally treated? Plus it typically favours the wealthy who are more likely to accumulate assets.
I think the exemption of income earned by retirees from superannuation is an unsustainable policy.
I’m sure people would have bought ipods in 1980 if they had existed. I’m never clear on what is expected – that we should not buy $50 MP3 players once every 2-3 years so that we can buy $600k 2 bedroom flats?
I wasn’t saying “have no roads”, Einstein, but thanks for the extended rantings.
I was suggesting that instead of constantly building more and bigger roads we should focus on sustainable, environmentally friendly options. Amazingly people live in New York and London without cars and somehow they have fridges and TVs and other terribly, terribly heavy items. You sound like someone so in love with their Toorak tractor that they cannot even imagine how to live without one 2-tonne vehicle per person – exactly the kind of person who will be looked back on by future generations as the ultimate in selfishness and shortsightedness.
As for rural regions, we could certainly do with a review of the way in which we burn fuel to produce food.
Been house shopping in Australia lately? $300k = a 1 bedroom rathole miles from anywhere; $400-500k = a cramped 2 bedroom place with no garden and probably a combined living/dining/cooking area. Slightly better than the UK, but not exactly the “Australian dream”.
“I think they should get rid of the 50% discount for capital gains made by individuals on assets owned over 12 months. I think that is an unfair law.”
Yep – this would have the added advantage of taking some heat out of the investor property market, to the advantage of owner-occupiers. Would more than compensate for the aboliton of the first homebuyers grant being abolished!
Hmm…that was unduly abolitionist of me. Just one abolish will do.
Abolish “abolition”? Lefty E@112.
“Sure, but that’s $4 billion in the second half of this year, when they’ve thrown $50 billion plus at other “stimulus” programs already, much of which has gone to the banks or gone overseas.”
Carbonsink, I would have thought it fairly predictable that much of the cash grants from the stimulus package would be in the bank at this early stage. People just received them. How could you know much has flown offshore so quickly?
It still surprises me that you thought 4 billion dollars on insulation expenditure was unworthy of a mention.
I agree with Paul. A why is it that people think that everyone else is lazy, and that other people should “get off their arse.” Besides, in reality Australians are generally overworked, what we need is more people to get on their arse again.
It’s even pretty common to hear unemployed people complain about other unemployed people – you know, the lazy one next door, not me.
Life doesn’t have to be as hard as it is at the moment – for any generation. In the post-war period societies all around the world were created whereby ordinary working-class and middle-class people didn’t have to work till they dropped to have the decent things in life. Instead, we’ve entered the Thatcherite world where we believe life has to be one long misery.
What was the line from Blake – “Mind-forged manacles”?
It was more the $300/mo mobile phone bills, the $200/week entertainment budgets, and the huge clothing budgets I was thinking of. Ditch the phone, stay at home and buy your clothes at K-Mart. People who bought houses in the 60s and 70s didn’t live very extravagant lifestyles.
By “gone to the banks” I mean, used to pay down debt instead of stimulating the economy. As for the money that wasn’t used to reduce debt, I reckon a fair chunk has gone overseas to buy imported products. I mean, what exactly can you buy at the shops these days that isn’t imported?
Or $350k for the scruffy but comfortable 3 bedroom joint next door to me, sitting on nearly half an acre and closer to Perth’s CBD than many of the “desirable” coastal suburbs.
For what it’s worth, I still consider it overpriced, but it’s still better than this place which, by astonishing coincidence, I used to live in 20 years ago and which sits at about the same point on the affordability scale as my current abode. The difference being that my current place is unlikely to get its front door kicked in at 3 in the morning and I can’t hear my neighbours indulging in enthusiastic sex several times a night on the other side of 3 inches of damp bricks.
Ginja is right, but the problem is that our expectations have changed, so most of us couldn’t put up with the lifestyle that the post-war generations enjoyed. We’ve all (or most of us) bought the lie that all this crap is necessary for an adequate existence.
“and GenY has never needed to worry about job security, until now. A thumping recession might teach GenY how to save and deliver housing affordability.”
If ‘GenY’ (I assume you mean those born after about 1980) haven’t had to worry about job security it’s because they’ve never had secure jobs in the first place. I can count on one hand the number of people I know my age or younger with permanent part-time or full-time jobs. Anecdotally it’s all contracts and casual for the young, and I’d be surprised if the statistics didn’t reflect something similar.
At the moment the full extent of my own extravagance is saving for a new washing machine, so forgive me, carbonsink, if I’m not totally convinced of the accuracy of your portrayal of the young.
Paul @ 109 – What do you think a review on the way fuel is burnt to produce food would come up with? Sadly pumpkins can’t be rolled from farms to the city.
And forgive me also carbonsink because I am not convinced of the accuracy of your portrayal of the government stimulus spending patterns because actually nobody knows yet.
Robert, just thought of another budget saving of 16 billion. Just say “no” to the purchase of the F-11 joint strike fighter. The Chinese probably now know-since the hacking- more about its runnings than the yanks would let us in on anyway. Why go for the most expensive option anyway as you wisely point out with the Rudd internet plan?
A fleet of cessna’s should do just fine.
The Brown Wiggle @97: “Flat tax rates should be in, so that people are enticed to work harder if they so wish.”
Why is this furphy so persistent?
1. If people earn enough to feel that income tax rates are too high because not all of their pay is taxed at the bottom rate, then they are usually not paid by the hour. Working longer or harder will not benefit them directly, other than possibly by facilitating a job upgrade or promotion.
2. The lower paid need to spend a much higher proportion of what they receive on housing, food, utilities and essential travel. Therefore, it is only reasonable that tax rates are progressive rather than flat or regressive.
Reducing higher tax rates just means more disposable income for those who need it least, less revenue that would ideally be spent on something worthwhile that cannot or should not be delivered by the commercial sector, and is totally decoupled from ‘working harder’ by those on professional salaries: they should already be motivated and responsible enough to be working as hard as required to do the job and do it well.
Fair enough, but do you think it could have been spent more wisely? I mean, I know all the arguments about “timely, temporary and targeted” but I very much get the feeling the govt has used up most of its fiscal arsenal on a cash splash before the economy has really slowed significantly, and while Australians were still deluding themselves that they can somehow escape the global downturn. When TSHTF in Australia later this year (as new mineral contract prices smash the resources sector) the govt will have very little firepower left.
klaus k @ 118:
Sure its all contracts and casual for GenY (and I’m not saying that’s good) but there was always another job to go to … until now.
I have a lot of sympathy for GenY trying to purchase their first home. Australian house prices are stupidly overpriced, and much of Australia’s recent resources wealth has been wasted on a real-estate bubble. Yes, you have reason to be angry at baby-boomers and the government for doing everything they can to protect real-estate wealth through negative gearing, the CGT concession, first homer owners grant, the “Rudd Bank” etc.
You have the misfortune of living in a country that does little more than dig stuff up and build houses for each other. The resources boom has bust, and the government will do everything it can to prop up the housing sector. The mainstream view is that a large correction in the housing market would be a catastrophe for the economy, and while that view holds sway the govt will work overtime to protect the wealth of homeowners at the expense of GenY.
BTW, you might be saving for a new washer, but I’m guessing you and your peers have a nicer phone (and a bigger phone bill) than I do.
But there’s also been a ridiculous amount of technological advancement since the 1970s or 1980s. The original walkman in 1980 cost around $200 – $500 or so in present day terms. Mobile phones in the 1980s cost thousands of dollars. Cars, clothes, entertainment etc etc has all become cheaper compared to what people earn. So to a large extent the “luxury” that generation Y enjoys is just the effect of 30 years of technological development, not some orgy of self-indulgence as is often implied.
Like many aspects of our civilization, farming more or less assumes zero cost for fuel. I think it would show that growing products in countries with cheap labour and then shipping them virtually for free (in dollar terms) to countries with more expensive labour is environmental savagery of the first order. Anything that can conveniently be grown close to market should be.
“BTW, you might be saving for a new washer, but I’m guessing you and your peers have a nicer phone (and a bigger phone bill) than I do.”
How’s less than 50 a month? I have a mobile for work and so I can contact my partner, who pays something similar, although she does have a full-time job at the moment so she tends to pay slightly more because of work-related calls.
I have only one friend I can think of with the much-maligned ridiculous monthly phone bill and phone fetish. However, he does own his own home.
“Fair enough, but do you think it could have been spent more wisely?”
Carbonsink, one thing for sure, I am far less concerned about people using some part of the cash grant to pay down debt. Government had very little debt while private debt is pretty scary. It is just a transfer from one to the other with the added advantage of taking a little pressure off the punters doing it hardest.
Everybody focuses on the cash grants and forgets about money for insulation and schools. The money for fibre to the home is very wise and could set up every home as a speedy office, entertainment centre and shopping hub just for a start.
I agree its a good thing that people pay down debt, but its not going to stimulate the economy, and because the banks have been hoarding cash to some degree, its not being lent out either.
That’s because they spent a lot more on cash grants.
Carbonsink, my tip is that a good part of the money will still spill out into stimulating the economy. Safer cars on the road after that long awaited service, for instance. It is not the black or white that the opposition would have you believe or you seem to believe. The first package gave very positive indications and has kept us from a dramatic economic stalling.
My bucks will go towards another water tank proudly made to Australian standards, in Australia.
Great, but the govt could have guaranteed that a lot more money was spent in Australia by (say) offering a 90% rebate on all water tanks installed before a certain date. Instead we got cash handouts to spend at Harvey Norman, and the FHOG to inflate the price of real estate.
Kev’s making noises today which strongly suggest the FHOG is gawn…
Get rid of rent assistance which is a great big con. No pensions to those who work as well as receiving the pension. No stimulus package to those who have never worked. Refugees to take their place on Public Houses queues and not to be paid any stimulus packages as they have contributed nothing to this Country and to get no special benefits. Cut the dole and single mothers pension in half. No handouts to private schools to build gyms and swimming pools and fancy buildings. No payment for security guards at private schools let them pay for their own due to the high school fees. Check the carers pensions as heaps claim it and certainly there are a lot of rip offs.
“Instead we got cash handouts to spend at Harvey Norman, and the FHOG to inflate the price of real estate.”
Not that black and white, again, carbonsink. Lots are employed in house building and Hardly Normal as well; money is spent on food and services that are locally based and may address equity issues, as well. I bet if, in the third stimulus package, money was directed to the long term unemployed pocket it would go straight to the target with extreme speed.
The Hun is saying this morning: First home grant to be extended in May 12 Federal Budget
My guess is they’ll keep it at $21K for new homes and drop it back to $7K for existing homes. Its still an outrageous subsidy to the housing sector.
That’s the kind of thing they should have done in the first place instead of handing cash to middle class families through the FTB.
taxpsayer @ 131,
Have you heard of the Universal Declaration of Human Rights? I think your suggestions re welfare, refugees and education breach it for sure. One permanent impression I have of the Rudd Government is that they’re trying to restore our human rights image in the world after it was so thoroughl;y trashed by the Howard Government. If you write to them and offer your suggestions, I reckon they’ll tell you to bugger off.
Having given a whole lot of dosh to the car industry, they won’t cut the FBT on cars much, if at all (Robert@14: the whole history of car industry assistance is of endless rollovers of protection. 2010 is an election year). 4WDs is another matter – the hope for cutting that exemption is one of the advantages of not having the Nationals in government.
Negative gearing too is safe as nobody has an answer to the dearth in rental properties that followed Keating’s flirtation with it in the late ’80s. There are people who regard the family home as their super – CGT exemptions on the family home are substituted for not having to take CGT off those people and pay it back to them as pension/aged benefits.
Does anyone think Defence will be cut in the face of an increased likelihood of activity in Afghanistan and Fiji? Really? I mean, hippiedom is all very well, but – really?
I agree with Al@12 about tax exemptions that will hopefully come from the Henry Report.
The alcohol tax proposed by Dave55@33 will cut further into the revenue bases of the states. This will worsen the problem where they aren’t accountable for spending the money they raise.
I suggest cuts will/should come from the following:
- The mentality where people are taking their stimulus payments but not spending them will see the maternity and first-home-buyer bonuses disappear. The idea of children as ‘lifestyle’ and ‘environmental vandalism’ is stupid.
- HECS for elite athletes will be small revenue-wise but big publicity-wise.
- Is there any evidence of an upsurge of people wanting to become school chaplains, or a surplus of labour in this are? Didn’t think so. Can it, look at other ways to achieve these outcomes.
- Farm subsidies – they’re not temporary in many cases, they’re permanent. Walk away, dust farmer, walk away – we’re not going to subsidise your rustic fantasy lifestyle any more. It’s more productive – and yes, more Aussie – to lay optic fibre than to grow stuff. Cancel farm leases for leaseholders who clear-fell. Cancel the kind of subsidies that make water-intensive farming profitable in non-water-intensive areas. It won’t happen, but you gotta hope.
- Medicare levy should double. The argument made above for defence is better made for health: fewer stat-manipulating shinybums, more frontline workers.
“Does anyone think Defence will be cut in the face of an increased likelihood of activity in Afghanistan and Fiji? Really? I mean, hippiedom is all very well, but – really?”
Yes I do. And I am not a hippy. Though even if I was, it does not strike me as a particularly strong argument that you run Andrew E. Defence seems to be the only completely unaccountable department that runs off the back of public fear of this or that supposed enemy. Batman for senior servicemen and all that-those days should come to end. As should batting for one side of politics.
Joe2,
As I understand it from last night’s news there will be incresed expenditure for the navy on submarines and other boats, and for the airforce.
Brill Paul. Paranoia has no bounds.