Aussie Politics

Glad to be back, E_S

Now here are some reforms we should support! (click 'continuing crisis' column...)

 

Violence rages in Australia for 2nd night

What an ugly situation. Hopefully it won't be another France.

 

It's slightly different in that we have a second group of antagonists. Unlike France, which was drawn down socio-economic lines more than anything else, this is race-based and it shames me to say that. Multiculturalism would work a whole lot better if more of the existing residents were open to it.

 

What has happened to the Liberal Party?

What has happened to the party I have stayed with through thick and thin since I was old enough to vote?

I am becoming more and more disillusioned by the day with the current government. Exhibit A: the hideous cloying tentacles of the welfare state, now so entwined with the tax system that meaningful reform is (seemingly - to Costello et al) impossible. We now have a situation where single people who earn less than the average wage pay more in tax than families with two incomes above the average wage. The lack of meaningful tax reform makes me want to vomit.

Exhibit B: a new obsession with something that will be grossly expensive, a likely invasion of privacy and totally useless in actually fighting terrorism - that favourite nugget of the left, the National ID card.

*sigh*

Hopefully Turnbull will have the numbers to take on Costello soon.

 

CCD, I just lived in a country that required all citizens and alien residents to carry a government sanctioned ID card. It was neither an invasion of privacy nor a particularly big deal, to be perfect honest.

E_S

 

Does that make it worth it, though? There's very little evidence being shown on the part of those pushing a national ID card that it's actually useful, and certainly very little as to what information this card would actually hold. I could see myself supporting it if it simplified things - e.g. if it acted as my driver's licence, Medicare card and passport. I'm yet to see a coherent argument for why it would help defend us against omg terroristz!1! any more than a passport does, however, and I think there are probably more effective ways to spend our money if that's the main goal.

 

I agree, Hawk. There's little evidence to suggest a national ID will curtail terrorism at all.

 

Well, I've seen one proposal which was being considered that would include all Medicare information via fingerprint ID, and the Medicare info would just be added to the existing database used by medical professionals as is. Medicare's not hard to rort; I believe backpackers often borrow a card to get subsidised care when they're here.

I agree it's a monumental waste of time in one sense, but having had one already I think the "invasion of privacy" claims and whatnot are simply overrated. And I suspect Taiwan has semi-pressing concerns in this area, with the contention with the mainland in mind...

E_S

 

I just don't see a need for it. Ruddock claims that the govt has all the info it needs already, so why bother? It is simply another inconvenient and expensive impost on law-abiding citizens, while actual criminals and terrorist-wannabes get away scott free as usual. I don't see why the masses should be treated as potentially guilty when it won't even delay any crime by a nanosecond.

I just find it worrying that people could be stopped and asked to "produce their papers". That has very negative connotations. While I respect & appreciate the role police and ASIO etc play, never forget that they work for the citizens, not the other way around. We own them. We are the government, not them.

Maybe I'm paranoid. But remember what Ronald Reagan said: "Government is always the problem, never the solution".

 

Well, I was carded a few times in TaiBei because often, foreigners had no ID card and were there illegally. And the police weren't nice about it either, they were in fact getting annoyed en masse with foreigners (Specifically Americans because they're the minority here; so I wasn't so much an Aussie as an American-like entity ). But it's not a big deal; you just show them your card, they spend an inordinate amount of time matching face to photo and send you away. Didn't phase me at all; the yanks I knew were outraged at it however.

E_S

EDIT: Oh, and I plum forgot; Bob Hill stepped down from Defence. Has he announced what he'll do now, like taking on the UN ambassador role or the like?

 

That's the current rumour. I'm more interested in who's going to replace him, though - it's old news that the good jobs go to the old boys club, so I doubt anyone would be too surprised about his new posting.

 

I think he would make a pretty good UN ambassador (as far as a delagate to a totally useless body be can good). He seems to have done alright at Defence, which must be a bastard of a portfolio (second only to health I imagine).

Now on to my gripe #2: the ghastly state of our tax system. Today's Australian carried a feature on the fact that young singles on low incomes (which I assume is most of us, certainly me) pay way more tax than families on average incomes and higher. This means that you and me have buckleys of ever buying a house or improving our lot unless we climb the corporate ladder and pop out a few sprogs (if you'll pardon the expression).

Anyway here's the article:

...According to Birrell, government economic policy since 2001 has not been kind to the group. "These figures belie the superficial prosperity of Australia," Birrell says. "It partly reflects the human capital of the males: the ones who have got the least education are going to find it hardest in the new work force. They are predominantly those who don't have professional, managerial and trade occupations, they have relatively limited post-school education."

Birrell's team of Monash University researchers believes these males are also responsible in large part for Australia's declining population. "What we're really struggling to [say] is, notwithstanding the boom in the Australian economy through most of the 1990s, it has still left behind quite large numbers of men whose earnings would be quite low in terms of their capacity to purchase a house, or to think about starting a family and having children," Birrell says.

"What we've found in our analysis of partnering is that these men had quite low rates of partnering ... they can't get to the starting gate: [that is] buying a house and getting married." Partnering rates for women in the same socioeconomic category have dropped off as well, Birrell says, as they show declining interest in getting married and having children.

...

Life is unlikely to get any easier for these singles. Two weeks ago Peter Costello took time out on a Sunday during his holidays to discuss plans to help Australian families. Pledging funds for parents in the May budget, the Treasurer said families would get "a helping hand in relation to tax and family assistance packages".

It was the second time since Christmas that Costello had sought to put a family stamp on this year's budget. But this time, the announcement was not welcomed.

Parents of young children have received significant attention every year since the GST was introduced.

The tax burden on singles, on the other hand, is rising almost as fast as the average-earning family's net tax liability is falling.

...

Have singles been subsidising family tax breaks? Experts say not yet - family tax benefits are roughly revenue neutral - but another generous round of tax relief flagged by Costello could tip the balance.

In the wake of Costello's announcement, the federal Opposition released figures compiled by the Parliamentary Library detailing the tax burden on parents.

According to the data, a family in 2005-06 faces a $0 net tax liability if its annual earnings are less than $53,000. Below that threshold, benefits in fact outweigh taxes.

Treasury Department modelling shows 40per cent of parents pay no net tax.

Rachel Lloyd, principal researcher at the University of Canberra's National Centre for Social and Economic Modelling, says singles are bearing a disproportionate share of the tax burden. "A lot of the focus of the Government's policies has been [on] helping families. There have been increasing benefits to families through the family tax benefits system: the thresholds have been increased and so have the payments," she says.

While a family's tax liability is being roughly offset by government benefits - that is, families have so far paid for their own breaks - another generous round of benefits for fam

 

CCD, that annoys the hell out of me, too. The personal income tax system in this country is a joke. I think the government is deliberately manipulating the tax system to encourage families -> ^ population growth.

I also got angry a few weeks ago when the calls for income tax reform started coming out in the media, and Costello said something along the lines of 'The average Australian worker doesn't care about tax reform, they are only interested in a tax cut.' Also at that time, he claimed the government couldn't affort tax reform because the recent huge budget surplusses were due to a commodities boom that we were were about to come out of. Now he is saying the commodities boom is set to continue, I wonder if he'll change his stance on serious tax reform.

 

I'm pretty sure that's it. The thing is, I coudn't possibly afford to start a family at the moment even if I wanted to.

This country is desperate for meaningful tax reform. The only reason the 'average voter' isn't interested in tax reform is because they don't know how horrendous the current system is. Spend five minutes explaining the situation and I'm sure that would change.

When countries have opted for radical tax reform (eg, Estonia - flat tax of 25%) tax revenues have actually risen; this is the result of increased business and employment.

 

I'm wholly in favour of a flat tax rate. I've lived under one, and whilst the proto-socialist elements of our past will rally against it as being favourable to the rich the fact we have capital gains tax and consumption tax (GST) means you pay more the more you spend. THe more you earn, the more you spend if you're only paying 10-15% tax.


E_S

 

A friend of mine is a big advocate of negative income tax and got me intrigued with the idea, if it could be made to work. John Humphrey's Reform 30/30 proposal is a fairly good example of what it's all about - essentially making a flat tax rate (in this case 30%) for everyone above $30,000 and a tax payment of 30% to everyone earning under $30,000. This would of course take the place of all welfare payments etc; the more you earn, the less payment you get until you reach $30,000 annual income, at which point you start paying tax. The reality of it would be nowhere near that simple, and it could potentially be a disaster, but it's an interesting take on the subject of flat tax.

Edit: forgot the link.

 

Well the problem with that idea is it's very, very short-sighted. It doesn't adequately factor in the necessity of government expenditure and rather looks towards a proto-socialistic programme for solving taxation issue.

15% Tax, plus a consumption tax (GST/VAT) is as fair the current system, if not more because it doesn't unfairly punish the top tax bracket with punitive taxation. They still pay more income tax, because they're consuming more which is of course taxed but it doesn't say, "There you go, tax bracket that statistically works the longest hours for the most number of years, have a disincentive to work harder int he form of 48% tax!"

E_S

 

ES, could you explain why the 30/30 program (thanks for the link, I'm also a supporter!) is shortsighted?

 

The problem is with the 30/30 is that we're asking the hardest working people in the country to support the least hard working via taxation, and so instead of collecting taxation revenue from all income earners, we're wasting a huge chunk on compensating them.

The reason we do have such high tax is both our proto-socialist roots and because we've a huge country with scattered population density to support. If you start taking chunks out of taxation from one end to give to the other, you're selling the country short.

There was an Economist piece that was here that found statistically speaking, the top 10% of income earners tended to work the hardest (in the US at least, but I'd doubt it that different here). They're already faced with a disincentive for hard work in the form of a punitive tax regime (48% = unfair), and this is suggesting we tax the rich to feed the poor. Yeah, awesome work; "From each according to his ability, to each according to his need."

Think about this; if you're only taxed 15% of your income, per annum, you've got a bunch of extra cash in your pocket. If you pay a sales tax on everything you buy, who will buy more? Thus, who pays more tax?

E_S

 

Don't worry, I agree about the flat tax + sales tax.

So you're saying that we need to get rid out our "proto-socialist" expenditure, like health & education (to use the ALPS favourite slogan)?

Your point about the 30/30 system supporting the bludgers by taxing the hard workers makes sense, up to a point, but we already do that. The 30/30 system is merely a better way to do it, with built in incentives to work harder. 30% sounds a lot better than 48.5% imo. Yes, 15% would be better than 30%, but politics is the art of what's possible. I think the 30/30 system preserves 'normality' in government spending but in a much more efficient and equitable form. And btw I don't imagine ppl earning under 30K will get money for nothing, the usual mutual obligations will apply.

 

But doesn't that happen already via a multitude of welfare support programs? The lowest earners in the current system still pay tax, but are essentially paying money to the government to simply get it back through welfare. It's pointless bureaucratic waste. Under the 30/30 system, the hardest working people (assuming that would be the ones earning the most money, which in many cases it probably is) would be paying less tax, acting as an incentive to earn more. The idea is simple - the government supplements you where you need it, at a rate of 30% of the shortfall between your wage and the minimum tax rate of $30,000. The total amount of money you get goes down as you earn more, but your total income still increases. Thus, the only way to earn more money (or even a subsistence living) is to work harder. Potentially the most difficult aspect of this to overcome is the idea in the minds of low-income earners that they get less handouts for working harder, despite their total pay increasing.

Humphreys is, unfortunately, rather light on the long-term effects on the economy. He notes that the only "losers" in his model are the unemployed (earning less in total than under the current system) but that could be thrown into question given his vague answers on the question of the benefits to the long-term economy. I'm all for lower unemployment, if it would have such an effect, but unemployment in Australia is already at 5.1%, a very low figure. To drop it much lower may bring us close to the point where there are simply not enough people to fill the jobs available. Of course, the reform would put thousands of accountants and public servants out of work, which may increase the unemployment rate anyway.

My only other criticism of his proposal is the abolition of the minimum wage. I've always been a supporter of having some form of bottom line, a safety net if you will, for people who lack the ability to negotiate effectively with their employers. NIT provides this safety net to an extent, but to remove the minimum wage completely still allows exploitation of workers who are not covered by a collective agreement or EBA. For those who have to negotiate their own wages, especially in low-skilled jobs where the employee may be inexperienced or may not even speak very good English, the potential for them to be earning well below what could be considered "fair" is real.

This tax is fundamentally different to an income tax, though - excluding necessary purchases such as food, people choose how much they want to spend and thus how much total tax they pay. Thus, how much of their disposable income they want to put back into the system is completely a person's own choice.

 

Well I'm the wrong person to ask about this, being a neoliberal. I don't think University should be free - and no, I'm still paying for it myself - and that if I can afford a mere $12/week on HCF, most anyone can.

But yeah, it's about time we dropped this "what about the workers" attitude because the time when Australia was a predominantly working-class country is long gone. It's a ruinous aspect of Australian politics and it cripples the labour party by way of that bloody union-dominated caucus.

Look at it this way; in Taiwan, where I used to live, the train system was clean, efficient, cheap and ran every 4 minutes. It would cost no more than AUD$2.50 to cover the city from top to bottom. Only, most services were automated. The reason we'd never get one here in Sydney isn't the cost, it's the latter part.

Hawk, having that kind of obvious handout though in my mind ends up being a massive step backwards. It ends up encouraging stagnation and so people just live off the 3 shifts a week at Video Ezy + the subsidies. It's like an easier dole, almost, and when you consider out <$30,000 people are rarely full time - given the average income per capita is pushing mid-$40Ks - I don't see it being terribly relevant either.

Maybe a decade ago?

E_S

 

Well no, not really.

People earn money for a reason. And more often than not, it's to spend it on creature comforts. There are misers who hoard their money. But population wide, you can pretty much bank on rich people buying more non-essential/luxury items.

 

Hey T65, haven't seen you around for ages.

That was kinda what I was banking on, with a flat-tax plus sales tax for revenue.

I look at Hong Kong SAR as an example; 16% income tax (over a certain amount) plus sales tax. Given that HK Chinese love to spend money on luxury items and food*, it's a winner!

(* The number of shops Prada, Gucci, Armani et al have on HK Island along, not counting Tsim Sha Tsui, is astounding!)

E_S

PS: People are suggesting China will invade over in the Koreas thread. Thought you might like a laugh.

 

It's funny that the Labor Party and Sydney Marxist Herald are far more angry about the cabinet reshuffle than the Nationals.

Kim Beazley, always one to miss a bone thrown to him, suggested the Nationals split from the Liberals. Nice crack at opportunism Kim, you portly bugger you, but I don't think so.

For Kim, when your party was rather soundly beaten int he last election, it emerged that the Liberals were less than half a dozen seats shy of forming government; that is, the Nationals are almost obsolete.

Or, in simpler terms, the Nationals need the Libs probably more than the Libs need the nationals. Ooops.

And the Good Old Sydney Marxist Herald, a bastion of "fair" journalism which of course seeks to present facts and not thinly veiled opinions that borderline on dishonest, ran a headline that this could threaten "PM's Grip on Power."

I think the SMH is gripping something a bit hard!

Look at it this way; the Nationals leader and deputy PM Mark Vaile still holds Trade, a top portfolio; the shuffle saw one person switch parties without crossing the isle and one person dumped from the ministry (who was uninsipiring at best) and the Left has tripped over itself trying to make some gains on this following an opinion poll which had Johnny back ahead.

Laborites, which ought constitute most bourgeois students here, I'm truly sorry your party is as hopeless as the NSW liberals are.

E_S