Tax Forum special – the welfare crisis

The Australian Government will soon have to deal with a welfare payments crisis that will eclipse the problems of refugee boats and tax reform, a financial policy expert has warned, reports news.com.

Greg Smith, a member of the Henry Tax Review, said on the second day of the Federal Government’s tax forum that the welfare payments system would become unsustainable.

I’m sorry to inject a sad note into the discussion, but my prediction for the next 10-15 years is that the issue will not be stop the taxes or stop the boats, it will be stop the welfare system.

Mr Smith said government spending and transfer payments would rise from 35 per cent of the nation’s annual gross domestic product (GDP) to 45 per cent over the next few decades. This could result in the average marginal tax rate rising from a current 45-50 per cent to 55-60 per cent, to fund government spending.

The marginal tax rate is the highest rate of income tax that a person pays on their income. Government spending had to be more efficient so the strains on the welfare transfer system did not place significant pressures on the budget, Mr Smith said.

It is a crisis . .  . Australia has to basically become much, much smarter with the way we do government spending and the way we do the transfer system if we are going to make this a sustainable policy.

Treasurer Wayne Swan said Australia had always done well in putting in place a “judicious” mix of taxation.

We have got to make sure on the one hand we can fund first-class services in our economy, a first-class social safety net, whilst we compete in a region where many of those services are not provided.  There is not some magic pudding out there that means we can fund every enhancement to our social security system and our social safety net.

Bingo, Mr Swan.

I have argued for some years now of this impending crisis.  Over the next 10 years the last of the baby boomers are set to retire, and such is the vastness of their current numbers in the workforce, there are not enough Gen X or Gen Y members to replace them.

Most of these baby boomers have not had the luxury of a life-long superannuation plan or access to compulsory super programs.  We could argue that they have not had the foresight to prepare for their retirement financially, nonetheless, their retirement years will be funded by the Age Pension and their welfare through other government support programs.  This will place an enormous strain on the budgets of future governments for the next 30 or 40 years, that is, until the baby boomers have passed on and replaced by the growing generation of people who have the nouse and access to support programs to fund their own retirement.

In the meantime and the immediate future we face a dilemma, as warned at the Tax Forum.

The growing burden of financing the retirement years of the Baby Boomers can only be met through an increase in the number of tax payers in the workforce.  But with a decrease in the size of the workforce predicted, we’re facing a real budget, spending, and welfare crisis.

The alternatives are to cut spending, raise taxes, or develop initiatives to increase the workforce (eg lifting the retirement age or increasing the number of skilled immigrants), and subsequently the number of desperately needed tax payers.

I look forward to your suggestions.

145 comments on “Tax Forum special – the welfare crisis

  1. Cafe patrons familiar with Bill Mitchell’s writings would know that all the angst over how to fund the needs of the ageing is misdirected.

    It is not a “funding” issue but rather an issue of availability of real resources.

    The state as monopoly issuer of the currency can buy any service that is available from within the nation’s stock of skills and physical infrastructure without worrying about where the money will come from.

    The money will come from “thin air” as it has always done. And the government will tax it back after it has done its job.

  2. Isn’t it typical to blame retirees for the nation’s welfare problems. Why not examine the vast sums of taxes which are thrown at creating and encouraging an unnecessary population growth and funding health and education costs for children.?. These are the BIG areas of government expenditure while retirees largely fund themselves and also pay taxes on their income and expenditures from their incomes. You need to get your maths right Miglo and look at where the major part of government welfare spending is targetted.
    Scrap the Baby Bounty, subsidised Child Care, and paid Maternity/Paternity Leave and the Budget will be in glorious surplus by 2012.
    Way to go, Mr. Swan.!.

  3. Jarl, just my opinion but to me it is a necessity that the government prune back and severely those people who are perfectly capable of paying their own way and drop a lot of John Howard’s middle and upper class handouts. This should have been made a priority immediately Kevin Rudd took over. And yet here we are today still subsidising wealthy parents to send their children to private schools.

  4. Way to go, Mr. Swan.!.

    …and every other Treasurer of every persuasion before him. You could probably successfully argue that it was Howard who weaned Australia onto middle and upper class welfare big time and so much so they now come to expect it.

    So if Swan were to get rid of it or cut it back he and the government he is in will be thrown out and what do you think a Liberal government will do? Of course throw even more money at the middle and upper classes whilst subsidising big business and giving everyone except those on the bottom tax breaks.

    The very formula that put the US into the mess it’s now in.

  5. One needs to look at the tax cuts over the last decade or more. Are these tax cuts the have been affordable.

    Not providing the infrastructure for a society to cope is short thinking.

  6. “Not providing the infrastructure for a society to cope is short thinking.”

    Absolutely, CU.

    But for some reason we think it’s smarter to salt surpluses away into so-called Future Funds rather than into education now (like training in health and aged care, from carers to specialists).

  7. Jarl, I don’t blame retirees or the soon to be retired for the nation’s welfare problems. Far from it.

    I blame the previous governments for not looking past a fiscal year and recognising that a big problem was on the horizon. Until the current government stepped up there were no programs in place to provide job training to the unskilled immigrants making Australia their new home.

    Despite what the emails say, new refugees do not get income support. Funding is provided to third parties so that these people can be trained and be job ready. We need them working. We need them as tax payers.

  8. There is no point in blaming retirees who have not had the opportunity to save, nor possibly had the resources to do so. Let’s not forget that many people today were earning as I was $23.75pw at the start of their working lives. Plus of course many/most women do not have any superannuation whatsoever.

  9. The problem for retiring baby boomers is that for most of their working lives, they did not have access to superannuation schemes, unless they were state or federal PS employees or in executive positions in banks or insurance companies.

    A large percentage would have come from families where the word superannuation had never been heard of. If their parents had enough disposable income, they may have had an insurance policy which matured on retirement and would have been used to supplement the pension, or they may have been able to save a small nest egg.

    And that would have been the expectation of most boomers as they commenced their working lives.

  10. Jane, I can remember far back enough when the pension was one’s retirement plan..that is, it was a sum good enough to retire on comfortably..such as my parents, to enable them to pay the bills plus take few holidays each year up to Yarrawonga. You paid your taxes during your working life and then when you retired it was paid back to you in the form of a pension.

    The only person who would have had superannuation would have been the bank manager, certainly not working class people such as my parents.

  11. Precisely, Min @6.57pm. The pension was your reward for working most likely from the age of 14 until men retired @65 and women @60, if they had jobs at all. And superannuation was for bank managers and other white collar executives, and our parents probably didn’t know there was such a thing.

    My grandparents were frugal and had saved a bit of money to supplement their pension. Grandma Rudd was Scottish and was super frugal. She dubbed my mother an honorary Scot on account of her frugality. lol

    Of course, both those generations had a baptism of fire-the depression. It really cranked up the frugality genes.

    My mother, a natural hoarder, was an extraordinary hoarder of stuff. I got 7 wheelie bins of hoarded crap out of her desk after she died. She had $1200 in coin she’d been saving.

    She patched sheets and towels, darned socks, rubbed my neck raw using cold water starch on my uniform shirts, kept string, paper and plastic bags and bloody plastic cream and ice cream containers! And so did both my grandmothers.

    My father and my maternal grandfather saved nuts, bolts screws, scraps of timber and metal, fencing wire, dollops of paint.

    Are you nodding, Min?

  12. Jane, I certainly am. My Welsh grandmother used to hide dollar notes on the inside of the curtains.

    My toys when I was little consisted of 2 jigsaw puzzles, a box of crayons and you used the butcher paper to draw on, a tomato stake and a piece of rope was Hi Ho Silver and Away.. However my father taught me how to cast sinkers and how to sole a pair of shoes and especially how to paint.

    I remember my mother ‘turning’ the collars on my dad’s shirts..that is, when one side wore out you cut them off, turned them around and sewed them back on. My holidays consisted of adding up rows of numbers sitting at the kitchen table as my mother used to do doctors’ books and she was allowed to bring work home during the school holidays.

  13. We are lucky that Mr. Keating broke that L.A.W tax cut promise and gave us 3% contribution to super instead.

    It is a pity that his other aim to increase the levy to 15% was abandoned by the Howard government. Imagine how much better the retirees and that budget would be better off today.

    The tax forum in my opinion was a success, if only for one reason, we have people talking to each other.

    As Henry said, our media is unable to distinguish between vested interest and the good of the country.

    The Chairman of a leading country said that he was surprise of the respect many had for the Henry report. He said it would need ten years to put into place. He said that we could have three governments in that time. He went on to say that the elephant in the room was the absent of the Opposition. He said that the only way for improving the tax system was bipartisan cooperation, therefore Mr. Abbott needs to start cooperating.

    The PM has created an atmosphere that allows taxation to be discuss. I believe that Mr. Abbott has dealt himself out of the ongoing debate. In this regard he has become irrelevant. He is on the outside of the tent.

  14. You may miss this in the Aus

    ‘Julia Gillard soars on reform, Wayne Swan reverts to type

    While it was Swan who declared the government’s intention to lift the tax-free threshold to $21,000 for all taxpayers, primary credit belongs to Gillard. She brought the issue to the table in the first place by connecting the Henry tax review to Ross Garnaut’s report on climate change.
    With her encouragement, Swan shed his caution on the topic earlier this year. Now Labor is on the verge of a big tax reform.

    Yesterday’s goal is only a small step beyond what Labor is proposing with the introduction of the carbon tax on July 1, when the tax-free threshold will be trebled from $6000 to $18,200.

    But the significance of adding another $2800 to the tax-free threshold is that it allows the government to abolish the low-income tax offset.’

    http://www.theaustralian.com.au/national-affairs/opinion/julia-gillard-soars-on-reform-wayne-swan-reverts-to-type/story-e6frgd0x-1226159610761

  15. Sue, and I see that The Age is still continuing with the rumour that
    Nigel Scullion was supposed to have overheard Senator Crossin on the phone to Kevin Rudd when he barged into her office.

  16. It is a pity that his other aim to increase the levy to 15% was abandoned by the Howard government

    Yes, and then the libs used this lack of investment to claim that ‘real wages’ had grown under them greater than under Labor. Well, this was one of the reasons, Labor put some of those ‘real wages’ into the future.

  17. KEN HENRY: It’s an unfortunate fact of life that public commentary – and let’s be frank, I’m thinking particularly of our media here – finds it impossible to distinguish the national interest from vested interest. That’s a fact of life.

    But it’s always been thus.

    http://www.abc.net.au/worldtoday/content/2011/s3332468.htm

    I agree with Ken Henry here, but has the media always been so brutally wrong in its ascertions, and has the coverage from one side of an argument been so complete?

    Those are the core questions that need to be asked.

  18. ………our media is unable to distinguish between vested interest and the good of the country.

    They’re able to distinguish alright, CU. It’s just that they think they’re one and the same and they’ve done a pretty good job of convincing the voters of it. We have a tough job ahead of us to show people that that Murdoch inspired spin is a load of bunkum.

    In regard to the taxation forum, I thought Rob Oakeshott was particularly good on Lateline last night when Tony Jones kept trying to turn it into a government leadership battle scoop. I was surprised when Oakeshott quoted the figure of $21K, but Sue @6.40am has cleared that up.

    The more I see and hear of Rob Oakeshott, the more I like him and think the voters of Lyne are very fortunate indeed to have a man like him representing them.

    Good old Richo, eh? It’s obvious he is still suffering from relevance deficiency syndrome.

    Min, i still don’t know how Scullion would have “known” who Crossin was talking to just by hearing her utter the word “eight” when he barged into her office. Perhaps he’s practicing for his post politics career as a psychic reader. lol

    And don’t you just love Jamie Briggs’ input? Perhaps if you’d bothered to show up at the forum, Mr Briggs, you could have raised the matter of the GST. No good whining from the sidelines. Once again a big fat FAIL for Liealot and the Liars Party.

  19. Jane, yes we were speculating on that one weren’t we..that the number 8 could have been the office Lotto number. It also also seems highly unlikely that Crossin would have said to Scullion, Hey I’m on the phone to Kevin Rudd.

    I agree about Oakeshott..the media tried to do him, to turn him into a brainless wordy piece of fluff, but clearly Oakeshott didn’t get where he is today by being stupid.

  20. Exactly, Min. The number 8 could have meant anything-a dinner engagement, a breakfast meeting, her pick for the xlotto syndicate, some kid’s birthday-anything. And it’s extremely unlikely that she’d be telling Scullion it was a number count for a leadership challenge.

    As you say, Oakeshott is a very astute politician, despite the country boy demeanor. I felt certain that he had Tony Jones’s number from the outset and played him well. And constantly made him return to the tax forum, which was the subject of the interview, and some of the outcomes of the discussions.

    Together with Tony Windsor, I think they may be two of the smartest and most honest operators going. And I’m very happy to have seen them in action. Their electorates are very fortunate indeed.

    I noticed he also had a quiet dig at the Liars Party for their bloody minded refusal to take part in the forum.

    They remind me of sulky children who refuse out of spite, to go to the birthday party of the year. Infuriatingly, the party was a huge success and their absence has been largely ignored by the guests who can’t stop talking about how great the party was.

    Worse still, the birthday cake was made by the best cake maker in history and they didn’t get so much as a crumb and the entertainment has been declared the best ever. However, guests have gone to great pains to rub their noses in how great it was let them know what they missed. :)lol:)

  21. Sue and Min re ‘Richo’, he’s yesterdays’ man, now the go-to man for ‘cash for comments’ !!

    The Chaser Team show The Hamster Wheel debuted last night poking fun at the way the media spin their point of view, spinning like a hamster wheel and a classic example wasn’t long in appearing….on Lateline.

    Oakeshott stresses need for tax reform
    http://www.abc.net.au/lateline/content/2011/s3333241.htm

    TONY JONES: You wanted outcomes from this tax summit. Do you seriously think you got any serious outcomes at all?

    ROB OAKESHOTT: We got a couple of very real outcomes: the increasing of the tax-free threshold to 21,000 is pretty significant, the …

    TONY JONES: I’ll just interrupt you there. That’s not an outcome, is it? That’s a promise that may happen sometime in the future. There’s not even a date set on it. It could be something that probably won’t happen in the course of any Labor government in the near future.

    ROB OAKESHOTT: Well, we’re better off than we were 48 hours ago. It is substantial reform. We’ll have a vote next Monday in the Parliament – or next Tuesday – in regards to lifting the tax-free threshold from 6,000 to 18,200.

    That’s very real and is seven days away.

    Rob Oakeshott could not complete his first sentence before Tony Jones interrupted.

    Later, Mr. Jones was hunting for a scoop on the pokies legislation, Mr. Oakeshoot pointed out that he hasn’t seen the legislation yet.

    TONY JONES: But what’s your instinct, though? You’ve obviously seen the campaign running from all the clubs around Australia – including in your own electorate – from Rugby League circles, from all over the place, saying this tax is bad.

    Jones finally got to the main topic on his agenda, nothing to do with the Tax Forum, but the Rudd leadership rumours….

    Rob Oakeshott then came back with the best line of the day,

    ROB OAKESHOTT: Look, of course I’d talk to him, but it would depend what the topic is. It may be foreign affairs. Look, an hour before your show I watched The Hamster Wheel, and they talked all about this issue.

    Jones seemed not to notice that he was running faster and faster on his own little hamster wheel.

  22. I was taught it is bad manners to eves drop. If the man heard anything, he did not hear enough to put it in context. Not that context mans much to our modern day media,

    As for vested interest, I am always a cynic when they utter anything.

    The first question I automatically ask, if it is good for them, why would it be good for me.

    Life has taught me that if it is good for the rich and powerful, it is unlikely to be in my best interest.

    I am or that is not willing to eat the crumbs from their table.

    All wealth is created when something is produced. The rich and powerful cannot do this without the humble worker, even in this day of automation. Someone still has to make the robots.

    The rich and powerful who do not realise that their interest are best served by a strong and effcient workforce with money to spend are stupid.

  23. Pip, I’d forgotten the attempted pokies “tax” (Jone’s contentious (imo) Freudian verbal slip) manipulation and Oakeshott’s skillful put down. I really liked the reference to The Hamster Wheel. Very chuckle worthy.

    Ditto the tax threshold gotcha attempt, brushed off like an insect on Oakeshott’s sleeve!

    And last but not least, Jones’s second gotcha attempt and the real focus of the interview, the leadership rumours manufactured by the msm and the Liars Party.

    I wonder if these characters even realise they’ve been gazumped by the mild mannered and very much underestimated, Rob Oakeshott? ROFLMAO!

    As I said above, my admiration and respect for Oakeshott increases each time I see him in action. Invariably polite and courteous, he still gets his point across firmly and without acrimony.

    He is a very clever man, imo as is Tony Windsor. I feel privileged to have observed them.

  24. Jane,
    Oakeshott and Windsor are the two most level-headed MPs in the Parliament which could explain why the hamsters are so aggro about them….
    Jones is supposedly a very senior journalist, but last night he proved he’s just another hack practising the usual arsehattery.

  25. Nothing but positive reports are coming out about the forum.

    However I saw a headline that Abbott denounces the introduction of GST on all food items. Accustomed as I am in thinking that an Abbott headline indicates a rejection of a Labor proposal I thought “Oh no, why are Labor proposing this?”. With relief I read that the idea comes from one of his backbenchers.

  26. Miglo, the back bencher is a very ambitious young fellow possibly
    aligning himself with a different faction 😀

  27. Jane @ 10.07am, a comment about ‘Richo’ on Twitter 😀

    Pollytics Possum Comitatus

    The only thing missing from that Richo segment was a big fart at the end

  28. Pip @1.34pm, Oakeshott ran rings around the smug Jones last night, imo. He and Windsor are now battle hardened hamster spotters. The funniest thing is that even though they’ve gone for the throat, the hamsters don’t seem to realise who’s chomped the jugular.

    I don’t think I’d like to be on the wrong end of either of those gentlemen, you’d be sliced and diced before you could wonder why bits were falling off. As you say, the two most level headed MPs in Parliament and real gentlemen into the bargain. My respect grows daily.

    Possum was right on the money about Richo; like the barber’s cat all wind and p!ss! ROFL!

    Migs, that MP was Jamie Briggs. All I can say is if the Liars Party hadn’t huffily thrown the invitation in Gillard’s face, they could have had their say. Unlikely as it is, perhaps they could have contributed something worthwhile. Fat chance now. Bit like the climate change and carbon pricing fora, wouldn’t you say?

    And climbing onto my hobby horse for a small rant. They are derelict in their duty to represent the people who vote for them. They should have been at the forum to articulate their side of the argument, but they couldn’t be arsed and now they’re whining.

    I sincerely hope the government will start to harp on this. It’s time dingbats woke up to the fact that they’re being short changed by this mob of lazy, unscrupulous, unprincipled, lying seat warmers. THEY ARE A DISGRACE!!!!!

    I point Richo’s arse in their general direction.

  29. I’ve said it once and I’ll say it again…

    The idea that the ageing population is going to place a great economic strain on us all is a giant furphy.

    Older Australians are much more active than their counterparts a generation ago.

    Many will stay on in the workforce rather than retire at 60. In the context of a contracting skilled workforce there will be more incentive to do so – whether it be full tine, part-time or in transition to retirement strategies.

    Older Australians are more active than a generation ago – leading healthier lifestyles this also contributes to their ability to paricipate in some sort of paid employment should they choose.

    More info here…

    http://bilbo.economicoutlook.net/blog/?p=4484

  30. There were business that agree they should have been at the forum. It was said by at least one, that bipartisanship is necessary to get on top of the problems. For this reason they suggested that Mr. Abbott gets on board.

  31. Jane, a Coaltion Senator, drawing on the public purse, is complaining.

    Coalition questions Ken Henry appointment to NAB board, but Julia Gillard rejects concerns
    http://www.theaustralian.com.au/national-affairs/coalition-questions-ken-henry-appointment-to-nab-board/story-fn59niix-1226160224667

    JULIA Gillard has rejected conflict of interest concerns over the appointment of former Treasury secretary Ken Henry to the National

    Australia Bank board while he is still on the public payroll.

    This reminds me of former Defence Minister Peter Reith when he left Parliament, and Dr. Michael Wooldridge, the former Health Minister.

    Ex-Ministers: Jobs After Government
    February 20, 2002
    http://australianpolitics.com/news/2002/02-02-20a.shtml

    Peter Reith’s Job With Tenix
    and
    Wooldridge’s Job With Research Australia

  32. CU @3.08pm, I agree. Something as important as tax reform should be a bipartisan effort, but the current opposition is only interested in wrecking the country, not in showing that they are a responsible alternative government. IMO, to elect this mob to government would be like electing 70+ two-year olds to run the country.

    reb, can’t I have a bludge for a couple of years? lol

  33. Tax Forum: Who are the winners from two days of tax talk?

    http://www.smartcompany.com.au/tax/20011106-tax-forum-who-are-the-winners-from-two-days-of-tax-talk.html

    While Nationals Senator Barnaby Joyce quipped the forum delivered a “couple of hours’ sleep, a couple of chardonnays and cheese”, independent MP Rob Oakeshott last night offered this riposte: “What’s their plan?”

    that doesn’t count because Barnaby wasn’t at the Tax Forum :mrgreen:

    So with a flagged tax-free threshold of $21,000, a tax reform working group, an independent tax advisory board and a harmonisation plan for the states on the table, SmartCompany takes a look at how everybody emerged

  34. I agree with Reb and even if there is an economic downturn they will be productive.

    As the baby bubble moves through the system there will be strains placed on health facilities, but this is easy to remedy with political will.

  35. Gillard promotes carbon tax at forum
    http://news.smh.com.au/breaking-news-national/gillard-promotes-carbon-tax-at-forum-20111005-1l86i.html

    Prime Minister Julia Gillard has promoted her carbon tax scheme at the federal government’s tax forum, saying her plan to triple the tax free threshold will encourage people to work.

    Ms Gillard told the forum in Canberra that raising the tax free threshold under the carbon tax scheme would help move people off welfare and back into work and encourage mothers to enter the workforce.

    “We are very proud of having structured a part of the carbon pricing reform so that we are tripling the tax free threshold,” Ms Gillard said
    on Wednesday.

    and
    Under the government’s carbon tax package, the tax free threshold will increase from $6,000 to $18,200 from July 1, 2012.

    Ms Gillard said 300,000 of the people who will no longer pay tax will be women.

  36. Tax forum gave us naked policy debate and no horseshit

    http://www.crikey.com.au/2011/10/06/tax-forum-gave-us-naked-policy-debate-and-no-horseshit/

    We simply awake to find that we have a tax forum, filled with experts — experts that aren’t derided because of their expertise — constructively discussing the problems we face with our current tax system, and doing so with a manner of civility and gravitas that we’ve all recently become unaccustomed to.

    Yet even more unusual compared to the recent past of our nightmares — it was a debate by experts and not pretenders.

    We now have an expert committee that over the short term will explore mechanisms to constructively treat business losses in a volatile economy struggling to adapt to the dislocative effects of a resource boom. And over the medium term it deals with broader business tax problems and explores whether a program of targeted measures rather than an homogenous corporate tax cut might produce superior results.

  37. http://www.crikey.com.au/2011/10/06/tax-forum-gave-us-naked-policy-debate-and-no-horseshit/

    Many of the participants at the tax forum aren’t actually used to debating in challenging environments, spending most of their time either speaking to friendly audiences and preaching to the converted, or waging “debate” through media releases, media releases pretending to be newspaper columns or through short five minute interviews on current affairs programs that no one watches and fewer still care about.

    Over the last two days, these folks had to confront some of their vested interests being dismantled before their eyes. There was no slick advertising to fall back on, no market tested slogans to fill capability gaps — it was naked policy debate where people had to own what they were selling. When their products started to stink, they had to own that too, in front of everyone.

    A more healthier thing for public policy you will never see.

  38. ‘no market tested slogans to fill capability gaps — it was naked policy debate where people had to own what they were selling’

    what ! how dare they !

    no stop the boats, no stop the smokes

    No wonder Abbott did not attend.

  39. Sue, No wonder Abbott did not attend.

    Abbott and his crew know that he would be completely out of his depth at a public forum of any description, that’s why his ‘public meetings’ are invitation only.

  40. Pip & Sue, surely even cheerleaders must now see what empty vessels the Liars Party contains.

    Even Ltd News actually exposed Liealot as a liar when he claimed not to have been invited to the tax forum. Childish sneering and name calling doesn’t absolve them from their lazy lackadaisical attitude to this important forum.

    This forum will possibly be the catalyst for our tax structure for the next 100 years and the Liars Party couldn’t be bothered attending! It certainly demonstrates their disinterest in the structure of the economy of this country for decades to come.

    Anybody who votes for this bunch of losers has got rocks in their head. How can they justify a vote for the Liars Party in the face of the overwhelming evidence that they are just too lazy to bother with policy matters of any sort and are clearly uninterested in the future of this country!

    We should take a cue from Rob Oakeshott and demand to know what their plan is for this country. I’ll bet the only answer will be We’ll stop the boats and stop the smokes. What a grand visionary plan that is. A slogan a grade 2 primary school kid could make up and little else!

  41. Just a thought, but imagine the strife we’d be in if retirement was still compulsory. We’d have people retiring who couldn’t afford to do so, thus creating a further strain on the budget.

  42. “I guess the best situation we could hope for is that everybody keeps working until they die”

    That is an official reb government policy (certain individuals excluded of course)

  43. I like your way of thinking Migs.

    Battenburg cake is the main culprit.
    My granny used to make me eat it and it was fkn disgusting.

    That’s the problem with today’s “libertarian political correct” society…

    Battenburg bakers should’ve been outlawed eons ago.

    I suggest lynchings are in order..

    http://en.wikipedia.org/wiki/Battenberg_cake

  44. I just read a rather silly suggestion in an article by Ben Eltham on New Matilda which was emailed to me. He suggested that people like baby boomers should pay income tax on the increased value of the family home.

    He bolstered his argument by saying that if you have a share portfolio you’re taxed on the increased value of the folio. I assume he means income in the form of dividends

    However, the giant flaw in his argument is that an increase in the value of your home does not result in an increase in your income unless you sell it.

    I remember a similar proposal was made some years ago by a federal politician, I think. The suggestion was that pensioners whose homes had increased greatly in value should be penalised by having either having their pensions docked or being taxed according to the increased value of the house.

    If this was financially ruinous, they should be forced to sell the home. This politician had obviously made the same erroneous assumption as Ben Eltham. That if the value of your property increases, it translates into extra income, which is patently untrue unless the house is sold. The suggestion died the death it deserved.

  45. Jane, this really is a WTF day. That justs adds to it.

    First some drunk at the golf club threatens me and then I learn that I’m a child molester, according to some jerk on Facebook.

    Time to see a lawyer and sort these assholes out.

  46. “…While the Prime Minister has been in Canberra this week talking about people, I’ve been in regional Australia talking with them. The parliament house tax and jobs forums were essentially pointless talkfests. Nothing came of them. By contrast, my community forums have shown that Australians want a government that knows what it’s doing and that won’t make their lives worse with unnecessary new taxes. …”

    http://blogs.news.com.au/dailytelegraph/yoursay/index.php/dailytelegraph/comments/pm_less_talkfests_and_more_productive_action

    Has Abbott been in the regional regions listening to people. Is the man telling the truth.

    it is my impression he has been continuing his stunts and spreading lies.

    We all know that the man does not trust experts, so it would be hard to expect he would meet with the business and other experts in the tax field, to see what they were proposing.

    It would have been nice though to see him turn up, so he could inform them all where they are wrong.

    He did say that the tax forum was a con and everyone there was conned.

    It must make one feel superior to be the only one in step.. I am not sure many in his party agree with him. We have Mr. Turnbull overseas, saying that China is addressing the climate change problem.

    We have a backbencher saying that the GST should extend to fresh food. It is already on process food.

    Can anyone tell me of any business that does not meet together to decide what needs to be done

  47. Jane, I know I am going to upset many. I would like to see capital gains tax on the family home over say two million dollars. I would also like to see any value over that amount taken into the income test to qualify for benefits.

    Also there might be more older people today but they are heather and living longer. Most will not end their lives in hospitals or nursing homes.

    If you live longer, it does not mean that you spend longer not caring for yourself.

  48. Migs, go for it. That is a disgusting thing to say about you. Is there anything you can get Facebook to do to force this freak to admit they are a lying scumbag? Or is your solicitor the best avenue? I hope this is resolved very quickly.

    CU, CGT would apply if the house is sold, but until it is, it doesn’t provide an income. A lot of pensioners are in the situation that their family home has increased enormously in value, but their sole income is the pension. My mother was in that situation.

    My parents built a house in 1964 in an area of town that wasn’t very desirable. They liked it because there weren’t any neighbours and the view was great. The house and land cost around $8,000 and they borrowed $7,000 under the WSH Scheme.

    40 years on, the house was worth 1m+, because their street had become very desirable indeed. However, my mother was on the pension and there’s no way she could have afforded to pay an income tax bill on a hypothetical income based on the increased value of the house.

    It would have meant chucking her out of her house at the age of 80. The same applies to baby boomers and their family homes, imo.

    Most would have bought the home years ago in a location which has recently become desirable thus raising the value of the property. But you can’t hit people with a tax bill for income they haven’t received and are unlikely to receive.

    When the house is sold, the government can hold its hand out.

  49. Na, Miglo, just that you were probably sober and looked nice, in other words a easy pushover. Would not worry, they have the problem, not you.

  50. Jane I am talking about big big numbers. The money is left in the home for the kids. Surely anyone in a home of over two million could down size and still live decent.

    I find it a little indecent that money is tied up in one home to avoid capital gains tax. It would lead I believe to more people investing in extra rental homes or other worthwhile investments, if they had to pay Capital gains on the value of over two million. They would also have a income when they reached retirement home.

    I am not talking about those who have had a modest home for twenty or thirty years, and found the value increased above the normal.

    If your mother had a home worth two million, why would one struggle, living on a pension, in a house that that does not meet their needs.

    I find it hard to believe that one could not buy a smaller or cheaper home, in the same area that met their needs, and have left over, a income that makes their lives comfortable. The tax system could be shaped to make it easy for these few people.

    Does anyone believe that many would invest tens of millions in home, if capital gains tax has to be paid on the home.

    I find it wrong that someone can invest, say two million in a home, to sell it three for years later, for say six, without paying tax on the profit.

    jane, do not worry, I have found few that agree with me. I feel that too much of ther country’s money is invested in homes at the expense of investment that adds to the economy in a more worthwhile way. Many of us are building homes that are too large for our needs.

  51. CU, my 87yr old mother lives in Hawthorn..where could she buy a cheaper home. She has lived in the same house since she was 14yrs old and the only way that you will drag her out of that house is in a pine box. The house is worth a million dollars probably more since the last valuation.

  52. Min, I did say at least two million. I also acknowledge there were cases that needed to be address in different ways.

    What I am talking about is those who deliberately put their money into the home, to get capital gains without paying the tax.

    Do not worry, I do not get much support when I raise the matter.

  53. CU, it really doesn’t matter if the family home is worth a great deal. A lot of people don’t want to downsize; they want to stay in the house they love and holds lots of memories until they’re carried out feet first or have to go into a home.

    Generally, that’s when the house is sold, CGT is collected and the tax man is happy.

    Some people are not as attached to the house and sell up so they can downsize. Either way, tax will be collected and the remaining profits will be invested to supplement the pension or for self funded retirement income and eventually for the children. Tax will be collected and once again the tax man will be happy.

    Where there are large amounts of capital it would be more likely to be tucked away in family trusts, than lavished on a house, I would think. Either way, the tax man will extract his pound of flesh. 🙂

  54. Here’s a paragraph (or two) from Reb’s billyblog link that might help folk understand just why Reb said (quite correctly) that the issue of the ageing baby boomers is a giant furphy.

    “If we adequately fund our public universities to conduct more research which will reduce the real resource costs of health care in the future (via discovery) and further improve labour productivity then the real burden on the economy will not be anything like the scenarios being outlined in the “doomsday” reports. But then these reports are really just smokescreens to justify the neo-liberal pursuit of budget surpluses.

    As a final irony, for all practical purposes there is no real investment that can be made today that will remain useful 50 years from now apart from education. Unfortunately, tackling the problems of the distant future in terms of current “monetary” considerations which have led to the conclusion that fiscal austerity is needed today to prepare us for the future will actually undermine our future.”

  55. my community forums

    lol It is becoming apparent that the participants are more a carefully chosen ‘representative’ group of conservative, cardigan wearing, liberal party wannabees rather than a random selection of ‘community’ members

    The other explanation was that Michael Ronaldson, the Liberal senator who hosted the forum (and a man who plays his politics hard), had been less than assiduous in assembling a truly representative sample of the local community.

    http://www.theage.com.au/national/laborlands-liberal-praise-for-abbott-20110517-1erfq.html

    http://www.abc.net.au/local/audio/2011/07/26/3278359.htm

    ‘community’ my ****

  56. Tom R
    The Abbott community forums are at least consistent, they are not filling the halls.

    Compare the forums to Gillard’s community cabinets, where audiences are large are on TV and are open. One big problem they are not then highlighted in the next days newspapers.
    In comparing the 2 events it makes you wonder about the accuracy or not of newspoll polls.

  57. ‘….lifting the retirement age or increasing the number of skilled immigrants), and subsequently the number of desperately needed tax payers.

    Yes and not only skilled immigrants, but how do we convince the electorate that we may have to grow Australia a lot faster?

  58. “The alternatives are to cut spending, raise taxes, or develop initiatives to increase the workforce (eg lifting the retirement age or increasing the number of skilled immigrants), and subsequently the number of desperately needed tax payers.”

    This is neo-liberal bullshit.

    “I look forward to your suggestions.”

    Really ?

  59. This is one old biddy that needs to be put out to pasture. From an article titled The predictable and pointless tax forum

    In fact, there were some sensible propositions put forward in the course of the forum, although they were not universally accepted.

    😯

    So, a ‘predictable and pointless tax forum’ actually had some ‘sensible propositions’. Were these ones that she agreed with pointless and totally predictable too?

    http://www.abc.net.au/unleashed/3336988.html

  60. Mangrove Jack, the coffee and cake was ‘bad’….poor petal….
    Ms Sloan of the Institute of Public Affairs is a far-right free market
    advocate.

    He was a bit more upbeat on the second day. The forum had suddenly become valuable and constructive. A clear impression was that he had decided (or been instructed, perhaps) to stay positive – for the sake of appearances.

    The reality is that the forum was all over the shop, participants delivered set speeches on their pet topics and we broke frequently for bad coffee and cake.

    How dare she write such nasty tripe about Ken Henry who was in the Howard era Treasury.

    Tom R, she makes no valuable contribution to any debate, and is entirely predictable !

  61. Pip, my last rather tetchy comment was in fact directed at Miglo, the author of those quoted remarks (in the topic intro).

    Ironically, Professor Sloan could easily have written that same tripe.

    If “we” at the progressive end of the political spectrum can’t be bothered questioning the dominant neo-liberal paradigm that works against the public interest then we’ll get what we deserve.

  62. Migs, your problem (and you are not alone) is that you see the problem as one of financial constraint (“and subsequently the number of desperately needed tax payers”).

    This is not a “funding” issue. It can never be. Our government is not financially constrained.

    It is however, politically constrained, and your contribution helps perpetuate the myth that this is a funding issue. You are doing the progressive cause a gross dis-service.

    The problem will be physical constraints, or real constraints, to use the economist’s jargon.

    And the solution to that problem lies in the here and now.

    I’m afraid I can’t express it more clearly than Professor Mitchell in those comments I quoted earlier today. If you don’t get it then I guess we’ll just have to leave it there.

  63. MJ, I don’t disagree with your side of the argument, so the point is taken. I still, however, believe that the concerns I have expressed are still valid.

    I based my argument on the financial constraints, but I’m fully aware that there are many factors at play.

    Cheers,
    Migs.

  64. Miglo,

    I realise that by saying there are no financial constraints I am being quite provocative. To most people this is counter-intuitive. It contradicts everything we have been taught. When the penny drops however, it can hurt your foot.

    There are certainly many factors at play, but none of them is financial.

    Please have a look at Bill Mitchell’s essay ““Another intergenerational report, another waste of time”

    http://bilbo.economicoutlook.net/blog/?p=7717

  65. I’m with Mangrove Jack on this (fabricated) “issue”.

    The “answer” does not lie in increasing taxes, cutting spending or finding more taxpayers.

    In fact, the idea of adding more taxpayers into the funnel would only perpetuate “the problem” of an increasing ageing population further down the track – based on the “logic” of those perpetuating the myth.

    Things like the “baby bonus” – financial inducements to produce taxpayers – only add to “the problem.”

    It’s all just neo-Liberal BS as MJ says.

  66. Are people missing my point?

    Point 1: Retirees of the future (say from 2030 onwards) won’t need the Age Pension as they would have had a superannuation plan from the first day of their working lives. The soon to be retiring baby boomers didn’t have access to compulsory super until about 1990/91, and even then the contributions weren’t that fabulous.

    Point 2: The number of retiring baby boomers over the next ten years is expected to make a massive hole in the working population that won’t be able to be filled from Australia’s current population. So we’ll see less income tax being paid and a big spike in th number of people on the Age Pension.

    Reb/MJ, I’m not ignoring your arguments or disputing them. It’s just that mine makes more sense. :mrgreen:


  67. “So we’ll see less income tax being paid and a big spike in th number of people on the Age Pension.”

    No we won’t. Listen and learn….

    What we will see is a greater incentive for people to stay in the work force for longer either in part-time, full time or transition to retirement arrangements combined with the flexibility to access their superannuation while still working thus decreasing reliance on the government age pension.

    It’s not that difficult to comprehend if you just give it a little bit of thought.

    It’s challenging for some I know. But I appreciate the opportunity to enlighten the less fortunate with my almost limitless intellect. 😉

  68. Reb, how about I meet you half way?

    Over the next ten years many professionals (such as moi), who enjoy working and the good salary that comes with it will make the decision to work until 70 (health permitting) and stash as much away as they can for when they do eventually retire.

    The bulk of remaining baby boomers will retire and rely on the Age Pension.

    My predictions are based on logic. Unfortunately your limitless intellect lacks the capacity to apply logic. 😛

  69. “The bulk of remaining baby boomers will retire and rely on the Age Pension”

    Nonsense!

    All those baby boomers made shitloads during the great Australian property boom of the 1960’s through to the late 90’s.

    Most will be comfortably well off with their little investment property portfolios, yourself included.

    However I will meet you half way with this astute and timely observation.

    Many who are comfortably well-off, will, instead of relying on their own wealth to fund their retirement of which they are eminently capable of doing, will choose to structure their financial affairs so that they can access the age pension even though they don’t really need it.

    Just another form of middle class welfare..slumlord!!

  70. I’ve changed my mind.

    Old people should be euthenaised at 70 and turned into garden fertiliser or soylent green.

    The world’s agricultural problems would be over and world hunger eliminated.

    It amazes me that no one has thought of this before.

    The secret is to do it quietly while no one notices………

    A reb lead government will put an end to the so called “ageing crisis” (pfft!) and end world hunger.

    Vote 1 reb.

  71. No Min, I’ll be completely self sufficient.

    From the moment I commenced my working life, one thing I was sure of is that I don’t want to have to rely on “the State” for my livelihood.

    And since I made that decision I never have, and I don’t plan to in retirement either…

  72. I think the US has a big problem. Their deficit is $13 trillion. If every one of their citizens sold all of their assets – property, cars, furniture etc – they’d raise between 9 and 10 trillion. As it is each person would have to find $50K to get the country back in the black. Less than 20 years ago they had a surplus.

    Trouble ahead.

    Who do we blame? Surely not Swan.

  73. Rebb, Old people should be euthenaised at 70 and turned into garden fertiliser or soylent green.

    And when they’re gone, who will be next ??

  74. Gillard, Swan sail past summit perils
    http://www.smh.com.au/national/gillard-swan-sail-past-summit-perils-20111007-1ldh4.html

    Most important, and most palpable, was the pledge to include in next May’s budget tax cuts for those sectors suffering from the mining boom, pressure of a high dollar, high wages, high input costs and high terms of trade.

    Businesses such as industry, manufacturing, and tourism which incur losses, whether through a rough patch or spending big to restructure and adapt, will be able to claim deductions.

    This is the same proposal made by Malcolm Turnbull when he was Coalition leader during the global financial crisis and looking at ways to help business during a downturn.

    The Coalition stayed away from the tax forum summit and the tax break is now firmly Labor’s idea

  75. Twitter, some advice for Bacchus…

    cosmicjester cosmic jester

    China. We need to talk. You shouldn’t mix red wine and coca cola. Seriously. Don’t.

  76. “I think the US has a big problem. Their deficit is $13 trillion”….

    Why do I suspect that you haven’t read any Bill Mitchell (or Keynes, Galbraith, Lerner, Kelton, Fulllwiler, Mosler…) on the subject of deficits Migs ?

    I’m not part of the inner circle here (though quite enjoying the banter and joshing between you guys) but I’m picking up that you (Miglo) might be in a senior position where you can influence policy ? If so it’s critical that you do some homework and get your head around this. As amatter of urgency !

    If the US has a problem with its deficit it is that it is not big enough !

    Never mind the figure of 10 trillion for the value of their assets (I’ve never seen that number before…it doesn’t sound even close), their annual GDP is more than 15 trillion. To use the deeply flawed household analogy, who worries about a mortgage that’s less than their annual income ?

    But that’s still not the correct way to look at things: when the economy has spare capacity (as the US has…by bucketloads) it is absolutely essential for the government to keep injecting money into the economy to keep the ship afloat. Obama is politically constrained, not financially.

    The government can keep printing money right up to the point where demand is satisfied and there is no unemployment. After that there are inflation risks. Right now we have deflation risks. Inflation is in relative terms fairly benign compared to the effects of deflation…not that we have to choose.

    But everywhere we have conservative governments pushing this surplus nonsense. They seem determined to push their economies to the edge of the 1930’s precipice.

    The deficit is a totally imaginary boogey man that neo-liberal economics uses to frighten people. It wasn’t all that hard to do as we’ve been culturally primed to shiver at the very word. But at the end of the day it’s just a number. If the government chooses to issue “debt” in the form of bonds to equal the deficit, fine, that’s just an asset swap for the private sector, and the stream of dividends further stimulus, but operationally, it doesn’t have to.

    If the deficit was called the “private sector income supplement” we’d be a lot less vulnerable to being frightened by the deficit monster.

    So please, Migs, do some reading and ditch your neo-liberal leanings: we need your help !

  77. The USA has had more than two decades of lowering taxes, especially to the rich and belt tightening that mostly takes from the poor.

    The present President cannot be responsible for the mess the country was in when he took over.

    If cutting taxes and outlays are the answer, why are they in so much trouble.

    Maybe keeping the economy operating and keeping people in jobs is the cheapest and most efficient in the long run.

    I have this funny idea that money and the economy is a man made concept, that should benefit all. Money is a way of allotting the worlds resources, so that all benefit.

  78. Hi MJ. Sorry to take so long to get back to you but after reading Bill’s article I dozed off. No, it wasn’t the article that put me to sleep but my Lupus. Nodding off is a symptom.

    Can I get back to you? The doorbell just rang. 😦

  79. Now, where was I . . .

    I agree with everything Bill says. I would, however, like to hear what he has to say about Abbott’s and Hockey’s economic policies who would slash spending altogether. I’d imagine he’d be very critical.

    Despite what I wrote in my post, I have no problem if the government had have decided to keep running with a deficit. During the height of the GFC they had a choice of spending and thus incurring a deficit, or do nothing and see us enter into a recession. I believe that Swan chose wisely, and in doing so saved many jobs.

    The tone of my post was, admittedly, against the message I’d hoped to deliver, that is to increase the level of skilled immigrants. I stand by that belief.

    I confess to not having read widely on economics, despite sticking my neck out and writing on the issue. It is a topical subject and I’ve welcomed the opinions of others more proficient in the subject, such as yourself.

    My skills are not in economics but in anthropology. On that subject I tend to write with much more confidence, as those who have read my posts on Indigenous Australia will attest.

    Nonetheless, I’ll keep writing economic and political posts in the hope that varied opinions can be attracted.

  80. Migs, might I add. And as everyone knows I am about as far away as you can get from being an economist, my skills being in law specifically constitutional and criminal law.

    However, the Café does welcome all those who would like to put up topics no matter which points of view. Therefore, I would like to reiterate if anyone would like to write a topic then to contact either Migs or myself.


  81. “the Café does welcome all those who would like to put up topics no matter which points of view”

    Pity the same couldn’t be said for comments, which simply get deleted if they don’t fit the prevailing vibe of the moderators….

  82. Reb, I’m back now so all that’s in the past.

    Min, no smooching allowed. This is a respectable joint. I’d hate to have to ban you.

    Reb, kindly ignore her advances.

  83. “I agree with everything Bill says. I would, however, like to hear what he has to say about Abbott’s and Hockey’s economic policies who would slash spending altogether. I’d imagine he’d be very critical.”

    First, thanks Migs for taking the time to read Bill Mitchell. I would’ve thanked you even if you didn’t agree, so your concurrence is especially welcomed.

    Re Abbott and Hockey: Mitchell would dismiss them as lunatics, quite possibly dangerous ones. He would also be critical of Swan for his pursuit of the non-sensical surplus.

    If (hopefully) you find the time to work through the Mitchell archive you’ll quickly develop a useful grasp of macro-economics. It will empower you to nail the flaws in the neo-liberal argument from a sound basis.

    Your antennae might also pick up a sense of the man. Not my place to say but I doubt you’d draw a cigarette paper between Bill Mitchell and yourself on those other issues you hold dear.

  84. Thanks MJ.

    Two things work against me. The first of those is the lack of time. I find it so restrictive. 😦

    The second is that as a federal Public Servant I choose to be very careful in what I say. There is nothing to stop me being mildly critical of the goverent of the day, but I don’t think it’ll be ethical or professional.

    I work the same way. My employer, whoever is in power, has my professional support. Mind you, I’d have to bite my tongue if Abbott was my boss.

  85. I sympathise with your time poverty Miglo. And I understand your ethical and professional constraints. How you navigate a course through these competing demands will be yours to choose.

    Here’s a link to another website that might get you “over the hump” a bit quicker at the expense of the finer detail you’d find in Bill Mitchell’s work:

    http://pragcap.com/resources/understanding-modern-monetary-system

    It does however carry this ominous warning:

    “This subject is very dense, highly complex and counterintuitive to much of neoclassical economics. Because it requires a substantial time investment I would recommend preparing yourself to spend several hours (or even days) on the material before getting overwhelmed by it. The discussion forum also covers many of the common misconceptions when first confronting this subject.”

    From my experience it wasn’t the density or complexity that was the problem, it was the counter-intuitive nature of the material that I first had trouble with. But if you’ve already accepted the reasoning behind Mitchell’s essay on the intergenerational myth then you’re well on your way.

    There is a downside to having these insights however: you will be utterly appalled at the either the ignorance or mendacity of those who have their hands on the economic levers. The remedy is to arm oneself with knowledge and spread the word.

  86. Mangrove, as parliament resumes this week then of course the boss is going to be exceptionally busy. We here at the Café do appreciate that his time is limited on such occasions.

  87. This discussion is like varnishing and re-arranging the deckchairs on the Titanic. It is the entire system of Capitalism which is cancerous to people’s aspirations and it is long overdue that other more equitable systems were examined. When the communist socio-economic system collapsed, the Capitalists rejoiced because they then had a clear field and no other system to offer any form of competition to them.
    But Capitalism is the Politics of Avarice and Greed and periodically it collapses and has to be revived by making the workers (the creators and generators of wealth) suffer with loss of jobs and other forms of income, while those who gorge themselves in the `Boom’ periods of capitalist growth, have fortified themselves with their excessive wealth. It is their greed which has led to the current collapse in the Capitalist system yet they have escaped with impunity for the harm they have caused to others.
    I am not by any means suggesting a return to communism, but the harmful effects of capitalism must be recognised and a different system devised which limits the growth of billionaires and does not create an underclass in poverty and destitution.

  88. Jarl, and so your solution is? I am talking about practical solutions rather than speculation about which theory is right or wrong, because all theories are bound to contain certain elements of both.

  89. Min, here’s a clue.

    Morgan: 57-43 to Coalition
    http://blogs.crikey.com.au/pollbludger/2011/10/07/morgan-57-43-to-coalition/comment-page-49/#comment-1051687

    comment 2428

    The Finnigans
    Posted Monday, October 10, 2011 at 1:21 pm | Permalink
    Let me remind everyone of the beautiful set of numbers again and again:

    0. Best Fiscal consolidation & spending restraint in the last 20 years
    1. Unemployment 5.3%
    2. Inflation 3.6%
    3. Public Net Debts 6.1% GDP & Aust Govt deficit is 3.4% of GDP and compares to deficits of over 10 per cent of GDP in the US and UK.
    4. RBA Interest rate 4.75%, compared to 6.75% when Howard was voted out
    5. For the whole of the 2010-2011 financial year, the economy grew 1.8 per cent, the ABS said. Despite all the natural disasters during the year
    6. AUD Vs USD 0.9823
    7. Trade Surplus – $2B jun 2011- Australia’s $2 billion-plus trade surplus for June brought the tally for the last financial year to $22.4 billion – easily the biggest surplus in raw terms for the past 40 years of records compiled by the ABS
    8. “ALP best manager of money, history shows” – George Megalogenis – http://bit.ly/jD9jYf
    9. Australian families depending on one breadwinner pay among the lowest amounts of tax in the world and have become better off under the Gillard Government – Natsem
    10. Investment in the next year in mining and related infra-structure projects $140B
    11. Labor’s Tax take 21.75% of GDP Vs 25% under Liberals
    12. No interest rise for the 10th consecutive month Vs 10 consecutive rises under Howard/Costello. It is now expected no rises in the future with a prospect of interest rate cuts.
    13. The number of people filling for bankruptcy in Australia has fallen by 16%.
    14. Australia safe from debt crisis: OECD – http://bit.ly/o4HGEI
    15. Credit Rating AAA
    16. We are in Asia
    17. business investment spending is expected to grow by 15 per cent this year and another 15 per cent next year. – Ross Gittin
    18. Australia in good shape if another crisis hits, says IMF – 8/8/11 – http://bit.ly/n7yK7k
    19. Australia Stock market has finally decoupled itself from US. On 8/8 ASX up 1.2% as DJ down 6%
    20. Capex investment went gangbuster in July and retail up 0.7%
    21. NEW Treasury analysis finds Mining played minor role during GFC, it says service industries such as retail – which received a hefty boost from Kevin Rudd’s stimulus package – were crucial in sustaining the economy during its darkest days.
    22. Spending survey shows we are better off than we think – YOU would not believe it if you listened to our politicians, but household fuel and power bills eat up no more of our wallets than they did six years ago. And petrol eats up less. he only comprehensive survey of household spending – conducted once every six years by the Bureau of Statistics – finds domestic fuel and power accounted for 2.6 per cent of household spending in 2009-10, 2.6 per cent in 2003-04 and 2.6 per cent two decades earlier in 1988-89. http://bit.ly/qbWVJw
    23. For the whole of the 2010-2011 financial year, the economy grew 1.8 per cent, the ABS said. Despite all the national disasters during the year. And the growth is not all attributed to the Mining sector. Households are not only spending, but saving
    24. MASSIVE investment in resources and healthy household spending have delivered the best economic growth in four years and boosted the government’s chances of delivering its promised return to budget surplus. – http://bit.ly/qZuYDY
    25. Wayne Swan – Treasurer of the Year 2011 – http://t.co/p1nywVMY
    26. Global recovery stalled, says IMF, but Australia well-placed to weather economic turmoil. But the Australian economy has more scope to adjust than most countries, with the ability to slow its return to budget surplus if conditions get worse, and it will be buttressed by the continuing strength in Asia, the fund says. – http://bit.ly/oDr0d5
    27. iiNet predicts 27% cost drop on NBN – http://www.zdnet.com.au/iinet-predicts-27-cost-drop-on-nbn-339322771.htm
    28. The Wobblebys in Rugby WC Semi Final

    😀 😀

  90. Pip, many inconvenient truths for the Opposition and PM haters.

    You sure do have to ignore a lot of facts to stick by the notion that Labor cannot govern and this one is the worse of the lot.

  91. Min – I was not suggesting there is a readymade solution but that we need to start a debate and discussion to find one. The Boom and Bust economics of Capitalism is destroying people’s lives, people losing their jobs, their homes, their marriages, and some even taking their own lives during such recessions. If people could lift themselves out of the mindset that Capitalism is the only socio-economic system, then such a debate could begin now. Most businesses and companies are owned by investors through the stock market, so it could begin with people having far greater direct control over those companies, rather than small groups of `Directors’ having sole control.

  92. After the summit: a descent to low reality
    http://www.abc.net.au/unleashed/3459010.html

    It is easy to be cynical about summits, conventions, assemblies, conclaves, conferences and other gatherings; to dismiss them as gabfests whose real function is to give the participants their 15 minutes of fame while avoiding the need for concrete action.

    And indeed, a lot of them are exactly that. But sometimes they can take on a life of their own, and if not fulfil the aspirations of their more idealistic organisers, at least give rise to ideas and understanding which can only be beneficial in future. And so it was last week.

  93. Jarl, I sorta thought that this is what I’ve been doing on the blogs for the past 4+ years. I started as moderator on the late great Matty Price’s blog, then to Tim Dunlop’s Blogocracy, then to Blogocrats with Joni and Reb, then again as moderator to Joni’s The Blogocrats and now to this blog.

  94. Jarl,

    Capitalism and socialism are such loaded terms these days one has to be ever cautious in their use, lest you offend or horrify your audience.

    Sometimes, in an unguarded moment in conversation, I have mentioned how my mother, a child of the Great Depression would sometimes vote for the Communist candidate. Try that at the next meeting of the Anglican Ladies Auxiliary for dramatic effect.

    But things aren’t black and white: both ideologies are a moving, evolving, feast. To paraphrase Churchill, capitalism is the very worst system on which to build a society, but better than the alternatives.

    In the capitalist societies of that great prosperity following WW2 (up to say 1970), capitalism was different from today. There was not the offensive CEO remuneration, there was more regulation, and labour got a fairer share of the pie. The unemployed were a concern of governments, rather than a tool to be used to discipline the workforce and fight inflation.

    So we know how to do it better. We’ve been there before.

    Things are clearly out of control today, but those excesses will sow the seeds of reform. The OWS movement might just be the start of things.

    I share your concerns Jarl, and continually seek opportunities to discuss and debate, this blog being one. Can I ask if you have been following the discussion Miglo, reb, and I have had over the last few days because it’s very relevant to what you’re saying ? Did you perhaps take the time to look at those links to Bill Mitchell’s essays ? I would be most interested in your thoughts.

  95. “Unfortunately, Capitalism has become corrupted by greed.”

    I think greed and its analogues, ambition, self-interest etc are in our DNA.

    The trick is in moderating it and bending it to public purpose.

  96. I wish I could read it in work time, MJ. This spreadsheet is driving me crazy. Anything for a diversion. Goodness, I’ve even resorted to reading Tom R’s comments.

  97. I’ve even resorted to reading Tom R’s comments.

    MUAHAHAHAHA!! 😉

    (as long as you’re clicking the clips too)

  98. I lost a bet of a slab of Crown Lager today.
    I was confident this government could not get more stupid.
    I put amber fluid on the line.
    I am not happy.

  99. Why do you believe the government is more stupid.

    Surely you do not see the PM as stupid for stating clearly what she believes the best solution to be.

    It would be more stupid to do as many say, to agree to Mr. Abbott’s demand and settle for the Nauru solution. A solution that the experts say will not work and is very expensive. This would be a gutless. political solution. This lady is not gutless.

    The lady has said that she will do what the circumstances allows her to do. They will revert to processing onshore. They will not extend the present facilities. They will address the problem by other means.

    At the same time they will do all in their power to stop the boat trade, which by the way has more than halved this year. The detention camps have also been emptied out.

    The PM said that she will continue to work towards putting in place the ,Malaysian plan.

    The PM has said that it is likely that the boat trade could grow.

    The PM has said that she does not believe the problem should be addressed by punishing the refugees.

  100. Pingback: Did someone mention a deficit? « Café Whispers

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