28 Jun 2013

Why The Left Should Back A GST Rise

By Ian McAuley

The states need cash and a GST increase might be the best way to do it. Could Kevin Rudd pull off the politically distasteful? Ian McAuley makes the case

Kevin Rudd is back, and, as Bernard Keane wrote in Crikey this week, he has a clean slate when it comes to policy. Building on the big-ticket policy items set up by Julia Gillard, Rudd might have the opportunity to work on a few neglected areas, either before the election or, should he win it, during his second tilt at the prime ministership.

One such neglected issue is taxation – the very issue that got Rudd into hot water in the first place. Tony Abbott and shock-jock journalists have successfully conveyed the impression that our taxes are high: two-thirds of people surveyed by the Australia Institute believe that Australia is a “high tax” country, while only 2 per cent correctly identify Australia as having almost the lowest taxes among the 30 countries in the OECD.

In fact, an analysis of ABS taxation statistics shows that Australian taxes have fallen sharply from their peak in 2004-05, when the Howard government was enjoying a boom spurred by rapidly rising commodity prices and a property boom. In that year our taxes – Commonwealth, state and local – reached 30.3 per cent of GDP, before falling to 25.6 per cent of GDP in 2001-11 and only slowly creeping up since. (See Figure 1 below.)

Had Wayne Swan enjoyed the taxation revenue that flowed into Costello’s coffers, the Commonwealth Budget would have had an extra $197 billion in revenue over the four years to June 2012 – enough to fund the NBN, the Pacific Highway and an east coast fast train, with some left over, and with no net debt (assuming those assets remained on the Commonwealth balance sheet). Perhaps Chris Bowen will be luckier, although it seems unlikely.

While Commonwealth revenues have suffered, so too have state and local revenues. By the same calculation as I have used for the Commonwealth, state governments lost $22 billion over that period from their own tax bases, and they lost another $24 billion in GST revenue – money which is collected by the Commonwealth, but passed through to the states.

That’s why state premiers are crying poor, and why, apart from Campbell Newman's intransigence and the usual squabbling, are attracted to the Gonski reforms. When there is money on offer they care little about the partisan alignment of the Canberra government.

In general, state governments survive or fall on the quality of their services. Health care and education absorb half of all state expenditure and policing takes another 10 per cent (see Figure 2). These are all skill-intensive services, for which labour costs are a major part of expenditure. It may be convenient for some on the left to condemn the hard line state governments are taking towards nurses and teachers, but that hard line is more a fiscal imperative than an ideological stance. (Again, Queensland must be excused from assumptions of fiscal rationality.)

There are rumblings from state premiers about their share of GST funding, particularly from Western Australia which, because of its potential to raise royalty income, gets a much lower share of funding than other states. The Grants Commission recommendations for the coming year (which the Commonwealth usually follows) are for Western Australia to get back only 45 cents per dollar of GST collected, while at the other extreme the Northern Territory will get $5.31 per dollar collected and Tasmania $1.61.

Redistributing GST away from the Grants Commission formulae would be politically difficult, particularly in view of the fact that Tasmania has the same Senate representation as larger states, and it has a number of swinging House of Representative seats.

And it’s hard to imagine that GST revenue will come back to its earlier levels.  When the Howard government introduced the GST in 2000, it was definitely a “growth tax”.  Incomes were rising, and people were running down their savings, particularly by borrowing against rising house prices. It was a boom period, but that boom ended in 2008.

Although real incomes are still rising, people have become more cautious about going into debt – the GFC and stabilising house prices have had a sobering effect. Some items exempt from GST, particularly health care and education, have been subject to relatively high price rises, and this has meant less expenditure on items on which GST is levied. And, to the marketers’ chagrin, there is emerging among many young people what the advertisers call a “post materialist” lifestyle. For many, shopping is losing its attraction.

An Abbott government is already considering increasing the rate of GST. Julia Gillard's predictable response was to prepare to launch a scare campaign. But there are a few reasons why progressives might support an increase to the GST.

The textbook economic wisdom is that consumption taxes are more regressive than other forms of tax, particularly income tax. The better-off devote a larger share of income to saving and a lower share to consumption. That means consumption taxes take proportionately more from a household with low income than from a household with high income. That is no mere abstract theory. Australia’s GST is regressive, even allowing for exemption of most food and health care.

But the GST is much harder to avoid than other taxes, and, apart from local government rates, it is virtually the only tax collected from wealthy “self-funded” retirees, thanks to the undeserved breaks granted in Costello’s final budget, which have been so hard for the present government to wind back.

There is also a case for abolishing or paring back certain exemptions. As incomes have risen across the board, food is taking a smaller share of our expenditure: in 1988-89 food took 18.1 per cent of household expenditure; in 2009-10 that was down to 16.5 per cent. The same reduction in food’s prominence has happened in all income bands. There is also a good case for applying GST to private health insurance to arrest its uptake, before it inflicts more damage on our public hospitals. After all, other insurers are subject to GST.

Most importantly, GST goes to state governments, who provide those services which form the most important part of the “social wage”, particularly health, education, transport and public housing, which all have redistributive benefits as well as a strengthening of our social and human capital. States don’t squander money on military equipment or on middle-class welfare. And they have no incentive to subsidise private health insurers to suck resources out of public hospitals.

A higher or more inclusive GST is not the only way to improve state revenues. But the general point is that there are political and constitutional imperatives for the states to be responsive to people’s needs. If Abbott pitches a rise, perhaps Rudd could show leadership; instead of beating up a GST increase as a bogeyman, he could sell it as an antidote to the neoliberal sell-off of public services. A rise may not be politically popular, but it may be necessary.

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EarthFan
Posted Friday, June 28, 2013 - 12:17

A discussion of the GST and no mention of online shopping!?

Phil263
Posted Friday, June 28, 2013 - 12:55

Not sure that I can follow your argument for increasing GST, considering that as you rightly put it GST is a regressive tax. The only way to reduce this regressivity is to impose GST at different rates on "luxury" items, but this creates an administrative and compliance nightmare, not to mention the costs. We should also bear in mind that a change in the GST rate ( which is enshrined in the Act itself in contrast to income tax rates imposed by a separate Act) would require the agreement of ALL states.

A resource tax ( or a panoply of resource taxes) as recommended by the Henry review is  the obvious alternative source of revenue. It 's a shame that its introduction was bungled so miserably by... Rudd. To these resource taxes, one could add taxes on "sinks" i.e unwanted wastes from our economic activity that return back to the planet or its atmosphere. A carbon tax or an ETS would fit into that category.

Besides being an alternative source revenue, this type of taxes ( on resources and sinks) have the advantage of taxing "bads" and should be designed as a substitute to taxes on "goods" such income taxes which penalised the product of labour.

As you mentioned in your article, an additional source of tax revenue would be the removal of multiple tax concessions and exemptions ( called "tax expenditures" in fiscal jargon) which cripple our tax system. Those concessions and exemptions are the reason why our tax legislation is one of the most complex in the world . Besides representing a loss of revenue, those concessions offer obvious loopholes and opportunities for "tax planning" ( read avoidance to pay a fiar share of tax) for high income taxpayers.

calyptorhynchus
Posted Friday, June 28, 2013 - 16:17

What would be even better would be a simple Carbon Tax. I see Rudd is already talking about going to the floating price a year early, and as the price for carbon credits has dropped so low this would be tantamount to dropping carbon pricing full stop. A fixed rate Carbon Tax would reward low carbon industries and not reward polluting ones and drive us towards carbon neutrality.

Philip Howell
Posted Friday, June 28, 2013 - 20:20

This article seems to be part of the nauseating campaign by Australia’s right wing to increase taxes on ordinary people so that they can grab even more of the pie. Business has already made it clear that it wants the first term of an Abbott Government to prepare the ground for a GST increase.

 

No-one should support an increase in Grossly Stupid Tax. It never had a rationale beyond reducing taxes on high income earners.

 

The article makes the laughable claim that it is harder to avoid. Not in the cash economy it isn’t. How many shops do you go into where they don’t ring up your payment on the till? Ever had a tradesman at home who didn’t offer you a cash price without GST?

 

All Governments should accept responsibility for raising their own revenue. The States never do this. They pathetically bleat about the Commonwealth not funding them, when they could raise all the revenue they need from land value taxation. LVT is highly efficient and has a rationale based in morality as well as common sense.

 

The Commonwealth should progressively withdraw funding from the States and force them to raise land value taxation.

phoneyid
Posted Friday, June 28, 2013 - 22:10

So, I guess that Rudd won't be trying to get money out off the mining companies or kick out any more Israeli ambassadors because of abuse of Australian passports; as he did in the fortnight prior to his overthrow.

Why do my taxes subsidise mining; what do they give back for all they pull out of our ground.

where's our share? because "we" seem to supply quite a bit for a population of 22Million

Iron ore – Australia was the world's third largest supplier in 2008
Nickel – Australia was the world's second largest producer in 2006
Bauxite/aluminium - Australia was the world's largest producer in 2011
Copper 5th largest australianminesatlas.gov.au
Gold – Australia is the second largest
9.3% of global production minerals.org.au
Silver 4th largest at 57.8 million ounces with 1/2 coming from a single BHP mine
which alone represents 15% of global silver production. (various sources)
Uranium – Australia is responsible for 11% of the world's production
Diamond – Australia has the third largest commercially-viable deposits
Opal – largest producer of opal, 95% of global production
Zinc – Australia 2nd in 2008, just under 14% of world production
Coal – Australia is the world's largest exporter of coal and fourth largest producer
Natural gas - world's 3rd largest producer & forecast to be world leader by 2020.

OIL.. too convoluted... look it up if you wish.
most figures from http://en.wikipedia.org/wiki/Mining_in_Australia

To top it off, a heap of this stuff gets exported with little "value added" as ore.
We even send out tree trunks to be milled overseas.
Crickey! On our store shelves you can even buy Australian prawns and scallops "shelled overseas".

On gst;
I challenge anyone to show me a "tax invoice" from ebay.com.au for the service they provide.
If you are in business, and have since onset of gst, paid money to ebay.au for their services without withholding 48.5% (good luck) in the absence of a tax invoice; then YOU are in breach of your gst obligations.
I reported this to the ATO within 30 days of gst commencement.... all I heard was crickets.
There's a story newmatilda.

Lets put up the gst then, apparently we gave a "mandate" when we voted in Labor as they and Libs took it in turns at various elections to bring it in.

Please don't call them "left"; I take offense.
Between the "left" and the "right" how is it that so many of us are unrepresented?

Stripling
Posted Saturday, June 29, 2013 - 14:32

Ian I think you have been in isolation for too long.

The GST is a linear tax that gets passed on down the line and the end user pays all.

Phoneyid is right when he talks about mates rates-what choice has a Tradesman got?

The cost of service has put it out of reach for the most of his potential clients.

What you need to accept is that Capaitalism is in its death roes and No medicine is going to cure this ill-the change has got to be internal.

FOR A NATION THAT EXPORTS SO MUCH WHY ARE WE NOT A SHIPBUILDING NATION?

WHY DID WE SELL THE MERCHANT NAVY?

WHY DID WE SELL COMENG?

WHY DID WE SELL ANYTHING THAT WAS WORKING?

HERE'S A QUOTE FROM ROOSEVELT ABOUT WHY,

 Roosevelt began blaming the economic crisis on bankers and financiers, the quest for profit, and the self-interest basis of capitalism:

Primarily this is because rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence....The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.[96]

http://en.wikipedia.org/wiki/Franklin_D._Roosevelt

WHEN PEOPLE LIKE YOURSELF ADMIT THAT FEDERATION HAS TO GO BACK TO WORK AND EARN A LIVING LIKE THE REST OF US I WILL BE MORE INCLINED TO LISTEN TO YOUR IDEAS.

This user is a New Matilda supporter. Rockjaw
Posted Saturday, June 29, 2013 - 14:58

Admit it Ian, if it were up to "economicsts" like you, there would be no "income", only taxes, debt servitude and autocratic regimes.

Until the greedy governments and authoritarian regimes of the OECD can provide empirical proof that the GDP of their tax exhausted countries is factually "redistributed", as is their claim, every taxpayer should simply refuse to submit another tax return or to pay single buckled cent to their revenue authorities.

 

imcauley
Posted Saturday, June 29, 2013 - 15:55

Thanks for the comments which raise many issues..

Three responses -- one on regressivity,  one on online shopping, and one on taxes on "bads".

Yes, the GST is regressive. But when we look at regressivity. we need to consider the whole package of taxes and benefits, not just its components.

For those who are familar with Gini analysis -- a measure of income inequality -- the GST worsens inequality by 1.0 basis ponts, but our spending on education, health care and housing improves equality by 3.1 basis points.  Their redistributive effect is stronger than that of our mildly progressive income tax (2.7 basis points).  These are quite small figures, but the Gini incdex is a very sensitive variable.  (I can send the calculations to anyone who seeks them.)

In other words, there can be net equity benefits in using a mildly regressive tax to fund services with strong re-distributive benefits.

On the other points about the GST itself, it was badly implemented, and the government was warned of its flaws. But the opening of international transactions to consumers has caught governemnts and businesses across the world by surprise. Our problems with GST collection are just one of a host of taxation and other issues (e,g, consumer protection, illicit drugs) associated with this development. The solution has to lie in international cooperation.

On carbion and mining taxes, these are good taxes, and it's unfortunate that the Gillard Government caved in so easily on the latter.  But they are too volatile to form a strong basis for our long-term tax base. Revenue from a carbon, tax, if it is sufficiently strong to be effective in reducing GHG emissions, should ideally fall away over time, just as we can hope to see a day when tobacco tax collects no revenue because no-one is smoking.

Stripling
Posted Saturday, June 29, 2013 - 17:08

The Gini along with lassiters curve are probably the two most famous indicators in modern economics and fair enough they actually are mathematics.

Given that have you calculated the Second Differential?

Because in case you haven't noticed Capitalism is in "Fractal Chaos" something which the second differential of Calculus will indicate.

America and Australia have the highest or best Gini Index at the moment yet America has debt issues and Australian States are not balancing their books in terms of the services they need to PROVIDE.

The Gini index takes the whole resource  and the whole population and then shows the distribution as  an area. It is more accurate than putting 1 trillion dollars over 25 million people admittedly as in how many Australians increased their wealth by $400,000 last tax year? 

The reason I mentioned the second differential is because merely changing the Gini Index is not necessarily good,

that is just 1st Differential thinking,

What you need to think about is The Rate of Change over a period of time and the fact that economics flouts the laws of mathematics but eventually Reality Bites.

It is true enough that education is hugely important and funding it is imperative,

BUT this is no time to clutch at straws we have to find more practical means of Consolidating the Commonwealth and evenly distributing the Commonwealth to the States on a pro rata of population and need basis.

THE GST does not do that it has not made our tax system simpler it has made it more complex and therefore inefficient. In fact I think the Coefficient of Thermal Loss is more applicable to Tax than the Gini's Index.

Federation needs to practice Federation and be in the marketplace as a player, an employer, educator and trainer and a supplier of the basic services in such a way as to allow Australians to engage in private enterprise,

AND YES that means we need to create a couple of [not too many]

NATIONAL INDUSTRIES.

phoneyid
Posted Saturday, June 29, 2013 - 20:41

from http://www.oziz4oziz.com/restoring-prosperity---details.html

What most ordinary citizens have already concluded is that:

Economists appear to have contributed significantly to the financial disaster with their glib and rarefied theories, and failure to realise that their favourite equation… debt equals credit equals wealth… is untenable; or that futures, derivatives and credit default swaps are merely sophist juggling, gambling and fraud, by other names;
Private banks cannot be trusted to manage the wealth of the nation, on behalf of the nation; and
Journalists, for their part, are endemically unable to differentiate fact from fiction and are gullibly serving the entities responsible for manipulating this situation in the first place: the investment banks and Wall St.
Nor was the oft-heard wail ‘no one could have seen this coming’ related in any way to substance.

phoneyid
Posted Saturday, June 29, 2013 - 20:56

It's also becoming apparent to the masses, that we have rulers and their Grooms Of The Stool http://en.wikipedia.org/wiki/Groom_of_the_Stool

Here's one; Keynes the man, the self described "immoralist" .
An interesting read. No Economics knowledge required.
http://www.lewrockwell.com/rothbard/rothbard208.html

Jade w
Posted Sunday, June 30, 2013 - 07:05

Ian's opinion piece doesn't encourage me to whip out the Visa card to fund New Matilda.  I can read that crap in mainstream media.

jackal012
Posted Sunday, June 30, 2013 - 12:10

phoneyid great comments, you are doing very well indeed.

Stripling great read, you've got a good grasp of things.

I don't think much of Economists or Historians but lets not throw out the baby with the bath water. Ian Mc is far more on our side then other  (Neo fruit loop idiots)  side in the same Profession. So steady at the helm we want to turn the boat into the weather to ride out a financial storm not flip it over. We can turn her around once we are in calmer waters.

We are all Seaman or Passengers on this Boat known as the world economy and worldly it is because you can't have an economy of any kind without exports and it is the desire to export to somebody that has caused wars. You can't export to poor countries but you can exploit them for whats in their ground.

The American's have always been feudalistic for monies sake, why can i say that.

Well because the great unwashed, the sheep sold their right to life away under Draft legislation/ Conscription to get a Vote in a Political Process that very few American's participate in, even if it is just to save their lives from being wasted in wars to make a few rich.

That alone makes a mockery of that Morron of a Nation which apparently always fought for freedom and democracy, despite the fact that they always fought to rape, pillage and plunder. Now the Industrial complex has moved off shore and all the dumb Yanks have left is Retail and the public service sector, as well as the Military Arms Manufacturing Complex which is infect only rorting the place.

Yet those Morrons and the Pommy Poofta's who lost the Empire to the Yanks wrote the Text Books we all learn from when it comes to economic theory and Practice.

How could a Nation (England) that had a Dept. of Economic War Fare loose, they obviously could not tell the difference between David and Goliath, so they weren't ever going to recognize a Trojan Horse when their looking or looked at one..

Running a Nation is not like running a Super Tanker of one product, its more like running a Passenger Liner, its a ship but not a ship, one is a ship of people, people with needs and feelings, some rich some poorer but all passengers, lets make sure its not a Titanic.

We should all know what happened to the 2nd and 3rd class passengers, they were locked into their cabins doomed to die, even if a boat had have appeared out of nowhere.                                                                                                                                                                   

jackal012
Posted Sunday, June 30, 2013 - 12:35

Now, what si the problem with humanity you ask.

Let me tell, you. Its about the Economy/Unemployment  stupid!

Yet look at all of the articles here at NM and what do you notice.

4 million articles on Refugee's, Racism but fewer when it comes to economics

Then when you get an article about Economics, how many people actualy comment, reply.

Even Ian can't be bothered to reply to dummy's like me when I make a comment. It seems to be beneath him to talk about the fundimentals. When I asked who actualy pays Taxes, nothing. What does that tell you. What it says is that people don't comment or reply cause they don't want you to know that they know about as much as you do. Economics is not an Exacting Science, just a whole bunch of fancy words and Phrases to hide some kind of rip off.

The ship, the economy is depended on the Tax structure, the hull. So lets look at the Titanic, the tear in the hull from the Iceberg did not sink her. It was all the cheap rivets that popped thre allowed all the hull plates to open and caused her to take on water at an alarming rate. The whole ship was a joke, it was built and used in the way it was to restore the manufacturing glory of Englands Elite, but just like Marilyn Monroe it failed. American democracy that shinning bright lighthouse that guides us to a supposed save harbour has been built on the wrong headland and the economic map we have doesn't show all the reefs,so we are knackered. we could just run aground, but what if we sink..

 

 

jackal012
Posted Sunday, June 30, 2013 - 12:55

Now lets talk about the Lighthouse.

Watch:   "AMERICA — From Freedom To Fascism" (Full Length Documentary)  then ask yourself what of the Tax system in that Democracy as opposed our Tax System and what would be the difference in Democratic Value, out comes and Possibilities be..

The people in that Country pay 3 times more Tax then Corporations yet their u beaut Constitution, the one that they rant and rave over, says they should not have to pay any taxes on their private incomes. So what are they really saying when they say that the Tax Payer is Bailing out the Banks.

So how can our Passenger Liner become like their Super Tanker, both ships yet not. So why are we modelling ourselves according to that bunch of Dim Witted, drunken Pirates.

 

phoneyid
Posted Sunday, June 30, 2013 - 13:50

There are a few FACTS which the deceptively and dismissively named "conspiracy theorists" like myself learn during "conspiracy theory 101" which are largely alien to "accredited" individuals in various fields.

Accredited individuals in the field of "economics" ARE ignorant of fundamentals of "central banks", and others that are not ignorant continue to avoid discussion of the fact that these most central of the central banks are in fact "privately owned".
The BIS, IMF, USA's The FED, Bank of England; to name a few.
That "money" is created out of thin air as Debt.

As a result of this ignorance of accredited individuals and avoidance of discussion of these facts, the wider public is left with beliefs like ...
'The Independence of Central Banks is Above Political Vagaries And Short term Election Cycle Interests'
'Through Expansion and Contraction of Money Supply, Central Banks are Able to subdue Inflationary Pressures"

The truth however is that:
Private Central Banks, being free of political and democratic oversight and controls, are best able to serve the interests of their private owners. As with any "private company", they act in the interests of their private owners.
Through Expansion and Contraction of Money Supply, Central Banks are Able to manipulate all prices from housing to food to health and to DE-stabilise the wider public's savings and their very lives.

The printing of money above current levels at any given time is the root cause of inflation, and the lending of money at interest by the issuers of the money means that all debt can never be repaid.
Simply; if you put 10 marbles in a bag, you can not take out 11.

If what I have written makes you think that it's I who's has "lost my marbles" then I suggest you go to basics and watch "The Money Masters"
https://www.youtube.com/watch?v=HfpO-WBz_mw

This user is a New Matilda supporter. Rockjaw
Posted Sunday, June 30, 2013 - 18:00

Our Universities have become infected with this new fundamentalist faith in failed theories, suppositions, econometric models and calculations sans empirical evidence that any of it is anything less than complex mumbo jumbo.

 

THe bishops and cardinals of this new faith are all blessed with tenure at our Universities and the core of their faith is is the unwavering belief in a magical central banking Deity which is believed to possess the power to create wealth, not from production, like the rest of us poor worldy beings, but through the creation of eternal debt.

Australia is filled with these fanatical believers of this new faith, and on every Australian campus you can hear their loud and arrogant call to prayer reverberating loudly from the various Economics and Political Sciences faculties.

As they pray we can all hear them chant, in perfect unison:-

 

"There is no God but debt, and Keynes is his Prophet"

phoneyid
Posted Sunday, June 30, 2013 - 19:22

On "carbon" as a "good tax", as opined by imcauley.

Little discussed news revealed at about 2002
http://www.prnewswire.co.uk/news-releases/rothschild-australia-and-e3-international-to-take-the-lead-in-the-global-carbon-trading-market-154464275.html

That coincides with the period of Directorship of NM Rothschild and Sons (Australia) by Dr Megan Clark: current Chief Executive, CSIRO.
She's also Commissioner of the International Commission on Sustainable Agriculture and Climate Change.

From Rothschild.com website; "Rothschild is one of the world’s largest independent financial advisory groups"
OH.. "independent "... that must mean that they are without bias and not acting out of self interest. Perhaps benevolent even.
They sure have done well for themselves.

phoneyid
Posted Sunday, June 30, 2013 - 22:01

They're the Secular Priesthood Rockjaw; our guiding light, leading us willing neophytes to their indisputable truth.

If ya ain't with us, you're a'ginuss and a no good lazy heretic.

OMG!! Austerity has hit our monarch.
I can't wait for the garage sale to snap up some of those Titian paintings that were worth $100Million each decades ago.

http://news.google.com/newspapers?nid=336&dat=19980706&id=eTtOAAAAIBAJ&sjid=yOwDAAAAIBAJ&pg=2732,2445929

K Brown
Posted Monday, July 1, 2013 - 01:18

Low income earners and welfare beneficiaries can be insulated from the regressive effects of widening the base of the GST or increasing its rate with tax cuts, benefit increases and the elimination of other even more regressive State charges such as vehicle registratrion and drivers' licence renewal fees. 

High income earners who are not compensated would pay more tax.  That seems fair considering that 80% of of the benefits of reduced tax rates since 2007 have been delivered to the top 20% of income earners!

phoneyid
Posted Monday, July 1, 2013 - 08:00

K Brown;

but, but

If Mrs Rudd; were to buy an affordable Hans Heysen painting (or heavens forbid: a Titian) from Mr Packer; then those goods would be exempt from GST because Mr Packer is only ...'acting as one engaged in a hobby or recreational pursuit'.... I think you'll find, that's how it works.

Whereas; if Sue and Garry Smith buy a dirty second hand pram from Cash Converters; they will be paying GST.

Further; Garry is a fat slob and spends all his "disposable" income on fast food, coz there's not much in the fridge and so he actually spends more of his income as a % on food and it's GST component than Mrs Rudd and Mr Packer
Sue; is vain and likes to dress nicely for work in the office, so she spends up her disposable income  a bit at fancy dress shops... um.. at Westfield.
As a % of Sue's income; she spends more of her income on GST via clothing than Mrs Rudd.

Sue has a sister, Mary; Unlike Sue, Mary is a modest and frugal lass and only dresses to a minimum standard of that accepted (begrudgingly) by her boss at the front desk at head office where she answers calls, makes coffee and occasionally straightens the reception lounge.
Ironically; Mary also spends more of her income on GST as a component of clothing than Mrs Rudd.

Mary, Sue, and Gazza, are Aussie battlers and there are many millions like them.
By contrast; the afore named fancy folk; don't even dare call themselves "Aussie Battlers" and don't care about the gst they pay on clothing and fast food. They do complain like hell though and actually do elicit a politician's shoulder to cry on when they moan about their cut of the next $10Million coming their way after income tax.

 

phoneyid
Posted Monday, July 1, 2013 - 08:12

Oh; and the Mr Rorshchilds of this world that I mentioned earlier; never complain about taxes, and infact even call for "austerity" as exemplified by HRH in my earlier post because they know tghat those taxes are necessary as a source of income for, say the Bank For International Settlements which they undoubtedly have shares in,,,, but it's a secret.
That's  "the central banker's central bank" BIS that was described by ellements of our MSM last week as as 'most honest of all central banks'; as it called time for tightening of money.

http://www.abc.net.au/news/2013-06-24/bis-warns-central-banks-have-done-all-they-can/4776608

 

jackal012
Posted Monday, July 1, 2013 - 08:27

K Brown

"Low income earners and welfare beneficiaries can be insulated from the regressive effects of widening the base of the GST or increasing its rate with tax cuts, benefit increases and the elimination of other even more regressive State charges such as vehicle registratrion and drivers' licence renewal fees. "

Now how would that work for the under employed who a sort of on a safetry net, (the almost useless NewStart), yet not elegable for any concessions as in Rego etc.

Most un or underemployed can't afford the petrol never mind the Rego costs to get a Job.

Nothing in society is just around the corner anymore. Major Shopping Centres and the cheap foods are Km's away for most people.

The problem is Neo Cons have gone too far, Go to http://www.abc.net.au/tv/bigideas/stories/2013/06/24/3786603.htm

Michael Sandel: The Public Philosopher - Social Justice in the Age of Markets.

Basicaly we have lost the plot as a society. phoneyId is right to a great degree.

My take however is the you Rothy's are just as affraid of global warming as we are, they love life too, our problem is what have they decided to do now that the Space race has run out of Tax Payer funds and stalled, no more safe haven in the heavans, yet they can't afford to admit that our current system of Economics 101 was all about their greeed and theft.

Which then brings us to the New World order and whether we are going to be apart of it or whether we have been tagged for extermination to save the planet from the weight of humanity.

The question, are the Oceans realy depleted, if they are we are doomed. Start growing some Vegies.

The Key is America's Economy, its not taking off, why, is it being held down to force the issue of world over population, to force the breeding classes to confront their ignorance, their brain dead sense of entitlement., the fact that so  many failed to accept Global Warming. So, is it now a case of, "IF YOU WON"T LISTEN THEN SUFFER" The days of the Carrots are gone, its now time for the stick.

And all that because idiots, over education Knobs couldn't, wouldn't tell the truth behind all our wars and economic upheaval every ten years and now in a modern world every 20 or so years.

 

phoneyid
Posted Monday, July 1, 2013 - 08:38

FYI;
If I recall my 'conspiracy history 101' correctly;
the BIS are the cabal that transfered all of Poland's and Czeckoslovakia's gold to the NAZIs. At about the time the Bush Patriarch Prescott had his company pinged for "collaborating with the enemy" when he was laundering their money.
So much for "the sins of the father" theory.

Jackal, Jackal;
Don't mention "New World order"; you're kreeping them out.

K Brown
Posted Monday, July 1, 2013 - 09:21

Jackal012

Newstart  and other welfare beneficiaries could be compensated for GST increases through an increase in their benefit equal to the increased GST payable on the goods and services they notionally consume.  The State duty element in vehicle registration fees could be eliminated completely which would pare the cost back to the CTP insurance and an administration fee based on the real cost of processing.

Millions of low income jobs are located in industrial areas on our urban fringes where public transport is inadequate.  More affordable vehicle ownership would improve access for the un/underemployed to these jobs.

jackal012
Posted Monday, July 1, 2013 - 09:45

K Brown     can't disagree with you there.

Yes, phoney, world order, now if we could only figure out who the real enemy is.

It could be said that Feminism is the enemy of the working classes, if the movement is controlled by rich bimbo's who don't want to compete with working class men for executive positions and use working class women to defeat working class executives.

The rich have used working class men of one nationality against working class men of another in past wars so why can't you use working class bimbo's against working class dopes.

Destroy the working class family unit and you destroy their ability to raise to the top as well as creating more seperate working units competing for working class jobs. But there is always blow back and blow by. Well whats wrong with a bit of collateral damage.

Why are so many rich women getting well payed executive jobs in Charities, are they?

Is their any truth here or am I just stirring the pot. Only the devil knows it seems.

Would a rich woman work beneath a working class woman or could that become a cunning Kevin verses Julia back stabbing campaign.

 

phoneyid
Posted Monday, July 1, 2013 - 12:33

the"real enemy" are the same ones that have all the gold and manipulate us as "free range" cattle into thinking we are free just because we vote.
Only an informed public can have a democracy.

Instead we are distracted into interest groups as patsies.
Here we are contemplating "the good" of gst instead of asking where all the "money" or gold has gone.

Economists assure us they are right this time; unlike app 1999-2000 when they all stood by as National Tresuries all over the world sold most of their gold at $200-$300 per oz.

phoneyid
Posted Monday, July 1, 2013 - 18:13

merdeka044 "He's the best guy in his job and i think he deserves some credit for it."
judging from your link, "Carmack Moving and Storage " I presume you're an American

We, like Americans, should be guarded when heed is taken from foreign interests.

phoneyid
Posted Monday, July 1, 2013 - 23:19

Mr McAuley,
would you please address just one of my claims; namely that the Federal Reserve in America is owned by a cartel of private banks.
Surely one of your students has at some time put that question to you. What do you tell your students, if that question is discussed at all.
Surely, as the issuers of the globally hoarded "petro-dollar" they have considerable influence on the global economy.
Allan Greenspan once stated that 'if the petro-dollar were to cease then the US$ would devalue 25% overnight.'

Nugget22
Posted Tuesday, July 2, 2013 - 13:50

Why not abolish income taxes entirely and increase the GST to a level where it makes up for the lost income tax? As long as we have the present exemptions (private health insurance excepted), lower income people are protected. But it will catch all the wealthier tax dodgers. After all, your money is no use unless you spend it. Doesn't matter if you're a tradie who takes cash - when you spend it you pay your GST. Much simpler. Sure there'd be GST dodges but then it's a matter of enforcement. The only problem I can see is the transfer of money overseas for spending, stashing, or whatever. And since this can only really be done electronically, presumably there is a way of dealing with it.

And while we're on the GST, I've never understood why share traders don't have to pay GST on their stock in trade. I accept that investors (i.e. long term) can claim it's a financial transaction. But if your business is trading in shares - day traders up to anything less than say a year - it's no different from a retailer who buys stock intending to sell it for a profit. GST is paid on the margin of the transaction.

And as for negative gearing ... most agree it's immoral. unfair and a subsidy by the poor on the better off. It should go. But how to get that in without destroying the housing market and alienating all those voters who've been profiteering and dodging tax out of it? Or is it just a matter of a Government biting the bullet? I've never been convinced about how it somehow 'provides' rental accommodation. An unskewed market will just 'provide' cheaper rental accommodation.

 

Bennite
Posted Tuesday, July 2, 2013 - 15:05

Thanks Ian about the clarifying comments regarding the GST being regressive. Very interesting.

This user is a New Matilda supporter. Marga
Posted Tuesday, July 2, 2013 - 16:22

Ian has written - as usual - a well thought-through column but many of the commentators do not appreciate it.

On the surface GST is a regressive tax.  But as K Brown rightly pointed out the negative effect can be compensated for.  The negative effect of any tax can be compensated for. This argument is used by opponents of GST and have been used right from the outset.

GST should apply across the board at an even rate, and if increased should be increased across the board at an even rate.  A penalty tax for luxury goods is not definitive enough.  What is a luxury good?   Is a $100 T-shirt luxury when elsewhere T-shirts cost $10?  The $100 T-shirt may last years, the $10 one does not survive one wash.  So, quality comes into it. 

I would like to see a penalty rate slammed on unhealty foods and unhealty habits though.

But what we really need is comprehensive tax reform.  Ken Henry included many worthwhile items in his review.

Basically we should move away from income taxes.  Income taxes are taxes on labour, on what people earn in return for using physical or mental labour.  Even if income is derived from investments.  Investments require labour-input: difficult decisions where, how and what to invest, market analysis etc etc.

However, negative gearing could perhaps become neutral gearing, perhaps applied for property income along the same lines that capital gains/capital losses work now.

We definitely need resources taxes.  Economic rent (windfalls) should be collected not by individuals but by the community at large.  We need use-and-abuse taxes.  Why do we reward frequent flyers with cheaper flights?   Frequent flying should attract pollution taxes, as should frequent and unnecessary driving.

The Tobin tax would provide a good additional source of revenue (a micro-charge on exchange and share transactions)

Social welfare funded from Consolidated Revenue and controlled by politicians should change to Social Insurance, directly funded and not subject to political interference. Welfare as we know it today is simply unsustainable and is a frequent source of exploitation as well as an attraction for people from poorer countries. 

 

phoneyid
Posted Tuesday, July 2, 2013 - 20:34

yay! Go Marga.
So while "we" give assistance to low income earners theough the taxes "we" high earners pay...
Do you expect there will be much resentment for those poor by "we" of high income of ...say $75,000pa; even while "our" household income is above the median Australian Household Income to the tune of app $20,000 when "our" spouse's income of $10,000 pa made through Ironing Services is taken into account?
Your solution to income inequity is to go after "we" rich that are not rich enough to avoid tax through loopholes.
Wouldn't it be "fairer" to change laws at the stroke of a pen and thereby get more than, say...the $74,176 Australia got out of google in 2011 even though they generated MORE THAN ONE BILLION DOLLARS in revenue through Australia??

Or the ZERO GST "I suspect" ebay, and even ebay.au paid for the services they provide. ie gst (goods and SERVICES tax) I say "I suspect", because I can only go on the fact that ebay have refused to supply me with a tax invoice and I am yet to find anyone that can show me one.

If China can block google, ebay, facebook, youtube etc, then why can't Australia until they pay their tax here??
Why must "we" rich pay the tax, while the other kind of "rich" don't.

Yes, sure, by raising GST you will ensure that ebay etc in their Australian offices, will have to pay more for their printing paper when they top up at BIG W or Office Works,

Did you look at the rothschild web site I cited earlier?
They boast over 4000 employees world wide, just how much gst do you think you'll get out of them for the goods or services they might consume in Australia???
There are Pizza bar chains with more employees than that.

Your proposal and that of the author will surely help nail me, you, and those "terrible tradies" that so many despise because they earn more, but what about the other "high income earners"; That is the "realy" high income earners.
What is your proposal for dealing with them??
I hear crickets... same as when I told the ATO about ebay.

I tell you what, instead of moaning about the LOW "high income earners" like many Australian believers in a "fair go" do, why not understand that we 99_POINT_something % are all in the same boat not making more than a 1/4Million per year and start screaming about the fat cats.
Surely the "tall poppies syndrome" would only cut in at, say enough to at least by a good Audie.

Please don't come to me about "they create employment" or "trickle down effect", because they are trickling it down on us with their twinky as we type, They "rationalise" they "cut the fat", "cut costs", they actually destroy employment by shipping it out to China at perhaps $400per month wages or even India at $40pm.
A little flippant perhaps, but Rothschilds own 1/2 the world, and they have the gall to boast 4000 employees "globaly"! in the field that enriches them the most: finance.

And you want to stick the gst up us?...
FAIR GO Ian McAuley !!! Whose side are you on digger??
We're your mates.

phoneyid
Posted Tuesday, July 2, 2013 - 21:10

And while you and the other apostles at NewMatilda and your Centre for Policy Development claim your right to advise others to do something about the plight of women in Afghanistan through your perpetual advertisement; would you at least start with one's moral obligation to understand what the hell is going on before meddling.
Here's a start for you, because given the benefit of doubt, in that you aren't ignoring the reality but rather are acting in good faith for these women and Afghans in general; it seems to me that you don't understand what's going on there.
I suggest you do something about the 3Million people (according to the add link(amnestyinternational)) that are behind this cause you are promoting; because I suspect most of them haven't a clue either. So, in the interest of moral obligation, promote this link to them too, because the issue is not as plain as it's presented.
http://www.youtube.com/watch?v=5eqYEVYZgdo

fightmumma
Posted Tuesday, July 2, 2013 - 22:25

phoneyid - spot-on about amnesty international - I read somewhere in my uni research that they are only an international organisation and do not actually interrelate with grassroots, local communities in any meaningful way!!  It defies logic to assume that an organisation that doesn't have contact with locals can effectively address social issues, especially in a manner that is democratic, relevant and involving local voice/interests etc.  We have to ask ourselves what we want from our money funding others...for me I want it to empower individuals and communities to pursue their own goals, needs, problem solutions etc.

fightmumma
Posted Tuesday, July 2, 2013 - 22:54

Marga - you always fail to identify, acknowledge or realise the true impact and importance of social, cultural disadvantage...and underestimate the advantage of those living well above the medium wage.  The error in doing so is that your ideas become unrealistic to real life circumstances (thus are not workable in real life) and have a strong potential for producing further social disadvantage and social fragmentation, conflict.

There are underlying crises in most social and health services at present.  Our society is actually a wealthy society for some, and we are well and truly able/capable of funding wise, socially responsible and empowering social programs that benefit all of society.  Marga is trying to disseminate a common myth that the fraud involved in welfare is some huge, ugly, expensive spectre that becomes a piece of evidence as to why welfare should be eliminated.  It IS a myth, it is not true, but some groups like to chant it like a prayer or affirmation to empower anti-welfare/anti-social justice sentiments.

Marga would prefer we just roll over as a society and democracy to completely obey neoliberal policy, give real people no voice and ignore any social problems...just obey IMF, World Bank, WTO...because people who only have dollar sums and their own selfish interests at heart - seem to have all the answers to every problem...not very logical or sensible...but hey...if you lack the empathic and social-emotional intelliegences that she obviously does...you won't even care about that will you?

As a collective, with our social, cultural capital and community strengths, we have well over the potential necessary for building an equitable society (but I'm sure Marga and people of her "faith" don't care about equity anyway - they love the poverty because they need it to be so wealthy - addressing it/solving it threatens their own obscene wealth).  What needs to occur is for decent, deserving people who have the mature and more advanced mentalities, and social, emotional intelligences that successfully make a society function within its social processes, relationships and organisation, to step up and kick the people who thrive (at the expense of others) on self-interest, self-gain out of the positions that drive, order, discipline and reward entities in leadership positions.

Marga is also always on about people fulfilling their social obligations. One might point out that employers and the very wealthy also have social obligations if we are talking about social contracts - at least in feudal society lords had responsibilities to their villages and were obliged to fulfil these.  Now we have this assumption that investment and empowering the wealthy is what our society needs...especially for employment...but what we see is NOT employer or investors participating in reciprocal relationships between responsibility and obligation...we see them only answering to themselves and making UNDESERVED demands and voincing UNDESERVEDLY they own interests over ALL other members of our society.  This is not at all desirable in a democracy or in a society...what we see is these people as we have seen time and time again since neoliberal policies became so rabid...that employers love offshoring and outsourcing...so bye bye Aussie jobs in the thousands.

If you care so much Marga - why do I never hear you talking about the social contract operating as a reciprocal process, and advocating for increasing employment?  One of the anwers of all these problemns is more people working, in better paid jobs, more skilled jobs, more flexibility in job choice/training/hours (such as adapting for teenagers, family needs, disability/mental illness).  Why don't people like you ever complain about our governments' of the last 20 years completely abandoning pathways to full employment, or criticising all our governments' failures to protect Aussie jobs and Aussie industries and Aussie workplace conditions?

 

phoneyid
Posted Wednesday, July 3, 2013 - 01:29

yep fightmamma;
one must be wary of these well resourced NGOs.
Here's Amnesty International making what appears to be a case for continued foreign military intervention in Syria. As though French/US/NATO weren't already complicit in arming the so called rebels.
https://www.amnesty.org.uk/news_details.asp?NewsID=20676

Syria: Government indiscriminately bombing civilians, opposition abuses 'escalating'
The tittle clearly blames the Gov,

Amnesty International does not appear to have advertised the fact that a high rank UN Weapons inspector has jumped the gun, so to speak, and declared use of Sarin Gas and evidence that it was used by the "rebels" and declared an absence of any evidence suggesting it's use by the Government. Leaving us with the tripe "intelligence" accusing the Syrian Government of using sarin as offered by France, USA, and the other friend of Israel: Australia, via Jullia Gillard.
https://www.amnesty.org.uk/news_details.asp?NewsID=20676

Crimes by the "rebels" have been represented by Amnesty as "escalating"; which I'd suggest can only be seen as understandable in a theatre of war to any reasonable person.

In the Amnesty Int' 2012 report on (the now turned into crap) Lybia, NATO meddling is accused of only being complicit in the killing of "tens" of innocents.. Yea Right!!

Amnesty International always refrain from commenting on validity of foreign military interventions, but they do stress that caution be exercised before it's employed. Their reports and report tittles however, appear to have loaded terms and select observations, and as "reputable" sources offering a case for intervention, they seem (at best) not too cautious at all.

phoneyid
Posted Wednesday, July 3, 2013 - 01:31

http://www.amnesty.org/en/region/libya/report-2012

http://www.youtube.com/watch?v=sY_9SrIUVwU

fightmumma
Posted Wednesday, July 3, 2013 - 08:43

yeah - these types of injustices are the fault of large, powerful central governments and NGOs where there is inefficient capacity for grassroots locale to interact, have a voice and influence policies/decisions/actions that affect their own lives.  We see centralised organisational structures everywhere now - even in things like local emergenc services such as ambulances and postal services - where local information, knowledge and experience is completely erased due to the apparent "efficiency" of a central management style.  The problems with this are multiple and are a great threat to social health of communities, especially smaller and more remote ones.  Or in the cases you raise, where internationsl influence/interests can be served at the sacrifice of others...all done with certain mindset of certain interest groups who have the power.  These processes are a great threat to the principles and ideals of true democracy, but this is something that people who believe and benefit from neoliberal policies will never see or understand or care about - because they benefit from this existing injustice and also possess the power to maintain the status quo, and to maintain dominance of the language, communication and symbols behind interactions. 

This is why I say: we need to overthrow the pattern of central governing and replace it with smaller decentralised government that is forced to interact with, respond to and respect the real people making up our populations...to have to collaborate and cooperate and utilise social capital in more effective, inclusive, active ways.  How much of our money is wasted on central governments that fail to be responsive to what real people require of them?  Money wasted on large organisations that serve their own interests rather than utilising their power to hear and serve their populations...because they are too large and bureaucratically, administratively oriented to actually interface with real people in their real life contexts?