It is called "maths", not "math".
Keep your hands of my hard worked for and earned superannuation. Save some yourself.
As far as single parents are concerned if you can`t feed them don`t breed them. Make both parents support them. The taxpayer wasn`t there for the fun bit. Why should they pay for the hard bits?

Other workers work hard as well; But they are paying more tax proportionately so the top 5% enjoy tax concessions worth $10 billion a year - and growing. Gonski and NDIS must be paid for. Even Abbott supports the NDIS. And Gonski would improve the quality of state education - potentially saving them tens of thousands every year.

Your arguments about sole parents are disturbing. There is the rights of the children at stake for a start. Then there are parents who have been abandoned by their spouse, or even whose spouse may have died. Cutting sole parent payments once the child turns 8 is expecting a lot out of an 8 year old! Help sole parents find appropriate, flexible work, yes! And even then maintain some kind of payments to subsidise these families. But don't hold the proverbial gun to their heads...

Tristan, your comments on superannuation sound like Gillard spin. In other words, they have no factual basis. The $45 billion assumes that all the money currently taxed in super at 15% will be taxed at 46.5%. Obviously no one would lock money into Super at those rates and the after tax return would be less than inflation. High income earners would probably just invest in real estate.

A much fairer super system would have no tax on contributions or fund earnings and tax the withdrawals as normal income. Low income earners would get a much better deal and high income earners would be discouraged from putting too much into super. Remember that super is a 40 year plus investment and personal situations can change radically in that time.

Increasing tax on savings and Super is idiocy.

The problem is with the design of the taxing on inputs to super in that there is no differential on the taking money out.

For example, other countries have all super or retirement sacrifices as tax free. However, when the money is taken out, tax is paid at the normal rate. This would mean that those taking out $20k p.a. would pay zero tax, while those taking out $100 000 would pay considerably more, but still less than the marginal rate they would have paid if they had not saved for retirement.

This would greatly simplify the super system but the problem for the budget is that the tax only surfaces much later.

To be specific what we're talking about is *removing tax concessions* (as opposed to new taxes) that deliver an estimated $10 billion every year to *the top 5 per cent* income demographic. What the government is currently talking about is some marginal reform that might deliver only $1 billion. It appears the government is not 'holding its nerve' after all. And this raises the question where the money is coming from for Gonski and NDIS. Tax concessions for the top 5% income demographic is worse than 'middle class welfare' - it's 'welfare for the rich'.

Of course the same question could be asked of Tony Abbott... Where is the money coming from for his sweeping tax cuts; his generous parental leave for upper middle class women; his 'direct action' on climate change; his 'aspiration' to increase Defence expenditure... We know low income earners will have their super hit for a start... And we know the restructuring of income tax will be reveresed - also hitting low income earners. And we know he wants to hit the unemployed even harder - despite the fact we already have one of the most frugal and punitive unemployment insurance systems in the world...

Ttistan,

The top 25% of earners already pay 70% of tax and receive about 2% of the benefits. Labor and the greens treat them as though what they take home is stolen. "Removing tax concessions" is actually exactly the same as raising taxes, the difference is purely semantic, similar to Whine Swan's savings which consisted almost entirely of increased taxes.

The single biggest danger to the coffers of the state is that increasing taxes increases the incentive to avoid tax or simply transfer earning to tax havens. There are numerous examples where increasing taxes reduced tax receipts. I know of more than one consultant that "lives" in Singapore and pays 20% marginal tax to Singapore rather than the 46% in Australia.

The interest that we pay on Labor's cumulative debt could easily have financed the NDIS on its own

SM the problem with your reasoning is that 'top 25%' is probably as compared with children and pensioners - Otherwise the figure would be much higher.... Most of the world does not have dividend imputation at all. Trickledown economics never helped the most vulnerable here in America. But reform of super concessions and dividend imputation could provide over $20 billion - without which the NDIS and Gonski might never happen... As Richard Denniss has argued again and again - tax breaks for superannuation now outstrip the entire Aged Pension budget. So effectively the average taxpayer is subsidising the top 10 per cent. Looked at that way surely it cannot be seen as fair...

Tristan,

I used the term earners. These are registered tax payers not children or pensioners. They work hard and do work that ensures that the other 75% are employed. Without them the economy stops. They are also the most mobile, and can easily move out of the reach of the grasping labor party. when they do, the lowest suffer, as does the ATO's coffers.

You also seem confused between the term subsidy and concession. No high income earner is subsidised, A tax concession is granted to encourage savings behaviour that benefits the entire country. That the super concession outstrip the aged care budget is probably due to most retirees being able to self fund themselves and not relying on state hand outs.

Shadow Minister,

You need to explain why the "wealth creators" in countries such as Norway, Sweden, Switzerland, etc. that have lower Gini coefficients than Australia are willing to accept a smaller share of the pie. These countries all rank high on the UN Human Development Index, GDP per capita, the World Economic Forum Competitiveness Index, etc., so they certainly aren't suffering because of greater equality.

Actually, your proposal to tax superannuation when it is withdrawn, not while it is being accumulated, would fix most of the equity issues, although there ought to also be some sort of reasonable benefit limit. I don't mind giving people a tax concession so that when they are retired, they can get the roof fixed, pay the dentist, or replace a clapped out old car or refrigerator. Why should all the rest of us have to pay more, though, so that rich people can swan around Europe in a luxury car?

Since the government is unwilling to wait for its money, another alternative might be to tax super in bands as we do with income, based on how big a total balance an individual has in his super account(s), not what his income may be at a particular time. You could be allowed to put as much in as you want, but it might push you into a higher band.

Might be a good idea, Divergence. :)

D,

Norway's Gini index (GI) is low mainly because the country's population is so small and it has vast oil wealth from the North Sea. It's personal tax rates are lower than Aus. Swiss income taxes appear to be very similar / slightly lower than Aus with a higher GI? With Sweden being the only ones to tax high earners more than 50% marginal, and has experienced growth rates far lower than Aus and Sweden's wealth is distributed much less equally than its income, with a wealth Gini coefficient of 0.85, which is higher than the European average of 0.8

So I don't think any of the examples you have given are particularly relevant.

As for taxing Super inputs based on total value has some merit. It would however, need to be significantly lower than the marginal rate.

I am sure that Mr Ewins is basically a very nice person, is well-meaning and cares for his mother.

But he seems to be wedded to the idea that there is something criminal in putting aside enough money during your working life, so that you don't have to depend on the fickle self-interest of politicians in your later, non-working years.

Funding Gonski and NDIS are complete red herrings. The Australian taxpayers get precious little of any value from their contributions as it is, and are within their rights to ask why, if they are so important all of a sudden, such plans cannot be funded by sacrificing programmes of lesser benefit.

The present superannuation rules are already a nightmare, and need substantial overhaul. But such an overhaul should not be driven by a misguided "soak the rich" philosophy, as it affects a whole raft of people who are a) not rich and b) have taken responsibility for their own financial future, within the law and within the rules. Messing with that lot will not be pretty, and is guaranteed to be counterproductive in oh-so-many ways.

Pericles - You miss the point that I am not proposing a new tax; I am proposing the removal of *concessions* which cost us more than the entire Aged Pension budget. And I am talking about *the top 5% income demographic* - whose concessions alone are costing *the rest of us* over $10 billion a year. (And possibly the top 10% as the ACTU has suggested) You talk about 'soak the rich' - but in reality it is *the rich soaking the rest of us*.

Again: Tax concessions for super alone are now costing us more than the entire Aged Pension budget... Why not redirect some of that money into subsidising lower income Pensioners and self-funding retirees instead? But Tony Abbott wants to drop similar measures which Labor has implemented, and seems more interested in the position of the wealthy... And then they talk of 'class war'.

To get it in perspective: GDP is about $1.4 Trillion a year. If we halved dividend imputation, and remove superannuation concessions from only the top 10% - we would end up with about $25 billion - out of that $1.4 Trillion. (in the vicinity of just 1.6 per cent of GDP; it's hard to be exact because we know the top 5% receive $10 billion - but I don't have the exact figures on the top 10%)

Gonski and NDIS are not 'Red Herrings' - they are desperately overdue initiatives to do with educational equal opportunity and the rights of the most vulnerable and disadvantaged of all. Together they could end up costing close to $20 billion. Significant money could be left aside from the reforms I suggest to pay for Aged Care reform as well.

Currently much Aged Care is of a substandard quality; It is paid for via regressive 'flat-tax'-like user pays mechanisms. There is understaffing ; the infrastructure is often poor; quality of life for many is non-existent.

If we could address these at least somewhat by raising an additional $25 billion out of a $1.4 TRILLION economy - then why don't we?

We can argue "more tax" against "fewer concessions" until the cows come home, Mr Ewins.

>>Pericles - You miss the point that I am not proposing a new tax; I am proposing the removal of *concessions* which cost us more than the entire Aged Pension budget<<

These so-called "concessions" are a direct incentive for people - all people - to put an amount aside from their wages and salaries, in order to give themselves an income in their later years.

Think of those "concessions" as an investment: the revenue that the government does not collect today will be more than regained later, when these responsible folk who take advantage of them, do not suck vigorously on the public teat in their dotage.

Their alternative, which your policy appears to encourage, is to rely upon the State. Which in itself is a bit of a gamble, as we know beyond a shadow of doubt that they haven't a clue when it comes to setting aside the funds that will enable them to do this. What was it that brought the Future Fund into being? Unfunded Public Service superannuation, that's what.

>>Gonski and NDIS are not 'Red Herrings' - they are desperately overdue initiatives<<

They may well be "desperately overdue initiatives", but their essential fishiness is in the "either/or" nature of your argument. Specifically penalizing savers is no the only way to fund these programmes, there is a wealth of over-engineered programmes that could be trimmed to make way for them. Unfortunately, that would cause public servants to be made redundant, which would, I am sure, be against your religion.

You clearly feel that it to work hard, save money, and generally handle your own affairs responsibly is a form of oppression on the working classes.

Phoooey.

The point is that there are millions trying to save on lower incomes. For many home ownership is an impossible dream even with both partners working. And the way things are many of them have no chance. The pubic service, BTW, is not a 'magic puddding' you can keep cutting forever either... And tax breaks for the top 5% inevtiably means higher taxes for the rest of us. Or cuts in our services. Or user pays mechanisms that leave ordinary people much worse off.

If you want to give concessions to incentivise savings - do it for lower income Australians. But these are the people the Liberals are attacking by removing THEIR superannuation concessions... The top 5% income bracket don't NEED tax breaks. The rest of us shouldn't be taxed MORE so they can retire on incomes higher than most of the population earn working full time. This is just the wealthy trying to promote their personal interest as if it is the general interest. And they seem to actually have convinced themselves of it as well.

A few thoughts: when using the emotive term 'costing the public', don't we mean 'failing to collect on behalf of the public'? We're not paying these people. We're simply not collecting from them. Costs put us in the negative; failure to collect leaves us at zero.

That said, I don't fully understand the ins and outs of superannuation, so I'll take what you said at face value. Provided that earnings are not taxed twice - on the way into super and again on the way out - it's reasonable to remove concessions. My understanding from the text-heavy and information-light ATO site, though, is that we pay tax when we draw on our super - isn't that double-dipping?

Finally, I'd like to know why it is imperative that we fund Gonski. In your own words, can you explain how Gonski will improve educational opportunities and outcomes for children? I've heard the spin, but as yet it seems to boil down to an economic rationalisation rather than an educational reform. We can double the funding to state schools without improving their outcomes. Some of the commentary I have read seems to suggest that Gonski is as much about bringing down the standards of the elite as it is about bringing up the standards of the ... well, non-elite. That isn't educational reform - it's levelling the playing field in the same way that the French and Russian Revolutions did so. I'm hoping you can explain to me why these suggestions are wrong.

The NDIS, on the other hand, seems to be an open-and-shut case for me.

Tristan,

The left whingers seem to believe that the top 5% can be endlessly taxed with no consequences.

Incentivising these people to save means that these individuals will still have some spending power after retirement. There are a surprising number that don't save and with increasing longevity become a drain on the state a decade or so into retirement.

While I agree with increased incentivisation of the lower income group, with a greying population, reducing savings for retirement incentives anywhere is crazy.

"Incentivising..." really, SM, you're usually better than that.

Here's an idea. Since you mean 'encourage' which has synonyms such as embolden, nuture, promote, inspire and steel, this could yield:

"Steeling these people to save..." and "While I agree with increased steeling of the lower income group..."

Which would, given the taxation context, be simultaneously correct and sound amusing.

As I understand it the point of Gonski is not to take from private schools, but to give to public schools and struggling private (mainly Catholic) schools. As I understand it Gonski involves loadings for disadvantaged students - helping to reduce student-teacher ratios, and provide money for essential resources - for libraries, computer labs, science labs etc. And helping disadvantaged students with personal assistance. But to be meaningful all of this will cost billions. It should also go towards improving teacher wages and conditions - helping to attract more highly skilled people to the sector. Attempts to make teacher entry more selective there has to be the incentive of better wages and conditions as well - otherwise it simply won't work.

Thanks for your reply, Tristan. I still take the Gonski reforms with a pinch of salt, largely because they are monetary rather than educational. However, I also take the words of the naysayers with a pinch of salt, because they are naturally interested in pushing their own barrows with scant regard for others. Certainly as a Catholic school teacher I have read the reports that suggest we will be better equipped to do our jobs under a Gonski-inspired system. That's Gonski in its original form, of course: not the watered-down form that is likely to eventually find its way into our schools. You can blame the Liberals for that, though it is worth noting that the Labor Party has done little to sell the reforms. They keep telling us how wonderful they will be, but don't offer any information to back it up. They make the leap from money to performance that doesn't wash with the thinking public.

Perhaps that's one of the causes of the broad disenchantment with Labor that seems to be sweeping across the nation: they treat us like idiots. They state facts and expect us to believe them without providing any supporting evidence. John Howard did the same thing towards the end of his time. Is it arrogance?

Tristan,

Considering that Labor has yet to balance the budget with existing policies (estimated $20bn short this year), let alone find the $8bn p.a. needed for the NDIS, the further $6bn p.a. looks distant from reality.

Ths single greatest failing of Gonski is why after an increase in real spending over the past decade or so in public schools, the outcomes have fallen so badly. Until the reasons for the decline are pinpointed and adddressed, the Gonski funding is just another $6bn down a socialist rathole.