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The Forum > Article Comments > Debt and deficit Downunder a view from Europe > Comments

Debt and deficit Downunder a view from Europe : Comments

By Alan Austin, published 30/4/2013

Australia's Prime Minister has just delivered a speech similar to that of most of her counterparts across the globe. Though with notably brighter news.

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Just because we are not quite a basket case economy, is hardly a comfort.
Just because we compare favourably to basket case economies like Japan, is no cause for complacency?
The formerly profitable service industries are doing it tough, and the world's best eco
tourism destination has just been put into liquidation.
We now import around 85% of our oil needs, and enough to gradually kill our economy, like a frog slowly brought to the boil, warm and comfortable until it's too late!
China may have stabilised, but the fact that it continues to stockpile commodities and import more and more of its coal from next door neighbour Mongolia, is more bad news.
Many of the projected investments have been shelved.
Profits and export incomes continue to be squeezed by the high dollar, as does consequent tax receipts!
Penny Wong said on breakfast radio, that no single economist saw this coming?
However, several dozen married ones clearly did!
Its just that the, we know best elitists like Penny, simply weren't listening, preferring instead the ubiquitous conformation bias.
Nor should we reduce this to an asinine ideological based, either either argument or winners and losers.
Fund education or pensions, or disability support etc/etc. When we can do it all.
We spend too much!
Simply fixed by removing all of Howard's welfare for the rich programs, and means testing all public largesse.
Keeping some is tantamount to taking bread from the mouths of babes, and costs consolidated revenue over 20 billions annually.
Negative gearing is costing consolidated revenue over 5 billions annually.
Take it away say Sydney Landlords and we'll simply raise rents!
Good luck with that I say, in the most expensive city in the world.
We need to produce surpluses to allow us to continue to borrow at preferential rates! Continued. Rhrosty.
Posted by Rhrosty, Tuesday, 30 April 2013 10:28:02 AM
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Doing what you've always done while expecting a different outcome is madness.
It follows therefore, we need to do something different.
First cab off the rank is our extraordinarily complex tax system.
40,000 pages, with a loophole per page?
We can make more rules and more complexity and the tax avoidance industry will respond with even more creative and more expensive avoidance schemes.
It is a scrambled rotten egg omelette that can't be unscrambled.
The only choice is to throw it out in its entirety and replace all that convoluted complexity, with a single stand alone entirely unavoidable expenditure tax.
Something that would work for most of Europe as well?
A single stand alone expenditure tax set at just 4.8%, will raise around an additional 100 billion per.
It does this by including the 40% of multinationals, who currently pay no company tax to anyone!
It does that by making sequestering profits in tax havens entirely counter productive.
It does that by making some of the creative accounting schemes, like sending the same sum of money through several subsidiaries, to effectively cook the books, even more counter productive.
A single stand alone unavoidable expenditure tax, collected via the banking fraternity, will eliminate the need for compliance, and the average 7% hit to the bottom line, it creates.
The accompanying repeal of all other tax measures inclusive of fuel excise and the continually cascading GST, will add some 30% averaged to the bottom line; and around 25% to household disposables, making a non contributory 15% super immediately doable.
Microscopic adjustments to the tax rate alone, region by region where necessary, will alone control all inflation/stagnation; meaning, interest rates can be brought down until the AUD hits its natural value of around 65 cents.
The rest of the formula requires very cheap publicly supplied energy, like say cheaper than coal thorium.
The lowest tax rates coupled to the cheapest energy in the world, would have virtually all the high tech energy dependant industries of the world, queuing to relocate here!
Rhrosty.
Posted by Rhrosty, Tuesday, 30 April 2013 11:00:30 AM
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As someone looking for ideas about how public policy can be improved, or at least get me to think more, I welcome Rhrosty's comments.

As for the article, utter garbage reflective of a propagandist rather than anyone who has a clue about what is going on.

I promised myself i would not read his garbage anymore, but it is always good to be amused.
Posted by Chris Lewis, Tuesday, 30 April 2013 11:11:37 AM
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In 1870, Australia was even further ahead of developed world, yet any reasonable analyis living conditions then pointed to much misry for many Aust's.

These pathetic-type pieces are an insult to the many Australians increasingly struggling with our supposed policy eltes having little clue or guts to make an effort to reverse worsening trends.

I am hoping a Coaliiton govt will begin the badly needed reform.

We Australians who live here still have an opportunity to improve our situation, including for future generations, but we need drastic change which will incliude reform to tax, social welfare, industrial relations and industry policy.

Only aspect that is a concern to me is how the reform will be carried out: either through divisive or fair policies that receive consensus support. We need ideas that support the latter, albeit that some pain my be inflicted.
Posted by Chris Lewis, Tuesday, 30 April 2013 11:41:47 AM
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According to Austin, Australia is the Promised Land.

I'm sitting here at the moment trying to decide whether to accept 4.45% on my small amount of investment money which I need to supplement my part-pension.

Over the past few years my standard of living, already cut to the bone, has further declined because of falling interest rates and increasing costs!

Alan Austin may have a money tree growing in his backyard in France or he may be addled-brained because of his religious bent.

Whatever the reason, his article has no relevance to the bulk of Australians who are struggling and it's set to increase.

Why is he allowed to publish such B....S....!
Posted by David G, Tuesday, 30 April 2013 11:56:36 AM
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The kindest thing that might be said about Alan's articles is that they take a glass half full approach to economic data, often at the expense of accuracy. Putting Australia ahead of Norway is one illustration. Some basic data make the point. All figures for 2012 and all in $US.
GDP real growth 3.1%
GDP per capita $55,300
Unemployment rate 3.1%
Budget revenue $282.9 billion; expenditure $206.7 billion
Budget surplus 15.2% of GDP
Inflation rate 0.6%
Net external creditor
Exports $162.7 billion; imports $86.78 billion.
Sovereign wealth fund world's second largest at >$700 billion.

I cite Norway because it is a country I lived in for many years and am most familiar with. It is possible that some others have revealing statistics that undermine Alan's argument further.

Although the Australian government is to be commended for softening the blow of the global financial crisis of 2008-date that does not make it exempt from criticism. The current government has some blind spots and its taxation policies would have to rank high on any list of areas overdue for reform. The fact that only 2% of the Henry reforms were adopted illustrates better than most examples that we have a timid government beholden to special interests that prevent this country being as good as it possibly could be.

This should not be taken as an endorsement of the Coalition. It is just that they are beholden to a different set of special interests. Abbott is being given a free ride to power at present. It would be a fool who would assume that a Coalition government will address the fundamental problems. In my view they will simply make a different set of mistakes.
Posted by James O'Neill, Tuesday, 30 April 2013 12:15:19 PM
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