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The Forum > Article Comments > An unusual election budget awaits us > Comments

An unusual election budget awaits us : Comments

By Don Aitkin, published 3/5/2013

How did the world's best Treasurer get into this pickle? Alas, there are no really good answers to this question.

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There is a 12 billion dollar shortfall in the Govt's budget?
It occurs to me, if we still owned Telstra And the CBA, we would be able to fund that shortfall and a two billion dollar plus surplus.
It also occurs to me, that if Howard hadn't given away the rivers of gold that flowed from mining boom mark one, and instead invested in a sovereign fund, we may well be now developing our offshore resources ourselves, and generating quite massive returns for the fund!
At the time we gave away Telstra, we could have acquired Woodside and her assets, for around ten billion.
We can ram home the blame for the structural deficit on economic illiterate, [Quote unquote,] Howard's welfare for the rich and buy votes/pork barrel strategies.
It wouldn't have mattered who the treasurer was, he would have still inherited this very outcome sooner or later.
The current treasurer/Ken Henry's stimulation priorities, kept us out of the GFC!
We still have the world's best performing economy!
Those that don't think so, remain free to migrate to Britain, Spain, Italy, or France.
If the treasurer is in a pickle, then it was as a direct consequence of a highly flawed economic recipe already in the oven and cooking, well before he took over the allegorical kitchen!
I believe, only the intellectually challenged and those with serious memory loss issues; or, who could put their brains in a thimble, and still hear them rattle, would think otherwise?
Or allow the incredibly negative and disingenuous opposition, to convince them otherwise.
Contrary, to some popular local opinion/patently partisan shock jocks, the Labour Party did not create the Global GFC, nor any part of the economic slow down that flowed from that.
They are however, riddled with corruption and a criminal element, and for that reason and some democratisation issues, still left undone, need to spend considerable time in the political wilderness!
Time to find and put back in, traditional core values!
And time to finally and at long last, completely and unreservedly, accept true grass roots democracy!
Rhrosty.
Posted by Rhrosty, Friday, 3 May 2013 12:18:22 PM
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The 'pickle' was created by Gillard trying to copy Whitlam.

Both of them, lawyers, had no clue about money or sensible concepts such as living within your means.

They both worked on the premise that, if they came up with an idea, then it was brilliant and to implement it, money was no object!

Gillard has taken it a step further and has future spending continuing years down the track when she will be little more than a bad dream.

LABOR, brought back into favour by Hawke and Keating, has again lost the plot!

Who will save it?
Posted by David G, Friday, 3 May 2013 12:46:16 PM
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Gillard is simultaneously living in two worlds at once. In one, she is handing out money to the "disadvantaged" who the Labor Party can find anywhere they wish to look while at the same time admitting theres no money left. Massive social "reform" schemes such as the NBN,NDIS and the Gonski reforms will suck the economy dry with the NBN and Gonski likely to result in no real improvements in productivity.

This woman seems to be obsessed with leaving a legacy for herself to admire in the future, regardless of the cost to the community. She clearly doesn't understand economics and is still mired in class war politics of the 1970's and hoping to be held up as a hero. But who is she fighting? Unfortunately its most of the population.
Posted by Atman, Friday, 3 May 2013 2:24:39 PM
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Labour is a lower taxing Govt than Howard's and spends less as a total percentage of the GNP.
Before he became PM, Howard was the treasurer, and left office having created a 10 billion dollar black hole.
Treasurer Costello described him as an economic illiterate! Quote unquote.
The Howard Govt, gave away the rivers of gold from mining boom mark one, as vote buying largesse, pork barrelling and welfare for the rich!
And in so doing, created the very structural deficit, which is now bedevilling us.
Moreover, their economic success had nothing to do with them, any more than they were responsible for the remarkable Chinese growth, which improved our economy, our mining sector and terms of trade, that alone produced the better results!
To critique the Govt for their stimulus spending response to the GFC, is to display an unusual level of economic illiteracy.
From an economic perspective, it mattered not that the money went to pink batts of overly expensive school halls, just that it was put out there as rapidly as possible.
In case you haven't noticed, there is a virtual world wide recession, which appears to be progressively worsening, despite all that Govt and central banks do!
It also affects our terms of trade, and our dollar, which remains stubbornly high, despite all that we have done thus far, by way of interest rate reductions/monetary policy.
And that along with worsening terms of trade have quite dramatically reduced Govt revenue.
Govt has cut the budget to the bone, in defence spending and is overburdened with refugees, in spite of the fact that they caved in to the opposition and reinstated their Pacific solution!
All that said, Labour is destined for a train wreck landslide at the election, and maybe the coalition may even control the senate once again in its own right, or give you exactly the Govt you deserve.
Maybe then you really will have something actually real to complain, carp on and generally whine about, rather than the clearly manufactured political propaganda, the weak-minded can't see past.
Rhrosty.
Posted by Rhrosty, Friday, 3 May 2013 3:12:06 PM
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To critique the Govt for their stimulus spending response to the GFC, is to display an unusual level of economic illiteracy.
Rhrosty,
A stimulus is created by making money work & do what it's designed for. Throwing it ad hoc at a mindless scheme is not stimulating an economy, it's ruining it as is now so clearly evident. To do what Labor did is an unusual level of economic illiteracy at our expense & mortgaging our future.
Labor can not manage, simple ! Labor has build the longest gravy train in history & Now they're trying to make the rail system longer. That there are people out there still supporting Labor is just beyond belief.
Posted by individual, Saturday, 4 May 2013 7:01:49 AM
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Since when was Wayne Swan 'World's Best Treasurer'? Treasurer of world's best performing economy at one stage, perhaps, but that's a very different thing.
Posted by Candide, Saturday, 4 May 2013 8:12:45 AM
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When are we going to have a party that advocates the kind of budget changes that I would vote for?

When a government has to look at budget cuts the first item on the agenda should be politicians' salaries and expenses.

The next item should be foreign aid, on the basis that charity begins at home.

The next items should be the grandiose new projects that people won't miss because they have never had them.

If any further savings are needed they will have to come form welfare.

That wasn't hard! I've balanced the budget!
Posted by plerdsus, Saturday, 4 May 2013 9:13:18 AM
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plerdsus,
My sentiments exactly. That last federal pollie pay rise was just so immoral. I still can't believe the australian people let them get away with it. It also put a serious dent in my support for the Coalition as they should have rejected it. same goes for all pollies.
That's why I'm hoping that perhaps Clive Palmer could get support if he froze all public service salaries & even drop them. Put in a non-military service & a flat tax & we'll be up & running again.
Posted by individual, Saturday, 4 May 2013 9:55:56 AM
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Individual, how about the 20-26 billion, we current shell out PA as middle class welfare?
Surely our generosity ought to be reserved strictly for need rather than, simple mindless greed.
The trouble with this Howard (aspirational) legacy, unethical vote buying largesse, is that people now believe they're entitled, even if that unearned and therefore undeserved entitlement, takes the bread from the mouths of babes!
A flat tax?
What about a single stand alone unavoidable expenditure tax, set at a painless 4.8%?
Collected in lieu of all the current convoluted complexity, inclusive of fuel excise and the ubiquitous cascading GST?
This simple single stand alone measure, would increase consolidated revenue by around 100 billion plus annually; as well as, end the need for compliance and the often onerous costs, which currently rip 7% averaged, from the average bottom line.
This increase in revenue, would allow us to increase our defence budget, to where it did look like genuine self reliance!
The simultaneous repeal of all other tax measures, (doable) would further improve the corporate bottom line by an average 30% and household disposals by around 25%.
Thereby making a compulsory non contributory 15% super immediately doable, as well as compulsory, or means tested, co payment, health/unemployment/disability insurance?
The states tax, the foregone GST, could be fully compensated for by the fed taking full funding responsibility for health, education, power and water, which could be managed by local boards/councils (regional autonomy)?
The modest profits generated by power and water reticulation, could conceivably cover more modest and far better contained, transparent, comparative, bench marked, best practise, admin/costs?
The icing on the much larger economic cake, would come if we simply used some of the extra revenue garnered for overdue nation building infrastructure roll-outs, like say, cheaper than coal carbon free, (publicly provided and profit generating) thorium power, (localised) and rapid rail.
Followed by say, an inland shipping canal, that could cut thousands of miles, (time and money) off our Asian trade routes!
Rhrosty.
Posted by Rhrosty, Saturday, 4 May 2013 11:23:58 AM
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PA as middle class welfare?
Rhrosty,
I thought that was what we call the Public Service Super funds. Welfare, I mean real welfare is nowhere near that figure judging by the poor sods who lose their income due to Labor incompetence.
As for your proposals re a shipping canal etc yeah, flood lake Eyre with water from North Qld & Bingo, you have an economy that's hard to slow down. Also, a Mono rail system like a spider web would do away with expensive & unviable road systems.
Ah and, Non-Military national service to get the confused off the dole & show them the real world out there. The potential is near limitless. It's only our authorities' vision that is limited.
Posted by individual, Saturday, 4 May 2013 2:25:41 PM
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When a government has to look at budget cuts the first item on the agenda should be politicians' salaries and expenses.

The next item should be foreign aid, on the basis that charity begins at home.

EXACTLY !! Actually I had to check the date of the 'Worlds best Treasurer' quote because I expected it to be the first of April. Would someone please advise me why we allow complete dropkicks like the dying duck (Andrew Fraser / Tim Nicholls / Peter Costello etc etc) access to hundreds of billions of taxpayer money ?? The method of choosing state & federal treasurers is unquestionably due for a major overhall. Nobody in their right mind would allow a totally unqualified deadbeat access to their finances, so why is the standard so low for state & federal treasurers ?? One of the major online newspapers ran a story on the budget deficit within the last day or two & invited readers to see if they could do better than the dying duck. For what its worth, I got the country into surplus with a few mouse-clicks and could have easily done much better if the system allowed more clicks than that necessary to get past the magic twelve billion dollar figure. Interestingly, many of the expense items I would have scrapped were not properly detailed eg handouts to has-been parasites, DRASTIC slashing of politicians entitlements, discontinuation of the 'lets support any & all yankee wars' protocol, scrapping of all overseas aid programs & support for all manner of insane causes.
Posted by praxidice, Sunday, 5 May 2013 11:25:41 AM
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Individual: Negative gearing,costs us over 5 billion per, for just this single measure.
Money better spent as tax breaks for volume builders of low cost/rent housing, which would also serve to boost the domestic economy, which by the way, serves us all!
We could save over 20 billion per, just by means testing all publicly supplied services, education and health.
Means testing public health would incentivate/oblige the better off, to buy health insurance; meaning, we could remove the rest of the, welfare for the better off, health insurance subsidy!
I don't see why the less well off ought to subsidise the mortgage/hire purchase payments made for MacMansions, or two beamers in a two car garage!
The current structural deficit, left unchanged, may leave us with little choice, but reapplying the top tax rate of 45 cents onto incomes above 62,000 per.
I'd rather increase the top rate to 65 cents, [I paid 68] onto personal incomes above 150,000, and ramped up until personal incomes above 1 million, were taxed at a top rate of 95 cents in the dollar.
This would ensure more of our money was reinvested in capital growth; our own people and their better ideas; and, allow us to raise the actual tax threshold to around 65-75,000?
This measure would also allow us to remove complex family tax returns A+B, the baby bonus, family school payments, money churning etc/etc.
I'm quite partial to your idea of a spider web of monorail links, which ideally, would connect to very rapid rail links, and very high traffic volume, moving walkways. Which if intelligently planned, could still be providing efficient service, a hundred years from now.
My shipping canal would link both gulfs and utilise Lake Eire, given it and much of central Australia is already below sea level, which would allow much of the building to be progressively undertaken with electrically powered dredges, which is far and away, the very cheapest way to move the earth.
It would have dual lanes/purposes, and serve as a ultra reliable source, of permanent water!
Rhrosty.
Posted by Rhrosty, Sunday, 5 May 2013 11:27:27 AM
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Rhosty,

If Juliar and Whine had not gone on a vast spending spree in spite of the rivers of gold from mining, the $70 accumulated surplus could have funded an awful lot. Now we have a $270bn debt with a nearly $10bn annual repayment that could have paid for the NDIS and some of Gonski.

What we have now is a debt that needs to be repaid. This should be done by selling what remains of Telstra, Quantas, NBN etc.
Posted by Shadow Minister, Sunday, 5 May 2013 6:11:20 PM
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I've spent considerable time pondering the various expense items and am far from convinced scrapping negative gearing would be a good idea. The very first target for me would be the bottom-dwelling parasites responsible for the financial poo, namely the red-headed witch, the dying duck and the myriad of has-been parasites living in luxury courtesy of taxpayers. Why should the <censored> responsible get away scot free ? Second on my list are countries like Indonesia who get massive amounts of aid but don't have the gumption to deal with their people smuggler issues. Third item to be dealt with are the ostensibly 'humanitarian' rip-off lawyers who make millions representing aliens .... rack off Noddy, go get an honest job. The list goes on and on, zillions of dollars squandered on ever more inane causes.
Posted by praxidice, Sunday, 5 May 2013 7:07:54 PM
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