< The Premiers are calling for more tax revenue to fund massive increases in education and health expenditure that were promised by prime ministers Gillard and Rudd. >

Why is it, Peter Hendy, that politicians of both persuasions seem to have an enormous blind spot with this whole issue?

Why is it always all about increasing funding – increasing and refining the tax base – in order to meet our almost overwhelming need for improvements in education and health?

Why do we never hear anything about the other side of the coin – the rapidly, constantly and neverendingly increasing demand for all of this which is comes as a direct result of our absurdly high immigration rate?

Surely it has got to be about both supply and demand, and not just constantly about only the supply side.

The day that your Coalition buddies, and the Opposition, start talking about the demand side, and the need to reduce the immigration rate directly in relation to health, education and all other infrastructure and services, will be the day I start to gain a basic level of respect for them.

Perhaps the biggest issue of all here is that any increase in GST or any other refinement of the tax system that reaps the government a significantly bigger return, would predominantly go into the DUPLICATION of basic infrastructure and services to meet the needs of new immigrants and into repairing or upgrading existing I&S that has become overburdened by this rapid population growth. And scant little of it would actually go into real improvements of the sorts that would significantly benefit current residents.

We are having great difficulties in simply keeping up the basics for the increasing population. So.. what should we do about this? Should we continue to have very high immigration and to struggle with it all, knowing that the task is nigh on impossible even if the tax take was to suddenly become considerably larger…

… or should we pull tight back on immigration and give ourselves a fighting chance for the supply side to catch up with the demand?

Agree with most of this Peter.
The GST was introduced against the express wishes of around 87% of Australian voters.
Moreover, it was merely revenue surety, masquerading as real reform!
And rather than simplifying our tax system it massively complicated it.
It transferred the tax burden from the wealthy to the poorest, and was labeled by some democrats as a granny killing measure.
And when Honest John faced the electors, after forcing his hugely unpopular reform through, he won the resulting election, with just 49% of the two party preferred! This simply wasn't a mandate by any fair-minded measure!
A bombastic Beasley, would have done better, if he had stayed the course, differentiating new labor from the coalition, instead becoming a me too, pale shadow.
The GST was introduced to allegedly combat the off-shoring of around 95% of corporate Australia, who took their former tax liabilities with them.
We could increase the GST, and apply it to all goods and services, if you're locked into conventional economic theory, and then offset any real harm, by doubling the pension?
And while that's an option, I prefer a radical departure, from conventional thinking; on the grounds of doing what you've always done, gets you just what you've always got!
If there's a revenue shortfall, it could be completely cured, just by completely eliminating all forms of welfare for the rich, reform which would boost the budget bottom line by some 70 billions, or if you will, by 20 billions more than the current deficit.
Meaning debt could also be wound back and or repaid in just five or so years. Belt tightening should be applied more heavily on the better off, rather than those whose budgets are so low, they can on longer afford winter heat, or even more importantly, summer heat wave cooling! Continued.

A national emergency, would allow all state govts to be suspended, as they were during WW11. And that simple measure, would save the most over-governed nation on earth; bar one, a further 70 billions PA!
And indeed, without loss of a single service; and allow the govt just to crack on with what must be done.
And there's around 30% current expenditure to be saved, without said national emergency, just by granting complete local autonomy, and a direct funding paradigm.
Bound to be resisted by many often seemingly corrupt state governments, given it would shrink them and or the power they wield.
Even as they waste billions of increasingly scarce resources, just puffing themselves up, or promoting pure self interest!
I mean just look at the real estate holdings of politicians, and just what state laws and a failure to release enough urban land, has done to house prices etc!?
What we really need is to throw the whole rotten mess out, and replace all that extraordinary costly complexity, with a single stand alone, unavoidable expenditure tax.
A rate of 18% initially, would raise around 380 billion from a 1.6 trillion dollar economy and as former avoiders, were forced to pay their fair share.
And given tax compliance expenditure would then be no longer necessary.
A 7% savings to the averaged bottom line, would make the real rate an effective 11%, or if you will, the lowest real tax rate in the developed world!
Further, the rate could be further and further reduced, to as low as around 5% variable as all current avoidance was obliterated. Continued.

A 5% marginally varied rate, taken as the only tax necessary, could then be marginally varied region by region as necessary, up and or down and simultaneously, to alone control all inflation/stagnation; meaning, interest rates could be lowed to set and forget, historical lows, to kick in the economic afterburner for the non performing parts of the economy, and without adding anything to more rapidly controlled inflation!
A single stand alone unavoidable expenditure tax set at around 5% variable, would if applied equally and without fear or favor, or special case exclusions, would raise at least 100 billions more, than the total take from all sources.
Naturally, the ATO and all other also entirely unproductive tax practices, will argue for the status quo, and claim as they now do!
We already have a broad based tax.
The only problem with that, most of the offshore corporations doing business here,( some with budgets bigger tan many sovereign nations,) can successfully avoid it, as does some of the purchases done on the internet.
Even so, this measure, if fully implemented as outlined, would add around 30% to the bottom line of Aust. based business, a huge imperative to return.
And around 25% to averaged household disposals, making a non-contributory 15% super immediately doable, and indeed, end forever, the so called destiny of demography!
Rhrosty.

The final piece of the puzzle is the roll-out of Cheaper than coal, thorium based power, and given local micro-grids, able to be supplied to industrial estates the length and breadth of the land, for less than half what is charged elsewhere; and without any subsidies.
But only if it remains in public hands, rather than price gouging private hands.
And if there's a better place or better way to invest the huge new surpluses, I for one would like to know what they are!
The only thing that allowed public ownership to become an albatross around the nations neck, was the lack of competition!
That could be completely overcome, by more regional competition, contractual managers, and staff, who could tender for three year job contracts, and then compete as if they were private operators, for market share.
If only to ensure costs and what have you were fully met, and without having to dip into a sizable security deposit, as part of the normal conventional tendering process!
After that, we just need to crack on and convert our cities to ones more and more reliant on locally produced endlessly sustainable biogas!
On the grounds, nothing else is as cheap!
The byproducts are also extremely useful, and can replace many expensive imports; all while underpinning a viable alternative endlessly sustainable local oil industry!
And if we can't do any of it; it will only be because some very recalcitrant, intransigent pollies, stand in the way?
And possibly, for the worst possible reasons; or put another way, for he who must be Obeid!
Rhrosty.

I thought I might join the Rhosty show, if I can get a word in that is.

Ludwig, the huge increase in immigration has seen the hopes and dreams of many simp,y dwindle away. Like those amou g us, whom aafter having worked all their lives, in the hope of a comfortable retirement, only to now have that dream shattered because there's simply not enough to go round. but, it didn't have to be like this, if we simply had insisted that, if you wish to come here, you must have something to offer and not simply be a passenger. I mean, where else in the world could you arrive here, never work a day, yet be paid $50,000 for the privilege of having ten kids. It's been a joke for years and is o ly getting worse.

As for the GST, perhaps one option is to include all goods and services, then reimburse the genuine needy. Of cause the hardest par of this would be to determine who the needy really are.

Another option would be to raise the tax free threshold so as to accommodate the additional spend on the GST.

There are several issues we must address before much longer, otherwise any amount of tax reform will simply be playing catch up.

An immediate ban on all non productive immigration, if not all together. No more 457's, and of cause a finacial transaction tax so even those taking their profits off shore pay their taxes. These are just a few.

Of cause the problem is governments get voted out for doing unpopular things, with those opposed rarely acknowledging the cause of the problems in the first place.

I can't see much changing so it's going to be a case of every man for himself I fear.

Instituting a GST, or hiking the one with which we are already lumbered, is a device for making the many pay more so that the few can pay less. This was its purpose when the Howard government, with the aid of rogue Democrat senators defying their own party's constitution and the expectations of those who elected them, instituted it while SIMULTANEOUSLY reducing the company tax rate by 16.5% from 36c in the dollar to 30c in the dollar.

Now the entitlement community, with their fully-owned party having lied itself into office, are circling around the existing GST demanding that it be increased at the cost of the plebs, to fund further cuts in the collected taxation (excluding the taxes which their bought politicians arrange for them to be able to dodge) of those who amass great wealth while personally creating none whatsoever.

The way the Abbott-Hockey government are showing that they intend to swing it is to slash the states' share of the national tax take so that the state governments, to fulfill their commitments, will be driven to clamour for increased GST-based funding. The direct outcome is an even further increase in the transfer of wealth from those who have least to those who have most including those who have created no wealth at all.

The answer: take a leaf out of the Libs’ 1975 book, block supply and force an election.

I think the LNP could have secured at least four terms if they had rejected the last parliamentarian payrise. Asking the whole country to tighten their belts to make up for the criminal Labor wastes & then accepting massive pay rises was exactly the wrong thing to do. If this Government is short of money then they should drop Government pay rates. It would be good for Australia & it would show Australian that their Government is genuine.

Peter, the total turnover of shares, currency and derivatives in Aust is $135 trillion pa. Just a small turnover tax of 0.01% will raise $135 billion in tax. Cannot our rich afford a $1 in $1000 tax ?

The other big issue is the selling off of our Govt Banks. We no longer create any of our new money debt free via Govt funded infrastructure. All our money is now created as debt and mostly by OS Central banks. We should never have sold these Govt banks since they kept our taxes lower.

Until a truly fair tax system is introduced, one where the wealthy don't get to dodge their responsibilities, then we're stuck with this total mash-up, and the Neo-cons, Liberals et. al. are driving us down the road to the New Feudalism, and we're already half-way there!

After all this time, Arjay, you still don't get it.

>>Just a small turnover tax of 0.01% will raise $135 billion in tax. Cannot our rich afford a $1 in $1000 tax ?<<

It is not "the rich" who will pay a tax on turnover in the derivative market. We all will.

Mind you, you would already know this if you had the faintest idea what derivatives are. You seem to think they are some kind of commodity that only "the rich" buy and sell.

Bizarre.

Pericles,
Yes, it's us who always end up footing the bill. That's why we need a flat tax FULL STOP !
No gobbledeegook about not understanding how the system works, we do know how it works & in whose favour. That's why the greed mongers don't support tax reform. Get rid of NG, introduce a transaction tax & be done with it. Those who are already rich are rich enough, those who don't have much can do with more. Imagine what Australia could be like with a more contend society ? The hangers -on will be forced to put in an effort but that can be achieved via non-military National Service.

Amazing pericles did not pick up my error. It should have been 0.1% tax or $1 in $1000 tax. A turnover tax stops all the rorting. No excuses or imput tax credits. If you cannot handle such a small tax, then you should not be in business. No one complains when they have to pay rent and tax paid by all is the rent for infrastructure and Govt services.

The likes of pericles do not like the idea of a turnover tax because they will have to pay more while the average person pays less.

Arjay, a TT would see even the rich pay way less tax and, they would also save huge amounts as they would no longer have the need to tax minimize as they do, something that is very costly.

Indi, I agree that if this type of tax were introduced, we could do away with the likes of NG as apart from increased net wages, the investor would also have virtually tax free rental income.

A TT of just 2% should do the trick, so why the government doesn't introduce one at just 0.2%, instead of the levies they are introducing is beyond me.

As I see it, this would be a great way to test the water so as to say.

As for banks passing the tax on, they are hugely profitable businesses and, they make their profits from our money.

So the government simply needs to legislate against increased bank fees so at least they can do some of the heavy lifting for a change.

I just don't have a problem with genuinely successful people paying less tax!
But I do have problem with huge multinationals getting away for decades, just not paying any, or far less than comparable home-based corporations!
And here we are talking about tax avoiding multinationals, often with bigger annual budgets, than many sovereign nations!
And yes, when they don't pay their fair share, someone else has to pay it for them. As was the case when the Granny killing GST was introduced!

Ajay, you may well be right, but your solution just adds to the current complexity!
One very wise man once said, at some point, complexity always becomes fraud! Quote unquote!
My preferred system just jettisons all current tax measures and (hide behind) complexity, and replaces all that with a completely unavoidable, stand alone expenditure tax.

Sorry Arjay but, the problem with your proposal and others, it just increases the always passed on by the banks, tax liability on the very entities, we would encourage to relocate here.
Namely high tech manufacture!
Our only possible future, other than a third world banana republic!
Let all pay some tax, but only a fair measure, and in complete accordance with their affordable spending patterns, which by the way, is also everyone's individual carbon footprint!
If a simple system that charges just 18 down to 5% of your expenditure, but then allows you to also pocket the former 7% of the bottom line, that were once your tax compliance costs!
Would you continue to shell out that 7% of your bottom line, just trying to avoid an effective 11-5% impost!?
Rhrosty.

Rohsty we have to get away from the idea of taxing people and start taxingbmoney because, unlike our current taxes, which are only collected once, a tax on money taxes the same $100 every time it shifts from one account to another, which can be thousands of times a day.

The tax structure wrongly penalises taxpayers on the volume of their income. It needs recasting so that tax on income derived from payment for PERSONAL, HANDS-ON wealth creation (i.e., actual creation of goods and services) is set at a very low flat rate and that the bulk of revenue-raising be at the expense of income derived from acquisition, without personal creation, of wealth.

Sources could be a Tobin tax on income derived from gaming international currency transactions, from investment (which merely allocates wealth to give permission to creators to create it), from international trade (profiting from the production cost differential between Asian slave countries and Western countries which have constructed a social contract).

The broad principle is policy settings leading in the direction of a redistribution of wealth from the takers (whose personal success is at mere acquisition of wealth created by others) to the makers whose contribution of wealth entitles them to decide on its social distribution.