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The Forum > Article Comments > Debate on tax and 'small government' flares again > Comments

Debate on tax and 'small government' flares again : Comments

By Tristan Ewins, published 29/1/2015

The time has come to question neo-liberal shibboleths around 'small government' and 'the market'.

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The sentence:
"The lowest earning household pays 24 per cent of its income in tax and the highest earning household only a little more at 28 per cent."

Come now, who is Tristin trying to kid. It wasn't quite clear who was saying this, the Age or ACOSS, but I hope that no one actually believed those figures.. a lot of work has been done on tax-transfer (as in dole, welfare payments) system .. go and look at the figures for income and company tax versus consumption tax.. there isn't any way consumption taxes could shift the tax system that much.. however, GST does have major problems because of the way it excludes fresh food. A wafu steak ordered at a specialty butcher does not attract GST but a Macdonald's hamburger (the food of the masses) does. Eliminate that exemption and you go some way to fixing the problem that Tristin imagines is occurring
Posted by Curmudgeon, Thursday, 29 January 2015 4:07:51 PM
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And Rhian re: Superannuation concessions: At a rough estimate - If $20 BILLION of superannuation concessions goes to perhaps the top 10 percent wealth demographic - And the REST OF US ARE PAYING FOR IT - How is it self-destructive for Labor to address this? How is it self-destructive to address the material interests of the vast majority?

And what if that $20 billion goes towards tax cuts for low-middle income earners? Or goes towards a National Aged Care Insurance Scheme - so working class families don't have to sell their homes to provide care for their loved ones? What if it pays for a progressive restructuring of welfare for the sake of fairness - since we have one of the most unfair unemployment pensions in the OECD? What if some of it goes towards Medicare Dental. (finally!) And what if some of that money goes towards 'closing the gap' on life expectancy for the mentally ill? And public provision of communications, energy, water and transport infrastructure - when the alternative is privatisation and user pays which hurts those on low and middle incomes especially....

The real danger here is that the movers and shakers in Labor Unity will get cold feet and decide to only support a policy that takes us *backwards* on social wage and welfare, tax and industrial rights. A modestly progressive/reformist Platform is crucial if Labor is to actually stand for anything. And a progressive expansion of social expenditure by 2.5% of GDP is a modest platform - much more below which would have us relegated to tokenism and rhetoric rather than substance on policy.... Both in the Left and the Right people have to decide what we stand for - and whether a PERMENANT POLICY OF RETREAT is acceptable. Perhaps the Conservatives understand better than we do that determining the framing the terms of public debate and the broad policy parameters is actually more important than actually holding government itself. Something I learned in student politics many years ago - holding office without controlling policy is meaningless and a waste of time. :-(
Posted by Tristan Ewins, Thursday, 29 January 2015 4:11:12 PM
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Apparently Tristan is not the only socialists bleeding heart who failed arithmetic 101 in primary school. It appears Cassandra Goldie is equally bad when doing her sums.

Tristan please explain how Australian middle income people can pay only 20% or less tax, when the government expenditure is approaching 50% of GDP. You tell us we don't tax, or even subsidise all those nasty businesses, so where do they get it from?

Do they get all that extra money from the poor, or the dole bludgers?

Mate if you are going to get anywhere promoting your brand of bleeding heart thinking, you have to stop believing we are all fools. Try telling the truth some time, then put up a reasonable argument, for your ideas. If your beliefs have any validity you will perhaps win some converts.

While you set out to con everyone with half truths, & straight out untruths each time you sit at your keyboard, you will continue to get nowhere, & indeed, only become a laughing stock among real people who can see straight through all that spin.
Posted by Hasbeen, Thursday, 29 January 2015 4:16:53 PM
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Divergence

The reforms proposed in the paper you linked to look sensible. My understanding is that Tristan is proposing to remove entirely the superannuation concession. Politically, I think that would be a very tough sell, even if most of the benefits do go to the rich.

Tristan

My focus was mainly on your painting of the Coalition as “small government”. Whatever the rhetoric, historically that has not proved the case – government spending as a percentage of GDP increased under Howard, for example. Historically, it has fluctuated in a fairly narrow band, and it is currently close to its all-time high (37.5% in 2014, second only to 2009 when the post-GFC stimulus was at its peak).

I’m using IMF data on general government spending as % GDP for consistent international comparisons, taking 2014 data as “current”:

http://www.imf.org/external/pubs/ft/weo/2014/02/weodata/weorept.aspx?sy=1980&ey=2019&scsm=1&ssd=1&sort=country&ds=.&br=1&c=512%2C668%2C914%2C672%2C612%2C946%2C614%2C137%2C311%2C962%2C213%2C674%2C911%2C676%2C193%2C548%2C122%2C556%2C912%2C678%2C313%2C181%2C419%2C867%2C513%2C682%2C316%2C684%2C913%2C273%2C124%2C868%2C339%2C921%2C638%2C948%2C514%2C943%2C218%2C686%2C963%2C688%2C616%2C518%2C223%2C728%2C516%2C558%2C918%2C138%2C748%2C196%2C618%2C278%2C624%2C692%2C522%2C694%2C622%2C142%2C156%2C449%2C626%2C564%2C628%2C565%2C228%2C283%2C924%2C853%2C233%2C288%2C632%2C293%2C636%2C566%2C634%2C964%2C238%2C182%2C662%2C453%2C960%2C968%2C423%2C922%2C935%2C714%2C128%2C862%2C611%2C135%2C321%2C716%2C243%2C456%2C248%2C722%2C469%2C942%2C253%2C718%2C642%2C724%2C643%2C576%2C939%2C936%2C644%2C961%2C819%2C813%2C172%2C199%2C132%2C733%2C646%2C184%2C648%2C524%2C915%2C361%2C134%2C362%2C652%2C364%2C174%2C732%2C328%2C366%2C258%2C734%2C656%2C144%2C654%2C146%2C336%2C463%2C263%2C528%2C268%2C923%2C532%2C738%2C944%2C578%2C176%2C537%2C534%2C742%2C536%2C866%2C429%2C369%2C433%2C744%2C178%2C186%2C436%2C925%2C136%2C869%2C343%2C746%2C158%2C926%2C439%2C466%2C916%2C112%2C664%2C111%2C826%2C298%2C542%2C927%2C967%2C846%2C443%2C299%2C917%2C582%2C544%2C474%2C941%2C754%2C446%2C698%2C666&s=GGX_NGDP&grp=0&a=&pr.x=58&pr.y=11

(sorry, that’s a horrible link but it should work)

I’d support measures to make the overall tax system more progressive as part of a program to get the budget back on track – by which I mean structural surpluses (a small surplus on average over the business cycle). But I’m not convinced by arguments that government is “too big” or “too small”; or that any major party is wedded to “big” or “small” government.
Posted by Rhian, Thursday, 29 January 2015 4:22:16 PM
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Gee Tristian, if only you had told those duds Gillard and Rudd, before 07,
Who knows we may have not seen so much wasted as we did, resulting in the mess we have now.

Dreams are cheap but the one thing that won't change if you get your wish for a change of government, is the bank balance, as it will still be at $0 and the debt will still be there costing us much of our collective taxes just to service, not repay because that's going to be left for future generations.

So where do you propose these fairy tale dollars are going to come from, remembering of cause while Morrison may have stopped the boats, he's still dealing with the fallout from Kevin 07 and it's costing billions, not only in ongoing costs, but in legal fees as well. You really do have quite an imagination there Tristian.

So, negative gearing gets yet another frown, so tell me something that no other opponent has been able to Tristian, if you get your wish and remove NG, where are the renters going to live? And, what do you propose we do for the increased number of homeless as rents will most certainly go up?

Of cause the building industry will also collapse and developers will no longer be in a position to land bank, again putting pressure on land prices, the key component of housing, although a slump in building may put downward pressure on prices, but then who's going to buy an investment with after tax dollars and return a net 3%.

Everyone complains about business not paying it's fair share, however there is one huge difference, while individuals pay their tax first, then claim back their deductions, business claims their deductions first, then pays tax. This causes a huge disparity in the numbers and the media loves it because they hate allowing the truth to get in the way of a good story.

Labor get back in, keep dreaming. You forget people have good (bad) memories of labors mess.
Posted by rehctub, Thursday, 29 January 2015 4:30:18 PM
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Hasbeen: Ok I was a bit out on my top-of-the-head estimate. Wikipedia has Australian government expenditure (at all levels - local, state, federal) amounting to 35% of GDP - or about $525 billion out of an economy of $1.5 Trillion. If we were at Swedish levels we'd be spending about *$230 billion MORE* than we are currently. Specifically I am suggesting raising social expenditure by $45 billion a year in the first term of a Labor Govt. Note the massive difference - which suggests my policy is quite modest and gradualist. Importantly our expenditure is well ahead of our revenue - So it's true we need to raise tax. But we don't need to do it regressively like Hockey is arguing. And it doesn't have to mean austerity if we have our priorities straight.
Posted by Tristan Ewins, Thursday, 29 January 2015 4:30:24 PM
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