Well we can make a case for reduced spending and doable without shutting down the economy by simply eliminating welfare for the rich, which simply has to include family home worth more than $500,000.00? I have lost count of how many have blown the super on a mcmansion and a dozen or more cruises and just to reduce their private means to enable them to collect a pension and free health care etc!

Even then some seem to have the means to force feed the favorite one armed bandit? A few seem to have quite lucrative cash businesses, or own offshore holiday homes which collect rent and pay for almost nonstop cruising?

[Welfare could be more generous if it was limited to just the needy not the greedy! And as an increase in the hands of those who through no fault of theirs are reliant on the public purse?] And don't tell me the ATO are on top of it, cause if they were it would be happening! [No names no pack drill.] And the pubs and clubs that depend on this cash would have to look elsewhere, say in the provision of low cost rental property?

Which would allow us to ameliorate poverty, particularly in post code poverty traps, (gonski, the NDIS) which given subsequent unavoidable increased spending, would allow dependant rural and regional economies to grow and prosper!

Which in turn would flow on up and percolate through the wider economy, and grow a snowballing bigger pie!

Trickle down economic theory isn't working and has never worked, unless you want to include the Great Depression and the following Great recession as classic examples of this fundamentally flawed economic rationales effect.
Alan B.

Shadow,

Try thinking about things a bit more before you dismiss them as twaddle.

"Firstly most businesses that benefit from the tax cut are the 400 000 small businesses who are not sending dividends overseas,"
As calwest pointed out, most of the small businesses are unincorporated so would derive no benefit.

Also, small businesses are generally not very lucrative, so even if they make up most of the beneficiaries they wouldn't benefit most in dollar terms.

AIUI most small businesses have some debt, so many would find an interest rate cut preferable to a tax cut.

"Secondly even the large corporates do not send most of their dividends overseas, and what they do send is largely balanced by Aus companies based overseas repatriating dividends. Finally, even if an investor owned a company 100% and repatriated the dividends, people would be employed and pay tax."
You miss the point. I'm not criticising foreign ownership; indeed I think the current restrictions on that are too tough. But Australia cutting company tax will result in more money going overseas in dividends, yet will not give a corresponding increase to dividends coming into Australia from overseas.

___________________________________________________________________________________

calwest,

I agree that reducing compliance costs is very important for small businesses.

But I very strongly disagree with your claim that the problem is too much spending. If the problem were too much spending, inflation would be a lot higher. Recently our problem has been too little spending.

What do you have against spending on things that will make our economy more competitive?

Look, I don't know anything about economy and I don't give a hoot about economy: all I know is that it is not fair for one person to pay more tax than another just because the other guy hired an accountant to arrange their tax affairs as a "company" (or "partnership" or "trust" or any other dirty trick).

There should be one flat tax-rate for all: this alone will eliminate most red-tape as well as tax-loopholes. If during a financial year you earned X dollars and expended/invested* Y dollars, then you should pay R*(X-Y) dollars in tax, regardless how you call yourself.

Lots of bludger accountants will then join the dole queue (which thankfully has a means-test) :)

And if the multi-nationals don't like it - then good riddance!


* "investment" in this case is defined as anything real that was purchased because it is reasonably needed for production.

Garbage, as usual, from you, Aidan.

If spending was the panacea you claim, we'd already be rolling in riches from the massive over-spending of KRudd and Dullard.

We're not. So that's the end of the logic train for you.

You and the rest of the Leftist clowns never tire of spending other people's money. Just bugger off and leave people to make their own decisions on how they spend the money they earn through their own hard work.

Try to remember this: it's not your money. Keep your grubby little hands off it.

Yuyutsu,

"Look, I don't know anything about economy and I don't give a hoot about economy".

Good, admitting your ignorance is a start. Your simple-minded view of how taxation works is not worth bothering about. Now move on.

Dear Calwest,

[[[
Numerically, the vast majority of businesses in Australia are small businesses.

And the vast majority of small businesses are not incorporated.

Thus, they derive no benefit at all from company tax cuts.

The best way to assist small businesses to grow and prosper would be to reduce the crushing burden of compliance costs - particularly in terms of the soul destroying form filling and reporting for reporting's sake, just because some public servant thinks it would be nice to have a lot more information, even if nothing productive is ever done with it.
]]]

Guess who wrote this?

Whoever did, I agree with every word!
And what I wrote was simply an implementation of the same.

Yes I am simple and I believe in simplicity... and honesty. I dislike scheming.

calwest, I'm not claiming spending to be a panacea. It doesn't intrinsically do much to make the nation competitive (though some of the things the money's spent on do that).

Spending does solve the problem of the lack of business opportunities resulting from a lack of spending.

Rudd's spending kept us out of recession in the GFC. Those who want to credit China for that forget that the surge in Chinese demand for our minerals came a year later.

The RBA then sabotaged recovery by raising interest rates too soon, reducing private spending and business investment. And since then the governments have cut spending in a futile attempt to rush to surplus. But even if it were possible to run a surplus at the moment, there's no reason to.

My logic train can go a lot further than yours, as I can see past the false assumptions that you make.

Cutting taxes would, to some extent, be functionally equivalent to increasing spending. But a tax cut instead of a spending increase would mean that the nation would fail to gain the benefit of what the money would be spent on. And the benefits of a tax cut would flow more to those who are already rich and less to those who actually need it.