Lots of points here, I will address a few of them.

The World Comptetitivness Report is a great way to compare
things like corruption, political stability, innovation etc.
At the end of the day however, its not where large companies
invest their money. China is well down on the list, yet
many companies from the Nordic zone are falling over themselves
to manufacture their products there.

A large part of Finland's economy is based on one company,
Nokia. At one point its shares made up two thirds of the
Helsinki Index. Does that sound healthy to you? With Sweden
Ericson plays a large role. There is no doubt, the Nordics
are innovative people. When its so cold, they can't go to
the beach like we can :)

If we look at wealth in Australia, there are very few seriously
rich people. They choose to pay tax here. If we increase rates,
they can move their wealth anywhere, just like rich Swedes do.

If we look at who owns most Australian companies, the results are not the megarich, as many assume, but in fact all of us. The
superannuation pool in Australia is now worth 1 Trillion $, which is
as much as the value of the ASX. The 9% levy is in fact a huge tranfer of wealth to everyone. The young benefit, they will be paid this all their lives, something that we never had.

Other large shareholders are the grey nomads. People who worked 40 years, saving their pennies, who are now enjoying retirement, often at no expense to the taxpayer. Of course they will have more assets then a teenager fresh out of school! They have 40 years of hard work and saving behind them after all.

Can anyone give me a good reason, that if grandma's Manly house is now suddenly worth 1.5 million $, why grandma should not use the value of that house to pay for part of her old age care? Clearly
grandma is seriously rich!

My grandmother's house was the only asset she had - and it wasn't worth very much as it had been worn down over the years she had survived on a pension. She had very little in the way of cash savings, and survived on a war widow's pension. God only knows how she would have survived on a normal pension. She had to sell her house to get into a nursing home - and then she only ate when my mother went to the nursing home to help. Most elderly people don't have children who care as much as my mother cared. I bet you'd complain about an inheritance tax for millionaires - but if a poor old woman has to sell the only asset she has in order to receive sub-standard care in a nursing home, that's fine. Costello's just gone and blown the surplus on tax cuts - mainly for the rich. What are we going to do with an ageing population when the asset boom ends, and when already most nursing homes are understaffed and provide insufficient care? Six billion dollars in tax cuts in the first year going to over $30 billion over 4 years. That's enough to put an end to waiting lists in public hospitals. But no, it had to go in tax cuts instead. And not a cent of it went to the poor - no tax credits for low income earners and those trying to move from welfare to work. And then there's the Labor Party saying 'me too, me too!'.

It is true that there's a lot of money in superannuation funds - but that's a subsitute for the pension - effectively it's a privatised pension. And, as such, it discriminates against the poor. The vast majority of shares, on the other hand, are still owned by a tiny minority

Tristan, I’m sorry to hear about the bad treatment that your grandma received. Hopefully you reported the nursing home, so that they either lost their license or improved their conditions.

The average house is Sydney is now worth .5 million$. Why should the elderly not use those assets to provide better conditions for themselves in their last years?

I do actually agree with inheritance tax, as I agree with tax
of family homes. Tax needs to be broadly based, but at low levels to make it fair.

Most of the present tax cuts actually went into moving the 15%and 30% levels upwards, so 80% of Australians benefit..

Tell me if I am wrong, but it seems that you think we should provide Rolls Royce health care for everyone, including those who believe that providing for themselves is optional, even if they could.

I think that’s highly unfair. Those miners down those gold mines for instance, they work hard, under difficult conditions. They do it not for fun, but to help themselves and their families. I think its unjust to want to take more of their paycheck, to provide Rolls Royce services for those who refuse to get out of bed in the morning and provide for themselves.

Young Australians are very fortunate. This country is full of opportunities, if they go out and seek them. I don’t know about Victoria, but certainly in other parts of Australia. So to me its all about attitude. Some think that the country owes them everything for doing very little, others go out and make things happen in their lives and for their families. If Costello has given some money back to those who go out and makes things happen, money which was theirs in the first place, then I am not going to knock him for it, especially not if its people like hard working miners.

I agree with Robert's point about the undervaluing of individual effort. There are plenty of middle-income people - both aspirational and those only just surviving - who are getting slugged via income tax. As income tax raises over $100 billion per year, it's easily the dominant revenue-raising engine for the government.

To solve the problem that Robert talks about, the GST rate could be doubled so that it raises about $80 billion, thus making it comparable in size with income tax. In conjunction with this, the government could calibrate its dole/pension payments so that equity is maintained for the poor. It could also raise the tax-free threshold to help the working poor. Then with the money left over it should significantly reduce the income tax scales.

The overall effect would be to smooth out a lot of iniquities between major groups of taxpayers. This is because, as just about everyone is a consumer (and pays the GST) while only a bit over half the population pays income tax, an increase in the overall proportion of tax raised by the GST will share the tax burden more fairly.

If the idea works as it should, the super-rich, who have anecdotally reduced their average tax to 25% or less via tax minimisation, will pay more, the middle-income earners will pay less, and low-income earners will stay where they are. It doesn't solve all the problems out there, but it would be heading in the right direction.

re: increasing the GST - what about low income earners? There's a whole class of underemployed and working poor out there. How do you compensate them for increasing the GST - and if you substitute the GST for income tax - how do you cut income tax equitably? At the moment Costello's tax cuts are aimed squarely at the core Liberal constituency - the rich. A $10 tax cut if you're on $40,000/year - meanwhile: "people on $250,000 will receive $253.85 a week more, or $13,200 a year." http://www.theage.com.au/news/budget2006/10-cut-for-most-workers/2006/05/09/1146940548320.html

Tristan,

I’m with you on this – we should all get that $13,200 tax cut. It doesn’t make any sense for those on $500k to only pay 205k in tax, does it? I reckon $400k should just about make it fair.