The new tax free threshold has moved from $6,000 to $18,200.This means that $12,200 difference per working person which was previously taxes at 15% must be found elsewhere.This is a tax loss to the Govt of $1800 per working person.There are 11 million workers so the real tax loss is $ 19.8 billion.

Obiviously the Carbon tax was going to make up this short fall and the tax reduction was a bribe to induce us to vote Labor.Hang on there.Didn't the Gillard Govt dedicate 10% of the Carbon taxes to the United Nations?

How are they going to service the debt plus reduce tax and have a resources tax that doesn't work?

Labor will finance our tax reductions by increasing our debt so the fools will again vote them in.In Greece and Spain they borrowed money for social services and paid people not to work.Guess who's taking us down this slippery slope?

A friend of mine who lives in Spain said that in Spain you can work for 12mths and then lose you job and get 80% of your wage as social security.The Govt was borrowing from private banks to pay people not to work.Hence now comes the austerity.

The housing prices are collapsing in many parts of Australia and even with falling interest rates confidence in our economy is not there.The banks have observed that people are not borrowing.Our growth gets expressed as debt by the private banking system,so how can there be any growth if the mining sector slows?

This will mean rising unemployment thus loss of more taxes and we get the bill for more unemployment.They will have no options but to borrow from the private banking system under the existing agreements.

Arjay what is left to be said regarding these Socialist imbeciles in government?

What can be said about the latest pole that finds half the nation supporting them, nothing except half the populations are imbeciles.

Sorry I can’t comment further, but what is the use when you have a lefty media reporting on henhouse gender squabbles generated against the Coalition rather than the reporting of the facts regarding our economy.

With a surplus here and a surplus there, here a surplus, there a surplus, everywhere a surplus....in the dreams of that imbecile Swan.

Arjay wrote: "The new tax free threshold has moved from $6,000 to $18,200.This means that $12,200 difference per working person which was previously taxes at 15% must be found elsewhere."

Not quite. When you account for the low-income tax offset and the Medicare levy, the EFFECTIVE threshold actually rose from $16,000 to $20,542, and the EFFECTIVE marginal rate above the threshold also rose, although nobody paid more tax as a consequence. John Humphreys has the details: http://johnhumphreys.com.au/2012/06/25/australias-income-tax-rates/ .

I have found it hard to put a figure on exactly how much the Federal
government owes;
Approx rounded figures
Accumulated deficits $70,000,000,000.
Unfunded PS Super $100,000,000,000.
Government Bonds $250,000,000,000.
My Total $450,000,000,000.

Direct government borrowing $??
I have seen reference to totals that reach to $700 billion.
Anyone know what I might have missed ?

Arjay, not only do they have to fund what you mentioned, but they also need to find $12 million for every boat arrival. Four arrived just last weekend alone.

Then there is the surplus 'at any cost' that they are determined to achieve.

They have sent us backwards in just five years, they will most likely break us if they get another term.

Of cause they continue to blame the GFC, but they simply can't balme the GFC for the likes of the insulation stuff up, fuel watch, grocery watch, cash for clunkers, live export debacle, the list goes on.

Of cause, there is also the dumping of the Howard measures that stopped the boats.

I get accused often of being unreasonable when I suggest how on earth can anyone continue to support them.

But I have to ask, how can anyone not see what has gone on over the past five years and, what has caused it.

Revenue is the fundamental basis of any economy. If you have no revenue source then you have no economy. A classic example is East Timor. We liberated them with military might so they could have a free economy based on the revenue flow from the oil and gas reserves in the Timor basin. The only problem we have is that East Timor is not getting the real benefits of a revenue source. The Australian Government has allowed the big multinationals to get control of the undersea resources.
East Timor is still a depressed disaster of an economy because it has no real revenue stream.
Back here in Australia we have a government scavenging for revenue. We even have state premiers stating that they intend to roll out more speed cameras to collect millions of extra dollars in fines for the state coffers.
I say to you the revenue is out there Mrs Government but you refuse to collect it.
Example #1. A take away shop that bakes its own bread, pies and mini meals in a high turn over are of indigenous and single occupancy dwellings collects upwards of $5000.00 per day,24/7, has no operating till and declares $1000.00 per day, if that.
continued

That is $1,460.000 per year undeclared revenue ($146,000 unpaid GST)
Multiply that figure by a estimated 50,000 similar operations throughout Australia and you have $73,000,000,000 per year undeclared revenue ($73,000,000,00 unpaid GST)
Example #2. A dive tour boat in any tourist port take ten backpackers for cash over the back of the boat per day (and they do) @ $100.00 (min) then that is $365,000 per year undeclared revenue (36,500 GST).
Multiply that figure by a estimated 1,000 similar operations throughout Australia and you have $365,000,000 per year undeclared revenue (36,500.000 GST)
Massive isn't it
Now using example #1; we take a conservative figure of say 20% of this amount being fact this then $14,600,000,000 multiplied by 250,000 (a very conservative figure) you then have an amount of $36,500,000,000,000.
Now just say only 20% of this figure is true then we a missing out on $7,050,000,000,000.
Staggering isn't it?
So what it means is that our government is deliberately bleeding the worker who really shouldn't have to pay any tax on up to $100,000 a year income.
End of unemployment, end of poverty, end of medical waiting lists, better roads, schools and aged care,
Utopia revisited.
CG

100,000,000,000 in super. As long as everybody does not retire on the same day there's no problem.
The surplus push has not caused one lost job.
Backwards in five years, That is not what the economy figures say.
The GFC did happen, unless you were asleep.
The Howard measures that stopped the boats, will not work now.
This govt; is not perfect but the alternative is dangerous.
What has gone on in the last five years is steady growth, steady inflation, low interest rates, why would anyone complain.

Rehctub;
A government committee has reported that the governments response to
the GFC had no effect. So Wayne Swann did not save Australia after all.
All he did was waste it all.

Note that the "Worlds Best Treasurer" award he got was from the very
people who got us all into the current mess anyway !
Birds of a Feather come to mind.

Chrissgaaf1000,
Your second post is difficult to follow.

As I see it you have not allowed for the take away shops costs, but simply used a gross income. Have you ever had a retail business? Many go broke as can be seen by the changes in leases.

Rents in high pedestrian traffic areas are very high, try renting a shop in a shopping cantre. Then there are wages and related costs, electricity, gas and other operating costs. On top of that there is the purchasse of the raw materials used, insurances, interest on loans for plant and a heap of other costs you may not be aware of, such as waste of unsold product.

Butch may be able to give a rough idea of how much is left out of each dollar in turnover, but just because there is a high business income does not mean a profitable business or a high taxable income.

Bazz please give me*name of that report*who wrote it
How can I find it?
My bet is in a little Golden book.

So far no one on this group seems to understand Modern Money Theory.

Businesses cannot be profitable without customers and the lower paid always spend most of their income because they need to do so to live at a reasonable standard. That spending produces demand and as a consequence helps to provide employment.

Australia has nowhere near full employment (certainly there is massive underemployment)and while there are unemployed people and under-utilized facilities and supplies in the economy the sovereign government (the government which is responsible for the currency) can buy what is available without collecting revenue. The government pays by keystrokes crediting the suppliers bank account.

The government can afford to run a deficit particularly if, when it does so, it increases the infrastructure and asset facilities owned by the government on behalf of the citizens. That deficit can be continuously about equal to the growth rate of the economy.

A sovereign government is not constrained in the way an individual or household is.

Conservatives either don't understand this or are willfully ignorant on the matter. Read Professors Bill Michell or Randall Wray on the subject or read the blogs on New Economic Perspectives.

Arjay wrote 'Didn't the Gillard Govt dedicate 10% of the Carbon taxes to the United Nations?'

But at least that will save the planet, won't it? I've sent a cheque to Europe to help bring down temperatures even more. Maybe that's why we had a cool wet winter.

A few people here need to check their keyboards, it is putting in
extra zeros. $36.5 Trillion, & $7.05 trillion !
Thats a hell of a lot of hot cross buns !

Belly, it was a radio report. You probably should try Parliament House Library.
If it has been tabled it should be available on line by now.

Banjo, here is a small example.

I have owned five retail butcher shops, from 89 to 2011.

From 94 to 99 I owned a bulk butcher, which meant higher turnovers at lower margins.

In say 96, my shop turned over $30,000 per week, grossed 28%, wages were approx 9%, rent was approx 1%, which included work cove and super, another 1% for misc expenses, power, phone etc, the rest approx $5K was profit.

These days bulk shops struggle, unless they are huge, as the disposable dollars are not there.

So your average shop today turns over around $20,000 per week, with a gross margin of 50%. $10,000.

Wages (if paid on the books), about 22%, rents, approx 11%, power alone approx 5%, work cover alone 8% (of wages), misc expenses 5%, so what's left is less than 10% in most cases.

Now considering a butcher shop today costs about $250,000 to set up, the gamble is quite often not worth it.

Plus, the likes of Coles and Woolies seem to be unrestricted as to how many stores they can open and, in many cases, it's just one land lord, steeling tenants from another.

In fact, it's simply a matter of time before most centers become ghost towns, as the big two, combines with Big W and K Mart are simply taking what's left of shoppers that don't buy online.

Once they ( the big two) get lotto, which they are after, new agents will die and they are a pinnacle part of any centre.

Sorry to bore you, but it's one subject I am passionate about.

Foyle what you pointed out was correct, governments always did and
still do issue pixel money.
However the rules have changed while the financial people have been
gazing at their navels wondering what to do.

The usual rule of thumb is either print more money or have a crackdown
and austerity drive.
Much to their surprise these traditional methods no longer work.
The US has tried one and Europe has tried the other.

We all await their return from slumber.

rehctub;
Interesting post. However as no doubt you are aware many trends occur
in the US before they hit here.
Following something I read I looked at a website for redundant shopping
centres. Yes, websites for everything.

It appears that the large malls are going broke in their hundreds.
I used google streets to check on one in Houston Texas and there it
was with an empty car park surrounding it.
I don't remember what was the cause, although what you are saying
about rents etc maybe the cause.
There are always shops turning over in our local centre.

To all,
Yes my figures are 100% gross. Isn't the GST payable on Gross? Trillions...yes there are trillions out there.
I bet the butcher was taking home the best cuts of meat for the family with no recourse to the bookkeeping that says it was income.
I'M bloody sure the restaurant/cafe/takeaway operator takes home 100% of their food needs and writes it off against waste.
I spend a lot of time in the wholesale outlets and I see the trolleys and carts full of goods being bought on the company account but definitely not for resale in their businesses.
How much petrol is bought on the company account and used to take the kids to school or weekend jaunts in the 'company'4x4.
There is not a small business operator who can claim a 100% honesty rating.

It's a little scary, how little people understand about basic taxation issues.

Arjay, you should know better by now than to attempt anything to do with numbers. You know i) you'll get it wrong, and ii) that I am going to call you on it.

>>The new tax free threshold has moved from $6,000 to $18,200.This means that $12,200 difference per working person which was previously taxes at 15% must be found elsewhere.This is a tax loss to the Govt of $1800 per working person.<<

The effective threshold was $16,000, not $6,000, thanks to the Low Income Tax Offset of $1,500, which equates to $10,000 at 15%. That has now gone.

You also ignored the fact that the entry level tax rate - i.e. above the tax-free threshold - has moved up from 15% to 19%.

It's all here:

http://www.ato.gov.au/individuals/content.aspx?doc=/content/12333.htm

So a better equation would have been

Lost: 15% of $2,200 = $330

Gained: 4% of ($37,000 - $18,200) = $752

Except, of course, not everyone earns the $37,000 that is needed to make this sum work. So the actual gain/loss would have been carefully worked out on the numbers of people paying tax in the bracket $18,200 to $37,000

I somehow doubt the difference was particularly great, especially as we are talking low-income bracket here...

But today's prize for Gonzo math has to go to chrisgaff1000

>>Now just say only 20% of this figure is true then we a missing out on $7,050,000,000,000.<<

Sweety, that's seven trillion dollars. In tax. At 10%.

Do you have any idea what the total annual retail sales are in Australia, upon which GST is based?

Didn't think so.

Whatever you're smoking, it is damaging your brain.

Bazz,
The USA has not tried a sensible alternative.

The US government has not put the newly created money into construction of infrastructure for the future such as fibre-optics communications cabling or upgraded electrical power systems or into the repair and upkeep of existing infrastructure such as decaying bridges, highways and power stations. The USA government has put those extra dollars into circulation without buying anything worthwhile in exchange for them and thus stimulating the real market.

Instead they have pushed the funds into the banking system to be spent as the banks and speculators see fit. They are in effect setting the stage for a repeat of the GFC.

The USA has two major advantages over all other trading nations. The $US is both the accepted trading currency and the international reserve currency. That allows US firms to spend newly created dollars to buy goods and services and even corporations everywhere in the world for virtually no cost unless the target country applies restrictions, something our sovereign government is loath to do.

China has accumulated massive numbers of $US and cannot spend them in the USA. So they are trying to obtain assets in Australia. At least the Chinese have obtained their dollar balances in exchange for real goods sold into the US market.

Pericles your own ref to the ATO proves my point.
2011 -2012 0-$6000 no tax. + 15% tax to the next bracket.
2012-2013 0-$18200 no tax + 19% tax to the next bracket.
All the other tax brackets are virtually unchanged.

The reason why Pericles issues such invective is because I speak a lot of truths about 911 and the criminal international finance system which is involved in these wars of imperialism.

BTW Pericles I watched Borat after many years and this the golden line I missed. Borat,"Azamat said that we should not fly to California because the Jews might do their repeat of 911."

Another good line when Borat was addressing the Rodeo, "I support you in your war of terror." Sasha Baron Cohen is Jewish and that's why he got away with so much.

Not all Germans were Nazis and not all Jews are Zionists.

Actually Chris, most food businesses have a provision in thier accounts for 'good own use' so we do pay tax, as this is classed as drawings.

We do pay cost price, which is a bit of a reprieve, but we need a break, given the hassle involved in running a small business today.

I am afraid small business, esspecially retail, is fast becoming a high risk venture.

We not only have to find huge fit out costs, security bonds etc, but we also have to risk our house if we have to borrow, which most these day do.

All this on top of the risk of facing the prospects of more supermarkets within our area.

My fear is that small retail will never recover.

In fact, it's my prediction.

rechtub,if retail goes as you suggest and we have little manufacturing.The CO2 tax makes us even less competitive with OS businesses.They are attacking the farmers and the Mining Industry is the only one now remaining strong.

We need to put pressure on the RBA to start creating money like the private Federal Reserve does.This will save us right now $30 billion + interest in taxes.Our Banks borrow 30% of mortgage money from private banks who just create it with the click of a computer mouse.

Not quite, Arjay.

>>Pericles your own ref to the ATO proves my point<<

Except that last year, if you earned $16,000 last year, you would be "taxed" $1,500 on the difference between $6,000 and $16,000 ($10,000 @ 15%), then you'd get $1,500 back in the form of the Low Income Tax Offset. Net effect: $16,000 is the actual threshold before you started paying tax.

>>The reason why Pericles issues such invective is because I speak a lot of truths about 911<<

Invective? I thought I was being particularly polite.

But seriously, the reason that I pick up on your errors is because they are quickly spread across the internet, passed from blog to blog as some kind of truth, when in reality they are simply misunderstandings. Not everyone bothers to do one minute of research on these assertions, so they are repeated to and by like-minded people, rapidly forming a sort of alternate reality.

Exactly the same can be said of your 9/11 theories.

Incidentally, this might come as a shock, but Borat is satire, not documentary.

Your lack of interest in the realities of the financial world leads you to say silly things like this:

>>We need to put pressure on the RBA to start creating money like the private Federal Reserve does.This will save us right now $30 billion + interest in taxes.Our Banks borrow 30% of mortgage money from private banks who just create it with the click of a computer mouse.<<

I know that you think that money simply appears out of thin air. But it doesn't. It is created as debt. So what you are suggesting is that you replace one debt with another.

Any savings, therefore, will accrue only from the difference in those interest rates.

So what new interest rate did you have in mind? And how exactly would you ensure it was adhered to?

If you care to do the research necessary to answer those two simple questions, you will be well on the way to understanding how the whole mess fits together.

Won't help with your 9/11 fantasies but.

Foyle said;
The USA has not tried a sensible alternative.

Yes I agree a valid point. They have had some recovery, which I think
has been largely as a result of the extra oil and gas they have
obtained over the last two or three years.
Unfortunately the oil is comparatively expensive and there is no profit
in the gas.
Our GDP is so thin, that it will not take much change in the Tapis
price to eat it all up.

Anyway, it will be interesting to watch what happens in the US in January.

Arjay, I'm not up to speed with high finance, however I was of the opinion that when governments print more money, they secure it with bonds.

Perhaps someone better informed can explain it better.

As for retail, farming, manufacturing and, now mining, these industries all struggle with our high production costs and inflexible IR laws.

As we speak, labor are trying to revamp compassionate leave (I think) to include domestic violence and mental health, as reasonable grounds for taking such leave.

They have to be kidding, what about the rights of the employer, to have the confidence in delivering their goods on time, every time.

I raised the issue of confidence some years back. It was dismissed, just like my prediction that Julia would knife Kev.

More and more tenders come with time restraints and, if the timelines are not met, huge fines

With the ongoing push for more flexibility in the workplace, accurately tendering for these projects can be a nightmare and, quite often results in over the top prices, as those submitting tenders have too many variables to consider.

The sad part is, these excessive prices are not only passed on, but they also help to make us anti competitive in the market place.

Confidence is a key issue for any business and confidence is one thing that has been eroded with this labor government.

Rechtub, I am not right up with it either, but I think what happens is
that the Reserve Bank clicks on $1 billion button and transmits that
to the appropriate bank. That bank can then click on some of that
"money" and credit it to a borrower.

The borrower then clicks on that money and sends it to the dealer where
he bought his car. The dealer clicks on that money and sends it to his
bank, where he clicks on it and sends most of it to the car manufacturer.

But there is more; the borrowers employer clicks on his bank account
and sends it to his employees account, the bank may click on it and
send it back to the Reserve Bank.
However the employer's customer clicked on his bank account and sends
it to the borrower's employers bank account.

Each one of those clicks is separately added to our GDP, so you see
GDP is not all it is cracked up to be.
Some economists say they should use a different measure of economic activity.

Pericles; how many people are earning $16000 or less? This is the lower 10%. The average wage is $65,000 to $70,000.They get no $1500 tax offset.Most people would have got an increase in their pay due to this threshold being raised.My observation that this Labor Govt is bribing their way back into power remains valid.

rehctub,Our Govt creates very little money.Most of our new money comes from the private banking system as debt.Even our inflationary money gets expressed as debt.

The Govt mints coins and prints notes but most of the new money gets created via mortgages which 30% is borrowed from private banks.I'm not sure of the process of note printing.Also most of our money for infrastructure get borrowed from private banks.Our total debt is now 85% of GDP.

In the USA the Govt issues a bond which is a promise on behalf of the tax payer to repay with interest money borrowed from the Private US Federal Reserve.I'll have to research how our Govt does it.It seems that our RBA issues bonds on behalf of our Govt.Some of these things are difficult to find out.

rehctub,
I think you have it a bit backwards.

The government doesn't just "print money"and back it up in bonds.

It sells Bonds on the market with an interest guarantee. Investors buy the Bonds and this is the money the government "borrows".

While our interest rates are comparatively high and our economy is stable, the Bonds are in demand by overseas investors and so we appear to be "borrowing money from overseas".

Wasn't it Pauline Hnason who suggested that all the government has to do is print however much money it needs anytime it wants?

rache,who gave the private banking system the right to create from nothing all the money to equal our increases in growth + inflation?

Govt has a function in money creation since this represents our increases in productivity.It lowers our tax burden and creates infrastructure debt free from the private banksters counterfeiting system of debt money creation.

Hi,
Tell a simple country boy like me If the banks can line up cap in hand and borrow from the reserve bank whatever they want at the base interest rate why the hell can't the average guy in the street wanting to build a home or finance a business simply by pass the banks and their inflated interest rates and borrow direct from the sourse, the Reserve bank?
CG

There seems to be a not very transparent view of what goes on in the money system.
I have seen graphs that suggest our govt borrowings are a smallish
percentage of GDP, but all other dept is a very high percentage of GDP.
The government recently passed legislation to increase the borrowing
to $250 billion. They recently passed the previous $220 billion limit.
Each week they put over $1 billion of bonds up for auction.
This where the $150 a day you hear about comes from.
The government pretends this is not government debt.
However, someone holds those bonds and will eventually want their money back.

This sounds very much like Greece all over again.
On November the 16th a number of Greek govt bonds become due and they
do not have the money to pay them out !
Hmmm

Bazz the figures of Accumulated Deficits $ 70 billion + unfunded super $ 100 billion + Govt Bonds $ 250 billion = $420 billion.Is that for all Govts ? I know our total debt is over $ 1000 billion and that is not good.This would mean that Govt accounts for almost half our debt.

Hmmm, yes well I have read that it is $700 billion.

"In June 2012 net foreign debt, inclusive of the public and private sectors, increased to $756 billion or 51.5 per cent of gross domestic product (GDP). The total private sector contributes to 71 per cent of this debt, while the total public sector accounts for 29 per cent–the government contributes 83 per cent to the public sector net debt.

Over the last 10 years net foreign debt has risen steadily from 41 per cent of GDP to a peak of 56.0 per cent in December 2008. Since then it has decreased 4.5 percentage points.

Gross foreign debt is now $1.4 trillion (or 96.2 per cent of GDP), of which the private sector owes $1.1 trillion or 78 per cent. Commensurate with this, the public sector owes 22 per cent or $0.3 trillion. "

http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/MSB/65

WMtevor then Public debt of $300 billion which does not include unfunded super liabilities is over $27,000 per working person plus interest.Over 10 yrs with interest it would be about $600 billion meaning they would have to find additional taxes of over $5000 pa for every working person.

Thanks for the info.

I would presume that the major part of the private debt would be
housing loans, car loans & business loans.
It would be interesting to break commercial debt out of that.

To obtain the net foreign debt are we subtracting overseas investment purchases of Aus Bonds ?
If so that is really a debt not an asset.

Thanks for the info Trevor.