Apparently Wayne Swan thinks that increasing corporate taxation (via a more frequent transfer of money to the ATO) is compatible with his stated goal of reducing corporate tax. How else can one describe a measure which increases tax receipts by an estimated $8.3 billion over three years?
And where are these so-called savings measures (ie: cutting spending) – see below?
Anyhow, the reconciliation table always shows an interesting story, recall that the policy decisions are those within the control of the Government, while the parameter variations are those affected by exogenous events.
The policy decisions taken since the May budget (in underlying cash):
- increase taxes and other revenue by $1.821 billion in 2012-13, partly offset by
- increase spending by $0.410 billion in 2012-13
benefiting the underlying cash balance by $1.411 billion in 2012-13.
The parameter variations (again, underlying cash)
- reduce taxes and other revenue by $3.242 billion in 2012-13, partly offset by
- reduce spending by $1.373 billion in 2012-13
worsening the underlying cash balance by $1.869 billion.
What is being hidden?
In the section ‘decisions taken but not yet announced’, we find that there are $1.7 billion of spending decisions and $0.5 billion of revenue decisions taken but not yet announced. Was this part of the reason to rush MYEFO out the door?
Saves
Of course the Government has claimed $16.4 billion of savings measures over four years. Yet fully 78.2 per cent of these savings measures are policy decisions to increase taxes and other revenue! As for the rest, any spending reductions are more than offset by new spending decisions.
Underlying cash versus accrual
A comparison of the underlying cash and fiscal appear here, for 2012-13, to show the differences in timing:
HT: Noodle
Another one for Macquarie Dictionary.
‘Savings’ now means tax increases.
C.L.
22 Oct 12 at 6:06 pm
Not only tax increases, cost increases too. Loss to business of the facility of two month’s worth of tax as well as increased compliance cost. The Goose kills the goose that once laid the golden egg.
Biota
22 Oct 12 at 6:19 pm
blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/swan_saves_by_taxing_you_more/
http://blogs.news.com.au/dailytelegraph/andrewbolt/index.php/dailytelegraph/comments/not_saving_but_spending_not_cutting_but_taxing_harder/
Ivan Denisovich
22 Oct 12 at 6:24 pm
And notice that for the first time they have included net earnings from the Future Fund, not gross earnings, which improves the Budget bottom line. This is a difference of $417 million this year, and grows and the costs of the Future Fund grow. Paying greater fees to manage the Future Fund, actually helps Swan project a larger surplus.
Milton Von Smith
22 Oct 12 at 6:38 pm
Robber Barons..
who here has had a super account inactive for 12 months. I certainly have.
It’ll catch all those uni students doing sporadic work over the new-year break, plus all the rest.
duncan
22 Oct 12 at 6:41 pm
There’s probably some truth to the claim that for many super funds if you have a balance of less than $2000 for an extended period of time it’d be better to have it frozen and get no interest rather than receive interest and pay fees. As the fees (some of which will be fixed rather than relative to earnings) will exceed the earnings.
Chris
22 Oct 12 at 8:26 pm
Indeed Duncan.
WTF is that shit? Keating was right, we did turn out to be a Banana Republic.
.
22 Oct 12 at 8:28 pm
Another one for Macquarie Dictionary.
‘Savings’ now means tax increases.
Deficit (n) : An excess of receipts over expenditure ; or a deficiency of receipts against expenditure of up to $10 billion
Leigh Lowe
22 Oct 12 at 8:50 pm
We are going to Need Gulags ! To put ALL These Theiving Commo Bastards in,at the end of next year.Punish Them ! Make their lives a misery., to encourage future politikans?
Borisgodunov
22 Oct 12 at 8:52 pm
Just wondering ….. how many are there in the Department of Climate Change?
Why?
Ohhh ….. no reason really.
Leigh Lowe
22 Oct 12 at 8:53 pm
Savings (noun)
1. a reduction or lessening of expenditure or outlay: a saving of 10 percent.
2. an increase in taxation or revenue.
Samuel J
22 Oct 12 at 8:54 pm
MYEFO : My Extraordinarily Farked Offsets.
Blogstrop
22 Oct 12 at 8:55 pm
Can someone tell me how collecting tax 12 times a year gives you more tax?
Surely it can’t be just that the government receives more interest on the funds, given they are borrowing most of it anyway?
brc
22 Oct 12 at 9:18 pm
Chris,
the linked smh article says the ATO will pay interest equal to CPI on the unclained super, so on that basis the member will almost certainly be better off.
SteveC
22 Oct 12 at 9:25 pm
Perhaps they’re going to freeze the super for a certain period of time, so even if you do remember it and want to roll it over to your current scheme, you can’t because the Government has locked it up for a year or two to use it for something.
candy
22 Oct 12 at 9:50 pm
Candy, it’s the existing lost super fund. You can get it back as soon as you can identify yourself as the owner. It’s not locked up. The change is merely the threshold, increased from $200 to $2000.
I can’t see how it counts as income to the govt though, as the asset matches the existing liability.
SteveC
22 Oct 12 at 9:54 pm
Brc- its just a trick. They get may and june payments in july not august. So it shifts two months income by a financial year and looks better. No kore money in reality apart from slightly less interest costs.
Dan
22 Oct 12 at 9:56 pm
That joke will never get old.
Token
22 Oct 12 at 10:12 pm
You are 100% correct. If your private company tried to pull that you’d be whacked with penalties from the ATO.
Are you getting how crooked this bunch of thieves are yet?
Token
22 Oct 12 at 10:16 pm
It should only be treated as income for the difference in the CPI (the rate of interest paid on the accounts) and the government bond rate.
Samuel J
22 Oct 12 at 10:19 pm
Perhaps the government will levy charges when you want to reclaim your super from them after they’re confiscated it.
They have to benefit in some way, otherwise why do it.
candy
22 Oct 12 at 10:46 pm
They told us all the other week that if you overpay your GST, you won’t refund you. Give them time.
Token
22 Oct 12 at 10:49 pm
And if a future Abbott Government wants to restore the company tax cycle to quarterly, then there will be a hole in the revenue stream as the system catches up.
It’s a win-win for the ALP. Help their own situation and leave another problem for Tony to fix up afterwards. But don’t all of their policies have this effect?
Steve D
22 Oct 12 at 11:05 pm
Repeal the carbon tax.
Cull the public service.
Attack the mountain of debt.
Roll back the IR landscape (“What about the workers?”)
Etc. …
Steve D
22 Oct 12 at 11:07 pm
When did they say that?
SteveC
22 Oct 12 at 11:28 pm
Candy, you are jumping at shadows. From the MYEFO:
SteveC
22 Oct 12 at 11:33 pm
Can we get the underlying cash position taking into account the NBN and “green” tech fund?
faust
22 Oct 12 at 11:39 pm
SteveC, see this article by Deloites:
Token
22 Oct 12 at 11:50 pm
And SteveC is looking more like a govt troll every day.
blogstrop
23 Oct 12 at 6:17 am
You watch, the fine print will be that if you don’t claim the super within x years of the government getting it, you lose it.
There is no way they would go through all these hoops to ‘help’ people with small super balances.
The government is desperately short of cash, they have always been eyeing off the pile of money in superannuation. They’d love to get their filthy hands on it. All in the interest of ‘helping’ people, you understand.
Most likely the first thing that will happen is that super funds will be encouraged to buy government debt. Who knows where after that.
As for whomever asked about the falling take of GDP – for a start GDP is a useless measure – but that aside, tax take is a function of profitability. The government has been endlessly attacking profitability of companies in a myriad of ways, so the tax take reduces with this. GDP also uses government spending in the calculations – so as the government takes over more and more of the economy, that leaves less and less for the private sector to generate profits (and thus taxes). An increase in government spending must reduce the tax take of GDP simply because it transfers spending to non-taxable operations. The dept of climate change pays very little tax, after all.
brc
23 Oct 12 at 7:03 am
Rubbish brc.
There is no “fine print” The lost members register has been in place for over 10 years. The change is to the balance (was $200 now $2000) and the time period (was 5 years, now one year) before the money is transferred.
I guess you also believe the US govt was responsible for 9/11.
SteveC
23 Oct 12 at 1:04 pm
Having read the summary in the newspaper -
Private health rebate cut by $1 billion
Baby bonus cut by $0.5 billion
It’s not a lot, but it’s a start. There’s still $20 billion in family tax benefits ripe foir cutting. Interesting to see the conservatives trying to defend unnecessary welfare.
SteveC
23 Oct 12 at 3:32 pm
He sure is a Government troll.
Welfare churn isn’t bad, except when it can fund Swan’s banana republic budget.
.
23 Oct 12 at 9:07 pm