Almost a scary number

THE Gonski backflip brings to $16.5 billion the cumulative damage to the budget bottom line from discretionary decisions taken by the government in the three months since its election.

Looking at that sentence you might start getting concerned.

Spending is going in the wrong direction to be sure, but the devil is in the detail.

The additional $1.2bn in education spending follows the $8.8bn cash injection to the Reserve Bank, the decision to defer the $5.2bn in public spending cuts and abandoning a series of tax increases at a cost of $1.3bn.

That last bit caught my eye – abandoning a series of tax increases, like that is a bad thing. That is a combination of ideas so silly they can’t be implemented (tax on super over $100,000), minimum equity holdings designed to limit profit-shifting (doomed to failure) and then a tax on education and work expenses. This is what we read (emphasis added):

The clearest sign of the government bowing to lobby groups was its decision to remove Labor’s $2000 cap on the self-education expenses that could be claimed as a tax deduction. … A decision to place a limit on the public subsidy to private professional development is exactly the kind of saving one would expect a commission of audit to come up with.

The deductibility of expenditure incurred in the production of taxable income is not a subsidy. If the Commission of Audit starts recommending rubbish like this we’ll know its been a complete waste of time.

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21 Responses to Almost a scary number

  1. stackja

    I will withhold comment until I see the full report.

  2. Rococo Liberal

    Of course in lefty-speak any tax deduction is a subsidy, because all the money in Australia is the property of the government which kindly lets you keep some of it.

    Remember, if you are successful in making some small fortune, “you didn’t build that,” all you did was get lucky and gain the benefit of all the work done by the government, academics, nurses, teachers, social workers and all the other caring professions, you reprehensible, capitalist dog. How dare you even think that you deserve more money than a nurse or an academic. You exploiter of and murderer of little children. It’s your kind that has made the world an evil place full of discrimination and hate against women, people of colour, gays and transgendered parakeets with aids. You oght to be prosecuted and then forced to watch Q&A episodes on a continuous loop for 10 years whilst being told by an earnest feminist with a lisp and a stutter how your good fortune has harmed the opportunities of disadvanteged, lesbian tap-dancers in Dapto. Scum!

  3. Rococo Liberal

    Sinistra delenda est!

  4. Token

    Of course according to the Australian media it is more responsible to hide the blow out until you deliver the budget the following year when you can demand people to ignore the actual results and focus on the budget.

    Isn’t a good amount of the problem here more bad estimates from the same Treasury that was $200B or so wrong over the past 6 years?

  5. wreckage

    Typical trash. Any article that lists a deferment of tax increase as a government expense is not worth wiping my backside on.

  6. Ant

    As soon as they announce that they’re making massive cuts into public sector spending – all the lavish remuneration, entitlements and perks pissed away on the many useless pissants in stuffed shirts polishing seats with their useless behinds, as they dream up ever new ways to pad their nests while screwing us with ever more stupid regulations and laws, all on the back of the productive part of the private sector, I’ll know they’re serious about spending, borrowing and debt.

    But, where to start…

  7. egg_

    IMHO the budget should still be quantified in ABCs ($1.2 Bil? p.a.) e.g.:

    Gonski: 4.5 ABCs
    NBN: 90 ABCs
    Dole: 0.1 Snowcones
    et al?

  8. Empire Strikes Back

    A decision to place a limit on the public subsidy to private professional development is exactly the kind of saving one would expect a commission of audit to come up with.

    Uren takes inspiration from the Gittins playbook. Why do these people call themselves “business and economics commentators”?

  9. Rob MW

    “The deductibility of expenditure incurred in the production of taxable income is not a subsidy.”: - exactly Sinc.

    By extension David Uren in saying: “………..expenses that could be claimed as a tax deduction. … A decision to place a limit on the public subsidy……..” – has completely made a mockery of the BAS system given that Business capital expenditure is GST neutral which he would only view as a ‘Subsidy’ under his ruse.

    Looking at Swan’s shame in constantly revising down revenues, I think that attempting to go out too far with forward estimates which are contingent upon a commodity based economy might look and sound impressive from a goobly-gook language point view but at the end of the day is probably creating more problems than what it is solving.

  10. Popular Front

    Why do these people call themselves “business and economics commentators”?

    It sounds a lot better than ‘airheads and gainsayers’ ESB.

  11. Token

    Gonski: 4.5 ABCs
    NBN: 90 ABCs
    Dole: 0.1 Snowcones

    Good metrics here.

  12. .

    Popular Front #1098647, posted on December 5, 2013 at 12:20 pm
    Why do these people call themselves “business and economics commentators”?

    It sounds a lot better than ‘airheads and gainsayers’ ESB.

    Another reason, which hurts them deeply:

    Because they also lack the qualification to call themselves either economists or financial analysts.

  13. MT Isa Miner

    Rococo Liberal

    #1098602, posted on December 5, 2013 at 11:52 am

    Sinistra delenda est!

    Yeah, Rococo, Never let up.

  14. THE Gonski backflip brings to $16.5 billion the cumulative damage to the budget bottom line from discretionary decisions taken by the government in the three months since its election.

    So the Abbott government has added around 1% of GDP to national debt in its first 100 days, and this isn’t the thing that catches the eye of Steve Kates. LOL.

  15. Popular Front

    Because they also lack the qualification to call themselves either economists or financial analysts.

    Quite so Dot. It is incongruous that those least qualified to discuss various issues make the most public noise on those issues, like Hanson-Dungbeetle on illegal immigrants, or Wayne Swan on fiscal policies etc etc.

  16. will

    In a great many ways, I would have liked the Rudd-Gillard regime to continue, and deal with the fiscal crisis they created. They would end up eating their own, like removing funding from the tertiary education sector.

    The proposal to limit claims for self education to $2000 would hurt school teachers the most. This overwhelmingly ALP voting group are major gamers of the tax system. Virtually all AAT challenges are from teachers, who seek deductability for almost every expense, every holiday, every course. A limit of $2000 would not only hurt this group, it would hurt the wider education and training sector as taxpayers limit their self education expenditure to the deductable limit.

  17. Empire Strikes Back

    Virtually all AAT challenges are from teachers, who seek deductability for almost every expense, every holiday, every course.

    In fairness to teachers (in Victoria at least) their industry is highly regulated and protected. One can’t teach without a VIT registration. A condition of registration renewal is proof of “professional development”.

    If I had to cop that shit, I’d be claiming maximum deductions too.

  18. H B Bear

    That is a combination of ideas so silly they can’t be implemented (tax on super over $100,000), minimum equity holdings designed to limit profit-shifting (doomed to failure) and then a tax on education and work expenses.

    Towards the End of Days, The Goose abandoned his mere intellectual shortcomings and started flailing around like the drowning man he always was.

  19. Empire Strikes Back

    So the Abbott government has added around 1% of GDP to national debt in its first 100 days

    And the award for highest net debt and fasted debt growth rate in Australia’s history goes to…the Rudd-Gillard-Rudd government.

    He’s angry, fat and still trolling The Cat.

  20. Robert Blair

    Rococo Liberal

    #1098602, posted on December 5, 2013 at 11:52 am

    Sinistra delenda est!

    duplum delenda viridis sinistris!

  21. .

    CPD is such bullshit. You could be so far ahead of the worst teacher who does CPD, that they’d never catch up, but you must do the BS courses or you are not current.

    What if a teacher had:

    PG teaching
    Completed their registration requirements
    UG in other disciplines
    Trade quals
    Work experience in external quals (trade and university)
    Other professional quals
    Taught at TAFE with their silly teaching Diploma as well
    Years of experience teaching, as a mentor and head teacher
    Taught teaching at university
    Researched pedagogy/education, was published?
    Well rounded, foreign langauages/or performing/visual arts talent?
    Won awards for teaching, proven results and well liked by by staff, parents and pupils?
    Ran their own business and comittee member of community or sporting group?
    Member of a service, such as Army Reserve, former copper or RFS/SES member?

    Someone would be rare but such special and talented people exist.

    Why they have to do a yearly tick a box course in bullshit is beyond my ken.

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