A hairshirt budget

Well, get ready for it, an experiment in democratic politics, an unpopular budget aimed at no constituency at all:

Radical reforms to health and education will be outlined today in a searing assessment of federal finances that also calls for the family home to be included in the asset test for the age pension.

Action on the asset test is a key recommendation in a far-reaching review that identifies huge cuts to “middle-class welfare” to prevent budget spending climbing to $690 billion within a ­decade.

Tony Abbott will also be urged to scrap federal agencies and ­delegate more services to the states as part of a blueprint from his commission of audit that is ­already sparking resistance from key cabinet ministers.

The closely held report stops short of calling for the dismantling of federal health and education departments but warns of a massive cost to taxpayers from the duplicated effort between Canberra and the states.

In a deeply controversial finding, the commission identifies billions of dollars in savings from including the family home in the eligibility test for the age pension, arguing it is unfair for ordinary workers to subsidise pensions for the wealthy.

UPDATE: If you cut government services without lowering personal taxation, you have lowered our standard of living. You would have to be a good deal more informed about the economy and our prospects than I am, and I even try to keep up, for me to buy into this.

PAINFUL cuts to welfare and basic government services are being urged in a five-volume plan to slash $70 billion a year from federal outlays that presents Tony Abbott with dozens of deeply controversial measures he will be challenged to reject.

The “formula for the future” from the National Commission of Audit outlines savage cuts to the age pension, unemployment benefits, family tax benefits, the Medicare Safety Net, the Pharmaceutical Benefits Scheme and other programs used by millions of Australians.

If it requires five-volumes to set out its recommendations and arguments, it will require more time than anyone can possibly muster to absorb the fine details and project a better future for themselves out of the mishmash presented. What people will notice are the “PAINFUL cuts to welfare and basic government services”. I have a few descriptive words that come to mind but I will leave it to others to say what they think which is probably what I think.

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119 Responses to A hairshirt budget

  1. Rabz

    his (shorten’s) position could mean he is left defending lower taxes for millionaires and many others who earn far more than Australia’s average full-time income, which is about $75,000 a year.

    Another thing – why are we still being assailed by this cliched, class warfare bullshit?

  2. Gab

    Tony Abbott will also be urged to scrap federal agencies and ­delegate more services to the states as part of a blueprint from his commission of audit that is ­already sparking resistance from key cabinet ministers.

    The closely held report stops short of calling for the dismantling of federal health and education departments but warns of a massive cost to taxpayers from the duplicated effort between Canberra and the states.

    The report may as well state the ABC and SBS ought to be privatised for all the difference it will make to the socialist Abbott.

  3. Tony Abbott will also be urged to scrap federal agencies and ­delegate more services to the states as part of a blueprint from his commission of audit that is ­already sparking resistance from key cabinet ministers.

    The ministers are resisting, and good for them.
    They care about those government departments.

    Those programs must be run at any cost, even if it means stripping pensioners of their family home and taxing tradies. Yes! Keep the machinery of government running big and strong and powerful. keep all those opaque departments and dubious grants. The people may not understand but it is good for them in the long run.

  4. johanna

    Punishing pensioners will ensure that they are a one term government – if they even make it that far.

    When we see politicians’ and public servants’ perks taken down to the levels that they want to apply to everyone else, they just might salvage a few votes.

    Note that the Heads of the PM’s Department and Treasury get $40,000 a year pay rises this year, bringing them up to around $800,000 per year. As career public servants, as well as the dosh they have stashed away while working, their pensions (not means tested) will be well over $100,000 a year.

    Belt-tightening for thee, but not for me.

  5. Government programs are the best!
    Pensioners and taxpayers can just cough it up and quit complaining.

  6. H B Bear

    Abbott and Hockey better identify and flag some short to medium term payoff out of this (read personal income tax cuts). Given that a lot of the problem is structural, my sense is that the man in the street isn’t convinced things are as bad as they are going to become.

    Abbott deserves to be condemned for committing to Gillard’s Gonski and NDIS socialist programs ahead of the 2013 election. It is practically on a par with Hewson losing the unlosable election for political stupidity.

  7. incoherent rambler

    Changing asset tests for (or cutting ) aged pensions is political suicide.
    Abbott looks like handing the ALP the next election on a platter.

  8. Senile Old Guy

    And ever helpful, the ABC Fact Check Unit, lists Nasty Mr Abbott’s statements on tax.

  9. stackja

    Déjà vu?

    Barton Ministry
    From Wikipedia, the free encyclopedia
    http://en.wikipedia.org/wiki/Barton_Ministry
    The Barton Ministry was the first Australian Commonwealth ministry, and ran from 1 January 1901 to 24 September 1903. The ministry was made up of Protectionist Party members.
    Prime Minister and Minister for External Affairs Rt Hon Edmund Barton, KC MP
    Attorney-General Hon Alfred Deakin, MP
    Minister for Home Affairs Hon Sir William Lyne, KCMG MP (to 11 August 1903)
    Rt Hon Sir John Forrest, GCMG MP (from 11 August 1903)
    Minister for Trade and Customs Rt Hon Charles Kingston, KC MP (to 24 July 1903)
    Hon Sir William Lyne, KCMG MP (from 11 August 1903)
    Treasurer Rt Hon Sir George Turner, KCMG MP
    Minister for Defence Hon Sir James Dickson, KCMG (to 10 January 1901)[2]
    Rt Hon Sir John Forrest, GCMG MP (17 January 1901 to 10 August 1903)
    Senator Hon James Drake (from 10 August 1903)
    Postmaster-General Rt Hon Sir John Forrest, GCMG MP (to 17 January 1901)
    Senator Hon James Drake (5 February 1901 to 10 August 1903)
    Hon Sir Philip Fysh, KCMG MP (from 10 August 1903)
    Vice-President of the Executive Council Senator Hon Richard O’Connor, KC
    Ministers without portfolios Hon Elliott Lewis (to 23 April 1901)[3]
    Hon Sir Philip Fysh, KCMG MP (26 April 1901 to 10 August 1903)

  10. .

    Note that the Heads of the PM’s Department and Treasury get $40,000 a year pay rises this year, bringing them up to around $800,000 per year. As career public servants, as well as the dosh they have stashed away while working, their pensions (not means tested) will be well over $100,000 a year.

    The PS must always be cut from the top (and hard), unless there is egregious yearly payrises and overtime for say, road crews.

  11. RMR

    So the first constituency Abbott needs to win over is Cabinet. If they won’t agree to cutting expenditure hard then they don’t believe we have a budget emergency either. At that point Greg Sheridan is correct in the Australian today, democracy is doomed.

  12. Senile Old Guy

    Kennett:

    We’ve now had this debate about a whole range of issues which are going to raise – we now talk about a debt tax, which I understand, if correctly interpreted by me at $80,000, it’s going to raise $2.2 billion. Well we might be facing a deficit this year of $40 billion. So $2.2 is chicken feed. What are we talking about? We’ve got to address the big items to get the budget back into balance quickly as possible so we don’t worsen the debt, so we can then focus on the growth side to generate more revenue, more taxes and bring the debt down.

    And that is just part of the stupidity: enormous political pain for no real gain.

  13. Driftforge

    enormous political pain for no real gain

    Might as well have enormous gain, because the political pain wont be much worse.

  14. iamok

    For once I agree with Kennett.

    This tax is like trying to bring down wilderbeest by sticking it with a pin. Will only annoy the shit out of the beest and achieve little, except to piss it off and turn it back on you and the pin.

  15. Roger

    The PS must always be cut from the top (and hard), unless there is egregious yearly payrises and overtime for say, road crews.
    …unless there are egregious yearly pay rises, dot.
    Verb must agree with subject in number – in this case an inverted subject courtesy your tortuous grammar. English is a tricky language but with persistence you might eventually master it.

  16. Andrew

    Kennett for PM?

    I was thinking the same thing. Kennett was brilliant.

    Day one: Broaden the GST
    Day two: Abolish Penalty rates
    Day three: fix the federal system

    Please come back!

  17. .

    No.

    The payrises are decided singularly. Which is precisely the problem.

  18. …unless there are egregious yearly pay rises, dot.
    Verb must agree with subject in number – in this case an inverted subject courtesy your tortuous grammar. English is a tricky language but with persistence you might eventually master it.

    Don’t be a grammar nazi.

  19. Roger

    Don’t be a grammar nazi.
    Couldn’t resist. Mea culpa…

  20. Roger

    Kennett for PM?
    Now that makes a lot of sense.

  21. stackja

    Andrew
    #1287422, posted on May 1, 2014 at 12:28 pm
    Kennett tells Abbott and the Government to grow a pair…good stuff

    Kennett did not have RGRS/Greens/MSM as opposition.
    Better to support TA and not have unrealistic expectations.

  22. Splatacrobat

    It’s only year one. They should cut deep into the spending side this budget and leave any required tax increases for the 2015 budget. There was a huge outrage when Newman slashed government jobs and funding on literary awards etc. but now no one even mentions it.
    They should present a picture of the level of emergency and cut spending to the bone. Then next year show the stats and if this is not delivering fast enough they can then present the argument for increasing taxes.
    By 2016 the moochers who lost their jobs and funding will be long forgotten and any tax changes may not need to be so severe.

  23. Infidel Tiger

    What does Abbott have to do to lose your support Stackja? If he started gassing Jews but built a nice highway, would you keep marching in time?

  24. Natural Instinct

    Tony Abbott will also be urged to scrap federal agencies and ­delegate more services to the states

    David Crowe commits a common error popular amongst the Federal Parliamentary Press Gallery and many economic commentators. The error is a lack of understanding of our Constitution. And the error has grown as MSM concentrates more, and more, upon the personalities of the PM and Leader of the Opposition, and their daily celebrity battles.
    The colonies gave the Commonwealth only very limited powers when forming Australia. So it is not that Abbott should “delegate more services to the states”, it is that the Commonwealth should not do services that the States have retained the right to do.
    .
    Why is this important?
    Because the Federal PS are hopeless at delivery. They do not have the wherewithal or skills or local knowledge to run programs, e.g. Pink Batts, BER and more generally Schools, Health, Police, etc. Having observed a Federal Department write policy and a State Department implement, the problems come when the Feds think they should also implement (i.e. “let’s get bigger and do it without these troublesome states”).
    This comment may be out of fashion, but the growth of the Feds into the “doing” bit of government is why we have duplication, not because the States duplicate Federal departments – think NDIS as a prime example.

  25. Gab

    Exactly, Splat. Slash now, see the results over two years and then march confidently to the next election.

    But that’s not going to happen under this Labor government.

  26. Roger

    Because the Federal PS are hopeless at delivery.
    They can’t even buy supplies, furniture or utilities for their offices without getting ripped off. Every supplier and tradie knows to add 25% to a government contract immediately.

  27. CatAttack

    Never underestimate self interest trumping political choice at the next election.

    Even some pensioners I know with millions in assets who recieve $10 in pension money feel aggrieved. Yikes.

    The very first announcement that Hockey should make before anything else are changes to Polly Perks otherwise any messages about sharing the burden will come to nought.

  28. Roger

    Start with ex-PMs perks, CA.
    Good symbolism in that.

  29. Token

    And ever helpful, the ABC Fact Check Unit, lists Nasty Mr Abbott’s statements on tax.

    While Hockey & Cormann are smashing the people who bought the raffle tickets & handed out the how to vote cards last year so they can get one inch of good press, the ABC, FauxFacts and the rest of Labor’s Stenographers are getting ready to pummel them for being heartless.

    Great idea, charge and bayonet your supporters while your enemy is targetting their cannons on you. FFS.

  30. Gab

    We’re nothing more than collateral damage in Abbott’s rush to appease the Left.

  31. Token

    Start with ex-PMs perks, CA.
    Good symbolism in that.

    It is critical to tear apart the waste in the public service & with former politicains in the first year as the chance will never, ever come again.

  32. Ant

    “…arguing it is unfair for ordinary workers to subsidise pensions for the wealthy.”

    So come retirement for people who have busted their arse to make something for themselves, investing wisely in their home and other investments, contributing the vast bulk of tax revenue governments get all along the way, they are somehow being subsidised by “ordinary workers”?

    Yet if you bludged off welfare or some unionised sheltered workshop all your life, probably still paying rent or in public housing, having blown your earnings on booze and gambling, it’s perfectly OK for “ordinary workers” to keep subsidising leeches like that?

    What idiot twisted metrics are used in coming to that conclusion?

    And why are those “ordinary workers” to subsidise women earning way above the average wage to have a baby? So Abbott can defend himself against the media slurring him as a “woman hater”?

    This is how the political class thinks.

    Mind you, it’s the same political class which thinks that Sinodonis character “didn’t do anything illegal” when he stood to reap a truly stupendous $20 million from clinching a single deal, while they concoct schemes to see how they can keep swindling you in your twilight years to make themselves look good.

  33. Ant

    Why aren’t politican pensions means tested, hmmm?

    Seems like a walking trainwreck like Julia Gillard can retire in a multimillion dollar home and yet suffer no consquences to her pension.

    Why is that?

  34. .

    Ant
    #1287519, posted on May 1, 2014 at 1:34 pm
    Why aren’t politican pensions means tested, hmmm?

    Seems like a walking trainwreck like Julia Gillard can retire in a multimillion dollar home and yet suffer no consquences to her pension.

    Why is that?

    Abbott seeks her approval.

    FFS.

  35. manalive

    … the commission identifies billions of dollars in savings from including the family home in the eligibility test for the age pension, arguing it is unfair for ordinary workers to subsidise pensions for the wealthy …

    I’m in the age group that would be affected and think that proposal is overdue.
    There is now a government scheme for pensioners to borrow against the value of real estate assets including the family home to supplement their pension.
    My guess it is likely to be at least as unpopular with the likely beneficiaries as the pensioner.

  36. Dr Faustus

    Bill Shorten must be experiencing a waking wet dream. An unloved and unlovely leader of what should be an unelectable party, now handed a Get Out of Jail Free card by the Olympic political stupidity of his opponent.

    With his election material in production and scripts written for the next 200 days of parliamentary sittings, Shorten can sit back and enjoy watching the Government naked-mud-wrestle Clive Palmer’s poxies in the Senate over PPL, MRT and the Carbon Tax. Very little risk of a DD election now and the media will be full focus on Abbott’s political dance of death and the possibilities of PUP/Katter as the new face of conservative politics.

    If he is half smart, Shorten will be urgently trying to kiss and make up with Ms Milne and the Greens. He will need them to prop up a minority ALP Government in 2016 – if not before.

  37. John Comnenus

    Death wish 1 starred Kevin Rudd. Death wish 2 starred Julia Gillard, Death wish 3 starred the ALP is Tony Abbott signing up for the lead in Death wish 4? The budget will tell.

  38. Better to support TA and not have unrealistic expectations.

    Are you his mum?

    For crying out loud, stackja, take off the rose-coloured glasses. This isn’t Liberal Party HQ, not by a long shot.

  39. Senile Old Guy

    But Tasmanian Liberal Senator David Bushby is backing the Government’s reasons for considering the idea, saying a debt levy on high-income earners is a fair way of ensuring everyone contributes. “We need to make sure everybody shares the burden” he said. “It’s up to us to explain the reasons,” he told the ABC.

    Others have said it but it bears repeating: In this day, someone on $80,000, probably with a couple of kids, is a “high-income earner?”

    And I am a peaceful person, but if someone tries to “explain the reasons” why those who already pay more tax have to “share the burden” by paying even more, there will be angry words, at least.

  40. Natural Instinct

    TONY SHEPHERD:

    When we started our examination, the thing that struck us was that the Commonwealth this year will spend about $409 billion. And of this, $350 billion is what they classify as administered. And by administered that means, these are payments that the Commonwealth makes to others, including the States which are virtually locked it, committed, legislated or what have you. And there is about $50 billion of it what is called administrative expense or departmental expense which really they have some flexibility over.
    So that when we went to look at our key terms of reference, our key terms of reference, which was: how do we get to a sustainable surplus of 1 per cent of GDP by 2023-24, we focused on the 15 biggest programs which contribute 70 per cent of the increase in Government expenditure over the next ten years.
    .
    We looked at the taxation side in terms of overall revenue. But taxation was not part of our remit. We understand that the Government is going to have a separate inquiry into tax, a tax White Paper and what have you. And quite correctly, we believe that there was no sense in us spending our valuable time on that. We concentrated on our terms of reference requires us to do, which is to concentrating on expenditure. So we didn’t really touch revenue. We just assumed revenue would head to its long term average of 24 per cent of GDP and we proposed that as a sensible cap on the size of government.

    Why? Why not 20?

  41. Natural Instinct

    MATHIAS CORMANN:

    We will not be providing a detailed response in relation to each recommendation today. The Government’s response to the Commission of Audit report will be the Budget on 13 May.

    More secrecy, more uncertainty and more “making hay while the sun shines” for the ALP and the negative MSM.

  42. Ellen of Tasmania

    The closely held report stops short of calling for the dismantling of federal health and education departments

    Why??

    Andrew, Kennett wasn’t brilliant.

    1. Taxes should not, in any way, shape or form, be raised. Not at all. Not now. Not ever.

    2. He praised Abbott for being an honourable man; said we need such politicians (see ICAC) then encouraged him to be dishonourable. Go figure.

  43. Nod, 24% limit was weak.. Mind you, if that is an upper limit, it should both cause the average to drop, and lessen the extent to which it drops below.

    A limit becomes a right.

    That said, the amount should vary; a lower percentage in difficult economic circumstances, and a higher percentage in abundance.

  44. egg_

    If he started gassing Jews but built a nice highway very fast train, would you keep marching in time?

    FTFY.

  45. Ellen of Tasmania

    So come retirement for people who have busted their arse to make something for themselves, investing wisely in their home and other investments, contributing the vast bulk of tax revenue governments get all along the way, they are somehow being subsidised by “ordinary workers”?

    Yet if you bludged off welfare or some unionised sheltered workshop all your life, probably still paying rent or in public housing, having blown your earnings on booze and gambling, it’s perfectly OK for “ordinary workers” to keep subsidising leeches like that?

    Why Socialism & Communism Fail 101.

  46. egg_

    handed a Get Out of Jail Free card by the Olympic political stupidity of his opponent.

    +1

    KRudd would make mince meat of this.

  47. Natural Instinct

    Paul Dibb submission:

    • The DMO needs to be radically changed. It has become a hugely complex and ponderous bureaucracy employing over 7000 people and costing more than $800 million a year to run.
    • At the very least, it needs to be cut in half to less than 3500 people – thereby saving $400 million a year. Ideally, however, it should be reduced to a workforce closer to 2000 and so save almost $600 million annually.

    No Xmas card for him this year….

  48. James D

    Why is Abbott so insistent on stealing my money? The budget is big enough.

    I cannot believe this fucking moron is going to do this.

  49. Vicki

    I find it curiously chilling to hear the bad news about the Deficit Tax- or the refusal to deny the bad news about the Deficit Tax- by way of the flat, German tonality of Matias Cormann.

    “You vill pay ze tax!”

    Now take me away and prosecute me under 18C!

  50. Natural Instinct

    Paul Dibb submission:

    • The DMO needs to be radically changed. It has become a hugely complex and ponderous bureaucracy employing over 7000 people and costing more than $800 million a year to run.
    • At the very least, it needs to be cut in half to less than 3500 people – thereby saving $400 million a year. Ideally, however, it should be reduced to a workforce closer to 2000 and so save almost $600 million annually.

    So no Xmas card for him this year….

  51. David

    If he started gassing Jews but built a nice highway, would you keep marching in time?

    FFS IT I know you are only using an old example and we are supposed to be the chosen people but how about picking on some other bugger just for a change. Perhaps a Muzzie or two or a Seventh Day Adventurist perhaps

    Kol tuv

  52. Ellen of Tasmania

    If he started gassing Jews Presbyterians but built a nice highway, would you keep marching in time?

    There you go, David.

  53. Fisky

    Wayne Swan ‏@SwannyQLD 1h
    Comm of Audit is merely an Abbott/Hockey wish list prepared by their Sydney business mates to implement hidden Tea party agenda

    So the question is, was Shane Wand hit too much as a child or not enough? I’m kind of leaning towards “not enough”.

  54. Notafan

    If the welfare sector is unsustainable and it appears that it is, why are pensioners the sacred cow? in relation to pensioners we have to consider all the ancillary benefits the many discounts, the health costs the PBS, the council services, the rent discounts etc why shouldn’t these be reviewed. I don’t know any starving pensioners but I know lots between the ages of 65 and 80 who live the life of Riley.
    As for contributions so what? Paying tax wasn’t paying into a guaranteed income stream in retirement, everyone got access to lots of government funded benefits during their pre pension years, like defence, health and education. I don’t see that anyone has an absolute right to the pension because they paid tax. Plus this is about current and future pension arrangements.
    Oh and they can tighten eligibility pro rata pensions for residency under 30 years would be a start.

  55. So the question is, was Shane Wand hit too much as a child or not enough? I’m kind of leaning towards “not enough”.

    He never really noted that the Tea Party thing didn’t take off here, did he. It’s about as bad as calling the Libs ‘ Tories’.

  56. MemoryVault

    Notafan

    I don’t see that anyone has an absolute right to the pension because they paid tax.

    Which just displays your ignorance, Notafan.
    Every person who has paid income tax in the last 70 years has been paying 7.5% of their earnings that was supposed to be going into a sovereign fund, to pay for their Age Pension on retirement.

    The fact that the politicians long ago squandered the accumulated funds on pork barreling, while promising to pay future fund obligations from General Revenue, doesn’t change the facts.
    To this day the 7.5% continues to be taken out with everybody’s tax.

    The age pension is not a privilege;
    Is not a right;
    Is not a gift;
    Is not even welfare;

    The Old Age Pension is an asset;
    owned and accrued by each Australian Citizen who has funded this asset from their very own purse.

    Credit to L Hannigan

  57. Dr Faustus

    So the question is, was Shane Wand hit too much as a child or not enough?

    Obviously there could be no limit to enough. The bigger question is what happened to the intern at Euromoney who copied his name out as Winner of the Finance Minister of the Year 2011?

  58. johanna

    in relation to pensioners we have to consider all the ancillary benefits the many discounts, the health costs the PBS, the council services, the rent discounts etc why shouldn’t these be reviewed. I don’t know any starving pensioners but I know lots between the ages of 65 and 80 who live the life of Riley.

    How do you live the Life of Riley when the full pension is less than $400 per week? Bear in mind that those who are lucky enough to own their own homes still have to pay for rates (albeit discounted), maintenance, insurance etc for their homes.

    Perhaps taxpayers would be better off if they were in public housing?

    Riley’s living standards aren’t what they are cracked up to be.

  59. Sir Fred Lenin

    When Robert Menzies got the Age Pension ,he told alp/commo critics that he had paid the 7.5 percent all his working life ,so therefore he was being paid back by way of the Aged Pension.
    Its not the pensioners fault the money has been squandered,its the useless politicians fault.The money to pay the Aged Pension is not there because it has been confiscated to make Grubby politicians look good.

  60. old bloke

    The age pension is not a privilege;
    Is not a right;
    Is not a gift;
    Is not even welfare;

    Too bloomin right MV. My only criticism of Menzies is that he didn’t setup a sovereign fund like Costello’s Future Fund at the time. I’ll be retiring soon and will qualify for a part pension, and I’m going to claim it without any hesitation.

    My only annoyance is with those people who chose not to have children; why should my five children, all working and earning well, pay tax to support those people who wanted to “save the planet from over-population”.

  61. Sirocco

    Fully agree Old Bloke. DINKs are simply life long self absorbed narcisstic parasites.

  62. johanna

    Hey, guys, settle.

    They don’t get Family Tax Benefits. They don’t get Child Care Rebates. They don’t get Back to School grants. They don’t burden the education system and student income support system. They don’t benefit from student travel concessions.

    Their taxes just pay for all of the above.

  63. MemoryVault

    My only criticism of Menzies is that he didn’t setup a sovereign fund

    Actually, Ben Chifley set up the National Welfare Fund as a separate trust fund at the same time as he established the Compulsory Contributions Levy. Both commenced as of January 1, 1943, with the Parliament as trustee of the fund.

    One of the first things Menzies did when elected in 1949 was to introduce legislation to have the Compulsory Contributions Levy monies paid directly into the Consolidated Revenue Account, thereby depriving the National Welfare Fund of any further payments.

    In 1977 Malcolm Fraser transferred the then existing $470 million in the National Welfare Fund, into the Consolidated Revenue Account, where the pollies of the day promptly spent it.

    Pollies of all persuasions have been telling us the Age Pension is a welfare payment ever since – even as they continue to pocket the 7.5% levy (one shilling and sixpence in the pound).

  64. David

    G’day EoT,

    Nup – go to the gun safe and get out the large bore rifle. No more anyone going to gas chambers.

  65. duncanm

    They don’t get Family Tax Benefits. They don’t get Child Care Rebates. They don’t get Back to School grants.

    hey Johanna. I’ve got three kids, and I don’t get any of that stuff either.

    I’m terribly sorry that they ‘burden’ the education system… but not to fear, they’ll be out in productive employment in a few years.

  66. duncanm

    sorry… that’s not true.. we get childcare rebate. Which enables my partner to also work and pay taxes (> rebate value).

  67. johanna

    Duncan, I never said that all parents get all of those things – but most get at least some of them, and the cost is in the billions.

    I was responding to the accusation that people who don’t get any of them are “parasites.”

  68. Infidel Tiger

    Stupid me gets the grandparents to look after our kid so we get no welfare. Not one cent.

  69. duncanm

    Johanna,

    I don’t agree that either singles or families are parasites.

    Their relative taxation/benefit levels are somewhat different over their life cycle.

    I would suggest, however, that it is not parent receiving benefits from education etc, but rather the children themselves!

  70. MemoryVault

    Stupid me gets the grandparents to look after our kid so we get no welfare. Not one cent.

    Stupid me gets IS the grandparents to who look after our kids kids so we get no none of us get welfare. Not one cent.

    FIFY

  71. Notafan

    First of all not everyone is on the full pension, you get the golden ticket /Health Care card if you are entitled to $1 of pension and there is a army of financial planners out there to help you.
    As for the 7.5% this discussion has been had and I disagree, I have been paid tax for nearly four decades and there was never anything on my assessment notice that said I was paying a percentage into a pension fund, and just because for a brief span one government said it was there was doesn’t mean that any future government was committed to doing so.
    By this argument only those who contributed should be being paid a pension, and I bet there are a fair wack of full pensioners who never paid a penny in tax.

  72. MemoryVault

    you get the golden ticket /Health Care card if you are entitled to $1 of pension

    Yeah, I’ve had one of those for a year now.
    A few months ago I used it to buy a return rail ticket to Brisbane.
    Total savings – $6.00 – in a year – I better get one of those financial planners.

    As for the 7.5% this discussion has been had and I disagree

    So if the pollies tell a lie long enough and often enough, it makes it alright.

    I have been paid tax for nearly four decades and there was never anything on my assessment notice that said I was paying a percentage into a pension fund

    Aah – I see the problem. The term “Compulsory Contribution Levy” was removed from the top of the annual Tax Return Form in 1972 (but not the actual levy from your wages). That was 44 years ago. So you never saw it. Therefore, as far as you’re concerned, it doesn’t exist.

    Listen, I’ve got some shares in a dinky bridge and Opera House I can sell you – cheap.

  73. johanna

    So Notafan, your beef is not with the pension itself, but with the Health Care Card? After all, someone who is getting $1 a week is costing taxpayers $52 a year. Hardly crippling.

    As for the HCC, an elderly person with multiple health problems, unless they are very wealthy, would soon find themselves eligible for it. My olds, who are in their eighties, are on multiple, expensive medications and both need to see specialists regularly. Without the HCC their bills would be in the thousands every year. There are not many people in that category who have that kind of money to splash around for long.

    There may be a few rich smarties who have found a way around the system, but the vast majority of age pensioners are poor – last time I looked, around 30% are renting, for a start. Most of the rest have just one worthwhile asset – their home.

    Still waiting to hear about the Life of Riley. Even the pensioners getting a dollar a week can only earn up to about $30,000 a year (including the pension) before it cuts out altogether. Crack the Moet, eh?

  74. Notafan

    Interesting to see that up until 1973 (Whitlam) the age pension was means tested which defies any claims that anyone ever thought contributing to the fund gave them an entitlement to a pension, no matter what. In addition it appears that the contributions were intended to cover the cost of all benefits such as widows pensions. This looks far more like a form of compulsory charity that a savings plan. That fits far better with my understanding of the status of the age pension in the 1950s and 1960s. My grandfather refused to apply for a pension until he was in his seventies even though his income was well,pitiful as a dirt poor cocky until my aunt forced him to apply.
    Here is the link to the Astralian Bureau of Statistists info
    “There was a further development of specific relevance to social security in 1945. The Commonwealth split the personal income tax into two components. One, the social services contribution, was to be used exclusively to finance social security cash payments. Revenue from the contribution was paid into the National Welfare Fund, from which all such cash payments were to be made, but there was no link between personal contributions and entitlements. The fund was supplemented by subventions from payroll tax and general revenue. In the event, the social services contribution was again merged into a single personal income tax in 1950. All cash payments are now made direct from general revenue.”

  75. Tel

    If you cut government services without lowering personal taxation, you have lowered our standard of living.

    Paying back debt in any form lowers your consumption. What did you expect?

  76. Tel

    The Old Age Pension is an asset;
    owned and accrued by each Australian Citizen who has funded this asset from their very own purse.

    Ha ha, you believe in property rights.

    Look, the only property you own is either what you can personally fight for (not much) or what you can get other people to agree that you should be allowed to own (a little bit more, but also not much). You can have all the sense of entitlement you like, but just because you put something in, does not guarantee that anything comes out again.

    There might be very good logical reasons why having assets and property are a nice idea, but still the hurdle of convincing other people they should agree to that.

  77. Paridell

    The report may as well state the ABC and SBS ought to be privatised for all the difference it will make to the socialist Abbott.

    Gab, to privatise something (e.g. British Rail, Soviet gas, Victorian electricity) means to sell it to private buyer.

    I’ve asked before, what buyer is there for the ABC or SBS? Fairfax? News? Maybe Clive Palmer? (Now there’s a thought!) Most media in Australia are struggling to save themselves, without trying to swallow more.

  78. Gab

    I’ve asked before, what buyer is there for the ABC or SBS?

    Da ebil Murdoch666. He can buy the hardware and channels. Even if he doesn’t pay much for the ABC conglomerate, the $1.2billion per year savings to taxpayers is still a win.

  79. johanna

    It wouldn’t make sense to sell the ABC as a conglomerate, and nobody would buy it anyway. The individual bits, however, would appeal to plenty of niche purchasers – provided they didn’t have to guarantee keeping on all the staff at the same pay and conditions.

  80. Eyrie

    Or as Mr Heinlein said , Tel, “you don’t truly own anything that you can’t carry on your person while maintaining a fair clip”

  81. Dan

    Others have said it but it bears repeating: In this day, someone on $80,000, probably with a couple of kids, is a “high-income earner?”

    Ok I will continue my one-man campaign by writing to him next. When I was on 80/yr we had one child and my wife couldn’t work. I spent $20000 that year on training expenses. So I was wealthy and needed to “do my bit” while the large proportion of 800,000 DSP recipients who are simply malingerers enjoy the fruits of my labour?

  82. Notafan

    Especially with the size of mortgages people are expected to have?
    Clearly only self funded reretirees can afford Moet.

  83. MemoryVault

    Interesting to see that up until 1973 (Whitlam) the age pension was means tested which defies any claims that anyone ever thought contributing to the fund gave them an entitlement to a pension, no matter what.

    Yes, but the rates of means and asset testing were so high that you had to be today’s equivalent of a multi-millionaire to be disqualified. For instance, when Sir Robert Menzies retired as PM in 1966, he still qualified for the full pension despite being a substantial property holder , and being the recipient of not-insignificant income streams.

    As near as I can gather there is no allowance for asset or income testing in the original Compulsory Contributions Levy / National Welfare Trust legislation, both of 1943. It appears these measures were introduced in a very mild form post 1955, and only really became relevant to the population at large post 1966, following Menzies retirement.

    Yes, Gough Whitlam, for all his faults, did start a process of unwinding this travesty of justice, but Fraser undid all that in 1977.

    —————————————–

    All this is rather pointless, Notafan (and others). That the Compulsory Contributions Levy and National Welfare Fund became law in 1943 is beyond question. If you (and others) wish to maintain that sometime between then and now the Age Pension became a welfare payment, it is up to you to produce the legislation that cancelled the 7.5% levy deduction. The fact that it is no longer mentioned is not proof that it no longer exists.

    Produce the legislation, or accept that the levy still exists, and therefore a lawful entitlement to an Age Pension still exists. Put up or shut up, it is as simple as that.

  84. johanna

    MV, you are flogging a dead horse. The legislation which put the money into Consolidated Revenue did exactly that.

    You remind me of a serial correspondent when I was a public servant, who maintained that the removal of the Royal Crest from mailboxes when Australia Post was formed was unconstitutional. He never let go of this monomania, it went on for years, until presumably he eventually died or became incapable.

    Happy days. ;)

  85. mundi

    What pisses me off is that the blatent cheating has not been addressed at all, infact if the $70b in savings was realised, it would be an even more rewarding system for the cheaters.

    I don’t know if its because none of the politicians have any idea what is really going on in the poor areas, but for those who don’t know, its standard practice for two people to live together with kids while being non-defacto non-married ‘roomates’ to the government. This way the dad can work as a single, and the mum can collect full parent pension. This makes the family better off by a staggering amount – usually around $400/wk. If they are really smart they put the rent in the mums name, so she gets full rent assistance, this can make the family $500/wk better off than an ‘honest’ family with a working dad and a stay-at-home mum.

  86. MemoryVault

    MV, you are flogging a dead horse. The legislation which put the money into Consolidated Revenue did exactly that.

    Johanna,

    That the money went (and goes) into consolidated revenue is beyond question.
    The belief that this somehow negates the continued existence and purpose of the 7.5% levy beggars comprehension.

    My local council rates notice currently shows a figure for rubbish collection.
    If the council decides to stop showing the amount as a separate figure – but goes on charging it in the overall bill – does that absolve them from their responsibility to collect the garbage?

  87. Notafan

    The link is quite clear that the separate contribution existed for only five years between 1945 and 1950 and that during that period the fund had to be supplemented from two other revenue sources which means there was less going in than there was going out.
    It was both income and asset tested, irrespective of how generous those tests were and I am pretty sure given the supplements that were introduced during the later years indicates that the actual mount of the pension was very modest.
    The fact that Menzies chose to take it is neither here nor there.

  88. Paridell

    It wouldn’t make sense to sell the ABC as a conglomerate, and nobody would buy it anyway. The individual bits, however, would appeal to plenty of niche purchasers – provided they didn’t have to guarantee keeping on all the staff at the same pay and conditions.

    Nobody would buy it as a conglomerate, and (despite Gab’s suggestion) I doubt that Mr Murdoch would accept it even it were presented to him on a plate. He has his own media empire already. As for buying the individual bits, well, after the Sydney Olympics, I bought the Macintosh that the graphics were done on. In theory, the ABC could be sold off like that, in bits and pieces… but it’s never going to happen. The commission of audit didn’t even raise the prospect, and that was after the Government’s efficiency review.

  89. Notafan

    If you want a look at the means test, tapering was not introduced until 1969

    the means test

  90. Gab

    Nobody would buy it as a conglomerate, and (despite Gab’s suggestion)

    Oh I didn’t mean Murdoch buy the ABC conglomerate and keep it as an ABC entity. Heavens, no. As I said, he could buy the hardware and the airwaves and run another version of American Fox channels or whatever else he desired, after sacking all the ABC personnel.

  91. Notafan

    It is clear from my readings that the Australian age pension scheme was never intended to be an insurance scheme, except for a brief period in the 1970s (assets until 1984) during which no doubt there were stacks on the mill,it has always been subject to both income and assets test and is not an entitlement.


    The Joint Committee made it quite clear the Australian system, unlike that introduced in the UK was NOT an insurance scheme.

  92. Notafan

    Sorry, I left out except for a brief period in the 1970s it was always subject to both an income and asset test.

  93. MemoryVault

    Notafan

    The link is quite clear that the separate contribution existed for only five years between 1945 and 1950 and that during that period the fund had to be supplemented from two other revenue sources which means there was less going in than there was going out.

    No. The fund (for Age Pensions) never required supplemental income. That was introduced in 1945 (along with the means test) when unemployment and sickness benefit payments were added as responsibilities of the fund. Even so, when payments into the national Welfare Fund ceased in 1949, it was worth over $100 million. So much for “less going in than going out”.

    —————————————–

    Regardless, you are still left with the task of producing the legislation where the 7.5% levy on income was rescinded. If you can produce a scrap of legislation showing that the populace at large were relieved of this requirement (a 7.5% tax break), then I am full of shit and the Age pension is now a welfare payment.

    If you can’t, then the 7.5% levy is still embedded in the tax system and ALL Australians are entitled to an Age Pension as a superannuation they have paid into all their working lives.

  94. Notafan

    The belief that this somehow negates the continued existence and purpose of the 7.5% levy beggars comprehension.

    Yes, it was to provide social security, that means widows pensions, invalid pensions, orphans allowances, unemployment benefits and age pensions for people who met the asset and income tests, it was never a UK style insurance scheme.
    There was no requirement that anyone had contributed and no promise that had you contributed you were entitled to a pension.

  95. Notafan

    If you can’t, then the 7.5% levy is still embedded in the tax system and ALL Australians are entitled to an Age Pension as a superannuation they have paid into all their working lives

    The intention of the parliament makes it clear that this was not so (insurance/superannuation) and the presence of a means test reinforced the existence of that intension.

  96. MemoryVault

    Notafan

    The Joint Committee made it quite clear the Australian system, unlike that introduced in the UK was NOT an insurance scheme.

    A link to report written to support expansion of the DSP, written over half a century after the events we are discussing, and

    and in this 1961 speech Menzies talks about dramatic improvements to the means test for age pensions introduced by his government.

    a link to a speech by the politician most responsible for gutting the system in the first place.
    Nice going, Notafan.

    Now, how about a link to the legislation that rescinded the 7.5% levy imposed by the 1943 Compulsory Contributions Levy legislation? Produce a link, and I am full of BS. No link, and the Age Pension is something every working Australian contributed to, and we have all been conned.

    Simples.

  97. Notafan

    I mentioned the means test half a dozen times and you have not addressed how that fits with your universal entitlement claim. The means test was tinkered with in terms of the income threshold is but there was no taper until 1969. The means test was both an income and asset test.
    .

  98. MemoryVault

    Yes, it was to provide social security, that means widows pensions, invalid pensions, orphans allowances, unemployment benefits and age pensions for people who met the asset and income tests, it was never a UK style insurance scheme.

    No, the Compulsory Contributions levy was specifically for Age Pensions. Everything else came after politicians started playing with it, starting in 1945, but mostly after they had managed to get payments transferred from the National Welfare Fund, to Consolidated Revenue in 1949, courtesy of Menzies.

    —————————————-

    I repeat Notafan, all you have to do to “prove” the Age Pension is a welfare payment, as opposed to a bought and paid for entitlement, is produce a link to the legislation rescinding the 7.5% levy on income imposed by the Compulsory Contributions Levy, 1943.

    Everything else is merely debating points of administration.

  99. .

    I’ve asked before, what buyer is there for the ABC or SBS? Fairfax? News? Maybe Clive Palmer? (Now there’s a thought!) Most media in Australia are struggling to save themselves, without trying to swallow more.

    Gift it to the public in equal parcels of shares to each of them.

  100. johanna

    Notafan, there is no point in presenting facts, he is like the bloke I cited above who was convinced that the “EIIR” thing on mailboxes was a constitutional right. It is monomania, fixation on a tiny thing in the big picture.

  101. Notafan

    It is very clear from the joint committee reports that the purpose of the Social Security Levy was to fund the cost of post war unemployment, in addition it is noted that if you read Iterim report one, in order to receive an Aged Pension prior to the 1940s people had to sometimes relinguish property to the Commissioner. Both Interim Committee Reports 2 and 3 reiterate that the purpose of the levy is to fund expected post war unemployment.

    The Committe reports 1 2 and 3 most relevant

  102. Notafan

    I know Johanna but now I have found the committee reports, I’d like the EM but the actual contribution was in a taxing act. There are others who claim this is correct so we may as well get it out there. Gosh I love reading this stuff.

  103. johanna

    Great work, Notafan.

    The ignorance about the history of our social security system is monumental.

    I did 15 rounds with the fundamentalists here a while back about the history of the Deserted Wives Pension. Apparently men never piss off and leave their wives and children with no way to put a meal on the table, because the sanctity of the family shut up.

  104. twostix

    Apparently men never piss off and leave their wives and children with no way to put a meal on the table, because the sanctity of the family shut up.

    The government easily reaches into such a persons bank account now and takes whatever it wants and gives it to the woman.

  105. Notafan

    Joanna, my great uncle had a warrant out on him in 1916 for wife desertion, I wonder where he disappeared to?
    There are articles which suggest that Chifley was open to a UK style universal pension but it never got through caucus.
    It all seems logical to me, old age and invalid pensions had been paid out of consolidated revenue since 1908, unemployment was dealt with stop gap measures during the depression but they knew from the 1918 war they would have a,big transition at the end of WW2. They actually reduced income tax by 12.5% when the social security levy was introduced so there was no uproar though people were Wary they were getting socialism by stealth.
    Anyhow the bottom line is the age pension is not a shibboleth and there is no reason why the means test cannot be tightened.
    Not they will be asking recipients to hand over excess assets to get it or maybe?

  106. johanna

    I agree, the age pension is not a shibboleth. But all that Joe Hockey has done, and this year’s Razor gang can’t deliver) is threats. Pensioners now know that he is out to get them. Good, one, Joe!

    If Bob Hawke (or Neville Wran) wasn’t for practical purposes dead, he would be revolving in his grave. WTF are they thinking?

  107. Paridell

    Oh I didn’t mean Murdoch buy the ABC conglomerate and keep it as an ABC entity. Heavens, no. As I said, he could buy the hardware and the airwaves and run another version of American Fox channels or whatever else he desired, after sacking all the ABC personnel.

    Gab, I realise you did not mean that Mr Murdoch (or the ebil Murdoch666) would or could buy the ABC and run it as the ABC. He would not do that. But my point was, neither would he convert the whole thing into a hundred versions of Fox News. He already has quite enough on his plate. Network TEN had Lachlan Murdoch as interim CEO and then chairman for much of the last three years and he has just walked away, leaving a basket case behind him. The SMH reported at the end of March, “Even the ABC, much-maligned by the Murdoch-owned press, has gained ground and replaced Ten as Australia’s third-ranked free-to-air channel.” Would News want to repeat the experience on a scale ten times greater?

  108. egg_

    Paridell
    #1288568, posted on May 2, 2014 at 8:25 am

    Aunty’s digital TV vision was “narrowcasting” and NO HD channels.
    So be it.
    Murdoch could operate:
    ABC Kids
    SBS multiculti
    SBS indigenous
    The rest is purely duplication of (commercial) services and should be scrapped.

  109. .

    Notafan
    #1288425, posted on May 2, 2014 at 2:36 am
    Joanna, my great uncle had a warrant out on him in 1916 for wife desertion, I wonder where he disappeared to?

    …these days you get treated worse for not taking your puppy for a walk regularly enough!

  110. Paridell

    Egg,

    If your scrapping idea were implemented, Network TEN would say, like Francisco:
    “For this relief much thanks” Hamlet, (1.1.10).

  111. Notafan

    That the 7.5% levy was for the purpose of provided a body of funds to pay unemployment benefits is also underscored by the fact that the matter was put to referendum as it was not clear that the Commonwealth had the power to pay anything other than age and invalid pensions (even though they had already past the legistlation).

    The 1946 referendum

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