How to fix the budget

The Business Spectator posed the question:

If you could make one change to this year’s federal budget what would you do? And why?

My answer:

There is just so much that is bad about the budget that it becomes so difficult to nominate a single change.

If there was one thing to change about the budget process overall it would be to not have crafted the budget around being “fair”, but rather around being “responsible”. The challenge Australia faces is that our budget is on track to being finally balanced at a higher level of GDP, as opposed to a lower level of GDP. The irresponsible spending of the Rudd-Gillard government will have become permanent. Increased government spending crowds out private initiative and promises higher taxes in future. Small wonder the private sector isn’t expanding. By being “responsible” the Abbott government could have introduced spending cuts to welfare without then having to spend in other areas and also raising taxes. The one thing that Joe Hockey needed to announce on budget night, but didn’t, was a credible and plausible return to surplus. That might not have been “fair” but it would have been “responsible”.

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87 Responses to How to fix the budget

  1. Driftforge

    Well said.

    The rent-seeking and (in one case) victimhood inherent in some of the other responses is rather breathtaking.

  2. Andrew

    Most of the answers were about hiking taxes on superannuation or mention of negative gearing and were mostly from lobbyists who clearly have a stake in the measures that have been cut. Rather silly

  3. eb

    Good answer, Sinc. Still wouldn’t get through the Senate though.

  4. candy

    I thought he did mention a return to surplus actually, for around 2017/18, though I’m not sure he said it on budget night or the next day.

  5. Infidel Tiger

    Business Insider summed up Sinc’s contribution as this:

    Rethink budget ideology, don’t increase budget spending without raising taxes (Sinclair Davidson, RMIT)

    Bwahahaha!

  6. DrBeauGan

    Sack Hockey. He’s an idiot.

  7. If you could make one change to this year’s federal budget what would you do? And why?

    Shut. It. Down.
    Fire. Them. All

  8. Mayan

    Remove the 50% capital gains concession and restore the taxation of real capital gains. Then begin to harmonise the income and corporate tax rates to do away with the incentive to pump income through a corporate structure.

    And get rid of that silly paid parental leave pork barrel.

  9. Grigory M

    get rid of that silly paid parental leave pork barrel

    Yes – the question was “If you could make one change” – dumping the PPL is that one change for mine.

  10. .

    The idea the budget can’t be cut is insane.

    Cut the level of regulation, and the “need” for spending falls.

  11. Infidel Tiger

    One change? I’d remove income tax.

    The budget would be rooted, but we’d all be much better off.

  12. IT, I don’t think so. Removing income tax would give an enormous boost to the economy, directing consumption in a much more efficient manner. After all, Australias major problem at the present time is the misallocation of resources by private and public consumption caused by tax systems that push people into taxation efficient spending rather than consumption efficent spending.
    (Could be put much better, but I’m happy if someone else has a go)

  13. .

    The only thing that would be rooted would be the myriad of useless, oppressive regulation we all face every day.

    No more random checks for pool fences…smoke alarms…or gun safes.

    …and we’d all be no worse off.

  14. candy

    The Medicare co-payment should probably not apply for children of low income/pensioners as there will always be people who would buy cigs/gamble instead of putting money aside for the GP, so I think the kids need to be protected in that instance.

    Or perhaps it could be reduced to $3.50. Sounds trivial but it might do the trick.

  15. .

    Just get rid of it. Charging for services removes the queue but it has been poorly sold for a fund no one wanted.

  16. Percy

    Goodbye fuel excise. Is there any other tax that hurts the poor and hampers upward mobility more?

    If so, cut it instead.

  17. Mick

    Frankly, I’m tired of hearing the ‘fair’ thing being bandied about. Those not paying a net tax contribution don’t have reason to complain about fair, do they?

  18. Sack Hockey.

    Sounds like an unpleasant game.

  19. The Medicare co-payment should probably not apply for children of low income/pensioners as there will always be people who would buy cigs/gamble instead of putting money aside for the GP, so I think the kids need to be protected in that instance.

    Or perhaps it could be reduced to $3.50. Sounds trivial but it might do the trick.

    We don’t care about the medicare copayment, Candy, because they tied it to a massive superannuation-style boondoggle.
    We would care about it if it was the introduction of a little bit of user-pays. But it’s not user pays. The way they set it up, it’s actually a new tax. So nobody here is interested in supporting it.

    Had they done it as a user-pays, not-a-new-tax kind of way, then maybe some of their core constituents (e.g., readers of this site) would actually be out there talking it up.

  20. gary

    Seems like Hockey, Abbott, Turnbull etc wanted to be in a big government, big spending, big taxing political party but didn’t like the unions, so joined the Liberals and are trying to turn the Liberals into a Labor party without unions.

  21. mareeS

    Why not tax welfare?

    I have a brother with a wife and six children who calls his welfare benefit his “pay,” yet hasn’t worked for pay in 20 years. My taxes pay him and his family to live on welfare.

    I have two sisters and two brothers-in-law in the public service who all earn six figures, funded by my taxes as a private business person.

    The public servants in the family pay tax back to the nation from their taxpayer-funded incomes, so why shouldn’t spongers like my brother pay back a portion of his taxpayer-funded income at the going rate, seeing as he regards it as his “wage?”

    Also, this would force all spongers into the tax net, by being compelled to file and income tax return.

    Australia is so soft on welfare leeches, my own tax arrangements are pure by comparison.

  22. Roger

    Amazingly, for professional politicians, the entire Coalition Cabinet (with the possible exception of Julie Bishop?) need to attend Politics 101. It’s like amateur night most of the time these days. And Labor isn’t much better – but at least they seem to be able to avoid everyone constantly being reminded of their 600+ claims of a surplus!!

  23. stackja

    How to fix the budget: Abolish the ALP.

  24. Infidel Tiger

    Sack Hockey.

    Sounds like an unpleasant game.

    That made me LOL.

  25. Talleyrand

    From Tony’s personal diary written on his Winter break cycling tour .

    “Lets hold a big get-together in the main hall of the Federal Parliament building and invite lots of really smart people. We collect their ideas on butcher’s paper and stuff.
    Make sure to invite Hugh Jackman and Cate Blanchett..

    Alernatively, re read Road to Serfdom over the next long weekend and apply its warnings to governmennt principles….

    Joe’s has a thing for Hayek, said she was really hot in Tarantino’s From Dusk Till Dawn.”

  26. Squirrel

    Keep the co-payment, but put the money towards the deficit – if we’ve got a Budget crisis (and we do) a mega-medical research fund is a nice to have, not a need to have.

    If I was allowed a second change, I’d drop the co-payment to $5, and stick with the safety net arrangements, and then wait for any actual cases of hardship to be demonstrated – not just claimed and emoted on national television.

    (Didn’t bother mentioning the PPL because that already looks like a goner).

  27. 1234

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

  28. Tel

    Cut all spending, every department, every pension, every government salary, every payment, across the board … to 75% of current nominal value.

    Blame Wayne Swan, because he blew it out into stupid land to begin with.

    Implement a rule that locks spending such that the total cannot be increased while the government is in debt. That’s not two things, because the spending lock applies to future budgets.

  29. Tom

    One change? I’d remove income tax.

    The budget would be rooted, but we’d all be much better off.

    As a measure of how irresponsible the Libs are in 2014, they have not only entrenched the out-of-control spending binge of the Liars-Greenfilth between 2007 and 2014 and the out-of-control surge in tax-gouging of the past decade, they have also made IT’s suggestion quite viable:

    If the $183.6 billion in income tax in the 2014-15 budget were abolished, we would still have available deficit-free federal government spending of $207.7 billion — a fraction less than Costello’s last unencumbered non-election-year budget spending of $219.3 billion in 2006-07.

    The Liberals are out-of-control big government socialists.

  30. mareeS

    Squirrel, I have direct experience with PPL at the ABC. Same applies to all public service people.

    Thirty-one years ago at the ABC I took 6 weeks of pre-natal leave on full pay, and 3 months of post-natal leave on full pay, then 6 months on half-pay, and then I found to my amazement I had accrued sick leave and holiday pay on quarter pay, which saw me out for 12 months, upon which I had accrued a further year’s sick pay and holiday pay, which saw me through our second baby, leave accruing.

    Ask Leigh Sales how it works at the ABC, and how it doesn’t work if you’re not in the public service.

    During that period I

  31. Gab

    Uh-oh. Looks like Leigh Sales has struck again.

  32. Business Insider summed up Sinc’s contribution as this:

    Rethink budget ideology, don’t increase budget spending without raising taxes (Sinclair Davidson, RMIT)

    Bwahahaha!

    LOL… IT isn’t joking – that’s really how they summed up Sinc’s argument.

    Sinc, you might want to lodge a complaint – that’s slander!

  33. goatjam

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

    Four Fingers, you are a complete idiot.

  34. goatjam

    Shut. It. Down.
    Fire. Them. All

    Agreed. The entire Abbott front bench needs to be removed (sans J Bishop) and replaced by a group of people who understand what conservative values are and are not too gutless to uphold them. The current lot are an utter disgrace and I am going to have a difficult time ever trusting the Liberal Party again.

  35. 1234

    Goat jam – you might explain why rather than saying that I am a complete idiot.

  36. Infidel Tiger

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

    Haha! Remember when lefties loved Super?

    Now they’ve all remembered that they are retarded, so they want to punish the financially literate.

  37. 1234

    Well I was Costello who ruined it – take all your contributions as a lump sum and tax free at 60 and then when you have spent it all come back and get a govt pension. The money was mean to provide, ideally in my view, a guaranteed income stream until death with no residual. I you want to leave an inheritance, that should be managed outside super.

  38. JC

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

    Don’t think so. There’s a better way. Cut all welfare to people under pension age. Eliminate corporate income tax which is really double taxation, lower the GST rate but include everything.

  39. JC

    Haha! Remember when lefties loved Super?

    Lol, yea I remember. They see a pile of money there, which doesn’t belong to them and they want to get their greedy, dirty hands on it… you know.. to pay for all those unmet needs.

  40. 1234

    The point, which you all avoid, is that income should be taxed equally. Now that it is so easy to access super the case to provide it with special tax treatment has been eroded. Its called making the best of a bad situation. It would add about $25 billion to assist Hockey’s “budget crisis”. And your utopian solution is?

  41. 1234

    So Jc, I assume that you have thought through why we have franked dividends and recovering tax from foreigners who are paid dividends?

  42. JC

    Moron:

    The government doesn’t have a tax receipts problem. It has (and marginally helped further) a spending problem. Naturally you just cut spending to the fucking bone. No more welfare for people under the pension aged… eliminate corporate taxation and lower the GST but impose it on everything. Reduce the number of government departments to about three and fire every redundant fucker on the government payroll.

    It goes without saying that stuff like arts grants, the ABC, SBS would be defunded immediately.

  43. candy

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

    1234, I have a feeling your idea could be quite unpopular. A person’s super is pretty special to them, you now they’ve work and saved and put away for the future.

  44. candy

    Sorry – they have worked and saved and put away money for their future and their children’s future.

    It could be dicey to muck around with super, perhaps.

  45. JC

    So Jc, I assume that you have thought through why we have franked dividends and recovering tax from foreigners who are paid dividends?

    I have. It seems that you haven’t. Someone is footing the difference between the franking credit on dividends. It’s the individual, paying the differential. And companies still pay the corporate tax rate on retained earnings you fucking moron.

    I don’t distinguish between domestic and foreign investors. They’re all good in my my book.

    You really shouldn’t be here, as you’re simply not up standards that we expect from leftwingers.

  46. 1234

    Well, this post is asking about one change you would make. JC being the usual dill he is puts forward about hlf a dozen – reminder JC when all else fails read the instructions fuck knuckle. Unpopular – who cares about unpopularity, certainly not sloppy Joe. Perhaps he would be more popular than he is now if he took up my suggestion – had to see him more unpopular. Keep up the good work Joe and continue to seek advice from the IPA. Should guarantee Tony is one term.

  47. Driftforge

    The point, which you all avoid, is that income should be taxed equally.

    No, you added an extra word there. Income should not be taxed, just like capital shouldn’t.

  48. 1234

    JC you have no standards at all. Your incoherance on franking is legendary – try a course in English expression fuck knuckle instead of dribbling your incoherance on this site.

  49. Driftforge

    One change federally? Always spend less than they received last year.

  50. 1234

    Drift forge – what is an anarchist doing here? What would you like to tax?

  51. .

    1234
    #1424146, posted on August 20, 2014 at 8:11 pm
    JC you have no standards at all. Your incoherance on franking is legendary – try a course in English expression fuck knuckle instead of dribbling your incoherance on this site.

    LOL!

  52. Percy

    Tax all superannuation as income – no 15% tax holidays, no super tax free at 60 years of age.

    Just what we need, more pensioners.

  53. 1234

    Percy – so what would you prefer from a fiscal view – more pensioners or more claiming concessional tax on super? Take care (for what you wish for).

  54. .

    1234
    #1424161, posted on August 20, 2014 at 8:25 pm
    Percy – so what would you prefer from a fiscal view – more pensioners or more claiming concessional tax on super? Take care (for what you wish for).

    Spend less money, fuckwit.

  55. Percy

    so what would you prefer from a fiscal view

    Who’s fiscal view, the governments or the people funding it? You want a richer government to prop up more poor people, or more rich people that don’t need funding?

  56. One federal change: Remove federal political candidates, federal public servants and net-recipients of federal welfare from the franchise.

    I reckon with that conflict of interest gone, a lot of the rest would sort itself out.

  57. 1234

    Fleeced – well in the ACT untl the mid 1960s their HoR member could onl vote on ACT issues and no Senate representative until 1974 – been tried, not important.

  58. Rousie

    Not another single dollar on green schemes.
    It would have emboldened the majority to launch a jihad against the leftards.

    I genuinely miss the ridicule that was emerging among people of all walks pre-election

  59. 1234

    Big numbers – spend less mney? This bunch of clowns is spending more and has added to overall debt. Ha ha ha. And you voted for them. LOL.

  60. .

    I voted for Abbott?

    No champ.

  61. You know what? Fuck it – I’m going for self-interest: Eliminate capital gains tax and tax on interest earned.

  62. .

    Big numbers – spend less mney (sic)?

    Yes. Don’t call me numbers either.

    Here is an easy way to spend less money.

    http://www.afr.com/p/national/budget_for_real_liberal_mABwgz5ztjYDmbIqpVVU3I

    DAVID LEYONHJELM
    A budget for a real liberal

    There are three steps necessary to bring the Australian economy back to health: (1) tax reform and deregulation to boost economic growth; (2) cut government over-spending to immediately bring the budget back to surplus and start paying down the national debt; and (3) structural reforms that ensures government spending is sustainable in the long run.

  63. candy

    This bunch of clowns is spending more and has added to overall debt. Ha ha ha.

    1234
    ALP set up this terrible problem in the last 6 years. Promises of surplus every year, never happened, and yet more spending. And what is there to show for it? NDIS not even a bit funded (although that’s a worthwhile scheme).

    It’s almost to hard to fix, it seems.

  64. 1234

    Big numbers – leyhohjohn – specifically what is it that he wants. What you have presented is just words. What overspending? What structural reforms? As soon as he exposes what cuts and reforms he wants and his ideas are subject to scrutiny his support will fall away. Then again he could do an Abbott – hide it until after the election. But that would be dishonest. Didn’t stop old Tones though.

  65. 1234

    Candy – ball is in LNP’s court. Its up to them now. No excuses I think Mr Abbott said.

  66. .

    What you have presented is just words.

    If we gave you a budget, you’d call it “just numbers”.

    You’re not here to actually discuss a way to pay off the deficit. You’re here to justify the ALP’s blowout.

    “What overspending?”

    You turkey.

  67. 1234

    I have advanced my one idea. You, like that fuck knuckle JC present more than one, and they are not even yours.

  68. Tel

    A person’s super is pretty special to them, you now they’ve work and saved and put away for the future.

    Eventually all people will learn that the meaning of government is to promise everyone a future then snatch it away at the last possible moment. The excuse may vary a bit, the exact methodology may also vary, but the outcome is consistent.

  69. .

    If you want to believe it is an original idea, go ahead and delude yourself.

    You haven’t advanced an idea at all. You’ve defend profligacy by pretending the government efficiently uses resources and makes fewer miscalculations than the private sector or civil society.

  70. Tel

    This bunch of clowns is spending more and has added to overall debt.

    True, but the ALP were adding $50 billion every year to the debt, so given the current lot of clowns, there are worse clowns out there. Difficult situation for the voter, but that’s what preferences are for.

  71. wreckage

    One thing? OK. Take receipts; less interest payments, less a 25% reduction in principal. That’s the budget.

    Preferably, I’d like to introduce the Martyr Amendment. A PM can borrow money for the period of one year provided he or she publicly hangs him/herself in advance. The replacement PM has the same option for the following year. And so on. No pension or payout for the family or estate beyond that awarded a war widow.

  72. wreckage

    “Tax super”. That’s it? You get one amendment to the budget and it’s “tax super”. Not only is that the lamest idea in the entire thread, the fact that you’ve insinuated that it’s original and unique suggests you’re the intellectual match for a garden slug with an imagination to match.

  73. Tel

    In terms of understanding what a $50 billion deficit feels like, think of spending roughly $100,000 per minute, every minute night and day, without holidays.

    If you took ten seconds to read this message, that’s about sixteen thousand dollars gone in just those ten seconds. Even JC can’t piss away money that fast.

  74. Richard D

    One of my rules, never trust anyone who uses the word fairness as if it had an objective meaning. Theft & fraud are always lurking somewhere nearby.

  75. Adam D

    NDIS not even a bit funded (although that’s a worthwhile scheme).

    What the fuck is the ndis. It’s for disabled people but is it an insurance payout, does it provide equipment, or is it another government sinkhole? They set up a real nice office here in canberra. Top of the line real estate with no expenses spared and are advertising it on the radio but I still don’t know what the fucking point is. No one can argue against money for the disabled and as a result of our cultural patheticness we have a program worth 10s of billions in the pipeline that I have never heard of its actual purpose being articulated once.

  76. Tintarella di Luna

    No one can argue against money for the disabled and as a result of our cultural patheticness we have a program worth 10s of billions in the pipeline that I have never heard of its actual purpose being articulated once.

    Adam where you bin? But you’re right about no expense being spare for all the leeches, hanger-on and sundry rent-seekers. It was of course a Scheme designed by the Gillard government as political tool to paint as compassionate and wonderful was the eel-faced creature who is/was neither. Now we have things like this happening, and there’ll be more

  77. Adam D

    @ tint,

    That didn’t take long. I know it’s gillards monstrous policy which for reasons PC May never be criticised but what does it actually do, how does it help the disabled?

  78. Adam D

    To the topic on hand I recommend some accounting tricks for the budget, a flat income tax of 25% and any new brain fart from the left directly attached to this figure . U want refugees by boat then add 2% to income tax, u want an nbn then add x% to income tax rate, you want free uni, renewables, increase foreign aid, abc, sbs, art grants, subsidised industry, aboriginal extortion money, etc then add it to the tax bill. Good luck selling your shit ideas when every working person has to see a breakdown of its cost on there weekly pay check.

  79. It must be cold – autocorrect and gloved (fat) fingers are making some of the posts incomprehensible…

  80. goatjam

    U want refugees by boat then add 2% to income tax,

    Bad idea. When you have a large proportion of your population not paying any income tax then they will vote yes to just about anything that will give them a bigger cut.

    Better to tie it to a consumption tax, then even the dole bludgers would be hit by it.

  81. Diogenes

    Flat tax same as gst on everything(income & cgt) . No deductions. Cut all fed spending on everything expect defence, customs, foreign affairs & welfare, ie basically work out minimum running cost of govt and divide by amount of money being earned/spent. Allow states to levy income tax – BUT remove stamp duty (and any force state based discriminatory practices totally portable( eg teacher registration) to allow more mobility between States.

    Wrt to a comment about disability & NDIS last night on NBN Newcastle was a heartwarming story about a 14 yo girl with terrible CP who is having an assistant for playing Bocce funded (basically from what we saw the assistant does everything ) and the young lass will compete at the 2020 Paralympics. Having had a child who passed away nearly 14years ago from a condition similar to MD I was thrilled to see where the priority fro NDIS money is. /sarc

  82. Diogenes

    Damned autocorrect mucked up a few words sorry I do know how to spell except and fat fingers did the rest

  83. Kingsley

    Not sticking to the 1 change rule but my overall recipe is
    25% GST on everything
    Eliminate ALL other taxes ie income,capital,fringe,wine equalisation, excise the list goes on, ALL OF THEM GONE
    GST revenue allocated on a per capita basis ( guess which State I come from)
    Simple and overnight we are the most capital attractive location on Earth

  84. JohnA

    As above – one change is not enough.

    Here is what I just posted over at Andrew Bolt’s blog:

    ————
    OK, now it’s time to acknowledge that the original budget strategy was wrong.

    Time to say to the Australian voters:
    “Sorry everyone, we stuffed it up, and we are paying for it in the polls and in the Senate.

    “Time to rethink the whole thing, because the country is basically broke.

    “Let’s have a Double Dissolution Election, the only policy is the Budget, and our Budget says ‘Slash and Burn, Take No Prisoners’ or words to that effect.”
    ————

  85. Squirrel

    “mareeS

    #1424078, posted on August 20, 2014 at 6:56 pm

    Squirrel, I have direct experience with PPL at the ABC. Same applies to all public service people.

    Thirty-one years ago at the ABC I took 6 weeks of pre-natal leave on full pay, and 3 months of post-natal leave on full pay, then 6 months on half-pay, and then I found to my amazement I had accrued sick leave and holiday pay on quarter pay, which saw me out for 12 months, upon which I had accrued a further year’s sick pay and holiday pay, which saw me through our second baby, leave accruing.

    Ask Leigh Sales how it works at the ABC, and how it doesn’t work if you’re not in the public service.

    During that period I”

    Well, all of that does suggest a relatively small, but symbolic saving which could be made – cut parental leave, and all other entitlements for federal public sector workers to whatever the relevant community standard is. Given the horror of Labor at the idea of “millionaires” getting $50,000 for having a child, why should public sector workers on six figure remuneration packages get anything more than the lowest paid receive when they have a child.

    Just to make it interesting, the Commonwealth could make it a condition of relevant grants to the States and Territories that the same approach was taken to their workforces – i.e. where there is a basic community standard, that’s what public sector workers get, and no more – so no extra leave, holidays, redundancy pay etc. etc.

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