Liberals, tax your brains and drop the bank levy

Today in The Australian

Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

About Henry Ergas

Henry Ergas is a columnist for The Australian newspaper and the inaugural Professor of Infrastructure Economics at the SMART Infrastructure Facility at the University of Wollongong. The SMART Infrastructure Facility is a $61.8 million world-class research and training centre concerned with integrated infrastructure solutions for the future. Henry is also Senior Economic Adviser to Deloitte Australia. Prior to these concurrent roles Henry worked as a consultant economist at NECG, CRA International and Concept Economics. Henry's previous career was as an economist at the OECD in Paris, where amongst other roles he headed the Secretary-General’s Task Force on Structural Adjustment and was Counsellor for Structural Policy in the Economics Department.
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104 Responses to Liberals, tax your brains and drop the bank levy

  1. Razor

    Ergas -Intellectual yet Idiot

  2. iampeter

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    To paraphrase: “Since we have given up fighting you on principles and policy we may as well implement socialism as efficiently as possible.”

    This is how you lose to the left.

    Seriously Henry, why even bother?

  3. john constantine

    Tax ’em while you still got ’em.

    Creative destruction of their crony Australian Bank Oligopoly could come as soon as their shorten foundation regime handing out government guaranteed banking licences to Crony Union Super funds, or Amazon getting a bank licence [ government guaranteed after a suitable donation and board seats for the right sort.]

  4. stackja

    Sharri Markson: Malcolm’s next crew on the good ship Turnbull
    Sharri Markson, The Daily Telegraph
    May 19, 2017 12:00am
    Subscriber only
    A CABINET reshuffle is the next stage of the government’s “reset” agenda.

    A reset in policy, perception and narrative was the play behind Scott Morrison’s populist Budget. That’s phase one: out with the tough cuts and unlegislated zombie measures that would never be passed.

    As has been well canvassed, Downer is expected to be replaced by George Brandis, who was once close to Turnbull.

    Christian Porter or Michaelia Cash could replace Brandis, with Mathias Cormann as the new Senate Leader.

    Defence Minister Marise Payne has been speaking to the PM about her future and it’s possible she could be appointed Australia’s Ambassador in Brussels, where Dr Mark Higgie is nearing the end of his term, or she may even go to New York. Bizarrely, there has been a suggestion Peter Dutton could take the defence portfolio.

    He has told those close to him that he would prefer the all-powerful, and highly retail, Homeland Security super-portfolio and would even prefer to remain as Immigration Minister than move into the graveyard role of Defence (although of course Christopher Pyne doesn’t see Defence in quite the same way).

    Polls have predicted Dutton’s seat of Dickson is under threat, with a 1 per cent margin. Yet he has managed to hold the marginal seat for 16 years. He knows how to campaign and his profile has grown since the election.

    The hard line image he has cultivated on both social and immigration issues is playing well in his Queensland electorate.

    In other moves, Barnaby Joyce would shift to infrastructure from agriculture and water resources, and Angus Taylor could be in line for a new major projects role focused on IT and urban infrastructure projects.

    His private views on ministers and policy positions have certainly changed since the election, leaving some ministers heartbroken by the Budget and quietly fuming about the departure from lower-taxing, smaller government Liberal principles. Ministers also are dismayed at Turnbull and Morrison’s boasts that the Budget is pragmatic not ideological.

    Despite the lessons of Brexit and Trump, there’s disenchantment that, at the most globalised time in the world’s history, the government has lurched towards nationalism.

    But Turnbull has seen off his own leadership rivals and has made Bill Shorten vulnerable to threats from his own party. There’s no question Turnbull has achieved political momentum in recent weeks. He has no intention of losing it now.

  5. Tel

    Let’s be clear: increasing taxes is not necessarily bad.

    But that’s not clear at all, it sounds like more tax is a good thing, even despite Australia being some of the highest taxes in the world (49% top income tax bracket + 10% GST + 9% Super + 5% payroll tax + others).

    After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    If you wanted to be clear, you would say increasing tax is a bad thing, but punishing the unborn for events beyond their control is worse.

    Catching Ebola is worse than catching a cold, but under no circumstances is the cold a good thing.

    We do need sufficient tax to cover national defense and some basic legal system, but 10% flat tax should be plenty. Almost all of Australian tax goes to wealth transfer and massive inefficiency.

  6. stackja

    Catholics declare war on the Libs
    The Catholic education system will campaign against the Turnbull government’s school funding arrangements.
    SIMON BENSON
    The Australian 12:00AM May 20, 2017

    A significant bloc of MPs took a view prior to the budget that they needed to allow the government to focus on core business but made it clear to Senator Birmingham that he had to consult and find an arrangement with the Catholic sector. “He has failed to do that,” said one senior Liberal MP.

    Senator Birmingham’s office said the minister did not hold any meeting with the Catholic sector yesterday.

    Claims by Senator Birmingham that the Catholic sector had in the past received “a special deal” because it operated as a school system appear to have been undermined. Lutheran schools also operate as a system, as can any private school sector that applies as is provisioned for under legislation.

    The Catholic Education Commission’s new research, obtained by The Weekend Australian, examined 72 Catholic systemic schools nationwide, finding 31 would need to raise fees by between $3000 and $4000 a child next year and another 21 schools would be hit with hikes of between $4000 and $5000.

    Bill Shorten has continued to push the cause of Catholic schools, visiting St Brigid’s in the marginal Tasmanian electorate of Braddon yesterday. It was the Opposition Leader’s seventh visit to a Catholic school in the past fortnight since the government’s Gonski changes were announced.

    He accused Malcolm Turnbull and his team of launching “an ­unconscionable attack into the Catholic systemic system’’.

    “When will Mr Turnbull rea­l­ise, in his out-of-touch universe … that people who choose to send their kids to a local parish school should not be presumed to be wealthy,’’ he said.

    Mr Shorten said private schools at the very top end didn’t need much more money but disagreed with the proposition that parents who chose to send their kids to a Catholic parish school “shouldn’t get some investment back for the taxes they pay — I don’t buy that’’.

  7. OldOzzie

    stackja
    #2384885, posted on May 20, 2017 at 8:25 am
    Catholics declare war on the Libs
    The Catholic education system will campaign against the Turnbull government’s school funding arrangements.

    SIMON BENSON
    The Australian 12:00AM May 20, 2017

    A True Liberal Party would go with School Vouchers of Equal Value per Child to be used by the Parents at the School of their Choice – State/Catholic/Private

  8. The BigBlueCat

    Increasing taxes IS necessarily bad, Henry my lad. While I have no doubt the taxpayer will be required to pay for the massive overspending of the Australian government, courtesy of both the structural damage caused by Rudd/Gillard/Rudd AND the failure of the Abbott/.Turnbull governments to make the necessary changes to curb spending.

    It’s not that’s the Australian taxpayer wants this overspend, it’s that we’ve been forced into this situation by Keynesian economics and sheer bloody-mindedness by the political “elites” since 2007. We need leadership that will identify what we need as a government, rather than what vested interests in the economy want. The economy should originate from outside the government, with the government responding with policy that improves the position of its constituency, and not look at the taxpayer as though it owns their financial assets.

    Taxes are necessary, but excessive taxes are not. Regrettably we will be taxed more to cover the ideological spending of successive governments.

  9. candy

    I can’t help but think the Turnbull government has cottoned on to some anti-Catholic feeling we see around us now (eg, look at what is happening to George Pell, and how the media treated Tony Abbott being a Catholic) and the general stuff about us “micks”.

    So cutting funding to Catholic schools is seen as easy and not offensive policy to anyone (except the schools affected and their parents). It may help Newspoll even, to be been as Turnbull/government differentiating themselves from Abbott/Catholics in general, going with the general anti-Catholic feeling of modern times.

  10. Ubique

    Suffer the little children. Looking forward about ten years, in all of Australian modern history never will a generation have had such contempt for its parents and grandparents.

  11. Razor

    All company taxation has a negative effect on investment in the industry and so a negative effect on the economy.

    Taxing the financial providers reduces by that amount the money available for other industry growth. If passed on to depositors it also reduces the purchasing power of consumers.

    Totalbull is disconnecting the liberal party from it’s sensible roots and now is in the line of the Caesar who said bread and circuses, or similar.

  12. A True Liberal Party would go with School Vouchers of Equal Value per Child to be used by the Parents at the School of their Choice – State/Catholic/Private

    No, a True Liberal Party would get out of Education altogether at a Federal level.
    Education is a State matter.
    Ditto for Health.

  13. Razor

    To think – Memory V
    The Federal power all stems from one federation power: the rum excise.

  14. iampeter

    A True Liberal Party would go with School Vouchers of Equal Value per Child to be used by the Parents at the School of their Choice – State/Catholic/Private

    No, a True Liberal Party would get out of Education altogether at a Federal level.
    Education is a State matter.

    No, a true Liberal Party would recognize that education is not a function of government at any level and abolish any such departments.

  15. .

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    No. Mass sackings.

  16. No, a true Liberal Party would recognize that education is not a function of government at any level and abolish any such departments.

    Whether Education is a function of government at all or not**, is a matter to be decided by those who are governed, via the ballot box. Nonetheless, here in Australia Education is specifically excluded from S51 of the Constitution. Therefore the Federal government has no business being involved.

    ———————————-
    ** – For the record, I agree with you.

  17. John A

    Ministers also are dismayed at Turnbull and Morrison’s boasts that the Budget is pragmatic, not ideological.

    Which is the position of the Victorian anti-Kroger, pro-Reith faction (to which my atheist brother subscribes, “because there are no votes in moral issues like abortion, euthanasia, SSM etc.”).

    Since pigs don’t fly, they (and the nation) are about to reap the whirlwind of such poorly thought out pragmatism. The Victorian experience of Dastardly Dan will most likely be replicated across the rest of Australia’s electorates at the next Federal poll.

    With pragmatism ruling in Canberra, no doubt the people will follow the example and vote for the party which hopes to spend the most on lining their pockets, along with retaining the complications in the Senate so that any cost-saving measures are mired in perpetual “negotiation with the cross-benches.”

  18. Senile Old Guy

    Let’s be clear: increasing taxes is not necessarily bad.

    Given the current wanton waste, increasing taxes will increase waste so it is indeed a bad thing; a very, very bad thing.

  19. struth

    This guy is a complete wanker.
    Nobody takes him seriously anymore.
    If a so called economist can’t work out that increasing the tax burden on the private sector will decrease overall revenue , ignore the political hack.

  20. Zipster the leftoid torturemeister

    I don’t think I have seen a true liberal party in my lifetime and doubt I will.

  21. Diogenes

    St Gough crated a rod for every succeeding federal government with education funding. The government is damned whichever way it goes.

    Notice how the AEU, NSWTF etc etc have been very quiet about the cut in funding to NG schools, except the NSWTF has publicised an email from that nice Mr Scott to principals saying “do not believe the funding your school has been promised by the feds will be be the dollars you will actually get, apparently each school got a letter from Mr Birmingswan. I presume Head Office will cream a %age off the top like they did for DER, BER etc.

    If Morriswan changes the proportions within the existing spending announced watch the howler monkeys come out.

    By far the best solution is – “States as 1/7/2018, the federal government will retain GST (which will no longer have any exemptions, and will increase to x% to cover SocSec, and Defence & repay debt) and all excise income, and abolish ALL other taxes. You , and councils will no longer receive grants from the Commonwealth, and you may levy your own income taxes and spend as much on health, education, transport and infrastructure as you like.”, accompanied by a commensurate purge of departments. Have at it “

  22. Entropy

    Struth, you need to read the rest of the article. The opening statement was unfortunate, but is also recognising you must live within your means. Basically it wasn’t advocating an increase in tax, but how bad the bank levy is.

    Here is a large extract

    But if taxes must be raised, let it be done sensibly. Unfortunately, the proposed levy on banks does not meet that test.

    True, so little is known about the levy’s design as to make it hard to evaluate. In fact, Scott Morrison’s lack of clarity is reminiscent of the partygoer in Woody Allen’s Annie Hall who says of his latest brainwave, “Right now it’s only a notion, but I think I can get money to make it into a concept — and later turn it into an idea.”

    With tax, however, it is not merely the devil but the dollars that are in the detail. If virtually every aspect of the levy is still a work in progress, how could Treasury sensibly estimate the levy’s revenue?

    Ask Labor: as careful thought was not given to the design of its ill-fated minerals resource rent tax, the MRRT ended up costing more to collect than it raised.

    Even so, this much seems likely, both from what has been said and from overseas experience: as far as taxes go, the levy will be shockingly inefficient.

    It isn’t difficult to see why. In essence, these levies are a tax on an input used in supplying banking services, namely wholesale deposits — they are, in other words, typically calculated as a percentage of the amounts the banks borrow, mainly from global capital markets, to fund their loans. Those borrowings are a substitute for the deposits banks obtain from retail customers, in the sense that banks can finance their operations from one or the other. And banks have other funding options too, including drawing on liquidity provided by the Reserve Bank.

    As a result, a tax on wholesale borrowings does not only increase banks’ costs in aggregate, it also skews their funding decisions, leading them to turn from what otherwise would be a lower-cost source of funds — loans from capital markets — to higher-cost sources of funds, such as retail deposits.

    Just as a tax on steel, but not on the alternatives it competes with, would drive firms that use steel to shift to other materials (say aluminium) that may be costlier to produce, a tax on wholesale bor­rowings will distort the input mix the banks choose, making banking services costlier to produce.

    That means such a levy is likely to be an order of magnitude more inefficient than, say, a GST-type tax that raised similar revenues. For all its defects, the GST-type tax would have what economists call marginal effects: faced with the tax, a few consumers would decide not to purchase services they otherwise would have consumed, but the cost of supplying banking, calculated in terms of the scarce resources it absorbs, would not rise.

    In contrast, the levy will have an infra-marginal effect, making every unit of banking output costlier to produce. And the fact the levy is being imposed only on the larger banks, exempting their smaller rivals and the capital markets that provide services that compete with those of the major banks, compounds the distortion.

    To justify levying a tax on banking and on banking alone, the Treasurer has suggested that it compensates taxpayers for insuring banks’ retail deposits. But this argument, which many commentators have echoed, is hard to accept.

    It may be that banks are undercharged for the deposit guarantee, even taking account of the many regulatory burdens that come with it. If so, the government should charge a premium that reflects the risk the community bears from providing that guarantee.

    Banks then would find those deposits more expensive, and so would decrease their reliance on them, reducing taxpayers’ exposure — much as charging properly risk-reflective premiums for insuring dangerous activities such as skydiving reduces the extent to which they are undertaken.

    Seen in those terms, the levy is positively perverse. In effect, the levy will induce banks to rely to a greater, rather than lesser, extent on retail deposits, as it makes them cheaper compared to wholesale borrowing.

    Far from reducing or offsetting the social costs of deposit insurance, the tax is therefore likely to do the opposite, as banks replace wholesale borrowings with insured deposits, increasing the risk taxpayers bear. At the same time, the more intense compet­ition for retail deposits will force interest rates up.

    Ultimately, the best that can be said for this tax is that it will be popular. Why that would be the case is a puzzle: only those who believe in the tooth fairy would think that you can increase an industry’s costs without eventually increasing its prices. But the enduring attraction of bank-bashing is that it is the political equivalent of picking a dead man’s wallet — it is easy to get away with it.

    That hardly means it is praiseworthy. Indeed, those with ivy-clad memories will remember that the Liberal Party made its name by standing up for the banks when Labor proposed to nationalise them in 1947.

    The banks were certainly not loved then — on the contrary, the tight constraints they imposed on access to credit meant they were detested. And the labour movement’s assault on the “money power” didn’t hesitate to fan the flames, with the unions issuing, barely two years after the liberation of Auschwitz, a pamphlet demonising the “great chain of Jewish banking houses” as “the most powerful financial Empire the world has ever known”.

    Little wonder Robert Menzies, in a hard-fought but ultimately successful election campaign, ­denounced the attacks on the banks as “a farrago of allegations which are based on inaccuracies and which proceed from false premises”.

    Those were, of course, different times. But on the 70th anniversary of the “battle for the banks”, the Liberal Party would do well to remember its heritage. And on that score if no other, it should reconsider a tax that will do more harm than good.

  23. St Gough crated a rod for every succeeding federal government with education funding.
    The government is damned whichever way it goes.

    It started before Gough, Diogenes. I attended Tuart Hill Senior High School in Perth, from 1964 to 1968. In 1966 we got a new science block, complete with state of the art equipment, and teachers sourced from around the world.

    There was much ballyhoo at the time – we even made it into the national news – as it was apparently the very first exercise ever involving direct Commonwealth funding of a school project.

  24. duncanm

    Comments on Paul Kelly’s editorial. This sums it up:

    Peter:

    Gaining the misty-eyed good graces of people who will never vote for them, while simultaneously giving the finger to people who did vote for them, presents as a comical new low for this ‘Back To The Future’ Fraser 2.0 Liberal Party.

    NDIS is a bottomless pit. To pretend it will be funded by this single tax hike is ludicrous.

  25. Oh come on

    Um, why don’t people read what Henry actually wrote and tax their own brains too before jumping down his throat?

    Are we “genuinely unwilling to curb public spending?” Yes, the electorate seems to be unable to stomach any such cuts.

    So, should we “pay for it rather than passing the bill to future generations”? Yes, absolutely we should. It is completely unfair to dump the costs borne by our own ill-disciplined demands and expectations onto our children and grandchildren. If we (that is, a majority of the electorate) want a big government socialist paradise, then WE should fund it ourselves. So that means tax increases.

    Now, you could certainly make the argument that the tax system is too progressive and that far, far more of the people who are demanding the current levels of government spending be maintained ought to start ponying up themselves in a big way, but that is a separate argument. Henry Ergas’s point above is perfectly reasonable.

  26. H B Bear

    Let’s be clear: increasing taxes is not necessarily bad.

    Tax the profitable, value-adding sectors of the economy and tip those resources into the bottomless pits of health, education and welfare. What economist could possibly argue with that?

  27. .

    OCO

    Yeah I know it is terrible. The same with nearly anything DL writes. A lot of the commenters here can be wilful deadshits, in spite of their actual intelligence.

    I do prefer mass sackings. As Rudd would say, I make no apologies for this.

  28. Are we “genuinely unwilling to curb public spending?”
    Yes, the electorate seems to be unable to stomach any such cuts.

    How do we know this?
    When and how was it actually tried?

  29. struth

    OCO…..if we aren’t willing to cut spending we should not burden the next generation I agree with but raising taxes will not increase revenue.
    Lowering taxes will increase revenue.
    At this point in Australia’s decline raising taxes will only devastate the productive sector even more and revenue will decline.

  30. OCO…..if we aren’t willing to cut spending . . .

    I repeat, have we ever actually tried this?
    I mean realistically?

  31. Senile Old Guy

    Are we “genuinely unwilling to curb public spending?” Yes, the electorate seems to be unable to stomach any such cuts.

    Yet again I must remind people that Abbott won a landslide with ‘it’s a spending problem, not a revenue problem’. But, when the usual crowd started howling about some minor proposed cuts, the spineless liberals dumped him in favour of Turncoat and what we have is the result of that: a competition to see who can spend the most of OPM.

    It was not the ‘electorate’ that kicked up a fuss about the spending cuts: it was the ALP, their useful ally the ABC, and a variety of others looking (mostly) after their self interests.

  32. Oh come on

    MV, no major party has dared to try. The one you’d assume would give it a red hot go instead rolled a wildly successful leader who delivered it government less than two years prior. This is a failure of government, certainly. But, honestly. Does anybody honestly think that a majority of the electorate will vote for any party that doesn’t promise to let us have our cake and eat it, too? And what that means in practice is deficit spending as far as the eye can see.

  33. .

    It was not the ‘electorate’ that kicked up a fuss about the spending cuts: it was the ALP, their useful ally the ABC, and a variety of others looking (mostly) after their self interests.

    That budget he and Hockey had though. Total failure!

  34. OldOzzie

    Why not look closely at The Education Department and Department of Energy and Environment?

    The following applies to Australia

    TALK ABOUT LOW ENERGY!

    The U.S. Department of Education employs 4,400 people and has a current budget of $70 billion. How many children does the department actually educate? I am sure the round number approaches zero. I’ve had a few opportunities to ask liberal audiences aghast at Trump’s appointment of Betsy DeVos and alarmed at proposed budget cuts for the department to name one single thing a past secretary of education or the department has done that has had a meaningful effect on public education, and I can hear the crickets chirping while I await a response. I sometimes offer, “What about No Child Left Behind”? Most people on the left hate it (because it involved standards and testing), even though they can’t say very much about why (because it is an embarrassment to oppose standards and testing openly). Sometimes to twist the knife, I ask people to name three previous education secretaries. Hardly anyone can do it. Yet the Department of Education is a political sacred cow. It apparently runs on the principle of No Bureaucrat Left Behind (or Unemployed). Should be called the Department of No Education.

    Likewise we could do with some close scrutiny of the Department of Energy. Now 40 years old, just how much energy as the Department of Energy produced? It’s input-to-output ratio may be worse than the Department of Education. The great Mark Mills sums up the numbers for us in a terrific article this week in The Hill:

    After all these decades of government programs consuming some $500 billion in that pursuit, what’s happened?

    America uses 140 percent more oil for transportation today than it did in 1977. Electricity consumption is up 200 percent. (The recent slow growth in power demand looks a lot like a recession effect: we’ll soon know for sure when the economy fully recovers.) Lavishly subsidized biofuels have grown from an irrelevant 0.25 percent in 1977 to an unremarkable 5 percent share of transportation energy use today. Solar power rose from essentially zero, back then, to today’s irrelevant 0.15 percent share of U.S. energy. Wind power has been the biggest success: but even those heavily subsidized turbines now supply only 1.5 percent of America’s energy.

    The fundamental energy sources available to power society have remained unchanged not just since 1977 but since 1957. Politicians and pundits often intone that there are “a multitude” of new energy options, but that’s rhetorical hyperbole. There is no new physics in energy nor new energy sources, just better ways to use those that exist.

    The most remarkable and unpredicted energy tech change didn’t come from DOE or the super-major oil companies. Thousands of small and midsized companies perfected new shale oil and gas technologies and transformed the landscape. Shale tech has added 2,000 percent more to U.S. energy supply in the past decade than solar and wind combined. That’s the fastest and biggest addition to world energy supply — not just hydrocarbons, but all forms of energy — that has occurred in history.

  35. Dr Faustus

    Shari Markson [stackja @ 8:25]:

    But Turnbull has seen off his own leadership rivals and has made Bill Shorten vulnerable to threats from his own party. There’s no question Turnbull has achieved political momentum in recent weeks. He has no intention of losing it now.

    This is exactly true. But not in the way Ms Markson imagines.

    Turnbull has made an ALP win an inevitability – even with the utterly loathsome Shorten as Opposition Leader. As a result, the ambitious in the parliamentary ALP – who can almost taste the yummy spoils of leadership – are positioning to see what support there is to replace Shorten.

    Turnbull has certainly set up political momentum and he won’t stop now…

  36. Oh come on

    I would love to believe that a major party would go to an election running on a platform of fiscal responsibility and tax decreases (which can only benefit the better off in society, seeing as though only the better off actually pay taxes) – and stand a snowball’s chance of winning.

    I would love to believe this could happen. But I don’t. Not for a single second. I don’t believe a party would run on such a platform because they’d calculate they would be trounced by an opposition offering a chicken in every pot. And I believe they would be right.

    Also, I don’t believe any Labor or coalition government going forward would suddenly decide to enact these policies once in government, either.

  37. Does anybody honestly think that a majority of the electorate will vote for any party that doesn’t promise to let us have our cake and eat it, too?

    OCO, that’s precisely what the electorate did do, with Fraser, KRudd, and Abbott. Each one preached the need for economic responsibility, and once elected, went on a spending spree. Each one became a Master at “attempting” to cut expenditure, but couldn’t because [insert reason here].

    For example, with all the low hanging fruit available, what was Abbott’s very first announced major “cost cutting strategy”? Why, raise the retiring age to 70, of course. This never had a hope in hell of making it through the Senate, even if Abbott had a slim majority there. Enough Lib/Nats would have crossed the floor to vote it down. They’re not all entirely stupid.

    What about the 11,000 public servants employed by the Federal Departments of Health and Education, whose only reason to exist is to tell the States how to spend their own money? Do you think there would have been rioting in the streets if Abbott had announced that they were being closed down, their duties handed back to the States, and the savings expressed as PAYG tax cuts?

  38. Tel

    I would love to believe that a major party would go to an election running on a platform of fiscal responsibility and tax decreases (which can only benefit the better off in society, seeing as though only the better off actually pay taxes) – and stand a snowball’s chance of winning.

    You mean like the way Tony Abbott got a resounding victory running on a “budget emergency” warning?

  39. Dr Faustus

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    There’s no clear evidence that “we” are genuinely unwilling to curb public spending. What “we” have are two competing political groups who realise that they both have to offer the punters bread and circuses – and plenty of it – if they hope to win the prize of Government.

    We (and future generations) are funding the ticket price for an agreeable and remunerative living for rent-seekers and the careerist vampire squids infesting public office.

  40. .

    You know, the next budget will be even worse. The Federal election can be called at any time, but the next half-Senate election coinciding with the House can be at the earliest, 4 August 2018 IIRC.

    As the ALP, Greens and LNP would like to clear out the troublesome microparties, I reckon this will happen fairly soon and before the 2019 budget.

    The thing is, Malcolm could hold on for as long as possible. The latest date for a concurrent election is 18 May 2019. This might be the only way to beat a more popular Shorten. This won’t go well with the budget timing.

    I just can’t see a responsible budget passed until after the ALP eventually coming to office and really blowing things up.

  41. Tel

    Do you think there would have been rioting in the streets if Abbott had announced that they were being closed down, their duties handed back to the States, and the savings expressed as PAYG tax cuts?

    Are you including the riots that would have happened in Harris Street Ultimo?

  42. Are you including the riots that would have happened in Harris Street Ultimo?

    That’s why God invented water cannon.

  43. .

    There was a riot in Canberra when the ALP lost in 1996. Remember when the thugs vandalised Parliament…which is funny since Keating started IR reform, liberalised the export sector, opened up the economy, cut top income tax rates from 60% to 47%, he was a shy classical liberal but too cowardly to say so…he just spent too much.

    (Actually, Keating was doing well post-recession until his “One Nation” package failed as Keynesian policies often do…he lost office in 1996 because in 1995 we went through a mini-recession caused by reckless Keynesian make work ideas).

  44. .

    After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    Actually, it doesn’t matter. What happened to Ricardian equivalence?

  45. Tel

    Dot, the mini-recession of the Keating years was mainly caused by a wash-on from earlier overseas crashes such as 1987 Black Monday and then the Savings and Loan Crisis that followed. Australia just cannot be immune to those large overseas effects any more than we were immune to the GFC.

    https://en.wikipedia.org/wiki/Early_1990s_recession_in_Australia

    The response of the Australian government is always Keynesian, and going into debt, which basically just defers the problem for a while instead of facing it (kicking the can as the saying goes). We still have not yet come to terms with the GFC of 2007.

    Keating played his hand badly on that recession… he said it was what “we had to have” but would have made a lot more sense to say, it’s imposed on us by overseas events, we just ride it out.

  46. john malpas

    And the penalty for taxing future generations is what?
    QED

  47. entropy

    I just can’t see a responsible budget passed until after the ALP eventually coming to office and really blowing things up.

    I was going to say one of the many possible errors about that theory was that it was always possible that Shorten could pull a Hawke and adopt something the Campbell report recommendations.

    Then I thought about the likely Cabinet and opposition, and realised…not likely sunshine, and…we are so screwed.

  48. Tel

    What happened to Ricardian equivalence?

    I see two immediate problems: people will discount the future due to uncertainty (many things are uncertain, maybe I can stick someone else with that tax, maybe government will default, maybe a miracle will happen). Discounting the future happens at a higher rate than official interest rates, because the official rates are not real, they are set artificially low by the central bank.

    Secondly, people don’t live forever and we are out of the practice of worrying about our kids (overall we are also out of the practice of having kids).

  49. Dr Faustus

    What happened to Ricardian equivalence?

    About 60% of the voting population lost the habit of paying any net tax – and atrophied any need to save for future tax increases.

  50. .

    No Tel.

    The spending happened before the downturn in 1995 and after the 1993 election. I am not talking about the 1990-91 recession. He won the election after that.

    Do you want to tell me how a stock market crash causes a recession, BTW?

  51. RobK

    It seems we worry about handing on a debt (rightly so), yet happily proceed to attempt to pass on an economy that is devoid of coal, oil or nuclear power for the sake of some modelling that can be shown to be flawed.
    The issues are not unrelated politically.

  52. ned

    before commenting on anything we should read whole article:

    He do not like tax, and he think liberal leadership need new brains –that is how I understand article.

    Liberals, tax your brains
    Henry Ergas
    The Australian
    12:00AM May 20, 2017

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.
    But if taxes must be raised, let it be done sensibly. Unfortunately, the proposed levy on banks does not meet that test.
    True, so little is known about the levy’s design as to make it hard to evaluate. In fact, Scott Morrison’s lack of clarity is reminiscent of the partygoer in Woody Allen’s Annie Hall who says of his latest brainwave, “Right now it’s only a notion, but I think I can get money to make it into a concept — and later turn it into an idea.”
    With tax, however, it is not merely the devil but the dollars that are in the detail. If virtually every aspect of the levy is still a work in progress, how could Treasury sensibly estimate the levy’s revenue?
    Ask Labor: as careful thought was not given to the design of its ill-fated minerals resource rent tax, the MRRT ended up costing more to collect than it raised.
    Even so, this much seems likely, both from what has been said and from overseas experience: as far as taxes go, the levy will be shockingly inefficient.
    It isn’t difficult to see why. In essence, these levies are a tax on an input used in supplying banking services, namely wholesale deposits — they are, in other words, typically calculated as a percentage of the amounts the banks borrow, mainly from global capital markets, to fund their loans. Those borrowings are a substitute for the deposits banks obtain from retail customers, in the sense that banks can finance their operations from one or the other. And banks have other funding options too, including drawing on liquidity provided by the Reserve Bank.
    As a result, a tax on wholesale borrowings does not only increase banks’ costs in aggregate, it also skews their funding decisions, leading them to turn from what otherwise would be a lower-cost source of funds — loans from capital markets — to higher-cost sources of funds, such as retail deposits.
    Just as a tax on steel, but not on the alternatives it competes with, would drive firms that use steel to shift to other materials (say aluminium) that may be costlier to produce, a tax on wholesale bor­rowings will distort the input mix the banks choose, making banking services costlier to produce.
    That means such a levy is likely to be an order of magnitude more inefficient than, say, a GST-type tax that raised similar revenues. For all its defects, the GST-type tax would have what economists call marginal effects: faced with the tax, a few consumers would decide not to purchase services they otherwise would have consumed, but the cost of supplying banking, calculated in terms of the scarce resources it absorbs, would not rise.
    In contrast, the levy will have an infra-marginal effect, making every unit of banking output costlier to produce. And the fact the levy is being imposed only on the larger banks, exempting their smaller rivals and the capital markets that provide services that compete with those of the major banks, compounds the distortion.
    To justify levying a tax on banking and on banking alone, the Treasurer has suggested that it compensates taxpayers for insuring banks’ retail deposits. But this argument, which many commentators have echoed, is hard to accept.
    It may be that banks are undercharged for the deposit guarantee, even taking account of the many regulatory burdens that come with it. If so, the government should charge a premium that reflects the risk the community bears from providing that guarantee.
    Banks then would find those deposits more expensive, and so would decrease their reliance on them, reducing taxpayers’ exposure — much as charging properly risk-reflective premiums for insuring dangerous activities such as skydiving reduces the extent to which they are undertaken.
    Seen in those terms, the levy is positively perverse. In effect, the levy will induce banks to rely to a greater, rather than lesser, extent on retail deposits, as it makes them cheaper compared to wholesale borrowing.
    Far from reducing or offsetting the social costs of deposit insurance, the tax is therefore likely to do the opposite, as banks replace wholesale borrowings with insured deposits, increasing the risk taxpayers bear. At the same time, the more intense compet­ition for retail deposits will force interest rates up.
    Ultimately, the best that can be said for this tax is that it will be popular. Why that would be the case is a puzzle: only those who believe in the tooth fairy would think that you can increase an industry’s costs without eventually increasing its prices. But the enduring attraction of bank-bashing is that it is the political equivalent of picking a dead man’s wallet — it is easy to get away with it.
    That hardly means it is praiseworthy. Indeed, those with ivy-clad memories will remember that the Liberal Party made its name by standing up for the banks when Labor proposed to nationalise them in 1947.
    The banks were certainly not loved then — on the contrary, the tight constraints they imposed on access to credit meant they were detested. And the labour movement’s assault on the “money power” didn’t hesitate to fan the flames, with the unions issuing, barely two years after the liberation of Auschwitz, a pamphlet demonising the “great chain of Jewish banking houses” as “the most powerful financial Empire the world has ever known”.
    Little wonder Robert Menzies, in a hard-fought but ultimately successful election campaign, ­denounced the attacks on the banks as “a farrago of allegations which are based on inaccuracies and which proceed from false premises”.
    Those were, of course, different times. But on the 70th anniversary of the “battle for the banks”, the Liberal Party would do well to remember its heritage. And on that score if no other, it should reconsider a tax that will do more harm than good.

  53. Oh come on

    I would argue that at pretty much no time did the electorate vote FOR fiscal responsibility, even when that’s what it largely got. What happened was that they voted out governments that stank – either of gross incompetence (Whitlam) or simply being past its use-by date (Howard). When the Abbott govt was elected, it was because the RGR ALP govt was *so* catastrophically bad. Funny kind of “budget emergency” when on the eve of the election, we all saw Abbott reassuring us that under his government there’d be no cuts to just about everything, axe the carbon tax but keep the carbon tax-related welfare benefits etc etc. Abbott was scared that, in spite of the ALP government sucking *so* badly, he still might lose if he didn’t make it abundantly clear that a vote for the coalition meant zero pain for as many people as possible – even for rusted-on ALP constituencies! And you know what? He was probably right to have that concern.

  54. Senile Old Guy

    Funny kind of “budget emergency” when on the eve of the election, we all saw Abbott reassuring us that under his government there’d be no cuts to just about everything, axe the carbon tax but keep the carbon tax-related welfare benefits etc etc.

    That was at the very end of the campaign and was a piece of last minute stupidity by Abbott.

  55. ned

    1990s recession as “the recession we had to have”

    Trevor Sykes he identified the recession as a corporate calamity

    The Bold Riders: Behind Australia’s Corporate Collapses
    Australia’s corporate collapses of the 1980s were devastating. The crashes of such former heroes as Alan Bond, John Spalvins and Christopher Skase had an impact that went beyond the stock exchanges and shook the entire banking and financial system. This text asks, “How did it all happen?,” and “Will it happen again?”. Trevor Sykes, one of Australia’s leading finance writers, analyzes the forces that drove the corporate cowboys on their giddy careers and traces the inner history of their empires.

  56. alexnoaholdmate

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    Okay. Sure. I agree.

    But it’s one thing to raise taxes to pay off debt and restore a balanced budget.

    It’s another thing entirely to raise taxes to pay for even more spending when the budget is already in deficit.

  57. Andrew

    If people are given tax increases good and hard, they may even come to associate spending with taxes.

  58. john constantine

    What impact did the borrowings of the imperialist colonial government of Kenya have on the liberated Kenya?.

    What impact did the finances of Rhodesia have on the finances of Zimbabwe?.

    What impact did the finances of Imperialist running dog Hong Kong have on handed-over-to-China Hong Kong.

    The indebtedness and locked in cascade of spending is just a weapon to overthrow the illegitimate occupying racist, misogynist colonial society that has invaded and settled Australia so that a transnational globalist culture can replace it.

    Their left can feel no difference between 1970 Rhodesia and 2017 Australia.

    Some non-leftists call for shorten to get back in , so the corruptocracy of crony kleptocrats can spend so much that the Australian people reject socialism forever.

    Their lefts plan is to get their shorten foundation into power and spend so much that the obsolete and despised tory capitalist settler culture is utterly bankrupted and wiped from the pages of history like the settler society dominos toppled before it.

    The debt of current day Zimbabwe is a cheap price to pay for it to be a eternal part of their global left.

    Tory capitalism and personal freedom will never again arise in Zimbabwe.

    The debt of Australia does not matter, when our elite become Global Elite using global capital and the peasants exist in a cashless subsistance economy.

  59. .

    Andrew
    #2385218, posted on May 20, 2017 at 12:57 pm
    If people are given tax increases good and hard, they may even come to associate spending with taxes.

    If each time the ALP and Greens lost office we saw large spending and tax cuts, along with debt rectification, they’d come to associate the ALP and Greens with misery and theft!

  60. Oh come on

    That was at the very end of the campaign and was a piece of last minute stupidity by Abbott.

    No, that was coalition policy encapsulated into a neat one-stop-shop soundbite for his opponents’ later use.

  61. Oh come on

    Have to say, I am somewhat bemused by the bizarre faith that some here are selectively attributing to a majority of the voting public, as if they couldn’t possibly be fully brought onside with whoever promises the most generous lashings of government largesse paid for on the never-never. At other times, the people here defending that majority are cynical of it (and rightly so, IMO).

    It’s pretty clear to me that Henry Ergas is not arguing for tax increases. He is simply saying we ought to live within our means, regardless of how that is done. If we refuse to countenance spending cuts (and this seems to be the case), then we need to look at measures to increase revenue BEFORE resorting to deficit spending. I do not see what is controversial about this position.

  62. Senile Old Guy

    That was at the very end of the campaign and was a piece of last minute stupidity by Abbott.

    No, that was coalition policy encapsulated into a neat one-stop-shop soundbite for his opponents’ later use.

    My memory is that this was towards the end of the campaign, most of which had featured ‘it’s a spending problem, not a revenue problem’.

    He is simply saying we ought to live within our means, regardless of how that is done.

    Then why not simply say that?

  63. yon toad

    Too late! Too late! To have brains to drop you must have brains to drop nd the Libs under this freak Turnbull have neither balls nor brains.

  64. Oh come on

    I mean, if we want to get serious about fiscal responsibility in the long term, *something* must be done about the NDIS. This alone is going to be a fucking whale of a program. In a couple of generations, half of the country will be receiving benefits from it (assuming that, in the meantime, we haven’t gone completely tits-up and are barely eking out an existence in some kind of Mad Max dystopia). Look around an average classroom today. See the skyrocketing numbers of children with various ‘diagnoses’. These are all future NDIS clients. The scale of this thing is going to get completely out of control. And who would dare propose cutting it back? What?? Why do you hate disabled people???? In ten years, that’ll be Why do you hate impaired people???? In twenty, Why do you hate vulnerable people???? Thirty, Why do you hate troubled people????

    We will never be rid of this thing and it’s going to keep growing and growing; finding more and more beneficiaries to serve. Trouble is, it’s politically untouchable because its existence has become a symbol of morality and is thus insulated from grubby matters such as having the dough to pay for it.

  65. Marcus Classis

    There’s your false assumption right there – assuming liberals politicians have brains.

    THey’d also rather live on their kneepads (and a high-protein liquid diet provided by fellating male left-wingers in parliament) than fight on their feet, and believe the word ‘principle’ has a meaning applicable only to loans.

    Be nice to have a conservative party in this country, wouldn’t it?

  66. Oh come on

    Then why not simply say that?

    Um, it’s pretty clear to me that’s what he is saying. Tax increases are not necessarily bad IF you refuse to cut spending. Tax increases ought to be necessary, mandatory, if you refuse to cut spending. Far better to tax more to cover spending than to stick it on the national credit card. That’s just wrong.

  67. We will never be rid of this thing and it’s going to keep growing and growing; finding more and more beneficiaries to serve.

    The crowning achievement of our Canberra Mandarins.
    Perhaps we should just scrap Parliament, declare Parkinson Lord High Emperor, and be done with it.

  68. Tel

    Do you want to tell me how a stock market crash causes a recession, BTW?

    Well we could look at it from an empirical point of view, there does tend to be a correlation between major market crashes and business downturn. That doesn’t prove causality but anyway causality is irrelevant in the case of a small country because whatever causes the problem is coming from overseas and the small country cannot dodge that.

    There’s also a bunch of theoretical reasons like confidence.

  69. .

    Mostly right Tel, good enough.

    There’s also a bunch of theoretical reasons like confidence.

    You’ve got to understand this is shallow analysis from commentators who don’t see the numbers. If the US market crashes the same pressure and fundamental reasons are going to flow through here. We didn’t see a rise in our lending rates in the GFC because of “confidence” etc. US commercial paper dried up as a funding source.

  70. Oh come on

    Again, the budget of a country is really not so different than the budget of a household. If a country or a household is living beyond its means, then they ought to cut back on their spending. If they won’t do this, then they need to increase their income to cover their spending. Going into debt to cover their spending is the worst option.

    So, no, increasing taxes is not necessarily a bad thing if cutting spending isn’t possible. Henry Ergas doesn’t say how we increase taxes. I’d say that the tax net needs to broaden to include a far larger percentage of the population. If we really want our FTB – even for families on $100k+ – if we really want our NDIS providing gold-plated wheelchairs, if we really want our PMG NBN, if we really want all of the things we as a nation simply can’t bear to part with, then WE HAVE TO PAY FOR IT. All of us. If we are so stupid that we cannot see that government spending on our pet programs is simply our money taken from us and returned with 10-20% creamed off the top to maintain the bureaucratic class, then so be it. Don’t soak the rich. Soak everyone. If we cannot bear to cut spending.

  71. duncanm

    Oh come on
    #2385255, posted on May 20, 2017 at 1:52 pm

    xacry!

  72. Qley

    It’s pretty clear to me that Henry Ergas is not arguing for tax increases. He is simply saying we ought to live within our means, regardless of how that is done

    Is what he seemed like he meant from the get go. If we want all these programs then tax us now, when we’re all paying 80% of our income for wonderful waiting times then the people will maybe connect the dots. When it’s run off debt the cause and effect are too far seperated and we end up repeating it over and over.

    Seems like everyone lost their minds when they saw tax increases OCO

  73. Dr Faustus

    We will never be rid of this thing [NDIS] and it’s going to keep growing and growing; finding more and more beneficiaries to serve. Trouble is, it’s politically untouchable because its existence has become a symbol of morality and is thus insulated from grubby matters such as having the dough to pay for it.

    NDIS is not nearly rolled out yet, but it has already jumped the fence:

    More than 50 lawnmowing and garden-maintenance companies have signed up as providers to the $22 billion National Disabil­ity Insurance Scheme, to service clients including the parents of children with autism.

    Some contractors said they ­believed the taxpayer-funded scheme, which funds “reasonable and necessary support”, was paying for services that were too widely available.

    “I feel for these parents; they have difficult lives,” said a lawnmowing contractor who asked not to be identified for fear of losing work through the NDIS.

    The Australian – link may, or may not work.

    Shortly no politician will be able to express anything but tears of the utmost joy and delight at the fruits of Ms Gillard’s wonderful scheme. There will be too many voters feeding off this trough for doubleplus-ungood thought to be safe.

  74. There will be too many voters feeding off this trough
    for doubleplus-ungood thought to be safe.

    Rellie saw the writing on the wall and has just finished a double CERT IV – Aged/Frail Aged Care, and Disabled Home Care, or some such. She is now under consideration for employment by three different local companies. Some interesting points that have come to light so far:

    * – All three companies are offshoots of Therese Rein-style “Job Service Providers”.
    * – Two EBA’s to choose from – one non-union and generous, one union and much more generous.
    * – Both include generous pay plus penalties, plus a car, petrol card, smartphone and laptop after three months probation.

  75. Dr Fred Lenin

    Ruddbull should do a real reshuffle sack the entire cabinet including himself ,force them all. Including himself ,to resign from parliament ,hold by elections for the voters to replace them with real Liberal members who are not socialists , that might put some people with a brain in power . Then start to drain filthy corrupt green leftism from the stinking canberra swamp by defunding all leftists, starting with the crazy senate . Cut of senators to pne per million population. They are only state representatives to review arent they ? Then cut the reps to one third of present number .halve their wages ,cut their expenses to the bone ,make them pay their own super and pensions ,and limit them to one term in a lifetime .that will be a start of a long rehab programme to undo rotten green u.n.communism in Australia .

  76. RobK

    WA had a pretty close approximation of the NDIS until the charter changed to include mental illnesses. Someone mentioned a can of worms.

  77. cynical1

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    What a fucking dolt.

    Increasing taxes and your borrowing capacity?

    That’s like getting another credit card and using to pay off the one you have loaded up.

    “Paying for it” you ain’t.

    You will later…

  78. Are we “genuinely unwilling to curb public spending?” Yes, the electorate seems to be unable to stomach any such cuts.

    That is exactly right, OCO.
    But there’s a lot of people here who want to rant without reading what Henry Ergas wrote.
    It’s a luxury we cannot afford anymore.

  79. Are we “genuinely unwilling to curb public spending?”
    Yes, the electorate seems to be unable to stomach any such cuts.

    That is exactly right, OCO.

    Since nobody in the past decade has ever made an even remotely politically intelligent attempt to actually cut government spending, the above statements are pure conjecture.

  80. Rabz

    increasing taxes is not necessarily bad

    It is not only always bad, it is inexcusable, under any circumstances. Yabbott and Schlockey learned this the hard way – by losing their jerbs.

    Very poor, Henry.

  81. Oh come on

    No, there have been attempts to cut government spending. But the fact is that it just doesn’t fly politically. How do we know this? Because when some government proposes cuts to specific areas or budgets for cuts to specific areas (as Abbott did), well, we all saw what happened. The gradual drip drip drip of MP support for their Cabinet’s budget ebbed away. Why? Their electoral offices were getting flooded with concerned voters not willing to experience a bit of fiscal austerity. Things have changed since Howard brought his first budget back into the black after he was elected. Imagine someone doing something like that now. Ha! Impossible! We have become so fat and content over the last couple of decades that we simply won’t countenance anything that radical. We don’t see it as necessary. Back in 1996 when things weren’t all that rosy economically – ok, we’d gone through the worst but we’d had the jobless recovery and there was a wider realisation that something simply had to change. Howard was elected in this context – in the shadow of a recent, painful recession. As meaningless as political mandates are in Australian politics, Howard had about as close as it gets to a real mandate to perform the radical fiscal surgery that his government did.

    Governments are elected these days to keep on ladling the gravy. That might change, of course, if we go through a downturn similar to what we went through in the late 80s-early 90s – perhaps radical fiscal cuts will again become possible. BUT there is absolutely no question in my mind that right now NO party can win government on a platform of genuine fiscal responsibility. I mean, you look at Turnbull. He mouths the standard coalition fiscal conservative platitudes, it’s bullshit but he has to say it, and Bill Shorten is a shoo-in to win the next election by promising to be fiscally profligate! Nup, sorry, can’t see it, MV.

  82. Tel

    The gradual drip drip drip of MP support for their Cabinet’s budget ebbed away. Why? Their electoral offices were getting flooded with concerned voters not willing to experience a bit of fiscal austerity.

    No that’s not what happened, they just got some bad Newspoll numbers which scared the shit out of the weak kneed bastards.

  83. H B Bear

    If each time the ALP and Greens lost office we saw large spending and tax cuts, along with debt rectification, they’d come to associate the ALP and Greens with misery and theft!

    Tax cuts are the only unique selling proposition the Lieborals have. Without them you might as well vote for the Liars as everyone now realises.

    The early 90s recession was largely caused by international credit markets pulling the plug on Australia. The dollar was at 50 cents and heading south. Australian collapses are always external because the place has always survived on overseas capital since people arrived here in sailing boats.

  84. Nup, sorry, can’t see it, MV.

    Nice rant, OCO, but at no point did you address the issue of governments failing to offer “politically intelligent” means to cut expenditure. As I pointed out earlier, Abbott’s first attempt was simply to raise the retiring age to 70. Why not scrap Health and Education instead, and return their functions to the States? Far greater savings, far less people pissed off, and virtually no electoral resistance. Couple it to a promised tax cut based on the savings, and you have an election winner.

    What about the Medicare “co-payment” fiasco? For a start, nobody quite knew what Abbott was talking about, second, it represented no “savings” at all, since the money was going to be used to finance an unnecessary, white elephant “medical research facility”. And last, it was doomed to failure from the start, since the whole point was to introduce a price component to stop people over visiting doctors. Since the principal offenders are all on health benefit cards and were exempted, it was a pointless exercise.

    How about instead, Abbott had explained the problem – over-use of doctor’s visits, and declared henceforth, except in cases of ongoing chronic illness, the Medicare rebate would only be paid for up to six GP visits a year. No exceptions for health care card holders etc. Since most people don’t go the doctor’s six times a year, there would have been minimal objections. If Abbott had explained that the alternative was to raise the Medicare levy 0.5% – as has happened, we’d have another election winner.

    I could spend the next four hours citing examples, OCO, but I won’t. Suffice to say NO government wants to reduce expenditure, because the expenditure, and the taxes to pay for it, is the very base of their power. Health and Education, for instance, justify ever increasing taxes, ever increasing control over the States, and two senior ministries in the Cabinet. What government is going to willingly give all that up?

    So stop blaming “greedy taxpayers”, and direct your anger where it belongs.

  85. Oh come on

    No that’s not what happened, they just got some bad Newspoll numbers which scared the shit out of the weak kneed bastards.

    Whatever – either way, no one’s going to try it because the electorate won’t stand for it. Simple as that. MV has a rather naive belief that a party offering a credible plan of economic austerity coupled with tax relief – which will disproportionately favour the wealthy and businesses, because the wealthy and businesses pay nearly all the tax – could be a recipe for electoral success. No, it couldn’t be. That party would get trounced. In fact, there’s precedent for this – Hewson’s Fightback!. Long before Hewson became the ABC’s pathetic, embarrassing softcock house conservative, he was an economic reformist in parliament. Fightback! was a comprehensive set of policies that, had they been adopted, would have put us in a much better position than we’re in now. But there was the well-known and well-executed ALP scare campaign, and Keating won the unwinnable election. Hell, now that I think of it, Shorten came within a seat of winning the unwinnable election in large part due to Mediscare, which was based on absolutely bugger all!

    Sorry, MV. I do agree that our political class is craven and gutless. However, I’m afraid that a majority of voters today are living in a dreamland and want the impossible – remember that poll that was on the front page of the Oz a few weeks ago? What was it again? A majority expected the budget to be balanced, but a majority also didn’t support tax increases or spending cuts. Sorry, but this is a facepalm electorate that clearly needs to suffer a bit (or a lot) before it can brace itself to elect a government willing to make tough choices.

    Oh, MV. Did you see my post re. obtaining psylocibin for your son’s cluster headaches on the earlier OT?

  86. Oh, MV. Did you see my post re. obtaining psylocibin for your son’s cluster headaches on the earlier OT?

    Yes, I did, thanks OCO. Unfortunately, by the time I read it, the threads had moved on, so there wasn’t much point in replying. Supply is not usually a problem, it is a weed up in the hills of the Sunshine Coast Hinterland. However, this February-March were unseasonably dry and dusty, then it turned unusually cold and wet. Neither conditions are conducive.

    Fortunately it has now been warmer and wet, and the supply issue has been addressed.

    On the matter of politicians, election promises, and the electorate, I’m afraid we appear destined to disagree. I am happy to leave it at that – two gentlemen agreeing to disagree. There seems no point in boring other Cats with an endless, unwinnable, debate on the matter.

    And who knows, you just might be right.
    Since it will never be put to the test, there’s no way of knowing.

  87. Oh come on

    Fortunately it has now been warmer and wet, and the supply issue has been addressed.

    Good to hear. So is it the “miracle cure” for your son as well? This bloke I worked with who went to Bali periodically to get them swore by them, and it seems that many who suffer cluster headaches can stave them off indefinitely by consuming a dose of psylocibin once prior to the period they’re expecting the headaches. The guy I knew went to Bali for his dose once a year. Unnecessary, really, because plenty of these kinds of mushrooms grow naturally in the forests south of Perth, he certainly wasn’t the type to be foraging for mushrooms whilst avoiding the regular police patrols and stings that are set up in such areas during mushroom season. I imagine the War On Drugs has made proper medical trials involving an illicit substance such as psylocibin difficult or even impossible, but there seems to be an awful lot of anecdotal evidence that supports the efficacy of the treatment.

  88. Oh come on

    but he certainly wasn’t…

  89. Oh come on

    OK, going off topic here – The War On Drugs has so many casualties – many of whom have absolutely nothing to do with the illegal drug trade. Take the opioid painkiller diamorphine – legal in the UK but not in the US or Australia – which apparently is one of the very few painkillers that can treat pain related to bone cancer, usually in a palliative care scenario, so the patient is a goner anyway. Just makes their way out a little easier for them. Thing is, diamorphine’s more commonly known as heroin. So even though it can be legally prescribed for certain conditions in the UK, the US uses the various means at its disposal to lean heavily on the drug’s legitimate pharmaceutical supply in the UK, so there are frequent shortages there. Frankly, if it were one of my loved ones dying in agony of bone cancer and there wasn’t enough legal supply of a particular substance to ease their pain, I’d turn without hesitation to the market for an alternative source.

  90. Leo G

    Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.

    Does Henry believe it’s a good debt which increases taxes or a good tax which increases public spending?

  91. So is it the “miracle cure” for your son as well?

    “Miracle cure” doesn’t even come close, OCO. Less than a quarter of a cap, far too little a dose to ever get a high from, and he now has another twelve months immunity from the pain. Since it only seems to come every third year, he’s right now until 2020. On a quarter of a cap of a small mushroom that grows anywhere that’s reasonably warm and moist and has cow pats.

    If it were in my power I would take the medicos and politicians responsible for banning this simple cure, and scrape their eyeballs out of their skulls with a blunt fork. Then piss in the empty sockets.

  92. DrBeauGan

    What’s wrong with passing the burden on to my children and grandchildren? Sounds good to me.

    They can do the same when they are asked to cough up.

  93. Jimf

    NDIS- the very concept that a government program could even consider the notion that people with physical disabilities should have funding for lawn mowing tells me everything I need to know .
    Where , oh where is the sense of balance here between genuine care and systemic rorting? This “fairness” program is a disaster of epic proportions waiting to happen . We are the dumbest , most complacent nation on earth .
    If your cousin has a debilitating health problem for fucks sake mow his lawn for him .

  94. Jimf

    The fat arsed big nose Gillard may have been a short lived entity but her legacy will live on. None of the current crop of liberals has the intellectual horsepower or balls to fight this folly of the NDIS and why it should be avoided . Abbott is complicit too.
    They are worse than The ALP who at least declare their position. The wet liberals are traitors to our country – not even principled enough to stand by the party’s ideals . And the Nats under the spayed Joyce no better . I hope they get butt savaged in 2019.

  95. OCO;

    Take the opioid painkiller diamorphine – legal in the UK but not in the US or Australia – which apparently is one of the very few painkillers that can treat pain related to bone cancer, usually in a palliative care scenario, so the patient is a goner anyway.

    Have you heard of Fentanyl in relation to patient controlled analgesia?
    I vaguely remember it as a top up in conjunction with Maxolon/Morphine/Midazolam delivered subcutaneously.

  96. Oh come on

    Fentanyl is a relatively new medication, is it not, Winston? I first heard about it not so long ago, well after I read of the difficulties of legally obtaining diamorphine in the UK for use in palliative care, so Fentanyl may well have superseded a classical opioid like diamorphine. I know it’s extremely potent and believed it was commonly administered via a patch…? Read something a few years ago about junkies doing something to the patch to extract the active ingredient from it and injecting or freebasing the extraction or whatever – and since the effective dose is so small and the means of extraction so crude that it was unpredictable how much of the active ingredient they’d obtain from the extraction process, and it wasn’t uncommon for them to end up with a lethal dose. Result – lots of Fentanyl-related deaths.

    This being the case, I guess it’ll probably be banned soon too.

  97. .

    The war on drugs is a joke. Everyone I know that smokes, drinks or smokes weed in moderation are simply happier people.

    Marijuana is a miracle drug. For a long time, I supported ending the war on drugs but thought that was a hippy load of nonsense. It isn’t.

    If people want to drink Saffaras tea, smoke a little weed or ???? salvia, we should really leave them alone.

    It is patently obvious that cracking down always leads to more extreme drug use. Take away simple drugs and people go for meth, bath salts and so on.

    I read Turdball’s medicinal marijuana legislation. What a joke. 10-year penalties for cultivation without a licence. Treating weed like another sacred revenue cow like the excise legislation regarding tobacco. How many billions a year more were they going to waste from this so far untapped revenue stream?

    Then we have to look at the benefits of tobacco – the government simply lies. We all know the risks, we don’t need to be lied to.

    It is immoral, cruel, barbaric and superstitious to deny treatment to people on the basis that “other people” will lose their minds and microwave babies if they catch a whiff of bong smoke.

  98. .

    This being the case, I guess it’ll probably be banned soon too.

    Well, they’ve cracked down on codeine. Treating patients is less important than moral posturing.

    What an evil, barbarous “medical” “system” we have.

  99. ned

    Your comment is awaiting moderation.
    before commenting on anything we should read whole article

    “Let’s be clear: increasing taxes is not necessarily bad. After all, if we are genuinely unwilling to curb public spending, then we ought to pay for it rather than passing the bill to future generations.
    But if taxes must be raised, let it be done sensibly. Unfortunately, the proposed levy on banks does not meet that test.”

    “Ultimately, the best that can be said for this tax is that it will be popular. Why that would be the case is a puzzle: only those who believe in the tooth fairy would think that you can increase an industry’s costs without eventually increasing its prices.”

    “Liberal Party made its name by standing up for the banks when Labor proposed to nationalise them in 1947.”

    “But on the 70th anniversary of the “battle for the banks”, the Liberal Party would do well to remember its heritage. And on that score if no other, it should reconsider a tax that will do more harm than good.”

  100. ned

    ned
    Your comment is awaiting moderation.
    #2385186, posted on May 20, 2017 at 12:29 pm

    probably because I copy/past whole article to be read ….

  101. ned

    I am not religious person but tithe is my preferred tax.

  102. OCO;
    I vaguely remember using Fentanyl as an IV medication in the late 80s, but only in post op/recovery.
    Then it seemed to fade for a while, then came back in late 90s as a patch.
    I had it after a cholecystectomy, and I have to admit it was the best pain relief I ever had.

  103. Dr Fred Lenin

    The bank tax will only be popular with peopke who do nothave bank accounts because that is where the tax money .will come from .as for ruddbulls national green laboral comrades forbidding banks from passing this imposition on ,Right ! Thats gonna work Innit ?

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