Treatise on Swanenomics

The latest contribution from the school of (Wayne) Swanenomics was delivered by the Labor Party “economics” team yesterday:

Labor Treasury spokesman Chris Bowen said there was no scope in the budget for company or personal income tax cuts.

“When the budget returns to balance, you can look at tax relief,” Mr Bowen said.

From the same people who brought you the logic of we need to increase debt to reduce debt comes idea that we need to increase taxes to reduce taxes.

Let us remember the Labor Party “saves” plans to return the budget to surplus:

  • Permanent deficit levy tax
  • Increased Medicare levy tax
  • Negative gearing reductions
  • Capital gains tax increase.

Nowhere in sight is a proposal to reduce government or expenditure.

Sparty McSpartyface awaits the Swanenomics health policy proposal to lose weight you have to eat more.

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

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56 Responses to Treatise on Swanenomics

  1. Senile Old Guy

    Nowhere in sight is a proposal to reduce government or expenditure.

    To be fair, their is bipartisan agreement on this, with the LNP proposals increasing debt above levels even the ALP would have issues with.

  2. H B Bear

    Wayne Goosesteen is an elder statesman of the modern Liars Party who, along with KRuddy, saved Australia from the GFC. He also taught Boy Wonder everything he knows about economics. I will not allow him to be mocked in this fashion.

    He will also be a fine adjunct professor at the Nambour TAFE as soon as they recognise his genius and remove him from the obscurity of the backbench.

  3. Rafe Champion

    Thank you John Maynard K.

  4. Rafe Champion

    Someone tell him about Say’s Law.

  5. Up The Workers!

    One good outcome of the SSM vote, is the fact that it should double the accuracy of all budget and economic forecasting by future successors of “World’s Best Treasurer”, Wayne Swan, the legendary A.L.P. arithmetic expert and genius numbers man.

    Although clearly the most mathematically gifted member of the A.L.P., Swan’s only drawback was that even with all his clothes removed and digits extended, he could never count up beyond 21.

    Now, thanks to SSM, the next Labor(sic) Treasurer, with assistance from his naked husband, might possibly be able to theoretically reach all the way to 42 (i.e. the Meaning of Life, the Universe and Everything) though strict numerical accuracy at such astronomically high numbers is not absolutely guaranteed.

    Now, if only we can teach them the subtle distinction between a S.U.R.P.L.U.S. and a massive D.E.F.I.C.I.T.

    A.L.P. = Always Lax Mathematically.

  6. Rabz

    Negative gearing reductions
    Capital gains tax increase

    I can’t wait for the labor and greenfilth “apology” to renters and would be homebuyers when these two visionary “saves” do nothing to make housing more affordable.

    Of course, there’s no need for labor to mention death duties at this point, wouldn’t want to frighten any gullible idiots.

  7. v_maet

    I can’t wait for the labor and greenfilth “apology” to renters and would be homebuyers when these two visionary “saves” do nothing to make housing more affordable.

    Sadly they won’t be revoked when they fail to reduce housing prices and will be a permanent fixture in the economy.

  8. Dr Faustus

    Unlike Turnbull’s pitiful attempt to pump his own NewsPoll tyres by promising to try really, really hard to reduce tax and the deficit in the May Budget, Bowen is at least honest.

    Given the ALP has no intention to cut public spending – and a policy platform which guarantees vast new demands on the public purse (hello full-tote NDIS funding, hello 15,000 additional refugees, hello whatever the Greens exact for Senate support) and no improvement to productivity (hello windmills, hello AWU/CFMEU payback) – there is absolutely no ability to reduce the tax take.

    If we believe that Bowen actually has an ambition to return a surplus (yes, I know), he will need to find an additional annual $40 – $60 billion in new revenue. While the productive economy slumps.

    Given the demographics of the vote herd, this can only come from distortions to the corporate tax system to tap into Amazon/Apple/Google (which will pass back to consumers), ‘fairness’ taxes on the ‘very wealthy who can afford to pay more‘, levies on captive private capital (superannuation and real estate), and the dead.

    You can guess the rest.

  9. jrm

    Completely off topic, but has anyone else noticed this?

    Bill Shorten
    March 2015
    August 2016
    October 2017

  10. .

    “When the budget returns to balance, you can look at tax relief,” Mr Bowen said.

    That could be two generations away.

    My advice: emigrate.

  11. Kneel

    “…when these two visionary “saves” do nothing to make housing more affordable. ”

    That would clearly be because the measures didn’t go far enough. “resources tax” doesn’t provide more income? Then it obviously needs to be increased. Duh. I’m waiting for the “Greens” to suggest a growth tax to protect the environment from excess consumption.

    Maybe if we tax “stupid”…. that at least certainly appears to be in unlimited supply. The only real downside is that it would require the support of those with the greatest amount of it. Oh well. Just wait long enough, they’ll be too stupid to know they are the main target anyway.

  12. Rabz

    If we believe that Bowen actually has an ambition to return a surplus (yes, I know), he will need to find an additional annual $40 – $60 billion in new revenue. While the productive economy slumps.

    LOL.

  13. Robbo

    It’s the Labor Party mate. They aren’ t there to reduce tax. They are the undisputed big taxation champions, always have been and always will be. Anyone who votes for them must have shit for brains.

  14. Pingback: Australians want bold government | Catallaxy Files

  15. I am Sparty McSpartyface

    It’s the Labor Party mate. They aren’ t there to reduce tax. They are the undisputed big taxation champions, always have been and always will be. Anyone who votes for them must have shit for brains.

    Robbo. The most recent government to increase income taxes was the Liberal National government – deficit levy, medicare levy. They can call it what they like. They are still tax increases. Throw in the bank levy, ASIC/APRA/Austrac cost recovery, and everywhere else.

  16. Charlie

    I see no mention of ending foreign ownership or cutting immigration which would be the two most effective ways to cut house prices.

  17. Neil

    It shows how great Howard/Costello were. Within 12 months of getting into office they had turned the budget into surplus. This was after years of humungous deficits under Keating with unchanged economic conditions and unemployment at 8%. Way higher than it is now.

    Unless some miracle occurs we will be in budget deficit and hence increasing govt debt forever

  18. Spring is near

    Our Government, who art in Canberra

    Please refrain from Deficicating on my economy.

    Let he/she/non binary who has surplused first, cast the first stone.

    Thank you for he who has delayed his seating, hollowed be his character, remain unseated forever and ever

    Amen

  19. .

    It shows how great Howard/Costello were.

    They were barely competent.

  20. Neil

    Barely competent? They paid off the $96B of debt they were handed which was 18% of GDP at the time, started a $80B Future Fund which is now worth much more and left $40B in the kitty. They saved > $200B in just 11 years.

    They also stopped the PS Defined Benefit Scheme and started funding the new Accumulation Scheme so Super is now on the books instead of being funded from general revenue

  21. .

    Barely competent. Most Australians never go bankrupt. They’re no more special than Fred Nurk who paid off a mortgage.

  22. Neil

    Really? Their first budget resulted in a Parliament House riot because of spending cuts and industrial relations policies. Very few people would have done what Howard did. Certainly not you. There should have been massive cuts in the 2014 budget but Australia does not like spending cuts.

    We will not see a better govt than Howard/Costello for a long time if ever.

    We have been in budget deficit since 2008 with economic conditions better than they were in 1996. We will be in budget deficit for a long time.

  23. .

    Their first budget resulted in a Parliament House riot because of spending cuts and industrial relations policies

    Because the unions act criminally and the police stand by.

    Very few people would have done what Howard did. Certainly not you.

    Everyone on this blog (even you!) could have done what Costello and Howard did. Most of us would have been turfed by the party machine in the Libs for being too right wing.

    We will not see a better govt than Howard/Costello for a long time if ever.

    Then you should emigrate. I am considering this option.

  24. Neil

    Everyone on this blog (even you!) could have done what Costello and Howard did.

    Disagree. Very few people who post on this blog would have the courage to cut govt spending. Same goes for waterfront reform that Howard did.

    A 5-10% cut in govt spending would see the budget in surplus but nobody wants spending cuts

  25. .

    Very few people who post on this blog would have the courage to cut govt spending

    Wrong.

    Same goes for waterfront reform that Howard did.

    Wrong.

    A 5-10% cut in govt spending would see the budget in surplus but nobody wants spending cuts

    Apparently besides John Howard and Peter Costello, who through sheer will lead the electorate by the nose.

    Give it a rest Neil. Your narrative is starting to sound like propaganda for Il Duce.

  26. Neil

    I am not wrong. People often say one thing and then do something else. Getting the budget back into surplus, waterfront reform, industrial relations reform, sending troops to East Timor are things most people would not have the courage to do.

    But you are 2 stupid to see that.

    How much budget cutting and industrial relations reform has the Coalition govt done since 2013?

  27. .

    You are wrong Neil. Get this through your head.

    The people who post here are to the right of John Howard. You are too naive and ignorant to realise this and have the shocking brain dead audacity to suggest none of us would have the backbone to be a squishy centre rightie.

    We would not make it past pre-selection, the LNP machine would ensure that.

    Go and read the policies of the LDP and ACP.

  28. Neil

    and have the shocking brain dead audacity to suggest none of us would have the backbone to be a squishy centre rightie.

    Lots of people say things but do different things when the pressure is on.. Who knows what U would do when in govt.

    We will not see a better govt than Howard/Costello for a long time, if ever

  29. .

    John Howard had a double majority in Parliament.

    He did almost nothing of note with that except for WorkChoices.

  30. Neil

    John Howard had a double majority in Parliament.

    Didn’t have control of the Senate until 2004. Needed Meg Lees help to get the GST through parliament.

    Nothing of note? I assume U could do better? He did start APRA and the Future Fund which now contains $120B

  31. .

    He did start APRA and the Future Fund which now contains $120B

    I consider neither of those achievements. I consider them failures or errors.

    Didn’t have control of the Senate until 2004.

    …and the lowest he could cut the highest income tax rate to was 45% plus the Medicare levy (and MLS).

    You might be right that is the best we may get for some time. It was nothing special and maybe even in a democracy, it was what we all deserved.

  32. Neil

    I consider neither of those achievements. I consider them failures or errors.

    Hawke/Keating deregulated the banking industry leading to the collapse of Pyramid Building Society, State banks of Vic and SA. Without APRA our banks may have gone down the subprime route like American banks. The Future Fund pays for Public Servants Super which before Costello was unfunded and paid out of general revenue

    Howard/Costello took govt debt from 19% of GDP in 1996 and exploding to zero by 2006 and less than zero by 2007 and unemployment went from 8% to 4%

    We will not see a better govt for a long time if ever

  33. .

    Hawke/Keating deregulated the banking industry leading to the collapse of Pyramid Building Society, State banks of Vic and SA.

    No. Their State governments mismanaged credit. If deregulation was truly taken on we would have seen State banks sold off and investment and credit by government ended.

    Without APRA our banks may have gone down the subprime route like American banks.

    This is a load of garbage. Australian banks were saved by the interest rate being lowered by the RBA; if they were in peril at all. Several of our banks bought out distressed lenders. We had a healthy banking system because it does not have the structural problems like the US market (FHA PMI, no recourse mortgages and GSE issues).

    Do you understand that APRA merely merged or was divested from other agencies like the RBA, AFIC and the ISC?

    The Future Fund pays for Public Servants Super which before Costello was unfunded and paid out of general revenue

    So what? Do you understand Ricardian equivalence? It doesn’t matter if we pay taxes now or later, the point is that we have to pay. We’re no better with the money in there or if it was given back to taxpayers who would pay tax on a larger capital base. There is no constitutional guarantee to stop this being spent whenever they feel like it. Either you pay now and lose interest, or pay later and pay interest.

    It doesn’t matter. If you want to cut the benefits scheme, you cut the APS.

    Howard/Costello took govt debt from 19% of GDP in 1996 and exploding to zero by 2006 and less than zero by 2007 and unemployment went from 8% to 4%

    They soaked the taxpayer in doing so. Paying off the debt isn’t a great achievement. It is merely a bare minimum of competency.

    We will not see a better govt for a long time if ever

    Unfortunately, you may be correct. The best we deserve (as a democratic country) is bare minimum competency.

  34. Neil

    We had a healthy banking system because it does not have the structural problems like the US marke

    Is not that what i said. Without APRA our banks would have been giving subprime loans

    They soaked the taxpayer in doing so

    I thought Howard/Costello gave the biggest tax relief in Australian history?

    Paying off the debt isn’t a great achievement.

    Why not? Name me the govts in Australia either State or Federal who have paid off any debt?

  35. .

    Is not that what i said. Without APRA our banks would have been giving subprime loans

    No Neil. You need to look into this more. They were giving out subprime loans. Do you know what “subprime” means? They still do. It is the toxic subprime that matters.

    In America they were FORCED to give out NINJA loans, under the HUD/FHA PMI and the combination of the CRA rules and the GSEs then buying out and subsidising the CRA loans, underwritten by the FHA’s PMI.

    Our banks were not giving out NINJA loans because of self-interest. They may be banned from making loans that don’t keep their capital adequacy ratio above a baseline, but banks are levered about 8-20 times. You only need a small number of delinquencies and the whole firm is in danger of insolvency and illiquidity.

    I thought Howard/Costello gave the biggest tax relief in Australian history?

    Hawke and Keating dropped the highest marginal tax rate down from 60% down to 47%. They cut corporate taxes from 49% to 33%.

    Paying off debt isn’t a great achievement. Most Australian adults can do this.

  36. Neil

    It is the toxic subprime that matters.

    I thought APRA stopped that. Without APRA our banks would have been similar to American banks

    Paying off debt isn’t a great achievement. Most Australian adults can do this.

    Other than Howard/Costello name me the other govts in this country who have done that? I think Kennett did it in Victoria and the current Liberal govt in NSW is doing it. Bjelke Peterson did it i think. Other than that name me govts who have paid off debt?

    And most Australian adults are getting into debt

  37. .

    I thought APRA stopped that.

    No.

    Without APRA our banks would have been similar to American banks

    No.

    Other than Howard/Costello name me the other govts in this country who have done that? I think Kennett did it in Victoria and the current Liberal govt in NSW is doing it. Bjelke Peterson did it i think. Other than that name me govts who have paid off debt?

    I don’t know. I expect it as a bare minimum of competency.

    And most Australian adults are getting into debt

    Yet they pay it off.

  38. Neil

    I don’t know. I expect it as a bare minimum of competency.

    As far as i know in my lifetime it was Howard/Costello, Kennett, Bjelke-Peterson, current NSW Coalition govt

    Name me any Labor govt who has paid off any debt? Most Labor govts trash the budget

  39. .

    Yes Neil, they’re absolutely terrible.

  40. Neil

    Yes Neil, they’re absolutely terrible.

    Queensland now has $80B of debt. This happened during the biggest mining boom in history under Beattie/Bligh. The boom happened in QLD and WA mainly

    Howard/Costello is the best we will get for a long time

  41. .

    Howard/Costello is the best we will get for a long time

    I refuse to be grateful about such a shitty situation.

  42. Neil

    I refuse to be grateful about such a shitty situation.

    When Fraser lost govt in the early 1980’s govt debt was 6% of GDP. By 1996 it had tripled to 18% of GDP and exploding. If not for Howard/Costello it would have doubled/tripled by 2008 when the GFC happened and we would have been at debt of 40-50% of GDP which we are now heading for

    We have a lot to be thankful for what Howard/Costello did

  43. .

    No, we do not.

    Bare minimum competency.

  44. Neil

    Bare minimum competency.

    If you are right we are doomed. Howard/Costello is the best we have had for a long time and never to be repeated

    And you are wrong. Nobody but H/C could have taken govt debt from 18% of GDP in 1996 to zero by 2006 and less than zero by 2007

  45. .

    Nobody! Bullshit. They barely cut anything.

  46. Neil

    Howard cut lots. It created a Parliament House riot

    https://www.youtube.com/watch?v=jW0yxPbZq40

    Abbott should have done the same

  47. .

    They barely cut anything. They even had a deficit one year.

  48. Neil

    One deficit out of what? 12 budgets? You are insane man.

    U should resign from your job and go into Parliament and show us how it is done.

    You are a fool who would destroy everything you would touch

  49. .

    Hopefully we get Cory Bernadi in government, and he destroys quite a lot, with the support of the LDP, PHON, SFF and CDP.

  50. Neil

    They even had a deficit one year.

    U R Insane. We have been in humungous deficit since 2008 and U mention one small deficit under howard out of 12

    Hate leads to strange comments

    We will not have a better govt than Howard/Costello ever again

  51. .

    John Howard having a deficit one year shows that they cut stuff all spending.

    I’m not insane mate. You said you’d kill yourself if Australia had lax gun laws.

  52. Neil

    John Howard having a deficit one year shows that they cut stuff all spending.

    U R insane. One small deficit out of 12 budgets.

    Your comments show what hate can do

    You said you’d kill yourself if Australia had lax gun laws

    I said i would rather be dead than live in a country which allows people to carry a bazooka in their suitcase.

  53. .

    I said i would rather be dead than live in a country which allows people to carry a bazooka in their suitcase.

    Yes, that was hysterical.

    Your comments show what hate can do

    No. Stop being dumb.

    Menzies had total State and Federal spending as a proportion of GDP around or under 20% and finances under control as well. In 1963 IIRC it was 19%.

    We had Commonwealth scholarships to university, a very large military and the beginning of Commonwealth funding for schools.

    An economically wet conservative government ought to have this kind of competent administration as a goal.

    Dries should aim higher, libertarians more so.

  54. Siltstone

    “the perfect is the enemy of the good”
    I think observers of the Dot vs Neil stoush will understand

  55. .

    Menzies wasn’t perfect, but he should be the benchmark. Not John Howard.

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