English for Politicians

English is a fascinating language.  It has changed and evolved over time.  For example, Spartacus junior frequently comes home from school and say that he “versed” so and so and that his team is “versing” them and thum (you like that one?  creation of thum).

But while evolution is one thing, corruption is another.  And the English language seems to have been corrupted in the last 10 years for the purpose of confusion and obfuscation.

It all seems to have started with the World’s Greatest Treasurer, Wayne Swan and Australia’s best bank Chairman, Ken Henry.

So in the interests of doing his bit for public finance discourse, Spartacus would like to note the following:

  • A tax cut is not an expenditure.
  • A tax increase in not a saving.
  • Multiple tax increases are not tax reform.
  • Tax cuts do not need to be funded, expenditure increases do.
  • Recurrent expenditure is not investment.
  • The absence of a budget increase is not a budget cut.

And whilst it may be like a Tasmanian tiger, with lots of sightings but none confirmed, a surplus is when you spend less than you collect/earn.

Spartacus invites Cats to add to this list.  Perhaps we can send it to Treasury.

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

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48 Responses to English for Politicians

  1. Spring is coming

    A budget is something realistic that you set to achieve and regularly monitor and review
    It’s not set and forget.

  2. Tel

    There is no such thing as “off balance sheet”.

  3. Tim Neilson

    There is no such thing as a “tax concession”. Permitting people to keep their own money is never a “concession”.

  4. Rafe

    See George Orwell Politics and the English Language.
    Revisit every 3 to 5 years.

  5. David Brewer

    Re Greg Jericho’s article here:

    Handouts and subsidies are not “services”.
    Shifting thresholds or abolishing an intermediate step in the tax scale is not a “move to a flat tax rate”.
    The “tax wedge” includes employer costs and is therefore not a measure of income tax. (It also excludes compulsory super so gives a false comparison of Australia with other countries in respect of compulsory deductions from employees’ wages.)
    Disincentives to earn more come not from average tax rates, but from marginal tax rates.

  6. Fred

    When the ABC’s budget is not indexed to inflation they complain about a spending cut.

    We never hear the ABC complain that tax brackets aren’t indexed.

  7. manalive

    That’s a comprehensive list of big-government newspeak, language corrupting thought.
    The CC™ industrial complex has been practically built on the corruption of language and therefore thought.
    One example that is related to tax policy is the redefinition of a legitimate tax deduction, in the coal industry for instance, as a subsidy i.e. “a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low “ (Oxford), comparable with the genuine subsidies to wind and solar.

  8. JohnA

    The ABC is NOT an (essential or any other kind of) service.

  9. None

    Governments can not create jobs

  10. Econocrat

    There is no “tampon tax.”
    The term “negative gearing” does not appear in the Tax Act anywhere.
    Companies do not pay income tax, they pay tax on profits, if they have any.
    There is no capital gains tax discount; there is an adjustment to convert nominal capital gains to real capital gains.
    Compulsory superannuation contributions are effectively another form of taxation.
    The Australia Institute is not an educational charity entitled to being tax exempt, it is a left wing propaganda outfit.

  11. You cannot have negative growth !!!!

  12. John

    There is one glaring, critical fault with the format of the budget papers.

    Quality information requires the separation of direct and indirect costs. The most critical problem with government expenditure is money spent on unproductive bureaucracy, as well as expenditure on all the backroom people controlling and impeding government front-line services and the endless controllers of the controllers of the controllers. In addition to all the extravagantly paid informational gatekeepers and political hangers-on that provide dubious value other than surrounding ministers like ornaments of power.

    As an information professional, it is imperative for me to be able to distinguish (at-a-glance) between the amount of direct wages and oncosts of those people necessary and working at the front-line interacting with the end users of government services separately reported from that of all other (indirect/supervisory/consultancy/policy formation?) wages and oncosts of those supporting the front-line. If the frontline is not interacting with the end user. then their labour is indirect.

    I would consider such change to government accounting critical because I strongly suspect indirect costs to be at least as significant in amount as is unproductive welfare and qango expenditure, but the former is nebulously lost in government accounts, whilst the magnitude of the latter can be explicitly calculated.

    Thus, for example, when politicians say that they are increasing the health and education budgets, the user would be able to instantly determine how much of that is relates to improving frontline government services and how much for the expensive dead-weight of bureaucratic control.

    To me, the most efficient system is as close to a self checking system as possible minimizing the burden of unnecessary administrative costs.

    Why don’t other ostensible users of government financial information urgently insist to have this important information explicitly available in consolidated form with the presentation of future budget papers? Where is the voice of the Accounting Profession in all of this? How can so called experts make any sensible judgements about government budgets without such critical information?

  13. Fred

    Companies do pay income tax. Profit is an accounting concept.

    A company pays 30% tax on its taxable income.

    Even as the ATO says “Tax is not simply 30% of profit”

  14. Macspee

    Recipients of government largesse are not clients.

  15. Pete D.

    Welfare payment increases are not “pay rises”.

  16. thefrolickingmole

    Pissing money up the wall is not “investing in Australias future”.

    Spending more on education with worse results is not “doing a Gonski” unless you are being ironic.

    Relying on the migration Ponzi scheme to inflate GDP is not “prudent financial management”.

  17. Percy Porcelain

    Governments can not create jobs

    Government does not create wealth, it can only destroy it.

  18. Percy Porcelain

    Relying on the migration Ponzi scheme to inflate GDP is not “prudent financial management”.

    Nor is running a budget with a projected $18.2 billion deficit, record debt, more and higher taxes and record levels of government spending.

  19. H B Bear

    I’m still waiting to see a return on the Federal government’s investment in the Australian car industry. It might be a little tough now that they have shut the gates and gone back to Japan and the USA.

    For some reason it was always more galling when kd wrong called tax increases savings during her hopeless time as Minister for Finance than when Wayne Goosesteen did so as Treasurer. I guess that was because you assumed The Goose was a congenital idiot.

  20. Dr Fred Lenin

    The tax system is not a “magic pudding”( the magic pudding is a children’s story ,probably like a Koran to them )

  21. Leo G

    Government does not create wealth, it can only destroy it.

    Now, taxes become dearth, destroyer of worth.

  22. egg_

    The ABC is NOT an (essential or any other kind of) service.

    If a tree falls in the forest… on TheirABC, would anyone notice?

  23. Roger.

    Governments can not create jobs

    Yes they can. They do it in QLD all the time.

    There’s no limit to the number of jobs the QLD government can create, it seems.

    And there’s a bonus for the QLD government – all the people they create jobs for vote for them, because they want to keep their new jobs.

    But I digress…

  24. mizaris

    Recipients of (government largesse) OPM are not clients.

  25. mh

    Franking credits are not a genuine credit, they are a tax offset.

    The franking tax offset will cover or partly cover the tax payable on the dividends, the purpose of which is to avoid double taxation. So when there is no double taxation, why make the franking tax offset refundable? I expect it was done by Peter Costello to boost investment.

  26. DD

    mh,
    If the “”franking tax offset”” is not refunded there is double taxation. A tax is a tax whomever may collect it for the treasury.

  27. max

    Mr. Spartacus I have Question for you if you can answer, thanks:

    Insider Trading Rules That Don’t Apply To Congress
    In government, there’s no limit on your insider trading profits.

    do you know if Insider Trading Rules Apply To MPs and Senators in Australia?

  28. Howard Hill

    Tax cuts for business is not stealing from the public!

  29. Rohan

    Revenue is not net profit.

    Increasing taxes on revenue means an increase in the GST. It’s not an increase in company tax.

    The NBN will never return anywhere near the bond rate let alone a net profit.

    The government does not know how to value add.

    Increasing taxes does not stimulate the economy through government spending (see value adding above).

    We’re a loooong way down the rabbit hole.

  30. mh

    DD, tax is paid at the company rate then franked dividends may be distributed to shareholders. If the entity holding the share has no tax on taxable income, and they get no refund of franking credits, where is the double taxation?

    Or did you mean something else?

  31. Rohan

    So when there is no double taxation, why make the franking tax offset refundable? I expect it was done by Peter Costello to boost investment.

    So if the ASX listed company doesn’t pay the Company tax but the shareholder does when they submit their tax returns, do you expect the left not to scream blue murder that the top end of town aren’t paying ANY company tax?

  32. do you know if Insider Trading Rules Apply To MPs and Senators in Australia?

    they do. Spartacus is not a lawyer (can eat garlic and see reflection in mirror), but his understanding is that insider trading rules are materially different in AU vs US. In the US, there is a tight-ish definition of what an insider is (company board, management, advisors, auditors). In AU, it is not about an insider but access to information that’s not generally available, which is likely to have an effect on value.

    This is why in the US, frequently congressmen/women and senators become unbelievably wealthy while in office. In AU, MPs and Senators occasionally make their money post parliament.

    Read this about Congresswoman Maxine Waters, who was hit with the stupid stick and made the stick dumber. https://www.thedailybeast.com/maxine-waters-from-most-corrupt-to-resistance-hero

  33. DD

    mh, the imputed tax credit is added to the taxpayers taxable income but it has never been received in cash or kind. It is also included as tax already paid.
    If a taxpayer’s tax due is less than tax paid the difference must be refunded.
    If the difference is not refunded the dividend has been taxed as profit in the companies hands and again in the taxpayer’s hands: double taxation.

  34. Mother Lode

    The reason they get away with this is that no one calls them out.

    The Libs are supposed to be the ones that do in parliament, but lets face it: When a Liberal goes to hospital to have their appendix out, it is because the appendix has decided to get rid of a useless organ.

    Then there is the media, which has the profile. The ABC is a compromised beneficiary of these shenanigans, so while it is a deplorable state of affairs it is not a surprise. And even if it opts to stand on the side lines while the Treasurer and Shadowy Treasurer brazenly launch these fibs into the air, there is other media.

    But they are absolutely useless too.

    I am guessing part of it is that they are run by mere managers who just try to manage whatever events they perceive as beyond their control throw at them. (Actually, the ABC probably has the most doughty and pugnacious leadership of the lot.)

    There is also, I suspect, the fact that only bogans and very low information voters watch what they have to offer. People who like being told they will get more freebies: The Epsilon Minus Semi-Morons who enjoy their soma comas.

    Newspapers don’t cut through. Maybe because people read different bits at different times. Maybe information doesn’t stick. They will stand around the water cooler talking about what they saw last night on the telly, but not what they read.

    Very different in the US, where the political right sees itself as a force. In Australia they are oblivious to their being heirs to giants who have fought for freedom for all – instead they are mostly embarrassed that they are being greedy and selfish if they even suggest that all the myriad victim groups do not deserve more of their money.

  35. Egor

    The pouting and sardonic angst do no good.
    The mission is to avoid tax to the max anyway you can, anything else is just impotent rage.
    Get to it.

  36. amortiser

    What an expenditure cut is needs to be explained. Normal people would think that if you spent $100 on an item last year and you spent $110 on that same item this year, that would constitute an expenditure increase. That is not so when it comes to government budgeting.

    Last year my wife was paid a monthly allowance of $3000.00. Prior to the new year she held discussions which her girlfriends about what she should ask for in the new year. Without giving much consideration to my income earning capacity they settled on a bit for $4000.00.

    When this proposition was put to me I had to explain the limitations including our total income, mortgage repayments, insurance etc etc. at the end of the discussion I settled on $3500 per month.

    In the government sphere, this outcome would be regarded as a cut of $500.00. If she had received $4000.00 this would have been regarded as maintaining the status quo. Normal people, of course, regard this outcome as an expenditure increase of $500.00 and with a $1000.00 increase I would be a hero and thanked profusely.

    That, ladies and gentlemen, is how the government’s forward estimates and budget process works. Trimming the wish list aka the forward estimates is an expenditure cut.

    No wonder that our language is becoming more and more confusing.

  37. Egor

    The pouting and sardonic angst do no good.
    The mission is to avoid tax to the max anyway you can, anything else is just impotent rage.
    Get to it.

  38. Mother Lode

    A budget is something realistic that you set to achieve and regularly monitor and review
    It’s not set and forget.

    One of the big differences between Trump and other leaders is that his experience in business means he sees a contract as a starting point, while other leaders see it as an end.

  39. mh

    DD
    #2708666, posted on May 11, 2018 at 2:53 pm

    mh, the imputed tax credit is added to the taxpayers taxable income but it has never been received in cash or kind. It is also included as tax already paid.
    If a taxpayer’s tax due is less than tax paid the difference must be refunded.
    If the difference is not refunded the dividend has been taxed as profit in the companies hands and again in the taxpayer’s hands: double taxation.

    It may be added to the taxpayer’s taxable income, but if their taxable income falls below the tax free threshold, for example, there is no tax paid at that level and the offset is not required. No?

  40. David Brewer

    mh and DD:

    Depends what you mean by “double taxation”. If you mean, the same income is assessed twice, then there is double taxation. If you mean, tax is extracted twice, then that is not the case if the taxpayer’s marginal rate is below the company tax rate, even if the taxpayer is denied a rebate.

    The change proposed by Short’un would mean that all company income ending up with shareholders was taxed at a minimum of the company tax rate, with this increasing to the taxpayer’s marginal rate where that rate was more than the company tax rate.

  41. JohnA

    David Brewer #2708726, posted on May 11, 2018, at 4:42 pm
    in reply to mh and DD:

    The change proposed by Short’un would mean that all company income ending up with shareholders was taxed at a minimum of the company tax rate, with this increasing to the taxpayer’s marginal rate where that rate was more than the company tax rate.

    Ah, so it is really an increase in tax payable by some people, but without any reduction in tax payable by any other people.

    I assumed so based on what we know of Mr Shorten’s character and the character of the “pardy” he leads, but it’s nice to have the analysis too.

  42. max

    I am Spartacus

    Thanks for replay.

    I was asking that question because one of the:

    insider trading and budget knowledge.

    let say you are up there with power and deciding to build new airport — what you do ?
    buy lend before you announce decision.
    or you going to introduce new taxes for this or that corporation — well you short that stock.

    rinse and repeat

  43. flyingduk

    Wanting to keep the money i have earned is not GREED
    Taking what i have earned and giving it to others is not FAIR

  44. mh

    The change proposed by Short’un would mean that all company income ending up with shareholders was taxed at a minimum of the company tax rate, with this increasing to the taxpayer’s marginal rate where that rate was more than the company tax rate.

    I don’t think it was very clear what Labor’s proposal was in the first place. They have backed away from it now, anyway. I thought it was just no refund of ‘excess franking credits’. Bill Shorten sold it as stopping tax rorts for millionaires, but that’s how he tries to sell every policy.

  45. The BigBlueCat

    @mh @dd @JohnA

    The Shorten policy on franking credits was most certainly about increasing the effective tax rate on those risking investment in the property market. The same can be said for calls to remove the 50% discount on capital gains – that move would increase the tax rate on capital gains from an effective 24.5% to a whopping 49% (depending on the gain and the individual’s other taxable income).

    The whole idea of the discount was to eliminate the unwieldy indexation system that once applied to ensure the gain was calculated in real terms, rather than a simple historical price less cost calculation that yields a much more unfair gain.

  46. Jimf

    Bill Shorten really means bill lengthen.

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