Why the celebration

Last night, in his budget speech, Treasurer, the Hon. Josh Frydenberg said in his first few lines:

For the first time in 12 years, our nation is again paying its own way.

Hmmm.  No.  Not even close.

The GOVERNMENT is paying its way.  And it is paying its way not through fiscal constraint or conservatism, but through increased taxes.  Taxes taken ultimately at the point of a gun.

That’s right.  To balance the government’s books, it has unbalanced everyone else’s books.

Was there 1 major program stopped?  Was there 1 major line of expenditure cut?

And message to Canberra.  To take from citizens and then return to citizens less the Canberra management fee is not something to be celebrated.  It is something to be discouraged.  Shall we call it fee for no service?

Just leave the money in the hands of the citizens.  They know better how to spend it.  And we won’t have to pay the Canberra management fee either.

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20 Responses to Why the celebration

  1. stackja

    Voters like giving them the money to spend? Election coming up. Their choice!

  2. jock

    Wait till you see the size of the labor/ green gun! The alp caucus will be dripping with extra tax plans. If they can get away with the tax changes they have proposed why stop there. Remember 50% of the punters pay no tax and want more of the other 50% s stuff.

  3. Bruce of Newcastle

    Don’t you like being bribed with your own money Spartacus?

    Which I have to say is better than being made to drive golf carts and sit in the dark because of a desire to save the world from an imaginary threat.

  4. EJ.

    Just heard Chris Bowen on 3aw..he mentioned changes to Family Trusts! Anyone know what that’s about?

  5. Buccaneer

    They are still doubling down on labor lite. Every voter simply needs to ask themselves one question, does the government ever give them better service or value for money than that they can get elsewhere when they choose not to deal with government? The answer is always no unless the government steals the money from some other set of stakeholders.

  6. Pyrmonter

    In the two horse race of Australian federal politics, this is the least bad option.

    Like the feigned victories of one of the worse Roman Emperors, it’s garlanded with undeserved praise, but this milquetoast liberalism is to be preferred, by far, to the pernicious, corrupt socialism red in tooth and claw oferred by those on the opposition benches.

  7. Mark M

    Off topic sort of … but not. An update:

    Putin saved Assad in Syria. Can he save Maduro in Venezuela? It’s starting to look that way.

    “If the war starts, we can’t have you at a hotel, because the hotels will be some of the first targets for the regime and the Russians.
    We will move you into my house and we will have our base there for as long as this takes.
    But please, Annika, understand what I am saying—there will be bodies all over the streets, this war has only two possible endings—a new government or an emboldened old one with no restraints and no consequences.”

    https://www.thedailybeast.com/venezuela-simmers-with-violence-as-putin-sends-in-russian-troops-the-wise-are-running-for-their-lives

  8. For the first time in 12 years, our nation is again paying its own way.

    When we do it, it is called fraud.

  9. Dr Fred Lenin

    This is like a guy who owes a million dollars finding 5 grand in his account and claiming he is rich ,yeah right comrades ,where are the spending cuts? Where is the reduction in public service numbers .
    Lawyers=Liars most pollies are lawyers . Put a thrifty housewife in charge of Treasury ,watch the fur fly.

  10. John A

    EJ. #2978287, posted on April 3, 2019, at 9:29 am

    Just heard Chris Bowen on 3aw..he mentioned changes to Family Trusts! Anyone know what that’s about?

    At the risk of giving him stupid ideas, lemme guess: the plan is to tax the income of the trust instead of the profit/s (if any).

    Then in next year’s Labor budget he will try to apply a wealth tax to the “unfair” large base of assets held by family trusts.

  11. PK

    Fee for no service. Very good Tafkas.

  12. OldOzzie

    Opinion
    The AFR View
    Federal budget 2019: A historic moment that could have been better

    The AFR ViewEditorial

    Treasurer Josh Frydenberg has credibly set the federal budget into the black for the first time since the smart phone was launched, and finally ended Labor’s doleful decade of deficits. Treasurers no longer spend their time defending Australia’s AAA credit rating, which would have been a humiliating and costly loss for a country that still spent $18 billion on interest charges last year. Mr Frydenberg also has raised the prospect of genuine tax reform that could revive productivity growth by sharpening incentives to work, save and invest through flatter tax structure.

    But within this framework, the budget is driven by the politics of a looming election and the imperative to match both Labor’s phoney fairness agenda, and the softness of national wages growth. So the government is throwing its temporary revenue gains from the upswing in commodity export prices into an ungainly political auction with Labor over who can throw most money at middle Australia through a cash splash Low and Middle Income Tax Offset. The new offer only complicates the tax system but has the political virtue of spending the revenue largesse on more modest earners while giving nothing away to higher income wealth creators. And to counter Labor’s battler pitch, Mr Frydenberg doubles down on the new lower tax rates for small business by lifting the threshold for instant asset write-offs on new equipment. Big businesses will remain stuck on a globally uncompetitive 30 per cent company tax rate, with more money for the corporate watchdog to prosecute them.

    The tax blitz will see the Coalition spend another $158 billion over 10 years on top of the $144 billion it offered in the 2018 budget, after Labor trumped the government on low and middle income earners in last year’s budget reply.

    So there is the immediate $1,080 splash for low and middle income earners on between $48,000 and $90,000 — that’s effectively a bonus extra week’s post-tax pay packet to be paid just as the mid-year retail sales hit. This might be wasteful front-loading of its spending on voters that the Coalition will need in just a few weeks. But the government is also aiming to lock it into a worthwhile reform by also lifting the 19 per cent tax bracket up to $45,000, stopping half a million tax payers from moving into the 32.5 per cent tax bracket. The combination of this and an additional higher Low Income Tax Offset means nobody is worse off. That delivers an important curb on bracket creep which will encourage more low income earners into the workforce, including women.

    But the budget will have disappointed many by not pulling forward from 2024 the big structural change in the last budget — removing the incentive-killing 37 per cent tax bracket which trips up the aspirational worker earning over $87,000. This is to be replaced with a 32.5 per cent tax rate for all workers between $41,000 and $200,000. The Coalition will hold implementation of this measure for 2024, but is to cut the rate again to 30 per cent. These are important changes, and they both work together to flatten and simplIfy the tax system which is good outcome from this budget. And the government is showing resolve by taking all of these measures together as package to the election to seek a mandate. In effect it allows the Coalition to campaign on a 30 per cent tax rate for most of middle Australia in 2024, and dares Labor to match it.

    This is the last set-piece shot left in the locker for a six year government trying to get itself re-elected against the odds. It needs to uphold the Coalition’s polling advantage in economic management while offering enough goodies to distinguish it from Labor which has a $200 billion war chest for tax cuts and spending extracted from investors and savers.

    Politics should not have been the story of this return-to-surplus budget. By loading so much onto immediate measures for the low and middle paid, it does not do enough to boost incentive and growth that should be the aim of any tax reform. Tax cuts are an important incentive but despite what the government and the opposition might have told voters feeling the pinch of cost of living pressures, they are not a substitute for money on the kitchen table from wage rises driven by a more productive economy.

    The future outlook for the surplus is not as robust as it might have been — and there beyond the tax cuts there is a distinct lack of policy ambition in strengthening them by preparing for stronger growth. The Coalition has stuck to its tax to GDP cap of 23.9 per cent, which both curbs spending and drives tax cuts. But its other chief fiscal tools of a surplus of 1 per cent of GDP “as soon as possible” has now been kicked into the distance of “the medium term”, along with an earlier promise to bank any revenue gains. The overall size of government spending at a percentage of GDP remains only a fraction below its 30 year average.

    The government is now forecasting a surplus of $11 billion in 2020-21, $17 billion in 2021-22 and then falling to $9 billion in 2022–23 — when the cost of some of the tax measures hits — or $45 billion of surpluses over four years. But the budget revenue has been flattered by strong growth in profits, and the bracket creep effect on wages, both of which make up over-sized parts of the tax base. The economy as whole looks much weaker. Yesterday the Reserve Bank once again held interest rates at a record low, unchanged since mid-2016.

  13. Petros

    Love that, TAFKAS. Fee for no service.

  14. Rohan

    I was watching the budget night thing on sky last night for a bit. They had a sidebar graphic that stated that this FY the government is going to have a deficit of $4.7 billion or whatever. Is this correct?

  15. Fred

    Just heard Chris Bowen on 3aw..he mentioned changes to Family Trusts! Anyone know what that’s about?

    Labor is proposing to tax trust distributions at a minimum of 30%.

    As with most changes, I doubt it will raise much revenue. Most clients I have put their distributions into a corporate beneficiary and pay 30% tax anyway.

    The losers will be families that have kids at uni and not working yet. They can’t use their $18,200 tax-free threshold.

    But for really rich people, or families with young kids, it will make no difference.

  16. Fred

    Just heard Chris Bowen on 3aw..he mentioned changes to Family Trusts! Anyone know what that’s about?

    There is talk that it will catch out small business trusts that will end up paying a 30% flat tax on earnings.

    Don’t be surprised if they carve out an exemption for small business trusts.

  17. Robber Baron

    Josh Frydenberg was a useless resource minister, yet got promoted, he was arguably the worst Energy and Environment minster in history, yet got promoted to Treasurer and Deputy Liberal leader and delivered a gold plated Labor Budget, and most likely after the election loss will be elected Opposition leader. No one in my long memory has failed his way up as much as Josh.

    He represents everything that is wrong with the Liberals. Accordingly, he must be kicked out of parliament (despite not having renounced his Hungarian citizenship). The only way we can do this and send a message to the liberals that they need to be a party of the right and small government is to defeat Josh at the election. I am going to campaign for Julian Burnside of the greens. Frydenberg must be defeated for the forces of conservatism to retake the liberals from the left.

    Good people of Kooyong, please hold your nose and vote Burnside, J. The Greens.

  18. Cynic of Ayr

    That’s the problem isn’t it?
    It cost so damn much for Governments to give money away.
    A few million given for such and such a cause, includes the cost of the giving!
    The cause gets what’s left. If any!

  19. Squirrel

    “And it is paying its way not through fiscal constraint or conservatism, but through increased taxes.”

    Including very substantial revenues from mining exports – which will not last for ever, but the spending commitments currently funded by those programs, and the resultant expectations from an entitled public, will.

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