TAFKAS does not understand and cannot reconcile.
Apparently Australia is in an unusually low inflation environment as evidenced by ABS numbers. But for some reason, there is a massive cost of living problem that is driving all sorts of discussions about disposable wage erosion. And the so called recent income tax cuts were ostensibly to return bracket creep.
So which is it? Low inflation or bracket creep and cost of living pressures. One suspects that it can’t be both and someone is trying to mislead.
Hmmm. Who could it be? Hedonic adjustments anyone?
Overlay what probably is the real inflation story with the recent RBA interest cuts and talk of further. Is Australia living in a real negative interest rate environment? One suspects so. And who are the biggest losers of negative interest rates? Savers. And the biggest winners? Borrowers, you know like the profligate governments we Australians have. So who has the biggest incentive to pretend there is no inflation.
Hmmm. Who could it be?
But with negative interest rates, why keep money in the bank when it costs you. Forget about interest income. You pay for the privilege of lending money to the banks. And when there is a huge pile of superannuation money available to bilk, why not.
Which is why this latest consultation paper to emerge from Treasury is all the more interesting – Currency (Restrictions on the Use of Cash) Bill 2019.
Whenever government uses the word “Restrictions” is it seldom a good thing. But what pray is the government trying to active through this legislation? From the explanatory memorandum:
- This Bill introduces offences for entities that make or accept cash payments of $10,000 or more.
- This ensures that entities cannot make large payments in cash so as to avoid creating records of the payment and facilitating their participation in the black economy and undertaking related illicit activities.
Illicit activities eh. The government is proposing to make ILLEGAL the payment or receipt of $10,000 or more in cash. Inclusive of GST of course.
So basically, the left hand of government is nudging interests rates into negative territory while the right hand is sucking more money into the bank system so as to better tax it. And who is squeezed in the middle – the tax paying, money saving citizen.
Like all predatory or parasitic institutions, its first instinct (of Government) is that of self-preservation. All its enterprises are directed first towards preserving its own life, and, second, towards increasing its own power and enlarging the scope of its own activity. For the sake of this it will, and regularly does, commit any crime which circumstances make expedient.
The Liberal National Party – more like a liberal application of nationalist policy.