Reform, reform. My kingdom for reform.

For the love of god.  Can we please stop this talk of tax reform.

There cannot be and should not be any discussion of tax reform before we have a discussion of spending reform.

The 2020 Commonwealth budget estimated $493 billion, yes billion of payments from $505 billion, yes billion, of revenues (taxes).   And the payments don’t include off books spending on things like NBN.

Before there is any discussion on how to better and more efficiently collect more taxes, can there be a discussion on how the Commonwealth spends half a trillion dollars.  Repeat HALF A TRILLION DOLLARS per annum.

A 10% cut to spending, $50 billion, would not likely show up in materially diminished outcomes but would deliver a hell of a lot of tax reform oxygen.

Spending reform before tax reform.  To do tax reform before spending reform will mean there will be no spending reform.

And don’t forget the 240,000 Commonwealth public servants (about half the population of Tasmania) who costs a collective $22 billion, yes billion, per annum (corrected thanks Suburban Boy).  And that does not include the cost of the defined benefit pensions.

Yes.  We’re all in this together.  Except those who aren’t.

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20 Responses to Reform, reform. My kingdom for reform.

  1. Spurgeon Monkfish III

    Imposing more and higher taxes is NOT tax reform.

  2. Spurgeon Monkfish III

    The 2020 Commonwealth budget estimated $493 billion, yes billion of payments

    All rendered irrelevant and of absolutely no resemblance to reality (even coincidentally) by the COVID-19 hysteria and subsequent squandermonkey bingeathon.

  3. Robbo

    Asking for discussion on tax reform to be sidelined until after we squash the virus our Chinese friends have sent rampaging around the world has fallen on deaf ears in Victoria. In that socialist State we have Dan Andrews and his Treasurer Pallas already to get cracking on dumping stamp duty on new housing purchases and replace it with land tax on EVERY property in the State. Just so typical of a Labor Government. Send the State broke and then get out of the mess by putting in a great big new tax that will fall on everyone who owns a house. The sad thing is that we will probably get no more than a whimper from the hopeless Opposition in Victoria. By the time they wake up and understand that the Andrews Government intends to do something awful the game will be over.

  4. Suburban Boy

    Commonwealth public servants cost us $34 billion (not $167 billion) a year, which is 7 per cent of the Commonwealth Government’s expenses.

    By far the biggest expense category in the Commonwealth budget is transfers, which were $296 billion last financial year.

  5. Thanks @Suburban Boy. Corrected. TAFKAS was rushing.

    TAFKAS got his $22 bill number from here. Not sure where your $34 bill comes from.

  6. Roger

    There cannot be and should not be any discussion of tax reform before we have a discussion of spending reform.

    A righteous nation would set its tax rate at 10% and cut its cloth to suit its purse.

    Universal prosperity would follow.

  7. David

    In 20 seconds he makes the point perfectly. Have we a business ‘leader’ now who would do the same?

  8. Bradley Ashworth

    All Government employees ie Total Public sector – Local, State and Federal is $167 billion….
    How about a 10% reduction in Public Sector salary? There is $16 billion? for one year.
    Would be very unpopular but 10% less is better than 100% less…..

  9. Tim

    I can think of a few areas SLoMo can save a few dollars
    Health is not the constitutional responsibility of the feds
    Education is not the constitutional responsiblility

    Governments should only be spending in areas of constitutional responsibility. If they want to change that then take it to a referendum or else get out of it

    Then there are all the quongos, employ me for $1 per year and I will sort them out. All gone no ifs no butts
    Then there are all the outsourcing of public servants responsibilities. Either get rid of the public servants or make them accountable.
    Then there are the unis where do we start. No Uni person should be able to earn more than the prime minister
    Then the abc No ABC person should be able to earn more than the prime minister. In fact I would have a cap of $250K that would be 200K more than they are worth. Better still close it down and contract out those shows that are deemed necessary to the private sector

    Then there is all the climate change subsidy stuff. Wow couldnt I have a field day. First would be to cancel all subsidies and let consumers choose what power they wanted by ticking the green power option on the power bill.

    As PM i would be out of a job at the next election, but I would have left a meaningful legacy by leaving cash in those that earn its pockets.

  10. Perfidious Albino

    Only, I bet they don’t get rid of stamp duty altogether, just reduce it significantly while they introduce a land tax, but keeping open the potential to increase the stamp duty take down the track, probably selectively, as a quasi wealth tax. Or am I too cynical?

  11. Neil

    Then the abc No ABC person should be able to earn more than the prime minister

    I think that should apply to the whole Public Service

  12. MACK

    Perfidious Albino: “as a quasi wealth tax. Or am I too cynical?”
    There is no such thing as a cynic with regard to politics – only people who know what’s going on and those who don’t.
    All leftists dream of a wealth tax because they want equality of outcome. They think making rich people poor will make poor people rich. They tax you when you earn it and they tax you when you spend it and they tax any capital gains. That doesn’t work well enough for them so they want to tax your assets until you don’t have any more than anyone else, even if you have studied hard, worked hard, employed people and invested responsibly. They simply don’t understand human psychology – that’s why communism never works.

  13. Bruce of Newcastle

    I think I’d prefer a horse. Government and reform are words with zero credibility right now. At least if you have a horse you can eat it if you need to.

  14. Lee

    I can think of a few areas SLoMo can save a few dollars
    Health is not the constitutional responsibility of the feds
    Education is not the constitutional responsiblility

    Governments should only be spending in areas of constitutional responsibility. If they want to change that then take it to a referendum or else get out of it

    I would have thought any federal government would want to get out of those areas.
    No responsibility, no blame sheeted home.
    On the other hand, Morrison (as well as PDT and other conservative leaders) has been, and will continue to be blamed for areas that the states hold responsibility for.
    The bushfires several months ago is a case in point.

  15. Suburban Boy

    TAFKAS, the figure is from the consolidated accounts for the Commonwealth Government for 2018-19, available here: https://www.finance.gov.au/publications/commonwealth-consolidated-financial-statements/2018-2019-commonwealth-consolidated-financial-statements

    The $34 billion figure is the sum of the amounts for “Wages and salaries” ($24.3 billion) and “Superannuation” ($9.7 billion) in the “Australian Government operating statement” on page 35 of the consolidated financial statements. That statement also says the total expenses of the Commonwealth were $505 billion and total revenue $508 billion (including taxation of $456 billion).

  16. Squirrel

    It will probably take a few federal electoral cycles for the new fiscal reality to set in.

    Until then, it will be can-kicking and diversion while they desperately wait for the debt-funded, Big Australia ponzi economy to fire up – which it won’t, of course – that racket is done.

    Major spending programs which have been growing at rates well above CPI and population growth for years will have to be tackled, and the fat back office bureaucracies which have been funded with boom-time revenues (of fond memory) will have to be acquainted with the new fiscal reality.

    On the subject of stamp duty/land tax, let’s have no doubt that once the land tax change is bedded down, the push will be on to start applying CGT to the family home and for death duties. Stamp duty is a de facto CGT (it’s also a de facto death duty for most estates), but that’s an inconvenient fact which has to be ignored while the hunt is on for reliable revenue and fake reforms.

  17. John Dee

    Kerry Packer…Priceless.
    I have played that section so many times.
    You should have played a few more seconds though to include the ripple of laughter.
    You rarely …really really rarely … get a ripple of laughter at such high level hearings.
    Because to respond in such a way would almost certainly result in your ejection.
    Way worse than not putting your mobile into full shutdown rather than selecting off which is really standby.
    (been there…still have the scars…the judge went into “you killed my grandmother” pre-sentence mode).

  18. Pyrmonter

    @ TAFKAS

    Remind us, how did the Packers make their money? Wasn’t it with permits issued by governments they variously cajoled or threatened in return for favours? For ever Cosmo (not, I imagine, TAFKAS’s usual reading) there was a Channel 9, a radio station, and, back in the day, a newspaper with trenchant editorials and a readership inherited by its one-time competitor, the Telegraph.

  19. Pyrmonter

    @ Squirrel

    Stamp Duty is NOT a de facto CGT. The merits of a CGT could be debated, but its core idea is one of ‘gain’. Stamp Duty applies on the transaction value: there is no netting off of the cost of acquisition. If we had a ‘capital value increments’ tax, I might resist it less, but presently it is as sensible as the early Pauline Hanson ‘Easy Tax’ – a sort of perverse Tobin tax, but levied on the improved value of land.

  20. max

    Warren Buffett has two ideas for ending inequality
    Andy Serwer Editor in Chief Yahoo Finance27 April 2020
    Buffett has noted before that there is class warfare out there and that “his class was winning.” He elaborated on that point, offering the earned income tax credit — a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children — as a solution. He also proposed a second idea for ending wealth inequality: higher taxes on the very wealthy.

    You are never going to see two things in all this leftist proposals:

    No. 1 — Who are those wealthy people — how much they earn? how many of them are there?
    No.2 — price of those solutions that is proposed.

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