Do you believe that taxes would rise under Abbott? (1 Viewer)

Sathius005

Active Member
Joined
Jan 13, 2007
Messages
716
Gender
Undisclosed
HSC
2008
Uni Grad
2018
Why taxes would rise under Abbott

Election campaigns have become works of fantasy where, to enter the spirit of things, you have to suspend disbelief. And the greatest unreality this time is Tony Abbott's claim the budget can be returned to surplus in the coming decade while taxes go down, not up.
To most people the idea of permanently paying less tax is hugely attractive. And Abbott is promising to abolish the carbon tax and the mining tax, cut the company tax rate by 1.5 percentage points and abandon Labor's plan to end tax concessions for company cars. All this would cost about $28 billion over four years.
So what reason is there to doubt he would deliver a lasting reduction in taxes? Simply his promise to get the budget back to surplus - plus the knowledge government spending is set to grow strongly in the next decade.
To return to surplus and to do it while avoiding growth in tax collections would require a literally unbelievable degree of spending restraint.
Remember, though it gets little notice, Abbott is also promising to impose new taxes, increase taxes and eliminate tax breaks. These are partly to help cover the cost of the taxes he's getting rid of and partly to help pay for his new spending promises.
He's proposing a 1.5 per cent levy on big companies to cover the net additional cost of his paid parental leave scheme and a 0.5 percentage-point increase in all rates of income tax (aka the Medicare levy) to help cover the cost of the national disability insurance scheme (both raising $16 billion over four years).
To help cover the cost of abolishing the mining tax he's proposing to save $4.7 billion over four years by cutting business tax breaks: ending the instant asset write-off, removing accelerated depreciation for motor vehicles, ending the phase-down of interest withholding tax on financial institutions and ending the ''tax loss carry-back''.
Also to help cover the cost of abolishing the mining tax he proposes to save $3.7 billion in four years by effectively increasing the superannuation contributions tax for those earning up to $37,000 a year, and save $1.6 billion in four years on no-longer-forgone super tax breaks by delaying for two years phase-up in compulsory employer contributions.
And all this is before we get to Labor's as-yet-unlegislated tax rises, which Abbott has quietly indicated he would proceed with: extra revenue of almost $10 billion over four years from measures to ''protect the corporate tax base'', cut research tax breaks, increase cigarette tax and impose a levy on savings accounts.
When you see the list of tax hikes that accompany Abbott's grand tax-cutting gesture, it doesn't exactly inspire confidence he could keep taxes down in a way none of his predecessors has managed to.
And when you realise that - according to the earlier reckoning of Saul Eslake, of Bank of America Merrill Lynch - his election promises involve extra government spending of almost $15 billion over four years, it doesn't inspire confidence he could achieve the herculean spending restraint needed to get the budget back to surplus as well as keep taxes down.
The medium-term projections in Treasury's pre-election economic and fiscal outlook, about which I suspect we'll be hearing a lot more after the election, demonstrate how challenging the budget task will be in the coming decade.
According to the projections, if the government elected this Saturday sticks to Labor's strategy of limiting average real growth in spending to 2 per cent a year and not allowing tax collections to exceed 23.7 per cent of gross domestic product, the budget surplus will recover to 1 per cent of GDP by 2020-21.
But, since spending is projected to grow at an underlying real rate of 3.5 per cent a year, this would require an unprecedented restraint. And, even so, it would still require tax collections to grow 1.5 percentage points faster than the economy - equivalent to an ultimate $26 billion a year in today's dollars - over the decade.
Alternatively, were spending allowed to grow at its underlying rate, this could still leave us with a growing surplus, provided unrestrained bracket creep was allowed to cause tax collections to grow 3.3 percentage points (an ultimate $56 billion a year) faster than the economy.
And, get this. Were you to let spending grow at its ''natural'' rate, but limit growth in tax collections to a ceiling of 23.7 per cent of GDP the rest of the coming decade beyond 2018-19 would see an ever-rising budget deficit.
Whoever wins this election, I'll be amazed if taxes do anything but keep rising.


Read more: http://www.smh.com.au/business/why-taxes-would-rise-under-abbott-20130901-2sytp.html#ixzz2dgXSldEn
 

Rita96

New Member
Joined
Aug 15, 2013
Messages
8
Gender
Female
HSC
2014
Yes i really do! There is not way to get us to surplus without making painful cuts and/or implementing taxes. Lets just hope for the best :uhoh:
 

wannaspoon

ремове кебаб
Joined
Aug 8, 2012
Messages
1,401
Gender
Male
HSC
2007
Uni Grad
2014
Its amazing... not even a week has pasted and there is already talks of reviewing and changing the GST (to a higher rate...)

right I will just get rid of taxes on companies that earn as much as small countries, blame absolutely bad thing on the taxes these large companies have... (HIV??? its that dang' carbon tax... leperacy??? carbon tax brov!!!) wait, what??? we need to make money??? just hike up taxes on the normal person who earns the peasant wage...

then again, labor was doing it too... the proposed tax changes on cigarettes (that was supposed to change on December 1, don't know now, due to the LNP selling their souls and accepting campaign donations from British America Tobacco) was nothing more then a poor mans tax...
 
Last edited:

braintic

Well-Known Member
Joined
Jan 20, 2011
Messages
2,137
Gender
Undisclosed
HSC
N/A
Why do people always think only of themselves when judging the merits of policy.
The fact is that if we don't return to surplus there are long-term consequences for the country.
But the majority of people only ever consider the short-term financial situation, and the Labor party has always played to this general lack of vision by the people.
FFS think beyond the next few years. If we need tax hikes to return to a surplus, then so be it. I won't like it any more than the next person, but at least I take time to look at the big picture.
 

Lolsmith

kill all boomers
Joined
Dec 4, 2009
Messages
4,570
Location
Forever UNSW
Gender
Male
HSC
2010
Why do people always think only of themselves when judging the merits of policy.
The fact is that if we don't return to surplus there are long-term consequences for the country.
But the majority of people only ever consider the short-term financial situation, and the Labor party has always played to this general lack of vision by the people.
FFS think beyond the next few years. If we need tax hikes to return to a surplus, then so be it. I won't like it any more than the next person, but at least I take time to look at the big picture.
Name a single "long-term consequence" for Australia, based on its current situation, that would happen if we don't "return to surplus" (when? by what measure?).
Its amazing... not even a week has pasted and there is already talks of reviewing and changing the GST (to a higher rate...)

right I will just get rid of taxes on companies that earn as much as small countries, blame absolutely bad thing on the taxes these large companies have... (HIV??? its that dang' carbon tax... leperacy??? carbon tax brov!!!) wait, what??? we need to make money??? just hike up taxes on the normal person who earns the peasant wage...

then again, labor was doing it too... the proposed tax changes on cigarettes (that was supposed to change on December 1, don't know now, due to the LNP selling their souls and accepting campaign donations from British America Tobacco) was nothing more then a poor mans tax...
Getting rid of taxes on large companies isn't automatically a bad thing. The LNP have put forward for months now that they're going to increase company tax on the richest companies anyway so your point isn't entirely valid.

Merely accepting a donation doesn't mean anything either, unless they act in a preferential way to those donators. The IPA gets plenty of cash dollars from tobacco companies (afaik) but it's because their values and ethics align with that of the interests of tobacco companies before any donation occurs. It's more than likely the same thing here.

OT: I don't think taxes will rise, no. But if they do it'll be before the 1st July next year.
 

AB940

Member
Joined
Dec 23, 2012
Messages
121
Gender
Female
HSC
2012
Uni Grad
2015
Why do people always think only of themselves when judging the merits of policy.
The fact is that if we don't return to surplus there are long-term consequences for the country.
But the majority of people only ever consider the short-term financial situation, and the Labor party has always played to this general lack of vision by the people.
FFS think beyond the next few years. If we need tax hikes to return to a surplus, then so be it. I won't like it any more than the next person, but at least I take time to look at the big picture.
They are going the completely wrong way about it, though. That's why people are taking issue with the fixation on returning to surplus, which in itself is pretty short-sighted. By raising the GST, they will be taxing everyone at what will basically be a flat rate which will peddle the gap between rich and poor. Couple this with the effects of the planned cuts to expenditure and we'll have higher income inequality, the health and education systems won't be as good as they are now, and other public sectors and infrastructure will be compromised. This is where the real "long-term consequences" are going to come from.

Also... The LNP are hell-bent on returning to surplus but for some reason won't tax the mining industry or the heavy carbon polluters.... ??!?!?
 

nerdasdasd

Dont.msg.me.about.english
Joined
Jul 29, 2009
Messages
5,354
Location
A, A
Gender
Male
HSC
2012
Uni Grad
2017
Taxing pollution is a good idea! It gives companies an incentive to reduce pollution , which supports the renewable energy industry! They are mutually beneficial ...
 

Okashi

Member
Joined
Nov 7, 2011
Messages
300
Location
Sydney
Gender
Male
HSC
2013
If we don't return to surplus now when the economy is in good shape , when do we return to surplus then?
 

Lolsmith

kill all boomers
Joined
Dec 4, 2009
Messages
4,570
Location
Forever UNSW
Gender
Male
HSC
2010
why can't just one of you cunts who harps on about "surplus" give me one decent reason for doing so
 

Okashi

Member
Joined
Nov 7, 2011
Messages
300
Location
Sydney
Gender
Male
HSC
2013
why can't just one of you cunts who harps on about "surplus" give me one decent reason for doing so
Getting back to surplus on average over the economic cycle to:

- Not crowding other borrowers domestically.
- Lower Current account deficit
- aiming for surplus over the long term means no interest repayments.
- sustained deficits may lead to a 'debt trap' scenario where we consistently borrow more and more to finance existing debts.

I don't see why government fiscal policy should always be the main primary economic instrument at all times over the economic cycle to power the economy rather than simple domestic consumption and demand.
 
Last edited:

wannaspoon

ремове кебаб
Joined
Aug 8, 2012
Messages
1,401
Gender
Male
HSC
2007
Uni Grad
2014
@ Not crowding other borrowers domestically: sorry but the Australian government debt to GDP is only 11% of GDP that's hardly crowding the borrowing market domestically... considering that Japan's Government debt to GDP is 214%, Singapore's is at 114%, UK 88%, USA 74%... Australia's is a drop in an ocean compared to these countries... Borrowing is also a part of running any venture (Including Government)... Businesses do it, you would do it when you buy a car or a house... and you would expect the Government to do the same...
 

isildurrrr1

Well-Known Member
Joined
May 13, 2013
Messages
1,756
Gender
Undisclosed
HSC
N/A
Isn't the US debt much higher than that
Federal debt is 11 trillion, state debt is 5ish, so it totals up to 16 billion if you count the individual states...

Ability to service your debt matters more than anything. Okashi the economy isn't really in good shape, the only reason why we don't have a major recession is because of our natural resource boom. Governments run deficits all the time and it's not really that much of an issue, especially considering private debt of Australian's (not including mortgages).
 

Okashi

Member
Joined
Nov 7, 2011
Messages
300
Location
Sydney
Gender
Male
HSC
2013
@ Not crowding other borrowers domestically: sorry but the Australian government debt to GDP is only 11%. Borrowing is also a part of running any venture (Including Government)... Businesses do it, you would do it when you buy a car or a house... and you would expect the Government to do the same...
You're still borrowing regardless what the debt to GDP ratio is. While countries like Japan have a massive domestic savings pool - owing money to themselves,Australia literally has nothing at all. Businesses and individuals have to borrow money obviously but at some point I imagine they repay all of it... Unless you're advocating we should all owe money to somebody else forever.
 

Okashi

Member
Joined
Nov 7, 2011
Messages
300
Location
Sydney
Gender
Male
HSC
2013
Ability to service your debt matters more than anything. Okashi the economy isn't really in good shape, the only reason why we don't have a major recession is because of our natural resource boom. Governments run deficits all the time and it's not really that much of an issue, especially considering private debt of Australian's (not including mortgages).
Once the resources boom dies down do we have the ability to service our debt and keep the current account deficit at sustainable levels or will we go into a debt trap scenario? Debt is of course not an issue when it's at low levels but what some people are saying is that we never have to move towards a surplus. We are one of the standout economies in the OECD so if the economy is bad now, when is it good? Many European economies ran small deficits at the start backed with fake triple a credit ratings and because of cheap credit kept borrowing more and more leading to the current quagmire. Everything has to start from something.
 

soloooooo

Well-Known Member
Joined
Feb 13, 2012
Messages
3,311
Gender
Female
HSC
N/A
I don't think he will do much in the way of taxes, other than those already announced (to fund the parental leave scheme etc).
 

Users Who Are Viewing This Thread (Users: 0, Guests: 1)

Top