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Ken Henry and his tax review: should we be worried?

October 6th, 2009 · Greg Atkinson · 165 Comments

Back in May 2008, when times were good and the inflation genie was free, the Government announced that a review of Australia’s tax system would be undertaken. But that was before the global financial crisis struck and a lot has changed since then, so should we be worried about what recommendations the review panel will make?

Personally I think the tax review will end up being an expensive way to churn out door stoppers and although I don’t doubt a lot of good ideas will come from it, I do doubt that most of them will ever be implemented. Why?

Well according to the mandate given to the panel: “The review will encompass Australian Government and State taxes, except the GST, and interactions with the transfer system”.

This would mean then that to implement many of the review’s recommendations, State and Federal Governments would have to work together and that seems like a long shot (unless the States are effectively bribed). Just look at the current spat between the States over proposed changes to how the GST money is dished out and you can see how well our governments work together.

Can you imagine if the panel suggested for example that the resources sector should pay more taxes? States like Victoria & NSW would probably have no problem but Queensland & Western Australia are unlikely to be very happy. (putting it mildly)

In addition the tax Kevin Rudd once considered evil, i.e. The Goods & Services Tax (GST) is not up for review, so the panel is not really reviewing the entire tax system at all.

Why has the GST been excluded from the review you ask? Well because the GST is a great earner for the Federal Government and they don’t want it messed with. Yes the Prime Minster once vowed to fight the GST when he was on the Opposition benches as a matter of principle, but when he finally finds himself in a position where he has the power to do something about it, he won’t even let it be reviewed.

I guess if Kevin Rudd was Winston Churchill he would have vowed to fight the German’s on the beaches, but then have done a runner if they actually started crossing the channel!

Anyway since the review panel are due to hand the report to the Treasurer in December (I hope they label it well for Swanny, in big letters) I figure it is a good time to think about what might be some of the big ticket items contained in it.

A few days ago one of the regular comment contributors to this site posted a link to a speech by Ken Henry entitled: Towards a better taxation of savings and I think that provides a useful framework when contemplating what the Australia’s Future Tax System Review Panel might come up with. (thanks Ned for the link!)

In this speech Ken Henry focuses on household income and highlights how superannuation, investment property, capital gains, salaries, bank deposits and shares for example are taxed differently. Does this suggest therefore the panel will try to align how these are taxed more closely?

Could we see for example the capital gains even on the family home taxed in the same way as capital gains on shares? Could the review suggest that all capital gains from any investment be treated in much the same manner?

I also noted with some interest this observation contained in the speech:

“One piece of anecdotal evidence that has captured my attention in the immediate aftermath of the global financial crisis is the role played by Australian superannuation funds in financing, through equity purchases, a large-scale de-leveraging of corporate Australia. It is not at all clear that such a large structural change in corporate financing could have been achieved without our very substantial pool of superannuation savings.”

I have read this a few times and cannot work out if it is a vote of confidence in the Australian superannuation system or a hint that the panel will be recommending some structural changes in this area? Honestly sometimes when economists ramble on I am not even sure if they clearly understand what they are talking about.

Frankly I don’t quite see how you can have a review of the tax system where the GST excluded. Of course there are plenty of other tweaks that can be made but why leave out the GST? Does this mean the panel cannot even suggest (dare I say it) raising the GST?

After reading Ken Henry’s speech I was left with the feeling that the whole exercise will deliver a politically bureaucratic flavoured report over to the Government at a time when they will be pre-occupied in trying to get debt under control and preparing for an election year.

Therefore the danger is that rather than a comprehensive review of the Australian taxation system ever being undertaken, all we will end up with is the Government taking the bits they like (and saying they were recommended to them by the panel) and parking the bits they don’t. Thus we will simply replace one unbalanced taxation system with another.

Or the entire report could get the same treatment as reviews of the transport system get in NSW i.e; a big announcement, press releases but then gradually get buried and the Government does what it wants anyway.

I also worry that the overall timing of the tax review is not particularly good. Is the Australian economy really stable enough to seriously think about actually making any changes to the tax system in the next few years? Also could the panel have been swayed too much by the abnormal financial events of the last few years?

If no action is taken on the recommendations in the final report soon after they are made public then they will be left hanging. Individuals, businesses and companies will be left to contemplate what measures may be acted on and which ones the Government will reject. This may lead to investor uncertainty and affect business investment decisions.

We should also not forget that the Emissions Trading Scheme is due to be rolled out in the next few years so is it even possible to do anything else but try and get that working until early into the next decade?

Finally the only way I can see the State Governments being happy is if they get more money. So no matter what happens I doubt the review is going to result in less tax revenue being collected and I would suggest if you have felt the hand of socialist leaning policies in your pocket, then you better be prepared for the same hand to be looking under your couch for loose change.

But to be honest I have not be following the review very closely (although I heard some rumblings about lowering the company tax rate) simply because I don’t see anything happening until the next Federal election is well out of the way. In the meantime I will sit back and see how much of the report is leaked to the media. (intentionally or otherwise)

So I welcome feedback from people who been watching how the review has been progressing. Will the review result in long overdue changes to the taxation system that will benefit the nation, or will it end up like a mini Australia 2020 summit minus Cate Blanchett?


165 responses so far ↓

  • 1 Ned S // Oct 7, 2009 at 7:43 am

    The terms of reference are well worth a read:

    http://taxreview.treasury.gov.au/content/Content.aspx?doc=html/reference.htm

  • 2 Greg Atkinson // Oct 7, 2009 at 8:09 am

    Thanks Ned. Why couldn’t the terms of reference have been “review the tax system”? It seems the panel had limitations placed on in before it started hence the reason I said it would be a review with a political flavour. I am still surprised the GST is not up for review.

  • 3 Senator13 // Oct 7, 2009 at 3:53 pm

    So the review is due in December… Is anybody worried that any nasty bits will be buried in the Christmas news?

  • 4 Pete // Oct 7, 2009 at 5:05 pm

    Is anybody worried that any nasty bits will be buried in the Christmas news?

    Good point Senator. I’ll be looking out for that too.

    Incidentally I wonder what spending will be like this Xmas. Time for more stimulus payments? I dare say January will be a bit interesting.

    Greg I agree about churning out door-stoppers. And working with State Gov’s? Has anyone seen the State Gov’s lately? Bligh and Rees have destroyed any credibility their Gov’s had.

    Superannuation changes would be a bit of a worry. I doubt anything good will come from ideas in that area.

    Ultimately, as everyone seems to point out, it will come down to which recommendations are politically palatable and the others will probably be ignored. I think Rudd likes to see himself as a “man of change” (and of popularity) and wants to see lasting changes that he can put his name to. Ironically at the rate he is going, the things he will be famous for will be rather negative.

  • 5 Greg Atkinson // Oct 7, 2009 at 6:02 pm

    Senator, you raise a good point..it seems an odd time to finish a report, just before everyone vanishes for the break. Maybe this was intentional?

    Pete I do think we need to review the tax system, the fact that we need an army of people both in the public and private sectors to manage it means something is wrong. But I can’t see much happening as a result of this review. Anything nasty will be buried for sure, especially in an election year. I suspect Ken Henry will be pulling his hair out in a years time as his watches his report fade into memory, then again he is a career public servant so he probably knows what will happen anyway.

  • 6 Ned S // Oct 7, 2009 at 8:45 pm

    The GST is a very obvious tax on expenditure Greg – And Aussies love spending money. Rather than saving. So upping the GST rate is something that could result in a government losing an unlosable election – With Kev being way too smart to fall into that tired old trap.

    So there will just be other taxes on expenditure – Environmental ones are very good for now I suspect? As indicated in the terms of reference.

    And while Henry has been told that the acronym “GST” is not one Kev wants to hear much of at all I think, it is fully expected that he will chat about the future desirability of taxes on expenditure.

    And somewhere down the track, some other chap (blessed by the 20/20 benefit of hindsight), will figure out the REAL solution and say Geez, we could actually achieve all these wonderful things Henry spoke about by simply cranking up the GST a few percent – To make up for the now obvious but previously unforseen issues with collecting it through saving the environment – Which was of course the way that truly environmentally aware and nice Mr Rudd wanted to go.

  • 7 Greg Atkinson // Oct 7, 2009 at 9:24 pm

    You are right Ned, I guess you can see why I would not last in politics too long. I would just up the GST, tax savings less and get rid of a heap of other taxes. As long as the basics are GST free then I have no problem with the it. (it is a hard tax to cheat on)

    Then I would leave the company tax rate as it is, but offer say a max 5% cut if companies cut C02 emissions, were nice to the planet or invested in R&D. I am more of a carrot sort of guy.

    I just don’t like to see taxes used as a social engineering tool. We get enough of that when the money is distributed.

  • 8 Ralph // Oct 8, 2009 at 8:41 am

    Greg, I’d support a party with those policies too. But it’s just too simple. Not enough analysis of the winners and losers and whether they live in marginal seats etc.

    Whatever comes out of the review, it’s certain that Rudd will cherry pick the things he likes. For the rest, it’ll be “considered for implementation at a later stage” or whatever language politicians use to put these things off.

    I also agree with several other commenters who wondered about the timing. My thoughts are that because this thing was conceived of in rosier times, it’s somewhat lost its relevance now. I’m not sure there’s much appetite for wholesale tax reform right now. I reckon the main political thrust is returning to growth, including doing all the things that’s supposedly necessary to do that. Like borrowing and spending taxpayers money and keeping house prices high. Significant tax reform feels like a luxury in that context.

    As to the timing itself, just think of the distractions that we know will be there around that time. Aside from Christmas approaching, the first home buyers boost will be coming to an end (and who knows where prices will be then) and there will possibly be negotiations and a vote on the ETS and talk of double dissolution elections. There will probably be a bit of fanfare for a day or two, but I predict that it will then be drowned out by the surrounding noise.

  • 9 Greg Atkinson // Oct 8, 2009 at 12:28 pm

    Ralph I think many people can sense that the report is going to be buried, it seems the only person really talking about it much is Ken Henry.

    There will be some noise made about a few issues for political purposes and I guess a few key revenue raisers will be flagged but apart from that, I suspect it will be filed next to the ideas from the Australia 2020 Summit 🙂

  • 10 Ralph // Oct 8, 2009 at 1:28 pm

    Rudd’s legacy – a PM who promised a lot, looked busy most of the time, set up a lot of committees to look into important stuff and spun the wheels via reckless borrowing during a financial crisis caused by too much debt.

    At the end of it all, what do we have? Not a great deal of substance. He’s an administrator, not a leader. His title should be CA – Chief Administrator.

  • 11 Ned S // Oct 8, 2009 at 5:13 pm

    It’s extremely difficult to break away from one’s core beliefs – With me having to accept that my bias is toward saving – And that is neither a popular nor very successful way to operate.

    But events of the last 12 months do seem to point out that it still could have a bit to be said for it. And in that light, I’m looking forward to hearing Henry’s opinion.

    Yes, timeframe is important – Mine is pretty long (20 and even 30 years.) So the fact that Rudd mightn’t say Oh good let’s do that tomorrow, isn’t a real big deal to me.

  • 12 myforwik // Oct 8, 2009 at 7:04 pm

    I hope it doesn’t end up anything like the pension review.

    Anyway we are long past the point of being able to reduce any welfare. So any changes will only be the ones that are playable to the masses. I wouldn’t be surprised if that ridiculous 90% > $910,000 tax bracket was recommended yet again along with those 5% progressive income steps.

  • 13 Ned S // Oct 9, 2009 at 4:58 am

    myforwik – My take on what I’ve read to date is that there will be a stronger empathisis on getting the welfare brigade into the workforce again. Henry is big on “capacity building” in that regard. And he doesn’t seem too keen on stuff like Family Tax Benifits maybe – Again because that extra loot could be assisting some potential workers to stay home I think? He questions whether kids really need a parent at home once they are school age – And seems to incline to the view the kids should be better off if the parent were bringing home a wage.

    The report could make very interesting reading for lots of reasons.

  • 14 Greg Atkinson // Oct 9, 2009 at 6:10 am

    Ned – the question is how much of the report will Ken Henry really have control over? I note there is a member of the Government on the review team so does this mean the panel might be subject to some gentle prodding? I wonder how much of the final report is already finding its way to Swan’s desk?

  • 15 Ned S // Oct 9, 2009 at 9:36 am

    I’d like to think Henry will be allowed the courtesy of producing what he sees as a useful and appropriate blueprint for the future Greg. And there seems to have been a fair bit of community consultation.

    As to the politics of it, Rudd commented a while back that public servants are always running strange ideas past him, but we don’t need to worry our pretty little heads about it as he can relied on to quash any silly ones – Smile!

  • 16 Ralph // Oct 9, 2009 at 9:51 am

    I’d imagine that the government has a very good idea of what will be in the final report. And I also reckon there will be plenty of leaks leading up to the release so we’re softened up for some of the so-called negative bits.

  • 17 Ned S // Oct 9, 2009 at 11:48 am

    To a certain extent the answers are the answers I’d suspect? With us not liking them being a bit secondary. And the tricky bit being government figuring out how and when to implement them.

    Because while Aussies sitting back and collecting welfare while we bring in lots of migrants to do the work might sound attractive on the surface, governments also have to consider the fact that if you don’t work you really don’t get paid a lot.

    And current Aussies will get the dirts when they figure out that while recent arrivals are buying houses and eating steak, they are living in rented flats and eating mince. Time to get them back to work before they have too much more to whinge about in the future maybe?

  • 18 Senator13 // Oct 10, 2009 at 5:58 am

    I don’t know how many BIG reforms will actually come from this. I have a feeling that it is just going to be tweaking around the edges. Fiddle with some rates and thresholds… Hopefully they can iron out the system and make it a lot simpler. If making it simpler is the one thing that comes out of this then it will have been worth it.

    Anything to the GST is out. Any changes need agreement from all the States. Rudd would not want to go through an election on the GST. We have already had enough of those. It would also be seen as adding to the cost of living. I think this is why it was ruled out very early on.

    Another area that the States get in the way of is Stamp Duty. I would love to see it lowed or abolished – as it already should have been when the GST came in. But the states want all the money they can get so they will take the GST and also Stamp Duty and with it mismanage a state.

    The areas I will be interested in will be what they do with Capital Gains Tax? Hiking it on the family home is a bit scary. Lets hope that was just media speculation and nothing comes of it.

  • 19 Greg Atkinson // Oct 10, 2009 at 7:29 am

    Senator I think you are right about the tweaking around the edges. I believe the true purpose of the tax review is so Rudd can say he did it…then he looks like a reformist without actually reforming anything.

    In years to come if anyone is critical about the lack of tax reform then Rudd will say “we conducted the biggest review of taxation in 5o years”. He then blame the states etc. for any lack of real progress.

  • 20 Greg Atkinson // Oct 13, 2009 at 4:52 pm

    I wonder what this means? Are politicians trying to influence the tax review? http://www.theaustralian.news.com.au/business/story/0,28124,26204589-36418,00.html

  • 21 Ned S // Oct 13, 2009 at 6:00 pm

    Sounds like some vote buying from our mates who have an election coming up next year?

    Not sure why they bother – It’s not like they need the votes – Maybe they want to be remembered for something besides pushing Australia’s overpriced housing higher? Or distract attention from the ETS stuff?

    Who’s to know what goes through the minds of pollies.

  • 22 Ned S // Oct 14, 2009 at 7:59 am

    Some real quick and dirty calcs on that bit about the government (namely tax payers!) might chip in 1.5% to super:

    With 10 million workers in the country earning an average of $50,000 pa that means the government (namely tax payers!!) will get stung $7.5 billion pa to fund this rocket science. And the workers will take home $7.5 billion pa less to fund the other 1.5%

    But the superannuation industry will like the additional fees they can charge on it all. It sounds like a socialist grab to me – Take 1.5% of the national wage and salary income pa from one lot of tax payers and give it to another lot of tax payers. Plus a bit more of the “government knows best” philosophy where all wage and salary earners get to hand over 1.5% of their income to the super funds.

  • 23 Greg Atkinson // Oct 14, 2009 at 10:01 am

    Ned I think you are right, it looks like a covert money grab. I also would not be surprised to see the Government somehow tweak the system so the superannuation funds are gently pushed towards investing in Government infrastructure projects.

  • 24 Senator13 // Oct 21, 2009 at 12:39 pm

    I thought this was an interesting article by the former Treasurer in todays paper: http://www.smh.com.au/opinion/politics/labor-must-rule-out-a-tax-on-homes-20091020-h6sp.html

  • 25 Ralph // Oct 21, 2009 at 2:34 pm

    Nice link, Senator.

    I don’t think there’s much chance of Labor trying to try that one on. I don’t think they’ve got the guts to make any changes that may cause a drop in house prices. Imagine the outcry in voterland – how dare politicians reduce the value of my hard-earned equity. Not to mention risking the future of one of our national industries – real estate speculation.

    But to offset the reduction of the first home buyers grant with the introduction of tax treatment favouring property investment, that’s another matter. If so, we could be looking at the replacement of a temporary handout with recurrent tax treatment that’s favourable to the housing industry. Responsible economic managers?

  • 26 Ned S // Oct 22, 2009 at 6:16 pm

    What would actually seem to make intuitive commonsense to me is that if you buy an asset (including the family home) using cash there shouldn’t be any CGT owing on it – There is no interest to be negatively geared of course. Whereas if an asset is bought using credit one can claim the interest as an expense and you get to pay CGT on the appreciation.

    That would need lots of refining of course. And at this time I’m just happy to wait for the outcome of Treasury’s deliberations – They are the ones with the mathematical models that tell them how the whole system interacts I’d guess?

    Picked up a cute bit of goss a little while back – Seemed they were feeling chuffed that with unemployment not going up as much as expected, the drop off in tax reciepts would be less than expected. Well yes and no – Seems they initially forgot to allow for the fact that the working hours of all those still employed tax payers could have fallen a bit and with those lost hours being at higher marginal rates, tax recipts might be done a bit more than they’d like anyway.

    Gotta laugh hey?

  • 27 Greg Atkinson // Oct 22, 2009 at 8:45 pm

    Ned I think the tax office might also be in for a bit of a shock when people write off their stock losses for the past financial year.

    As for taxing capital gains on the family home I would say this is probably more likely than it perhaps seems right now. After all, the GST is suddenly untouchable and this was something Labor vehemently opposed while in opposition.

    Standby for the smoke and mirrors show 🙂 Give people something today (like money in the hand) and they won’t worry about the fact that they will have to pay it back later. If home owners were allowed to claim their mortgage interest as a tax deduction they just might happily accept to be taxed later when they sell their home figuring it will be years away.

  • 28 Ned S // Oct 22, 2009 at 10:50 pm

    Then there are the small business people Greg – Lots of reduced incomes there. Plus some big future tax credits through losses even.

    Still can’t see the CGT on homes flying for those who purchase with cash. Worse than just unpopular – Out and out iniquitous I’d say. And I don’t get the feeling Henry is about that as such.

  • 29 Greg Atkinson // Oct 23, 2009 at 7:31 am

    Ned I am thinking the CGT homes strategy might depend on how many voters in marginal seats would be open to the idea if they got some money in the hand now. The idea could be easily pitched along the lines of “why should property investors (insert “rich people”) be able to get a tax deduction for the interest on a property loan when “battlers” who work hard for the Australian dream cannot”. The tax could be designed in such a way that many people would simply figure it would be 20 years before it affected them so what the heck? If it reduced the tax they paid now I think a lot of people would take the bait. Perhaps as a sweetener the first home buyers grant might be boosted again? (and maybe the States agree to cut stamp duty and some other property related taxes?)

    I know it sounds far fetched but remember at one point it looked like the GST would never see the light of day and cost Hewson the election…and yet the GST is here to stay even when the people who vehemently opposed in are in a position to scrap it.

    It’s a funny old world!

  • 30 Ned S // Oct 23, 2009 at 8:39 am

    I don’t think it is far fetched Greg – The US has something along those lines I believe (but with the tax only being paid on properties over a certain value I seem to recall) – Although I haven’t researched it. It would be “risky” though – Especially with Oz house prices as they are – It just doesn’t make a lot of sense (to me) to introduce something right now that may well push them higher using more debt? (Fair enough as a one off stimulus when Rudd reckoned his little world was about to fall apart – But not now I suspect?) If necessary keep it up one’s sleeve should it really be needed for later just maybe???

    As to CGT on homes bought with cash – There are real issues there of course. It would affect all those homeowners who do actually own their properties – And while we hear a lot about all the ones who are in debt, there are lot who aren’t. I really struggle to see that flying. You sell a mortgage free home that was bought mortgage free, you pay CGT, you can’t buy another home of equivalent quality in a similar location? You typically lose on such transactions now given the existing “taxes” on them – Stamp duty, RE agent fees and legals. To add CGT to it is real rude. And it also runs against one of the primary reasons for wanting to dump stamp duty if my take on it was correct – Namely that it discourages things like people selling and moving to where their work prospects are better. Not that it was sounding like stamp duty would be dumped last I heard – Not yet anyway.

  • 31 Ralph // Oct 23, 2009 at 9:30 am

    I don’t think we’ll get CGT on primary residences either. It’s just too much of a leap in a recessionary environment. I don’t think there’s much stomach for reform at all at the moment.

    Overall, I think the Henry review is shaping up as a damp squib that will largely be swept under the carpet. Another committee/review that Rudd can chalk up and refer to in his election propoganda.

  • 32 Ned S // Oct 23, 2009 at 11:08 am

    Henry reckons the following is his last speech on it before the gov gets the report:

    http://taxreview.treasury.gov.au/Content/Content.aspx?doc=html/speeches/10.htm

    Haven’t read it in depth … Tonight maybe.

  • 33 Ralph // Oct 23, 2009 at 11:31 am

    Thanks, Ned.

    Read that. He basically just says that you’ve got to have a very sound case for tax reform and that an effective tax system can be used for all sorts of nice social outcomes.

    To me, that says he’ll recommend a series of things that are noble and nice, but are just too hard to do anything about. Stuff that means co-operation with the states (yeah, that’s gonna happen). Stuff that upsets vested political interests.

    Rudd is about as courageous as a wet lettuce leaf. My faith in the Rudd government to do anything that is actually good is close to the bottom of the barrel.

  • 34 Ned S // Oct 23, 2009 at 2:50 pm

    Think of it as a ten year plan maybe Ralph. A Rudley Dudley lacking in courage is OK by me. I’m just hoping he doesn’t make the mistake of thinking he’s competent and do anything gungho! 🙂

  • 35 Greg Atkinson // Oct 23, 2009 at 4:28 pm

    Ned this latest speech by Ken Henry actually scares me. It seems he holds the view that tax policies should be used to drive social outcomes whereas I reckon taxes should just be collected fairly and kept to a minimum. (with the aim of keeping the system as simple as possible)

    It is a worry that bureaucrats who have never worked outside the public sector are thinking that taxes are a good way to reshape the country they way they see fit.

    Perhaps all the media attention has gone to Henry’s head?

  • 36 Ned S // Oct 23, 2009 at 4:41 pm

    Haven’t read it as I said mate – Sufficient for the day is the evil thereof (or somesuch as the good book says?) – Tommorrow now maybe. But yep, I’ve had a feeling for a good while now it was going to be at least as much about societal change as revenue collection – Which is why I’m so interested in it. It will help tell me just how much I want to keep hanging around in this society. Cheers!

  • 37 Greg Atkinson // Oct 24, 2009 at 7:26 am

    Ned you might need to join me up here in sunny (well for now anyway) Japan 🙂

  • 38 Ned S // Oct 24, 2009 at 8:47 am

    Unlike the RBA perhaps, I do see value in having a Plan B (or even C) Greg. I’d have a few problems with language in Asia I think. But I remain open to other possibilities. 🙂

    I found BP’s comments on Novia Scotia interesting – But it’s way too far from any/all of my mob.

    Lots of it (for me) is just about figuring things out as best I can as to where I’d like to be in 5, 10, 20 and even 30(?) years from now.

  • 39 Greg Atkinson // Oct 26, 2009 at 9:19 pm

    Ned where is Biker Pete these days? He seems very quiet. I hope a bear didn’t get hold of him?

  • 40 Ned S // Oct 27, 2009 at 3:22 am

    If a bear got Biker mate, we’d be reading about a severely traumatised bear being nursed back to health by the Kanuk equivalent of the RSPCA I reckon! We’ll hear from him at an appropriate time I think.

  • 41 Ned S // Oct 28, 2009 at 9:46 am

    Our Kev is a busy little visionary alright:

    http://www.news.com.au/couriermail/story/0,23739,26271132-953,00.html

    The bit there that struck me was “And all infrastructure funding – which runs into tens of billions of dollars – could be linked to the rules.”

    Wonder what colour he’ll degree we should all paint our cars – White sounds safe and climate friendly. If one doesn’t have the money to pay the “black tax”.

  • 42 Greg Atkinson // Oct 28, 2009 at 10:58 am

    Ned maybe Kev will set up the Peoples Central Planning Committee? I guess developers would be happy about that because they would only need to funnel their “donations” into one area. Of course every “centrally” co-ordinated project would have a sign thanking our Dear Leader and Madame Julia.

    Perhaps Kev07 could instead focus on fixing say the hospital system or one of the other areas where he has promised action but we are yet to see any results. He seems on intent on taking on everything, but actually doing very little.

    Rudd and Co are starting to remind me a lot of the movie “Wag the dog”. Standby for a conflict or national crisis if Rudd’s poll numbers fall.

    By the way, I wonder how the nation is going to employ the millions of extra people who the experts reckon will be added to the population in the years ahead? It will not be in the mining sector, the trend there is towards driverless trucks, trains and automation where possible. Our manufacturing sector also continues to lose jobs so maybe we will end up a bit like Dubai and just keep building to keep the illusion of growth in place?

  • 43 Ned S // Oct 28, 2009 at 12:14 pm

    And nobody much in Oz seems to be noticing? Wierd – We must like having someone else do our thinking for us is about all I can put it down to.

    I’m actually hoping he is taking on too much to really achieve anything – Sounds best for mine. I probably could live under a dictator if he was competent – But I haven’t seen anything to indicate that Kev is. The lad has been worrying me a real lot ever since he took a week off last Chrissy to bone up on economics and decided he knew it all.

    Jobs and housing … Yep, we do sound a bit like the UAE – A high income developing nation. With the money coming in from resources; A large proportion of the population born elsewhere; Very heavy urbanisation; A love of infrastructure and property; The established population having a cradle to grave welfare mentality; And a pretty parochial way of thinking. With leadership having grand visions of opulence for all.

    Mighn’t be all bad – My house needs a clean after the dust storms – So a maid could be handy. Would be especially nice if we got UAE type taxes too … Dream on eh?

    Maybe that’s how Kev sees his future – Some sort of wise, benevolent and all knowing potentate. Although he’d be nasty little “king” to cross I think!

  • 44 Senator13 // Oct 30, 2009 at 9:28 am

    Do you think we will get another instalment of Rudd’s manifesto over this Christmas?

    Here is an interesting article:
    http://www.theaustralian.news.com.au/story/0,25197,26279369-601,00.html

    It just goes to show that there is so much more that is being swept under the rug and not attracting that much attention.

    With all that is going on, or at least suppose to be going on (or should I say going wrong?), is there enough time to successfully implement major tax reform? I would rather things stay as they are then another half baked rush job that pulls the rug out from everybody’s feet.

  • 45 Greg Atkinson // Nov 5, 2009 at 12:12 pm

    Here is comes from Swanny..the tax review will be a ten year plan! See: Tax review likely to be a 10-year reform plan, Swan says

  • 46 Ralph // Nov 5, 2009 at 1:03 pm

    Agreed. Swanny is something close to a national treasure. I suspect we’ll look back on him with fondness in years to come (in a tragic way of course). I can’t recall if the last government had a Swanny-like figure of mildly competent mediocrity. But don’t worry, we have Uncle Joe ready to step in and take up the slack if we’re suddenly relieved of Swanny at an upcoming early election.

    They are happy to pork barrel and cut corners to get money out the door when it suits them, conveniently overlooking little things like good governance. But then the government is happy to pick the eyes out of the tax review because it doesn’t much like what’s in it.

    I guess that’s government for you.

  • 47 Greg Atkinson // Nov 5, 2009 at 2:48 pm

    I think Swanny may be unique because he has reached such a senior position with so little ability. Mind you the Opposition team is not exactly full of bright minds ready to take power and guide the nation to safety.

    The problem is we need some real achievers to get into politics but the catch-22 situation is few of these people would ever consider politics as a career.

    Looks like we are stuck with Swanny and Shrek.

  • 48 Senator13 // Nov 5, 2009 at 4:57 pm

    ahhh hahaha 10 year plan! Of course it is. “Keep us in for another 10 years and we will deliver tax reform”. That’s classic.

    They might even finish off one of their other projects by then.

  • 49 Senator13 // Dec 23, 2009 at 4:52 pm

    Oh well, it’s in the Governments hands now:

    http://www.skynews.com.au/business/article.aspx?id=409980

  • 50 Ned S // Dec 23, 2009 at 5:17 pm

    Thank you for that comforting thought Senator. 🙂

  • 51 Greg Atkinson // Dec 23, 2009 at 5:46 pm

    A curious time for such an important report (or so we are told) to be released. It will now sit on the shelf for a few weeks and thus the media won’t be asking any tough questions for quite some time..if ever.

    Could this be the taxation version of the 2020 Summit?

  • 52 Ned S // Dec 24, 2009 at 12:59 pm

    Might get some idea in March by the sounds:
    http://www.theage.com.au/national/labor-keeps-tax-review-close-20091222-lbqy.html

  • 53 Greg Atkinson // Dec 24, 2009 at 2:49 pm

    Ned thanks for the link and…oh my. We think Australia is an open democracy hey?. An important report on taxation is handed to the Government and they refuse to hand it over to the Opposition for 3 months or more! Why? Because Swanny says the nasty Opposition might make tax an issue!

    Well Swanny you twit, you have just made tax an issue for the election all by yourself because now you are making the public wonder why a tax payer funded report cannot be released. The Henry review is not some secret document, the review was open to public submissions for crying out loud.

    This must be Rudd’s version of “open government”!

  • 54 Ned S // Dec 24, 2009 at 4:23 pm

    Yes, I suspected your feelings on that link might be similar to mine. 🙂 Doesn’t make me feel any happier about the fact that this is the mob that are censoring our view of the www either. Enjoy your Chrissy mate!

  • 55 Greg Atkinson // Dec 28, 2009 at 6:56 pm

    Ned, hope you had a great Christmas! I see the debate about the Henry review has started but since only Government have access to the full report it will be a while yet until we see some real scrutiny of the report. Looks like tax cuts are out of the question though, but I guess we already knew that. See: http://www.theaustralian.com.au/news/stimulus-spending-costs-tax-cuts-say-libs/story-e6frg6n6-1225814001205

  • 56 Ned S // Dec 28, 2009 at 7:35 pm

    Lovely Chrissy here mate – Ta – Three generations of family is about as good as it gets in the West for most nowadays I think!
    Tax cuts on wages and salaries – They’ll be thin on the ground for a good while I think? Going to be damn interesting to see what the verdict is on taxing investments though – Including their attitude to super. While bearing in mind that there are no free lunches.
    I’d probably prefer it if government confined itself to making decisions about important social issues – Stuff like whether gay marriages are legit or not maybe? Or the degree to which cigareete smokers should be made to feel like lepers?
    But given that they won’t, we all just get to make the best of their pontifications. Cheers! 🙂

  • 57 Greg Atkinson // Jan 11, 2010 at 4:13 pm

    So the Henry Tax review report is now with the government and I think we can safely say that they will not be going to the next election with any major changes to the taxation system that are even remotely unpopular.

    So if you take out measures that will not poll well where does that leave us? I suspect land taxes for the wealthy might be on the cards?

    Does anyone think the Government would be brave enough to suggest taxing capital gains on the family home?

  • 58 Ned S // Jan 11, 2010 at 6:56 pm

    Agree that Kev and Co aren’t at all likely to do anything to put a second term at risk Greg. But irrespective of what they do in an election year, the review will give us a good idea of the shape of things to come.
    Land tax – My punt is “Yes”. (Reasoning: It’s just such a nice big juicy piece to low hanging fruit to pluck.)
    CGT on family home – My punt is “No”. (Reasoning: A huge potential vote loser. And if negative gearing was allowed [which is the natural corollary] we’d have a housing market on absolute steriods – They’d want to have an awful lot of faith in their mathemtical modelling to risk that one just now.)

  • 59 Greg Atkinson // Jan 12, 2010 at 10:34 pm

    Ned I wonder if they will also give the tax treatment of shares a tweak as well? See: http://www.theaustralian.com.au/business/henry-report-under-fire-over-rumours-of-indexation-return/story-e6frg8zx-1225818585970

    I am with you on property, I reckon tax on the family home won’t see the light of day but a land tax on higher value properties could be on the cards.

    Mind you if China falls in a heap then things will get really interesting!

  • 60 Ned S // Jan 13, 2010 at 2:04 am

    Thanks for that link Greg.
    The bit at the end where it says “a plan to address the distortion in tax rates across the different classes of investments” certainly aligns with my impression of what they are about.
    I wouldn’t be at all surprised to see something like bank interest, dividends and rents all taxed on a different scale to wage and salary income – With the dear ole ma and pa types who don’t get “much” passive income paying quite a low rate on it and the nasty well-to-do types paying higher rates.
    And capital gains being taxed differently again (as it already is anyway) – But any tweaks there will be controversial as the link indicates.

    Loyal Australians do NOT mention the words “China” and “fall” and “heap” in the same sentence mate … 🙂 I’d HAVE to emmigrate – I don’t think I could bear to see what Kev would get up to in a fullon state of schizophrenic catatonia!

  • 61 Senator13 // Jan 16, 2010 at 1:05 pm

    The funny thing that I think a lot of people forget about China is that it is still a communist state with Government control over pretty much everything. Can we really trust all the numbers coming out of China? It is not like they have an ABS or other independent organisations scrutinising the numbers and putting out their own forecasts. I think there is still a lot we don’t know and I don’t think they are just going to let us see the true story. The Chinese have got them self into a good position and are not going to jeopardise it now by coming out and saying they have some shaky numbers.

    With all the talk of how diverse the Australian economy is – we do seem to have an awful lot riding on China.

    Oh well, I guess we wont really know anything until the Government does its report on the report… The rest is just speculation.

  • 62 Greg Atkinson // Jan 17, 2010 at 2:11 pm

    Senator I am also a little cautious of the numbers coming out of China. I mean if you were a regional official what numbers you would report..the ones the central government wants to hear or the actual ones?

    By the way I reckon we can count on beer being taxed more as part of the Henry review: See: http://www.smh.com.au/national/grog-review-spells-tax-hike-on-beer-and-wine-20100116-mdga.html

    What is going to be interesting to watch is how a complete overview of the taxation system will end up being little more than an excuse for the Government to raise extra revenue in areas that won’t hurt it at the polls too much.

    Alcohol will be taxed because it is a health issue they will say, but do you think they will slap a tax on fatty foods?

  • 63 Ned S // Jan 17, 2010 at 2:49 pm

    I have no idea if the Chinese are cooking their numbers or not of course. But a few points:
    * If I was a local official, I don’t think I’d feel very comfortable telling Bejing fibs unless they’d told me fibs were expected and required.
    * No-one questioned the figures pre GFC, so why start questioning them now – Without good reason?
    * I did read a while back that at the time there could have been some question about the amount of electricity being consumed maybe not lining up with what would be expected given the growth – That might be worth checking again?
    * There are certainly suggestions that China has been doing a bit of overbuilding and has a property bubble – Malls, office blocks and apartments with no tenants; Apartment prices that are 27 times income and such like.
    * But on that note I gather they now require a 50% deposit to buy an apartment (40% if it’s an investment) – Not sure what it was, but if it is a purely speculative debt based bubble and the rules are enforced, that sounds like it should pop it real quick.
    * China is such a different case to what “we” are used to I suspect – As in if any banks were to get into trouble, why would we even hear about it? It isn’t as if policy makers have to go to the equivalent of “Congress” to get some bailout funds I imagine?

  • 64 Greg Atkinson // Jan 22, 2010 at 9:01 am

    Ned – Well more of what Ken Henry has in mind is starting to trickle out. Tax breaks for older workers sounds good in theory, but I am sure it would have unintended consequences. Could it result for example in older people being paid less because employers know they are taxed less?

    As for China, their GDP numbers have been under a cloud for quite a few years and well before the GFC, it just didn’t get much airtime when all was good. This tends to happens – just think of Allco, Babcock & Brown etc. When times are good we often assume all must be okay because everything appears okay. But when signs of stress emerge suddenly everyone seems to be pulling the books apart.

    Even in western private companies regional offices etc. can tend to report what the head office wants to hear (unless the regional manager wants a new job). So I guess a lot of this would go on in China..seems only natural.

  • 65 Ned S // Jan 22, 2010 at 1:26 pm

    G’day Greg – There has been an old fogey tax rebate or somesuch around for a while now I gather. A Howard initiate that was introduced when I was overseas and not watching perhaps?

    A not so old chap (late 50’s I’d guess?) who’s still in the workforce mentioned it to me. As did a mate’s dad who’s retired and picks up a bit of income from his investments. Seems it’s called the mature-age tax offset. And you get it if you 55 plus.

    Yes, Ken Henry just got handed the dirty job of “leaking” the news that overall taxes are going to higher rather than lower I see – So that government can continue to provide its much needed and value adding services. 🙂

    And Rudd and Swanny reckon it’s all very serious stuff and we’ll need to work a bit smarter and more productively. (The word “jerks” comes to mind!)

    I think one of the things to be careful of in relation to the review at this point, is that we are about to see the various lobby groups starting to scream blue murder. And pollies working very busily to put their spin on it all. But that’s just short to mid term “noise” – Long term we’ll get whatever the recommendations are. Basically anyway. With a few carrots chucked in by those who like being elected officials.

    As to China cooking it’s books – I’m just not sure at all? But either way, I do agree with you that at some point one has to expect them to have a bit of a flat spot. And Oz won’t like it.

    It will annoy me if our learned leaders trot out the “No-one could have seen it coming” storey in amongst their woe is us weeping and wailing. Followed by Don’t panic; We’re hard working and clever and brave – We shall all work together as one and overcome! (Which just means they are going to annoy me again at some time in the future I guess … 🙂 )

  • 66 Ned S // Jan 22, 2010 at 1:37 pm

    A couple of specifics at this point:
    I’m not too worried about changes to CGT – Fingers crossed!
    But the possibility of increased taxes on the big resource companies would concern me if I held their stocks. With the impact likely to be the opposite for the banks with a lowering of the corporate tax generally perhaps?

  • 67 Ned S // Jan 22, 2010 at 2:12 pm

    This is weird: “Rudd has vowed to maintain the government’s $6.2 billion car industry investment fund despite Productivity Commission advice to roll back industry subsidies if it wants to increase national productivity”

    http://www.theaustralian.com.au/news/nation/bn-car-subsidy-to-stay/story-e6frg6nf-1225822319027

    Kev can’t seriously think we are going to be able to compete globally in the production of autos surely? Jeez mate, at least pick an industry where we have a chance!

    Maybe it has something to do with the auto industry being a big part of South Australia’s economy? And the fact that SA is off to the polls in March. That’s about the only thing that makes any sense to me???

    I’ve got stop reading this stuff – I’m convinced we are being led by retards.

  • 68 Senator13 // Jan 23, 2010 at 1:53 pm

    Some light reading:

    http://taxreview.treasury.gov.au/Content/Content.aspx?doc=html/home.htm

  • 69 GoWest // Jan 26, 2010 at 9:49 am

    Informative blog guys, unfortunately Ken Henry had to give us the bad news – yes all those public servants are costing us too much – especially Penny Wong’s 300 bludgers who have sucked out 2 years wages, super and pensions on an outright scam. As a taxpayer it makes you want to scream – they have blown the surplus and put us into debt to the tune of billions, now they have the audacity to talk about 10 year plans. The Russians had 5 year plans – obviously a 10yr plan will be twice as bad!
    I have seen accidently released treasury numbers and it is frightening how much tax revenue is disappearing to pay back debt. It is no-wonder Kevin is telling us he can’t afford to keep paying health dollars and is looking at ways of gouging more taxes from anywhere. My guess is that Kevin will take the easy option (as usual) and reverse all the tax reductions that Costello won for us PAYE workers. When that happens I will be looking at part-time work – why earn the money if they are going to pinch it off you?

    On another topic – Fairwork is a joke – if you want a union fight with gas companies in WA who pay revenue to the feds – no problem the feds will stand up and tell the workers where to go! I can understand the workers concerns about motelling – god knows how many times the state and fed govt’s have not delivered on promises to build more accommodation in Karratha. Bet you the opposite will be true in the eastern states for companies who don’t pay big fed tax’s.

  • 70 Greg Atkinson // Feb 6, 2010 at 1:57 pm

    GoWest I like how we now have plans out beyond 2020 when the government cannot even complete a tender for the NBN on time or within budegt. This is all smoke and mirrors of course, you simply promise everything to be delivered so far into the future and just hope the mug votes forget what you said.

  • 71 Ned S // Feb 15, 2010 at 12:12 am

    Gentlemen, we can rebuild him. We have the technology …

    http://www.smh.com.au/national/many-unhappy-returns-tax-office-faces-backlog-20100214-nzkv.html

    Maybe? 🙂

    Bloody typical – We get a new computer program for the tax office and the Chinese get a new train:

    http://www.smh.com.au/world/chinas-highspeed-train-breaks-record-20100214-nzes.html

    🙂 🙂 🙂

  • 72 Greg Atkinson // Feb 15, 2010 at 9:32 am

    Ned even Vietnam is getting a high speed rail link. When it comes to advanced technologies Australia is now trailing some developing economies.

    Here in Japan they are onto Maglevs and already have a test track up and running..these trains apparently crack 500 km/h.

    The Chinese train is fast alright, but it uses mostly imported technology as far as I am aware..so it is probably more accurate to call it a German-Japanese train in China.

    By the way, I have read articles saying the high speed trains in China will struggle to ever make a profit as it seems the average punter can’t afford the train fare.

    I wonder what the fastest train we have in Oz is..150 km/h?

  • 73 Ned S // Feb 15, 2010 at 6:45 pm

    I fully suspect the following doesn’t apply to any articles you’ve written or would want to write Greg, but just ensuring you don’t miss any tidbits that might assist you in knowing what really does flit around inside of Mr Rudd’s mind: 🙂

    http://www.smh.com.au/opinion/politics/dont-be-rattled-by-the-baby-guilt-trip-20100214-nzb9.html

    The sooner they release the tax report so he and Abbott both have something “safe” to chat about, the better perhaps?

  • 74 Ned S // Feb 18, 2010 at 8:52 am

    The coalition has its own tax review:

    http://www.smh.com.au/business/opposition-henry-review-wants-income-tax-cut-to-20-20100203-ndjz.html

  • 75 Senator13 // Feb 18, 2010 at 10:26 am

    Too bad they are not in Government or it might be more of a concern as to why they have not made it public… Yet we STILL wait for the real report.

  • 76 Greg Atkinson // Feb 22, 2010 at 8:50 pm

    I would guess the coalition would bring in views from a wide range of sources as they try and come up with tax policy. I am not sure why the SMH are trying to make a big deal out of it actually. What else can Opposition’s do besides try and develop alternative policies?

    The Government on the other hand has made a bid deal out of their tax review but they won’t show anyone what they have spent our money on. It is after all, a report we paid for..what’s the big secret?

    Rudd’s view of an open and transparent government looks pretty closed and opaque to me.

  • 77 Ned S // Feb 23, 2010 at 1:41 pm

    Kev seems more interested in chatting about whales and terrorists than about pink batts and taxes. It’s a pretty safe bet he’s looking for a few distractors.

    Suspect he might need to broach the tax topic before he goes to the polls though? Before he does his budget even would seem sensible.

  • 78 Greg Atkinson // Feb 23, 2010 at 2:11 pm

    Ned I might be wrong as usual but I suspect Rudd is a guy who doesn’t takes criticism very well and is now a man with a damaged ego. If he slips more in the polls I reckon he will be unable to work out what to do and that the tax review will get the chop basically because it is too scary to touch.

    As a result the budget will be an attempt to lift the Government’s standing and I guess there won’t be any major attempt to get debt under control.

    Actually I wonder if Swanny has any clue of what he is doing yet? Could he even get spending under control if he tried?

  • 79 Ned S // Feb 23, 2010 at 4:36 pm

    Imagine the chap who’d never been wrong Greg – What a bloody pain in the arse he’d be. 🙂 Plus what an inconsolable basket case when he eventually was. Hmmm …

    But philosophy aside, Yes, the Henry tax report issues are going to have to be handled very carefully by ALL aspiring government incumbents.

    As to Swanny, and the ALP generally, they do have a few issues when one realises that their grassroots support still really comes more from those who want some money they didn’t make than from those who made it.

  • 80 Greg Atkinson // Mar 4, 2010 at 11:43 am

    Well it seems I was right on the money when I wrote in October: “I don’t see anything happening until the next Federal election is well out of the way”

    Another win for this blog over the mainstream media plods who were getting all excited about tax reform.

  • 81 Ralph // Mar 4, 2010 at 1:29 pm

    Yes, nice crystal ball you have, Greg. K Rudd is a monumental disappointment. I don’t understand why he can’t just release the thing and let people see what’s in it. Can it be that bad?

    If something comes out of this government, it will be a lesson not to overpromise. Kevvie made that mistake and now he’s rightly being tarred as a do-nothing government. And I’m not sure that he has any way out either. But his answer is to propose a colossal change in health that has about as much chance of success as pigs flying. I hope the electorate see it for the stunt that it is – bring out a policy change that is bigger than Ben Hur on the eve of the election and expect us to believe it’s going anywhere.

    All this guy has done has spend money that we didn’t have in propping up the economy. Any PM could have done that. I mean, I could have done that just as well as Kevvie. What a joke.

  • 82 Ned S // Mar 4, 2010 at 1:47 pm

    Kev’s been busy with healthcare and hasn’t gotten around to doing the tax thing yet. So if Kev doesn’t do it, then there really is no-one else who can? This is insane.

    And it isn’t even making headlines anywhere except The Australian by the looks? Has Kev got the media in his pocket or something?

    Some quotes in relation to releasing the tax report:

    “I believe what Australian people wanted me to do is to get on with the business of delivering health and hospitals reform. Number one priority,” he told ABC radio.

    “Each thing in its season, we’ve got to do one thing at a time.

    “But in terms of specific timetables for doing it, no, I don’t have anything particular in mind.”

    So Kev reckons he knows what the people want?
    And reckons One thing at a time???
    So in relation to “specific timetables” on Tax, doesn’t “have anything particular in mind”.

    I’m gobsmacked – Abbott should be cutting him to pieces!!!

  • 83 Ralph // Mar 4, 2010 at 1:53 pm

    Hopefully Abbott is just working on his lines and is about to come out swinging. His ‘great big new tax’ line has wored a treat. Once he works on the next one and repeats it a few hundred times, this health thing will be a dead duck too. He has so much ammunition. I’m looking forward to seeing the Liberal attack ads. They should be corkers.

  • 84 Greg Atkinson // Mar 4, 2010 at 2:18 pm

    The main problem as I see it is the quality (or lack of it) across the journalism profession in Australia. Most of the plods reporting for the mainpapers simply rehash press releases and don’t bother to ask the tough questions.

    The notable exception being The Australian.

    I can read Rudd like a book because he is from the same mould as Sol Trujillo. Honestly have a look at this article I wrote in 2008 and you can see Rudd’s has followed much the same path as Sol. http://www.shareswatch.com.au/blog/business/sols-magic-mystery-tour/

    Maybe Sol and Kev are long lost twins?

  • 85 Ralph // Mar 4, 2010 at 2:46 pm

    Don’t forget the Fin Review. They also do a good job. But yes, I agree, the rest are dross.

  • 86 Senator13 // Mar 4, 2010 at 3:45 pm

    What a cop out.

    First the “greatest moral challenge of our time” and now the urgent “root and branch” tax reform – both put on hold by Rudd. I’m not too worried about the ETS being killed off as it was just a joke – but the tax review – once completed should have been released.

    It is going on three months now!!

    Did Rudd not argue about business certainty with the ETS? Where is his certainty for business when it comes to tax?

  • 87 Ned S // Mar 4, 2010 at 4:23 pm

    It sounds to me like his relaxation therapy’s starting to kick in:

    I know what I’m doing and it is good and worthwhile.

    I won’t stress myself by trying to do more than one little thing at a time.

    And I’ll steer clear of those timetable things ’cause they could stress me too!

    Is he on Valium or what?

  • 88 Senator13 // Mar 4, 2010 at 4:52 pm

    That’s it – does not matter that the review has been worked on for 2 years and is finished!

    I think Rudd is the type of person who can’t stand it if some people do not like him and call him PM blah blah.

  • 89 Greg Atkinson // Mar 4, 2010 at 5:01 pm

    You are seeing what happens when a guy who has never run anything is put in charge of the nation. Not only is Rudd a mess, but I don’t thing any of the cabinet have any hands-on experience either. They are either ex union reps or staffers from the ALP.

    Just wait until after the election. If Rudd wins we will find that the parts of the Henry review that raise income for the Government will be suddenly become very popular.

    I honestly don’t think the Government has any idea how they will fund the health system reform, build the NBN and pay down debt all at the same time. Why? Because it can’t be done.

    As Scotty would say: “the engines can’t take it captain!”

  • 90 Ned S // Mar 4, 2010 at 5:17 pm

    With a bit of luck Kev will be a “oncer” and he’ll be remembered by history as the nice man who said Sorry to the ATSI folk. It isn’t quite up there with being a Billy Hughes or a “Pig Iron” Bob, but should still pan out better than being the bloke who said “All the way with LBJ”. Although Gawd help us and him if he’s a “two timer”!

    Just read your Sol thing Greg – Yes, the one about setting the bar really low is important. For a number of reasons, Kev got that wrong – And it has now come back and bit him on the proverbial.

    A bit of direction for businesses that are trying to plan and implement stuff in the real world is really handy as you indicate Senator.

    Heck, does Abbott gut them for a) not knowing what is required to plan and implement anything or b) knowing the theory but not having the practical skills to do it or c) cynically withholding such info on direction from business for their own short term perceived political advantage?

    I’ve had the jack of this bloke! I wouldn’t give him a job wandering around the supermarket carpark collecting the trolleys – There’d be way too much potential for him to do damage.

  • 91 Ned S // Mar 4, 2010 at 5:45 pm

    Wayne Swan (as per wiki): Studied “public administration at the University of Queensland, becoming a lecturer in the Department of Management at the Queensland Institute of Technology … before entering politics”

    And Garret and Rudd’s writeups are less impressive in my opinion. Couldn’t bear to check anymore. NO PRACTICAL SKILLS in making ANYTHING happen in the real world.

    Geez, pick a bloke who runs his own little business as a sparkie and you’d most likely do WAY better!

  • 92 Anon // Mar 4, 2010 at 11:37 pm

    lol….sigh. What have we done to deserve this punishment and incompetence.

    “I’ve had the jack of this bloke! I wouldn’t give him a job wandering around the supermarket carpark collecting the trolleys – There’d be way too much potential for him to do damage.”

    haha…When something goes wrong, he’ll likely setup a trolley committee to evaluate what happened. Followed by a review of the findings and then another committee for implementation recommendations.

  • 93 Ralph // Mar 5, 2010 at 8:25 am

    So it’s agreed. Putting Rudd in was a mistake that needs to be corrected. I just hope that Abbott is starting to prepare an alternative position rather than just opposing – the job is his if he wants it. Now we hear that there seems to have been widespread fraud in the pink batts scheme. I really can’t see how the gov’t has any hope of defending this $hit. People were happy for the stimulus to be rolled out, but I don’t think anyone could justify the waste that has come with it. Getting cash out the door is one thing, but even then there are limits.

    Howard had reached his use by date, but I think few seriously thought Rudd would be this bad. As for sidekick Swanny, it’s hard to imagine a more inept politician. He clearly has absolultely no clue what he’s doing and can only recite party talking points given to him by his staff. Although, Garrett must go pretty close to giving Swanny a run for his money in the joke politician stakes.

  • 94 Senator13 // Mar 5, 2010 at 8:37 am

    The stimulus chqs were just a short term popularity ploy – I doubt many people would even remember receiving them let alone what they did with them and the chances of receiving some more free cash is slim.

    So Rudd really does not have much of a foundation to go off. People are sick of his grand plans and spin I think. They just want to see something get done.

    I think Rudd is starting to panic and rightly so because he has done nothing.

    I just can’t get over him sitting on the review after claiming how grand it was going to be.

  • 95 Greg Atkinson // Mar 5, 2010 at 3:32 pm

    It is going to very interesting to see at what point the Henry Review will be dusted off. My guess is that it will be used as the mechanism to raise taxes by stealth in the name of “reform”.

    The worrying thing is Rudd still seems to be hooked on spending and his health-care plan is likely to cost billions and undoubtedly millions of this will be wasted.

    But even more scary is that the RBA and Treasury seems to have no problem with our spiraling nation debt of the governments spend-a-thon.

    If the Chinese economy cools then we might just find that ourselves in a very nasty economic situation.

  • 96 Senator13 // Mar 6, 2010 at 11:11 am

    And here I thought that it would get buried in the Christmas news – I never thought it would never get released at all!

    Is what is in the review really that bad??

    I think your right Greg, tax by stealth might be their plan. They still have to pay for an NBN too…

  • 97 Greg Atkinson // Mar 7, 2010 at 9:26 am

    Senator when the review was first ordered by the Government Rudd & Swan were out selling it as a great moment in tax reform. Of course since the Henry review excluded the GST it was never going to lead to a system wide review of the taxation system, but at least a few good ideas were likely to come from it.

    In any case, why would the people who ordered the report and made a such a big deal out of it now not want the public to see it? On what grounds is the report being suppressed? The answer is simply because the Government does not know how to handle the report now it has been delivered to them, and they certainly don’t want to face any tax related questions in an election year.

    If they won’t even talk about tax reform how on earth will they ever actually deliver health reform?

  • 98 MH // Mar 8, 2010 at 2:07 pm

    Is it possible that they could be holding onto the reform until after the election. Hoping that they get re-elected by all of the mindless voters who had their hand out repeatedly. Their campaign will probably focus on the handouts and hospitals. Then after election, we will get shafted with new taxes and ITS, and swallow it for another 3 years. Whatever is in the review will hurt SME’s. Time to start preparing for more financial stress. I hope Abbott is ready.

  • 99 Ned S // Mar 8, 2010 at 10:18 pm

    Abbott has blotted his copybook straight off for mine – He wants to up taxes on big business and pay people to breed. Hey, I don’t care what he wants to use the money for; Or who he wants to take it off – The minute he says “increase tax”, that’s one strike. And he’s got lots of time yet to rack up two more and be “out”!

    We’ll see. But another high taxing, high spending, vote grubbing politician doesn’t sound like what is required to me.

    I think back to a supposedly funny yarn I heard once about a pretty unsophisticated old bloke in a third world democracy, who when asked how he intended to vote, replied along the lines:

    “Well, the first bloke who came through said he’d give me 10 dollars to vote for him; And the second bloke said he could only manage $5; And the third bloke offered me $2. I figure I’ll vote for the third bloke because he is the most realistic and least corrupt.”

  • 100 Senator13 // Mar 9, 2010 at 3:39 pm

    I would have to agree with you Ned. I am not a fan of the scheme or any paid maternity type schemes. It just encourages people to take on more then they can handle and compensates people for lack of forward planning. It also makes it harder for the organisation to do business.

    I do not think that now is the time for any new expenses especially those that involve raising additional tax.

    So I am far from being sold on the idea.

    I am sure the tax review would have covered such matters – but it looks like we will never know.

    But maybe this is the price to kick Rudd out and hopefully in the long term the good things that come of kicking out Rudd out weigh the bad?

  • 101 Ned S // Mar 9, 2010 at 8:33 pm

    As I said Senator, it’s more about the fact that he wants to up taxes to buy votes, than about what he wants to spend the taxes on per se. But Yes, I’ve got lots of reservations about governments fiddling to bring about societal change. And the example of them choosing who will and won’t be paid and how much to breed, is one that Australia has an extremely poor track record on – IMO.

  • 102 Greg Atkinson // Mar 9, 2010 at 10:01 pm

    MHL I would say Rudd and Co have looked at the Henry report and realised it is simply too hot to handle in the public domain before the election. Then after the election I guess what you suggest will probably happen and suddenly there will be tax increases because Ken said they were a good idea.

    I am not sure why Abbott is on about paternity leave, he should focus on giving people a choice between a big spending government that wants to run everything, and a smaller government that stays out of our way as much as possible.

  • 103 Ned S // Mar 10, 2010 at 10:42 am

    Swan and Rudd between them presumably know way less about taxes than pretty much any CPA. So they’d be poking their necks out a lot to tell a bloke like Henry who presumably knows more about tax than just about anyone in Oz, that he is wrong. No, their input really just boils down to figuring out what is politically acceptable to implement when – Precisely “because Ken said they were a good idea”.

    And at the moment, they don’t feel it is politically acceptable (for them), to even see the report discussed it seems?

    As to Abbott, well dropping clangers like he is going to up taxes on big business by 1.7% out of the blue is rather strange behaviour – A measure of just how much he’d desperately like to be PM perhaps?

  • 104 Ralph // Mar 10, 2010 at 2:22 pm

    Nice commentary, guys. Keeping the Henry tax review on the shelf is more than anyone expected, I think. If there was ever anything that tags Rudd as gutless, this is it. It really does show they are afraid of offending anyone.

    My guess is that it’s not even that explosive. More that K Rudd doesn’t know how to respond in a way that doesn’t alienate at least one key voter bloc. He’s already on the nose due to a perception of lack of delivery. So he responds with a grand health proposal that has absolutely no chance of being implemented. That’s more evidence in the public’s eye of “all talk, no action”.

    If K Rudd were to release the tax review, it’s inevitable we’d see no concrete tax reform come out of that – Kevvie has the brown underpants on. So yet another example of all talk, no action. The poor guy is damned if he does, damned if he doesn’t. Rather than release a report he can’t act on, he chooses not to release it at all and be seen as a non-actor. Not that I feel sorry for him, mind you.

  • 105 Ned S // Mar 10, 2010 at 6:53 pm

    I find it very, very difficult to respect anyone who actually wants to be a politician in a reasonably affluent democracy. They are either stupid and don’t realise what the job entails; Or self-serving and don’t care; Or arrogant and think they can improve things regardless! Hmmm … Don’t mind me; I’m just having one of my I hate politicians days. 🙂

  • 106 Ned S // Mar 10, 2010 at 7:17 pm

    And truth be told it’s often/usually(?) all three – “stupid”, “self-serving” and “arrogant”. Geez … No wonder a man has become a conscientious objector when it comes to voting. My personal opinion is that the sooner we all stay home on polling day to tell the twaddle-hards what we really think of them, in overt defiance of their having conscripted our votes, the better! 🙂

  • 107 Ned S // Mar 11, 2010 at 10:48 am

    Remind me again – Why exactly do we have politicians and just what do they add to our lives? The last time I can recall one doing something of significant use was back in the 1970s when Whitlam finally bailed on Vietnam. And that was just reversing another bloke’s cockup.

  • 108 Greg Atkinson // Mar 11, 2010 at 3:04 pm

    Ned this is a big part of the problem, you just don’t get a lot of talent into the political ranks because the profession is held in such low regard. The same could be said for journalism as well, it scores pretty low when they do surveys about which professions are respected.

    As for the Henry Taxation Review, what a complete waste of time and money. If I were Ken Henry I would not be a happy camper and I feel sorry for the members of the public who put in the effort to forward submissions.

    All in all, pretty disgraceful behaviour by Rudd & Swan.

  • 109 Ned S // Mar 14, 2010 at 2:18 pm

    http://news.smh.com.au/breaking-news-national/govt-to-release-tax-review-by-may-budget-20100314-q5ky.html

  • 110 Senator13 // Mar 14, 2010 at 2:21 pm

    Believe it when I see it…

  • 111 Ralph // Mar 15, 2010 at 12:54 pm

    I’m sure we’ll see it. K-Rudd and Swannie thought they could get away with burying it. Now, of course, they realise that they’ll look like cowards for having commissioned a tax review but not having the guts to even present the findings to the public. Not to mention, as Greg suggested, an insult to all those members of the public who provided suggestions.

    So I’m sure we’ll have it released – it’s part of Kevvie’s new pledge to be someone who is ‘all talk and perhaps a perception of action’. Whether our fearless government has the courage to do anything with it is going to be another matter altogether. Kev doesn’t even have enough courage to do tough stuff in his first term. Imagine how populist and weak he’ll be in his second term. Best to vote this clown out now before he becomes an even more ineffectual PM.

  • 112 Greg Atkinson // Mar 15, 2010 at 5:04 pm

    Ralph I suspect we will get a release without any comment. For example we will be told what a wonderful report it is, how great Rudd and Swanny were for commissioning it but….the Government needs further time to study the report blah blah.

    Any thing that looks tough will be pinned on Henry and the public will be told “it’s a just a report, not government policy”. Anything that looks like a vote winner will be more warmly embraced by Rudd/Swan and Co.

    Standby for the whole tax reform to be put on one of Rudd’s long term timescales. I reckon we might even hear the year 2020 mentioned again. It is going to be a big year that year! We may even have a broadband network by then!

  • 113 Ned S // Mar 17, 2010 at 2:17 am

    The following sums up Abbott’s gaff nicely IMO:

    http://www.smh.com.au/national/costello-slams-abbott-parent-tax-20100316-qclw.html

  • 114 Anon // Mar 17, 2010 at 8:19 am

    Abbott’s policies thus far have been disappointing. I dont think he’ll win and history has shown seldom do Governments get one term.
    Its unfortunate but we will have another Dudd term.
    Perhaps Costello will make another run for leadership once labor has had a few terms and turned us into Greece. Costello would be a shoein then lol.

  • 115 Greg Atkinson // Mar 17, 2010 at 9:10 am

    I think Costello should focus on being a team player and stop scoring own goals. If he didn’t have the courage to stand for Opposition leader when he had a few chances then he should shut up and let the current Abbott have a crack at it. Both Costello and Turnbull appear to be acting like a couple of sore losers. Message to both of them: grow up.

    I think Abbott needs time to come up with detailed policies. It is not an easy thing to do in Opposition as you don’t have the resources that the Government has.

    As for the parental leave plan, well big business actually pays for much of the current immigration programme so what is their problem with helping to pay for the next generation of workers born and bred in Oz? I also don’t think big business have really thought about this in much detail. For example, wouldn’t at home parents be an attractive market segment since they would have time and money?

  • 116 Anon // Mar 17, 2010 at 9:27 am

    I thought about the demographic issue regarding the parental leave policy. Its good for business to encourage population growth going forwards (we dont want to turn into Japan), but it was bad policy politically because he is now seen as a hypocrite. You cant argue about the ETS big tax on everything then put a huge tax on Big Business. He needs to hire a better strategist/PR firm…you cant make these kinds of errors running for Prime Minister. Another worrying sign was the speed at which he took the policy to the public…it was suggested his party wasn’t even advised/allowed to contribute?
    When Rudd came onto the scene it looked ominous straight away. I am not feeling as certain about Abbott. I really wish him the best and god knows I’m not a fan of Rudd.

  • 117 Anon // Mar 17, 2010 at 9:37 am

    I was just thinking…if we increased the pay of the Prime Minister to say 30-40 million a year would we get better candidates?
    I know the figure is large but it might address some of the problems with lack of good candidates we have for prime minister. Lots of the best and brightest will go where the money is…and surely thats not an unreasonable amount given they are running essentially a trillion dollar economy?
    Its funny we pay top performing hedge fund managers 50-100 million a year who manage 20 billion+ of capital in some cases. But we pay the prime minister, who runs a trillion dollar economy, 500k lol.

  • 118 Greg Atkinson // Mar 17, 2010 at 10:26 am

    Hi Anon, actually I am a fan of raising politicians pay and having less of them as I wrote a while back in this rant: http://www.shareswatch.com.au/blog/opinion/bring-back-the-toga-and-lose-the-house-of-representatives/

    The point about the P.M is that he/she actually doesn’t manage the economy really, he/she just manages Government spending and even then so much of this is recurring in nature that he/she actual only has control over a small fraction of Government spending anyway.

    Having said that, I think we could pay them a little more although I would be also cutting back on the post office travel perks etc.

  • 119 Senator13 // Mar 17, 2010 at 10:59 am

    Costello did not have the guts to run for leader over many, many years and now that he has left Parliament altogether – to go work in a job the Government gave him – to be making comments like he did today is a bit rich. I wonder when a Government appointment will be offered to Turnbull? It can’t be too far off.

    I am not that big a fan of paid parental leave schemes to start with and have not yet been sold on the idea. But I would rather have to pay for that tax then the CPRS tax. Abbotts PPL scheme is only $2.7Bn. I’m sure it could even be funded with out a tax on business as I am sure you could find 2.7Bn worth of savings in the budget – especially after seeing all the waste and mismanagement and reckless spending we have seen from this Government.

    Abbott’s PR has been okay up until now. He certainly is on TV a lot more then Turnbull was, and much of it has been positive, unlike Turnbull who made the headlines for all the wrong reasons. But I do agree that for him to become PM, Abbott and the Opposition still need to be more polished. At least they are exposing the Government over a few things these days, unlike the Turnbull days where the Government was getting away with everything.

    The ALP were only happy with Rudd while he was popular – if that keeps dropping off he might have to start looking over his shoulder.

    Back to the Tax Review – it is funny how that Wong kept starting countdowns for the Opposition to release their response to the CPRS, I think there needs to be a countdown for the release of the Tax Review. It is going on a quarter of a year now… What a joke.

  • 120 Anon // Mar 17, 2010 at 11:33 am

    “The point about the P.M is that he/she actually doesn’t manage the economy really, he/she just manages Government spending and even then so much of this is recurring in nature that he/she actual only has control over a small fraction of Government spending anyway.”

    Interesting. But the small fraction they do control can have huge negative impacts in the wrong hands. Look at the Retail handouts and FHOG flowon effects (I’m assuming Rudd and co had control of this?). Now the sugar has been given out and we have nothing to show for it. Billions down the drain…i would rather pay millions more to a competent leader and perhaps the money would have been spent more effectively.

    “The ALP were only happy with Rudd while he was popular – if that keeps dropping off he might have to start looking over his shoulder.”

    For sure. Gillard is in the wings. She has alot of great attributes more capable and less fake or put-on. I may vote for her if she comes into leadership…always game to give a female a chance to prove herself in the big chair.

  • 121 Ralph // Mar 17, 2010 at 1:09 pm

    I agree that Abbott has a way to go before he can lay any real claim to the Lodge. I think the message is out that Rudd stinks and that he’s flailing about like a fish out of water. I think the verdict is in that Rudd is incapable of doing anything other than instigating reviews and summits and then wimping out when it comes time to act on the findings. It’s quite hard to believe how he has been so weak and limp-wristed. So now people are looking to Abbott as an alternative PM, not just an attack dog. So that means that Abbott has to outline how he’d make it all better.

    I think Abbott’s problem right now is that he looks like he’s flip-flopping all over the place in an attempt to be loved by all. He doesn’t believe in climate change (he’s told us so), but he’s proposing a climate change policy. He’s known to be vehemently against paid parental leave but then announces a very socialist-looking policy. He opposes excessive stimulus, but won’t say what he’d cut. And on it goes. Although Abbott is giving us a very good reason to distrust Rudd, he isn’t yet mounting a very good case that he’d do much better himself.

    If things continue as they are, I reckon it could end up quite similar to the SA election this saturday. Rann (ALP) is very much on the nose as a confected purveyor of spin and the public is ready to dump him. But the Liberal opposition is struggling to mount a credible policy platform of their own. So it looks like the ALP may sneak back in given the benefit of the doubt.

  • 122 Anon // Mar 17, 2010 at 2:50 pm

    “I think Abbott’s problem right now is that he looks like he’s flip-flopping all over the place in an attempt to be loved by all.”

    Thats a good observation and right on the money. If you try and please everyone you end up pleasing noone!

    “Although Abbott is giving us a very good reason to distrust Rudd, he isn’t yet mounting a very good case that he’d do much better himself.”

    Yep thats how I feel. As Senator said he needs more guts and detail in his policy ideas, they sound very rough and not thought thru (unpolished).

    If I were prime minister (and thankgod i’m not) I would deflate the housing bubble by removing any associated stimulus, encourage saving and deleveraging and severely cutback government spending. Then I would resign and leave the country immediately before I was assassinated.

    Above not advice just chatter, see a financial adviser for information and decisions etc.

  • 123 Ned S // Mar 17, 2010 at 3:23 pm

    Abbott’s being set up for a fall on this KHR thing – Rudd and Swan should have a pretty good idea on what it contains and which bits they do and don’t like and why by the time it eventually gets released. While Abbott and Barney are going to get hit with it cold and asked what they think. So there’ll be plenty of opportunity there to be made to look very silly in a hurry if extreme caution is not exercised.

  • 124 Ralph // Mar 18, 2010 at 8:28 am

    Anon, taking the government supports away from the housing market would most certainly deflate the bubble in a spectacular way – as surely as the sun rises in east and sets in the west. But any PM with the courage to do that would have to have balls the size of watermelons. Or in Julia’s case, perhaps ovaries. Such a PM would guarrantee themselves to be a ‘oncer’, but they could slip off into the sunset knowing they’d done the nation a great service.

    Ned – I reckon you’re right in that the gov’t will surely be more prepared to handle the Henry Review. But I reckon it’s more a case of how the government feels about it. They are already very conscious of their perception of do-nothing scaredy cat ditherers. When they finally bring out the review they are only going to accentuate that by appearing to run a mile from anything that looks remotely difficult. Poor K Rudd and Swannie can’t win – they’re all talk and no action if they don’t release it, but they’re still all talk and no action when they release it but severely water down or ignore many of the recommendations.

  • 125 Ned S // Mar 18, 2010 at 9:51 am

    Can’t see the Oz government intentionally doing anything drastic that would reduce housing prices. The “company line” from all official parties all the time is that they want to see more affordable housing built. Which is not the same as saying they want to see house prices go down.

    Declining housing prices are certainly perceived to have severe consequences for national economies. So in the Oz case they’d need to be superbly confident the lost jobs and spending would all be offset by a huge mineral boom. And even then I doubt they’d try it – The affects on such a major store of Oz wealth as our housing just don’t sound politically acceptable to me?

    Neg gearing is one that we hear people mention. ACOSS hate it. The Brotherhood of St Lawrence hate it. And the ACTU hate it. But reading between the lines as best I can, it’s not likely to be scrapped.

    It’s probably reasonable to regard Oz investments purchased using debt (including residential RE) as “tax preferred assets” – And if so Henry discusses same here under the first main heading “Lesson 1: The case for reform should be compelling” :

    http://petermartin.blogspot.com/2009/10/what-to-expect-from-ken-henry.html

    Given his recognition of the potential need to compensate people for “windfall losses” arising from tax reforms as a matter of “fairness”, my punt would have to be that his following statement probably cover off on why we won’t get severe fiddles to neg gearing:

    “Accordingly, a threshold issue is whether the size of potential compensation is so large, or its delivery so complex, that the tax reform may not be worth doing at all.”

    Just my thought and I’ll admit the evidence is pretty thin. But when it comes right down to it I’ve seen very little mentioned in any of the KHR stuff on neg gearing at all. Only direct reference being one in a speech to ACOSS where Henry says the following and then changes the tack to talking about complexity in the system:

    “Redistribution is also consistent with the practical notion that you shouldn’t be able to get out of paying your fair share through concessions or loopholes, including those mostly available to the wealthy. Many have claimed in submissions to the review and at public meetings that aspects of fringe benefits tax, and the use of trusts and negative gearing, can lead to people not paying their fair share.”

    http://www.valuesineducation.org.au/pdf/henry090403.pdf

  • 126 Greg Atkinson // Mar 18, 2010 at 10:12 am

    I have to say I am almost over the Henry Tax Review. It will get released eventually but nothing will be done about it for quite some time and I get the feeling it will eventually be filed next to the Australia 2020 Summit recommendations. Rudd’s popularity has taken a beating and I don’t think he has the courage to take on anything that will get him heckled an Lang Park again.

    Of course Rudd & Swanny will talk, and talk about the Review but I wager very little of it will ever be implemented. The Government is now simply in a mess with the NBN stalled, Rudd’s health reform up in the air and very few of it’s other major initiatives going anywhere. In fact they are going backwards in some ares (e.g. the pink batts debacle)

    In any case, it is simply not possible to have widespread tax reform without including the GST. By leaving out the GST Rudd & Swan painted themselves in a corner.

    So any bets on when the report will actually be released to the public? My guess is it will be released just before Easter so that it misses any serious media scrutiny for a week.

  • 127 Ned S // Mar 18, 2010 at 11:02 am

    Timing – Soon enough! 🙂

    Neg gearing – Picked up an April 2009 interview where Lindsay Tanner was being asked about removing it – Amongst other things he said:

    “Well, there’s a lot of debate about the impact of negative gearing, but I think the key question that is unavoidable, Jon, is that were you to remove it the immediate impact on [indistinct] behaviour would lead to a crash property prices in much of the Australian economy. And in the current circumstances, of course, that would be disastrous.”

    http://www.financeminister.gov.au/transcripts/2009/tr_20090424_abc774.html

    I found that interesting because I wasn’t sure just how much impact it would have. But Tanner seemed to have a pretty clear cut view on it.

  • 128 Anon // Mar 18, 2010 at 1:44 pm

    Thanks for the links Ned and thanks for the reply Ralph!
    So from that quote Ned its clear the Government knows it has to continue to prop up housing or the consequences of not doing so would be far greater.

  • 129 Ned S // Mar 18, 2010 at 10:12 pm

    Intentionally crashing housing prices:

    Looked at very simplistically, at any one time we’ve probably got about 70% of the population who own housing, at least 15% of the population who never will (unless we go down the American track of intentionally encouraging true subprime type loans) and no more than 15% who’d like to purchase “before too long” who’ve got a good enough credit history and employment record that the banks will want to look at them.

    So to me, the basic numbers don’t stack up – Why would any government act to intentionally decrease the actual asset position of 70% of it’s population by $200k each (for argument’s sake) with the result being to decrease the potential liability position of 15% of it’s population by $200k each? Working on 70 people and 15 people (rather than percentages), that would mean that $14m less assets in the larger group translates into $3m less liabilities in the smaller group. Now I’m no accountant, but if one of them said to me Ned, I’ve figured out how by knocking $14m out of the assets column of your existing business, you can save yourself from putting $3m in the liabilities column of the new business you want to set up, I’d be looking for a new accountant.

    If I’m correct in looking at things like that, the response will always have to be There must be a better way – With the specific answer in our case at this time being “We need to produce some affordable housing for people to purchase”.

    There would also be a very good argument to be made that high prices potentially affect future waves of property purchasers as well – But I’ve got to suspect that the answer to that is always going to be Well, we’ll sort that out over time.

  • 130 Greg Atkinson // Mar 19, 2010 at 8:17 pm

    As I said a while back, I would prefer to see people get a bonus when they finish their training, diploma or degree rather than just getting money for nothing to go out an buy a house.

    But it’s all too late now. People believe owning a home is their right and also that it is the governments responsibility to help them get that home.

    What government is going to be brave enough to try and lessen people’s expectations? It certainly won’t happen in an election year!

  • 131 Biker Pete // Mar 19, 2010 at 8:56 pm

    Ned: “The “company line” from all official parties all the time is that they want to see more affordable housing built.”

    Yes… and you’ve also read Tanner right on NG, Ned.

    Miss your contributions on DRA, mate. We mustn’t let puerile pricks like Prozak dominate the airwaves… .

    Get in touch with you via email once my VR is through… .

  • 132 Greg Atkinson // Mar 19, 2010 at 9:04 pm

    Biker, I often wonder what exactly is meant by “more affordable housing”? Do they mean fibro shacks out in the scrub?

  • 133 Ned S // Mar 19, 2010 at 10:15 pm

    G’day Biker – DRA? I must admit that I find the conversation is considerably more edifying here on balance. 🙂

    The tenant has signed by another 6 month lease on that property I want to develop. Which is good – I never wanted to do anything major until I’d seen the KHR.

    I imagine it’ll be real nice to get your VR sorted out. I’ll look forward to hearing from you then … Cheers!

  • 134 Ned S // Mar 20, 2010 at 10:42 am

    “I would prefer to see people get a bonus when they finish their training” … I’m not big on handouts Greg. But as I’ve mentioned before, if we’ve got a bit of spare cash we’d like to genuinely invest in the youngies, I’d send them off to one of the BRICs (or such like) on a six month exchange program. All sorts of potential benefits to everyone in that.

  • 135 Greg Atkinson // Mar 20, 2010 at 3:51 pm

    Ned I am not big on handouts either. Perhaps a better thing to do would be to reward people for service to the community?

  • 136 Ned S // Mar 20, 2010 at 5:05 pm

    Maybe it depends how strongly nationalistic we are feeling Greg? I suspect I’m way less nationalistic than many/most and have pretty much accepted globalization as a fait accompli. (Leastways I hope it is or we really may have WWIII one day.) So see lots of potential advantages/benefits to all parties from including direct exposure to BRICs (and developing nations generally) as part of our youngies’ “education”.

  • 137 Ned S // Apr 29, 2010 at 2:56 pm

    I wish Kev would shut his yap hole:

    http://www.news.com.au/money/kevin-rudd-aims-to-lower-tax-for-majority-of-australians/story-e6frfmdr-1225859890943

    The minute a social democrat says the tax system will be made stronger and fairer and the majority will pay less, I go Oh no, so the minority will pay more which means my arse is grass! 🙂 Just let the KHR speak for itself please Kev – After all, you are only a pollie wanna cracka now type personage.

    Social Democrats – Isn’t that what the Greeks are … Or were?

  • 138 Greg Atkinson // Apr 30, 2010 at 7:39 am

    Ned we can already see how the tax review will be handled by some of the comments Swan and Rudd have made. For example they both have said that tax reform is something that will take place over years, so that means a decade or more in Rudd’s world.

    Swan has also said that not all the recommendations in the review are things that the Government will agree with, this means anything that is likely to be very unpopular will be parked or axed.

    Finally the report will be released on a Sunday and I guessing there is some announcement that will be made on the Monday in an attempt to take the media away from the tax review. Could Rudd be planning on calling an election the day after the review is released?

  • 139 Anon // May 2, 2010 at 2:01 pm

    “Key points of today’s announcement include:

    * Lifting compulsory superannuation from 9 to 12 per cent by 2019
    * More Government payments for low-income workers into their superannuation
    * Compulsory super payments for those over 70 and concessions on contributions for those over 50
    * A reduction in company tax from 30 to 28 per cent by 2015
    * Small business to benefit from company tax cut from 2012 Other write off concessions for small business
    * Miners to be hit with a 40 per tax on above normal profits
    * An infrastructure fund to be paid to the states each year to start at $700 million in 2012

    http://www.abc.net.au/news/stories/2010/05/02/2888088.htm?section=justin

    Not advice, just gambling and speculation. Always see a financial advisor for decisions etc.

  • 140 Ned S // May 2, 2010 at 2:18 pm

    “It is a great document – probably the best tax review ever produced in this country.

    Amazingly, the government has almost entirely ignored it. After five months of leaking and spinning since the report was handed to him, the Treasurer has picked up exactly 1.75 of its 138 recommendations, or a bit over 1 per cent.” :

    http://www.businessspectator.com.au/bs.nsf/Article/HENRY-TAX-REVIEW-Its-politics-not-reform-pd20100502-537EG?opendocument&src=rss

    That’s our Kev!

  • 141 Ned S // May 2, 2010 at 2:23 pm

    From same source:

    “The Henry Review also recommends that the tax-free threshold for personal income tax be raised to $25,000 and that there should be a simple, transparent two-step tax scale, with 97 per cent of the population paying 35 per cent. After five months of reading and discussion, surely the government could have formed a view about that. Well, actually they obviously have formed a view – that it’s too hard and they should just shut up about it.”

    and

    “The Henry Review also recommends a 40 per cent discount to individuals for net interest income, residential rent, capital gains and interest related to listed shares. Also leaked, but rejected.”

    Or as the source says:

    “In general, Wayne Swan’s tax policy statement bears almost no relation to the Henry Tax Review, except that it came out on the same day.”

  • 142 Ned S // May 2, 2010 at 4:18 pm

    “I do doubt that most of them will ever be implemented” – I still suspect they will be?
    (eventually ……………… [IF we ever get a government that’s capable of delivering anything])

    “Can you imagine if the panel suggested for example that the resources sector should pay more taxes?” – We’re about to find out.

    “the whole exercise will deliver a politically bureaucratic flavoured report” – Seems it hasn’t done the political bit of that – So full credit to Henry there.

  • 143 Greg Atkinson // May 2, 2010 at 4:27 pm

    I think we can safely say that in fact the Henry Tax Review is being shelved. Yes bits of it will be used, but most of what Swan announced today has been suggested via other reports over the years.

    Henry’s Report will find a nice place on the bookshelf next to all those suggestions from the 2020 Summit.

    So what’s next? Another review of course! I wonder what Rudd will want to tackle next? How about housing…that ought to be a vote winner!

    Standby folks for the most significant review of the housing sector in Australia’s history!

  • 144 Greg Atkinson // May 2, 2010 at 4:36 pm

    Ned indeed Henry dished up a report will a bit more punch than I expected but I don’t reckon too many of his recommendations will be implemented. The cherry picking and tinkering has already started and if the mining boom fizzles, then even what is on the table now may end up in the shredder!

  • 145 Ned S // May 2, 2010 at 4:39 pm

    A housing review – The Rudd and Plibersek interpretation of that 10,000 page report will be something like tax non-resident investors more to fund increasing super contribs to 15% by 2030 so all future retiress can use their super to buy their very own self contained tent and swag perhaps? 🙂

  • 146 Greg Atkinson // May 2, 2010 at 4:48 pm

    Anything goes Ned as long as it gets plenty of votes. This means that a small group with lot’s of money needs to be targeted so that the masses can be showered with cash..well at least be given the illusion they will anyway 🙂

  • 147 Ned S // May 2, 2010 at 4:55 pm

    If the mining boom fizzles Greg, I doubt that Oz is likely to want to take any austerity measures. So the KHR will be the obvious place to start looking to cherry pick the nasty bits that will upset the least amount of voters whilst raising the most tax.

    As to your comment above – 100% agreed!

  • 148 Ned S // May 2, 2010 at 5:53 pm

    PS: Self contained tents and swags shall henceforth be known as “Retirement Villas” in all Oz government and private publications and communications mentioning same! 🙂 🙂 🙂

  • 149 Ned S // May 3, 2010 at 7:09 am

    I didn’t see anything in the KHR recommendations I had violent objections to – Even the death tax bit just says we should have a chat about it – And as part of that chat I’d say I have violent objections to it! 🙂

    http://taxreview.treasury.gov.au/content/FinalReport.aspx?doc=html/publications/papers/Final_Report_Part_1/chapter_12.htm

    Swan ruled out death duties/bequest taxes anyway (as well as a bunch of other stuff):

    http://www.treasurer.gov.au/DisplayDocs.aspx?doc=pressreleases/2010/028.htm&pageID=003&min=wms&Year=&DocType=

    In answer to the question “Ken Henry and his tax review: should we be worried?” the answer is No, Henry seems to have given them the basics of a sane and sensible tax system on a platter? So the biggest worries we’ve got are our idiot pollies not doing the things that are in there and doing all their usual ad hoc vote grubbing stuff instead.
    SNAFU …

  • 150 Greg Atkinson // May 3, 2010 at 8:38 am

    It seems most of the finance and business media are pretty unimpressed with the Government’s response to the Henry’s work.
    Michal Pascoe today said questions if Rudd and Swan ever read the report! (see: Did Kev and Wayne even read Ken’s review?)

    He close his article with: “There’s a chance the government might cherry-pick a couple of voter-friendly ideas from the review for an airing on budget night. Heck, they might try some actual reform once the election is out of the way – but I wouldn’t bet on it.”

    Yep, pretty much as I was saying back in September.

  • 151 Ned S // May 3, 2010 at 10:11 am

    They didn’t bother to read it – Yes that thought crossed my mind as well Greg; After all it wasn’t that long back Kev tried the old Sir Johannes trick of Don’t you worry about that – Based on the excuse he’d been busy with other stuff and hadn’t gotten round to it yet.

    Given the government’s lack of response to it, I’ll take my time and digest it all slowly. But core recommendations I’m picking up would make it seem like the sort of system I would have killed for as a young bloke – Stuff like the first $25K of income is tax free (so if there’s mum and dad both working you’ve got $50K coming in tax free!); And a flat rate of 35% after that up to $180K each or somesuch – Heck, no disincentives there to work and save; With income on your savings (bank deposit interest, rental property income etc) being taxed at a 40% discount; And the the tax rate on your super earnings all being cut to 7.5%.

    If someone actually has a work and save ethic, it sounds like the basis of a very good deal to me?

  • 152 Anon // May 3, 2010 at 10:52 am

    ““It’s a worst-case scenario,” Citigroup mining analyst Craig Sainsbury said. Mining companies will be taxed about 58 cents for every dollar of earnings, compared with 35 cents before the new regime, he said. The resource profits tax is on top of corporate tax and companies payments of state royalties will be rebated under the new regime. ”

    Its not right the mining sector be booming and raking in record profits, whilst we’ve got alot of sectors in zombie mode. Lots of people hurting out there, lets hope this helps more than just the government!

    Not advice, just gambling and speculation. Always see a financial advisor for decisions etc.

  • 153 Ned S // May 3, 2010 at 11:16 am

    A whack of it should be being put aside for a sovereign wealth fund a) to help out as the various mining booms we’re going to have over time take a rest and b) so Aussies in 2075 actually have something to show for it other than holes in the ground and railways going to ports no-one has any use for anymore.

  • 154 Greg Atkinson // May 3, 2010 at 11:18 am

    Ned if all /most of the measures suggested in the Henry Report were implemented then we would most likely end up with a fairer and simpler tax system. But as it stands now, the Government is simply using the parts of the review that will deliver votes and cash as opposed to doing what Henry had in mind.

    Anon the problem with the new mining tax is that we are in fact punishing companies for being good at what they do. If the Government wanted to tap into the boom it could have taken equity in the projects or started a fund to invest in mining companies instead of handing out dollars for imported pink batts. We seem intent on destroying any large successful companies in Australia for reason’s I don’t quite understand.

    If Australian’s want to tap into the mining boom then they could have purchased shares in BHP or Rio instead of flying to Bali.

    Also, why aren’t banks who make super profits also taxed in the same way?

  • 155 Anon // May 3, 2010 at 11:28 am

    “Also, why aren’t banks who make super profits also taxed in the same way?”

    Because if Rudd does this and housing and jobs become stressed, he will look like an absolute fool. You must never destabilize banking and housing or you’ll be 6 feet under in bailouts.

    If the banking system needs a big bailout in the future, then Rudd will tax the big 4 in full force lol.

    Not advice, just gambling and speculation. Always see a financial advisor for decisions etc.

  • 156 Greg Atkinson // May 3, 2010 at 11:29 am

    Ned I am in favour of setting up a fund as I wrote in August last year: Is it time for another Australian sovereign wealth fund?

    This mining tax, if it passes the Senate, will come back to bite Australia.

  • 157 Ned S // May 3, 2010 at 11:50 am

    I don’t know what a “fair” amount of tax is to extract from resource companies Greg, but seeing what they do effectively boils down so selling off the farm, it seems reasonable to me to tax them at higher than normal rates – But NOT so our idiot pollies can buy votes with the loot now! It needs to be used to help position ourselves for when the farm has been sold and we’ve got to go and compete with the rest of the world for a living – That’s my simple minded take on it anyway? 🙂

  • 158 Senator13 // May 3, 2010 at 1:19 pm

    This was suppose to be “rood and branch” tax reform but all we got was a few falling leaves. And not even soon but pushed out for years all the way to 2020!

    This is just another back down and all hype and no action that is typical of this Government.

    Looks like when Rudd said of John Howard that he squandered the mining boom – what he meant to say was that he did not tax them enough!

    I would rather see the existing revenues from the miners go into a sovereign wealth fund. Or go directly to debt elimination. What is proposed is not to reduce debt but to increase spending.

    It just does not seem the right way to go about things.

    Many of the good things proposed seem to have gone into the growing “too hard” basket. Or have been left so that they have more things to announce in the lead up to the election…

  • 159 Greg Atkinson // May 3, 2010 at 1:24 pm

    Ned I agree miners should pay more (as they do now) since they basically create big holes and take chunks of the nation away. But I reckon they are paying a fair share of tax now, remember there was a time when mining companies like BHP were struggling.

    However one reason we don’t get more out of our resources is because we are not very bright, we don’t value add, we don’t build the ships that carry the ore overseas, we import 70% of all mining equipment, we import most mining technology…the list goes on.

    Anyway I totally agree that we should use the proceeds from any mining boom to make the economy more robust..we don’t want to end up like Nauru!

  • 160 Ned S // May 3, 2010 at 5:32 pm

    I just read “The tax on mining profits will pay for the super increase” – Is it just me or do others out there fail to see any logical relationship between these two things? :

    http://www.smh.com.au/opinion/politics/time-will-cut-through-the-frenzy-surrounding-the-henry-review-20100502-u1br.html

  • 161 Greg Atkinson // May 3, 2010 at 10:14 pm

    Ned it isn’t just you..don’t worry. Employers will pay for the extra super not the mining companies. The mining companies are paying for imported pink batts, handouts for first home buyers, school halls and the NBN.

  • 162 Greg Atkinson // May 4, 2010 at 7:07 pm

    Well the first mining project has been canceled because of the new mining tax: Cape Lambert cancels plans at WA project as a result of Henry tax

    So Rudd, Swan and the Unions reckon the new tax won’t cost any jobs. The mining companies say it will.

    Now who do you reckon might actually know better?

    Of course the tax will mean less jobs! It changes the whole playing field!

  • 163 Ned S // May 4, 2010 at 7:37 pm

    And lowers the value of the ASX; But while making more super contribs available to force the ASX higher. Read the detail of the KHR maybe – I haven’t on this “centrepiece” (my interest was more in housing) – But would be a bit surprised if Henry actually recommended what Rudd and Swan are doing?

    Gotta go – I SHOULDN’T be here – Endeavouring to keep up with what you blokes talk about is so far beyond me it takes too much time. But I’ve learned a lot.

    Stay clear of Euro debt now, China and Oz soon maybe, but consider holding a bit of platinum and palladium? – And No, I still don’t like gold at these prices.

    Cheers to all,
    Ned

  • 164 Vince L // Jul 2, 2010 at 8:10 pm

    Well Greg you were right. The Henry Report was a fizzer. It was used to try and hit the miners for a lot more money and that is about it.

  • 165 wayne // Jul 6, 2010 at 4:04 pm

    Its all a smoke screen nothing will change .No one is looking at the big picture .In Australia 1.5 million out of work interest rates to high for the average family to cope with .Many small businesses are closing down.Some have been in business for over 10 years .I predict we will be in recesion within12 months .Between the banks governments and Ato we have no spare cash .The biggest problem is the double taxation act ,The 90 percent of the overseas companies that own us pay little or no tax. The best way is to have a debit tax of .1 percent of every bank Transaction which would raise over 200 billion in 1 year . You would be able to get rid of every tax we have even the GST Australia would be rich in a very short time.

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