Shareswatch Australia Blog

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• 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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