The Greatest Treasurer

[Jimmy_041]

At least some of the money was given to the majority of the people - the middle class who make up, by a vast majority, the majority of people in Australia

Can you imagine what Labor would do if they could get their hands on the Future Fund

[redandblack]

Bugger, I thought you said you'd gone, mate

Well, this Government has given it to the people by way of tax reductions and pension increases.

If you disagree, tell me where the vast majority has gone.

[dedja]

Why is this government so on the nose if they've 'managed' the economy so well R&B?

Are you able to answer that one please?

[redandblack]

No, I can't, but that's the fact at the moment.

Then again, the majority aren't always right, are they?

I'll stick to the facts I posted rather than who's leading the polls two years out from an election. I recall Kevin Rudd leading by 60/40 before the last election; so much for that.

[Gozu]

No, I can't, but that's the fact at the moment.

Then again, the majority aren't always right, are they?

I'll stick to the facts I posted rather than who's leading the polls two years out from an election. I recall Kevin Rudd leading by 60/40 before the last election; so much for that.

Who were the people that advised Rudd to backflip on the ETS causing Labor's swan dive into the abyss?

Either way doesn't excuse his cowardice and poor political judgement.

[redandblack]

Indeed.

[Sojourner]

One small point that is forgotten by many about Peter Costello is the fact in addition to having a surplus and having a future fund set up, when elected in 1996 they inherited a deficit of 96 billion dollars. Which Peter Costello was largely responsible for having worked off.

I would like to see how Swan might have gone if left a deficit instead of a surplus as Costello was, time will soon tell if he does in fact return the budget to surplus from a far lesser deficit. Like him or hate him I do think Costello well and truly earnt his stripes as being a competent Treasurer. To suggest that Swan is his equal or better is still far premature IMO.

[Psyber]

I think just as legitimate a matter for debate is whether Mr Howard and Mr Costello squandered the fruits of the mining boom in their time on middle and upper-income welfare, which is now hard to reverse?

I'd agree that that is a fair question.
However, even Paul Keating was buying support from swinging voters with middle class welfare back in the 80s, so it has long been a policy of both major parties.

The last time I recall paying 57 cents in the $ was around 1979.
I remember that because it was factor in my deciding to buy my first Porsche that year.
(My accountant asked if I'd considered buying a Mercedes because I'd get 90% deduction without dispute then and was "paying too much tax".)

These days the car industry struggles more because the tax rates are down, making cars a less attractive deduction.
The luxury car tax makes only a small contribution as leasing rates are not greatly affected if you set it up right.

Under PK entertainment deductions were severely limited though, and the restaurant trade suffered - I suspect that may not have been good policy despite the unions liking it.
There may be more jobs for our youngsters, and particularly students working their way through Uni, if the entertainment deductions he curtailed were restored..

[Psyber]

Interest rates are low and falling, unemployment is low, growth is better than most of the world and we're better off than almost all of the rest of the world.

I don't think that has much to do with which party is in power.
It is more closely related to our low debt at the onset of the crisis, our coincidental mining boom, and the fact that our main customers are in the least affected area of the world economy.

[redandblack]

Fair points in those posts, Psyber.

Is a further reasonable question: how does one judge the success or failure of a Treasurer?

[Psyber]

Fair points in those posts, Psyber.
Is a further reasonable question: how does one judge the success or failure of a Treasurer?

It is fairly easy for me given my perspective.
There is no good in unnecessary debt, nor in debt you will struggle to pay for, even if you get "bargain" rates.
That applies to governments or individuals.

I'll concede that sometimes debt is necessary, but never borrow in excess of necessity, and make sure you get some tangible and real asset for it.
How much you borrow must be influenced by whether you can still pay it comfortably if rates rise.

[redandblack]

Thanks for that, Psyber.

Obviously you see debt levels as the most important factor, which is a reasonable position to take. As you know, I get frustrated with what I think are knee-jerk reactions from some that just regurgitate phrases such as ‘reckless spending’ or ‘ruining the economy’, without any explanation or evidence to back it up.

Government debt arises from budget deficits, which is a result of spending and revenue levels. Spending has increased, but generally in line with trends established over many years. Indeed, the four years from 2004 to 2007 saw the greatest increase in government expenditure for some time. Given that the vast bulk of spending is on health and welfare services, extraneous expenditure doesn’t have a major effect on the total payout. I haven’t seen much on here to offer possibilities for reductions in government spending and whenever governments propose spending cuts, they’re met with a wall of criticism and often direct action to oppose them.

So if you look at the other side of the equation, revenues, the story becomes clearer. Because of the GFC, revenues have actually decreased in recent years. Let me give an illustration of why that might be.

Let’s say a middle-income earner has an investment portfolio with a Fund Manager. Before the GFC, returns were good, so income tax on those returns and capital gains tax on the sale and trading of shares within the portfolio were strong, hence a good return from capital gains tax. Post GFC, returns have dropped, therefore less income tax and share prices have dropped, hence little or no capital gains tax. Not only that, but the capital losses can be carried forward, which means no capital gains tax on capital profits as the markets improve.

That leads to decreased revenues for the Government and, IMO, is the major reason for the current budget deficits. It doesn’t absolve the government of all blame for the deficits, but is a major factor out of the control of the government.

Your point about debt is fair enough, especially keeping it at a level that’s affordably repayable. That’s why I support the Mining Tax. I support it on a moral basis, but I also support it as prudent policy to reduce the deficit.

To finish, I wish you a Happy (perhaps Prosperous is more apt in your case, Psyber) New Year and I extend that to all on the Politics Board, left, right and centre.

[Jimmy_041]

I actually agree with you R&B
But cut the cloth to fit
If my income goes down dramatically, I dont borrow - I cut my expenditure on unnecessary items
Europe would be a much different place if the PIIGS had done this.
Should we learn from their failings?
This State Govt has an appalling financial record and we will all pay for it in the long run

[Sojourner]

Might have to suck it up about Swan, perhaps he is the greatest treasurer, he seems to have a scheme here to roll back the Superanuations of those on low incomes, clearly they must be planning to simply increase the Pensions instead? Good move anyway, why any government would not simply pay out a pension instead of going throug the rigmoral of having to have compulsory superanuation beats me anyway! Maybe these workers did have it to good under the Howard system and need to be reigned in anyway?

Workers will face an expensive super hit after superannuation scheme changes
Kelmeny Fraser The Sunday Telegraph January 01, 2012 12:00AM

THE country's poorest workers will lose more than $30,000 when changes to the government's superannuation co-contribution scheme take effect this year.

Low-income workers were promised a retirement nest-egg boost through tax cuts, adding about $35,000 to super.

But projections by financial adviser Noel Whittaker showed that was likely to be wiped out by changes in the rules from July 1.

A 44-year-old part-time worker earning $25,000 a year who made an annual personal contribution of $1000 into super could lose as much as $32,000 by retirement age.

"All these changes make it less easy for people to provide for their own retirement," Mr Whittaker, of Whittaker Macnaught, said.

"This further tinkering with the rules comes at a time when older workers are desperately trying to rebuild their super after the GFC. Many older employees may have to work far longer than they planned."

From July, voluntary super fund contributions will not be matched dollar-for-dollar by the federal government. Instead it will pay 50c for every dollar parked in super by workers and halve the maximum contribution entitlement to $500 a year.

Thousands will become ineligible for the payments after the income test cut-off was slashed from $61,920 a year to $46,920 a year.

Soon-to-be retirees would also be hit by an extended freeze on the cap limiting the amount of cash they can put into super to $25,000 a year.

SuperRatings managing director Jeff Bresnahan said it had gone too far in undoing overly generous Howard government incentives.

"In your 50s you should be allowed to sacrifice a fair whack of money into superannuation," he said.

A spokesman for Workplace Relations Minister Bill Shorten, who is responsible for superannuation, said changes to the scheme would better target low-income earners through tax rebates.

"In particular, more people will get it, because the ATO does all the paperwork automatically," he said.

http://www.dailytelegraph.com.au/news/w ... og_oneline

[Psyber]

I thought the whole idea of the Howard policy on Superannuation was to make it easier for people approaching retirement to catch up on building their Superannuation, so that they wouldn't need pensions.
(Thus saving the government money in the long term for the tax concessions now.)

Past Federal policies on Superannuation had made it a fairly unattractive option over the years, and we had all been encouraged to rely on getting the pension.

The 9%, later 12%, was tokenist anyway - just enough to say you were getting some Superannuation.
It was also just enough, when it was set up, to ensure Centrelink could cut you off from most of the fringe benefits for those on full pensions.
(I don't know if that situation still applies under current pension arrangements.)

[redandblack]

Overly generous super provisions during the Howard years, I would have thought, Psyber. Tax deductibility of contributions up to $100,000 pa (wealth redistibution to the already wealthy - only upper income earners could do that, and they did it year after year).

The government has scaled that back to much more equitable levels.

[Jimmy_041]

it was available to everyone for a change

[redandblack]

True, if you had a spare hundred grand every year.

Very equitable

[Jimmy_041]

God forbid, we might all be equal in this country

Anyway back on task - the government change super rules again, & the low earners cop the hit, and you raise history?

[redandblack]

I was answering Psyber's point about superannuation, where he raised history relating to the Howard years.

In your usual zeal to have a crack at me regardless, you must have missed that

If you think that giving a deduction of $100K a year for superannuation is a fine example of equality, then I'm happy to disagree.