If you were the Treasurer announcing your budget tomorrow, what would you cut and why?
31 Comments
It’s never a better time to ….
… cut negative gearing and other tax distortions such as 50% capital gains discounts now that housing finance commitments is starting to trend upwards again.
Investors heading for the exit could pay their capital gains taxation dues helping to create a surplus! (h/t to Gary from the Valley for this suggestion), while downwards pressure on household credit growth could allow the RBA to further slash the official cash rate without fear of creating a bigger bubble in a bid to reduce the Aussie dollar and cushion other sectors of the economy.
I’m only Treasurer for a day, so from a political fallout point of view, I loose my job anyway!
I’ve stopped dreaming now. Over to you.
All choices carry its own repercussion.
I would choose instead to:
1) Abolish NG
AND
2) Apply tax on sale of family home
This would discourage investor/speculator and reserve homes for genuine buyers that intend to live there.
Cutting CGT is also fine but the effect is not as substantial to the community. People can still live without profit (or incentive) on their investment but can’t live and function properly without a proper shelter.
Just my two cents …. Not even dreaming to be a Treasurer ….
If I was Treasurer for a day to save money. I would cut all the leaders pay and benefits. That would save a S#$T load of money.
1/abolish negative gearing
2/abolish fhog
3/abolish maternity leave
4/make uni students and trades learn classical economics. educate them how the centralized wages system is damaging the economy.flexible wages allows for greater job mobility, more jobs (more important than wage levels) and actually puts more pressure on employers to compete for workers. money flows to where it should.
my rule: you dont get your degree unless you have studied one unit of classical economics and one science subject.
5/ remove all incentives for banks to favor investing in housing over small business. housing has got to become risky again (it sure will anyway).
6/ educate people on why we need a free market in labor
7/ abolish car industry subsidies.
Remove the stamp duty, NG and HFOG.
Of course that would be painful to do in a single pass so I would stablish a year on year reduction of benefits. 10% lower per year to avoid the whole economy collapsing.
to add to above list,
Cut the salary and expenses of politicians
Cut the expenses of government agencies
I would cut any and all taxes designed to prop up the over-inflated property market. Oh, and the baby bonus. Paying people to procreate is madness.
1. Cancel negative gearing. Big cost to budget.
2. Abolish position position of govener general & Sell govt House.
3 Abolish all state governments. Huge savings in public servants wages & pollies wages.
4 Sell the lodge. P.M. could live in apartment 0r rent Hotel apartment.
5 Cancel submarine project. They have not stopped one boat yet.
Just want to add one more to list. Abolish Gonski because i don’t give a gonski.
Set politicians wages at the average of their last 5 years income.
That’s it.
You’ll find the career politicians who have a law degree and no experience wont nominate for a seat.
And business leaders who have done well for themselves will put their hand up.
As a successful boss of mine used to say ‘Why the hell would I want to be a politician? $140k(?) per year for no privacy and the longest work hours ever? Not interested’
Just to name a few
-Get rid of local councils
-Abolish NG
-Introduce one tax on unused land and get rid of the many other taxes that stifle investment and growth in industries
-Cut many institutional government perks, allowances and privileges etc etc
-Cut high ranking positions in institutional government
Cut all income/profit taxes to 15% no exceptions, deductions or creative accounting. Includes all corporations and churches and eliminate all other taxes.
Military spending cut to only include border protection.
Cut all lobbyist contributions to public servants & MPs.
Cut all lines of credits and guarantees to the big 4 banks. Voila! Instant surplus.
Cut the current party by executing them for allowing ng and other idiotic policies. I would invite the other party to rule with the threat of execution if they also tried to implement ng. I would put the 10 billion or so saved on ng to fund my own private army. I would use this to stage widespread execution of all top ranking bank leaders as a general warning of whats to come. I would implement AUs own money, printed by AU government to replace this rubbish we have under control from these criminal banks. I would use the banks to issue it with executions for all that resist. Effectively all banks then come under government control. All investors with more than 2 houses, units whatever, get taken off them and become government property. These get sold to first home buyers for O say 100k. All greedy investors who complain of course get executed. I would free up labour, abolish gst, and people like gina reinhart would be stripped of thier wealth and executed. Mining resources become property of the people. By this time AU is a facist dictatorship that rules with fear, BUT, everyone OWNS a home…..
@13 The question was what would you cut. I don’t think that implied heads!
But then again, if you look at the build up to the French Revolution, it’s not too dissimilar from what’s going on now, so you may be on to something…
Cut income tax to a flat 20% Your earn it you keep it!
Phase out negative gearing policies over 10 years prevent collapse.
Abolish state governments
Close carbon tax department and repeel all legislation for what it is – A SHAME
Stop all foreign aid unless we have surplus funds to make donation
That is a good start!
@15 – I agree with you Yoda, apart from one thing. I’d raise the Carbon Tax – not abolish it. There need to be severe penalties for corporations who refuse to look for renewable ways to offset their carbon emissions. A tax on carbon pollution is a good thing, but it needs to be more draconian in my opinion.
Why ‘abolish’ NG? A bit extreme with extreme consequences.
Here are a few ideas to get the ball rolling.
1. Put a cap on the number of NG properties… say 3 or 4 tops. Grandfather the existing property hoarders.
2. Base the tax deductions on the property income not the taxable income of the property speculator.
Do that and you will have the desired effect without crashing the housing market.
@Matty $140 000 is a lot of money for Australian politicians not to mention all their other benefits. Many of these so called “leaders” earned far less before they entered politics. After their stint in politics some go on various other “junkets” that they have arranged whilst in power.
As for your mining executive there goes another braggart who likes to believe he is some how more capable and then the rest of us. Sadly, due to market failings these “stuffed shirts” manage to command extraordinary incomes.
@ Fred. that is my point about the money. These guys go into politics as the pay is higher than in the real economy.
As for the mining exec….Where did that come from? He was an automotive dismantler, started from naught and built a business over twenty five years to be an amazing business. $140,000 PA is about 10% of what he was earning upon the sale of the business. He easily earns more than that from term deposits these days.
So why would he enter politics? There is no incentive for the people we need, yet there is plenty of incentive for the types we do NOT need.
As much as I dislike Turnbull, he is the exception, in that he had a massively high paying career before politics, he took a massive pay cut to enter. See how there is no incentive for the accomplished.
Then compare that to most of the Labor crowd, no business management history, no investment history, hell some have no industry experience, and they get the same amount of pay as Turnbull.
The entire economy is so distorted. Is it any wonder that genuine Mum and Dad businesses are closing at record numbers?
Want some examples? Here in SA they are trying to close hospitals buy cutting funding grants of $300k PA. They have tried to close country ferries over the Murray for $600k PA. etc etc etc the list is long.
Then they pay some architect $10M to design a FOOT BRIDGE over the dirty stinking Torrens pond….Only to offer up another $40M to build the stupid bridge.
They build a hospital which is private/public, costing SA $2billion…where we pay $2million interest a day….Then at the end of 20 or 25 years, the SA government have the option to buy it back from MQG…….What the hell is going on?
*I have shares in MQG.
The middle class and poor are being squashed into slavery and poverty by the governments they elected. But ‘The Voice’ is more important to most.
DO NOT get yourself caught on the wrong side of this rich/poor divide.
Only allow business and investors, including property investors, to claim expenses up the amount of revenue/income received in the same period. You go into a business or investment to make a profit, not to make a loss, and expecting to be rewarded at other peoples expense. Negative gearing would disappear in this model.
Cut education tax deductions to save negatively geared property speculators?
I have been reading all of the posts – would’nt it be good if we lived in a direct democracy where we could vote on these suggestions.
@22 As I’ve said before, as have many others here and elsewhere, put policies on the ballot paper, not personalities. It’ll never happen though – not until someone finally realises what the internet was invented for (no not porn), but for direct democracy. It’ll take some big brains to figure out the logistics, which are clearly complex, but given time, it could work. Until then, we’ll keep putting a cross in pencil next to a name and party affiliation – how quaint.
Just to be controversial.
I am an advocate of negative gearing and whilst I don’t think it should be abolished, I do believe there does need to be some limitations on it. The first one being the number of properties you can negative gear.
I agree totally what Yusuf Says:
May 13th, 2013 at 11:47 pm
All choices carry its own repercussion.
I would choose instead to:
1) Abolish NG
AND
2) Apply tax on sale of family home
This would discourage investor/speculator and reserve homes for genuine buyers that intend to live there.
Cutting CGT is also fine but the effect is not as substantial to the community. People can still live without profit (or incentive) on their investment but can’t live and function properly without a proper shelter.
How about a tax for leaving properties vacant for prolonged perioeds of time, as per this ‘amusing’ article in Adelaide Now a few days ago, and Lleyton Hewitts place. Blimey, almost 10 years later, they cannot seem to get what they paid for it ! Love it how the Dad says the market is not fair to the seller, after years of grants/tax schemes making it unfair to the FHB and buyer in general !
I would introduce just one lending rule: maximum loan to income ratio, and one tax rule: speculation tax (90% CGT on properties held less than 10 years and sold for profit reasons)
1. Cancel negative gearing.
2. Cancel First Home Owners Grant
3. Cancel all pension/lump sum schemes for politicians. Move to a standard 9% SG accumulation scheme, like the rest of us.
4. Remove the contributions cap priviledges that government employees have. For example Super SA members (non management) are treated under the old RBL system and don’t have the contribution limits that everyone else has.
5. Remove salary packaging. No more salary packaging cars or salary packaging home loans and bills for those under the PBI scheme.
6. Raise the age pension, but reduce the age pension asset and income limits. There is no reason why a retired couple should be able to have $1 million of assessable assets and still get a combined $130 per fortnight in age pension or equivalently earn $2,450 per annum of assessable income and receieve the perviously mentioned levelt of age pension.
7. Baby bonus would be scrapped.
8. Extend the capital gains tax 50% reduction period from 1 year to 5 years. Truly incentivise people to hold on to assets for the longer term.
9. Remove the low income tax offset, mature age workers offset, etc. Reduce the number of tax bracket. Maybe tax free to $30,000. 30% to $100,000 and 40% over that.
My objective would be to make things as simple as possible. Remove the loop holes and the confusion.
1. Retain Negative Gearing
2. Only allow negative gearing for *NEW* property
3. Introduce 50% capital gains tax on properties that are not your primary abode (circa 1990)
4. Abolish FHOG
5. Stop screwing around with super every time there is a change confidence is lost
6. Introduce > 55’s work incentive programs for those that want to continue to contribute
7. Block (100% ban) on all foreign property investment
It’s never a better time to ….
… cut negative gearing and other tax distortions such as 50% capital gains discounts now that housing finance commitments is starting to trend upwards again.
Investors heading for the exit could pay their capital gains taxation dues helping to create a surplus! (h/t to Gary from the Valley for this suggestion), while downwards pressure on household credit growth could allow the RBA to further slash the official cash rate without fear of creating a bigger bubble in a bid to reduce the Aussie dollar and cushion other sectors of the economy.
I’m only Treasurer for a day, so from a political fallout point of view, I loose my job anyway!
I’ve stopped dreaming now. Over to you.
All choices carry its own repercussion.
I would choose instead to:
1) Abolish NG
AND
2) Apply tax on sale of family home
This would discourage investor/speculator and reserve homes for genuine buyers that intend to live there.
Cutting CGT is also fine but the effect is not as substantial to the community. People can still live without profit (or incentive) on their investment but can’t live and function properly without a proper shelter.
Just my two cents …. Not even dreaming to be a Treasurer ….
If I was Treasurer for a day to save money. I would cut all the leaders pay and benefits. That would save a S#$T load of money.
1/abolish negative gearing
2/abolish fhog
3/abolish maternity leave
4/make uni students and trades learn classical economics. educate them how the centralized wages system is damaging the economy.flexible wages allows for greater job mobility, more jobs (more important than wage levels) and actually puts more pressure on employers to compete for workers. money flows to where it should.
my rule: you dont get your degree unless you have studied one unit of classical economics and one science subject.
5/ remove all incentives for banks to favor investing in housing over small business. housing has got to become risky again (it sure will anyway).
6/ educate people on why we need a free market in labor
7/ abolish car industry subsidies.
Remove the stamp duty, NG and HFOG.
Of course that would be painful to do in a single pass so I would stablish a year on year reduction of benefits. 10% lower per year to avoid the whole economy collapsing.
to add to above list,
Cut the salary and expenses of politicians
Cut the expenses of government agencies
I would cut any and all taxes designed to prop up the over-inflated property market. Oh, and the baby bonus. Paying people to procreate is madness.
1. Cancel negative gearing. Big cost to budget.
2. Abolish position position of govener general & Sell govt House.
3 Abolish all state governments. Huge savings in public servants wages & pollies wages.
4 Sell the lodge. P.M. could live in apartment 0r rent Hotel apartment.
5 Cancel submarine project. They have not stopped one boat yet.
Just want to add one more to list. Abolish Gonski because i don’t give a gonski.
Set politicians wages at the average of their last 5 years income.
That’s it.
You’ll find the career politicians who have a law degree and no experience wont nominate for a seat.
And business leaders who have done well for themselves will put their hand up.
As a successful boss of mine used to say ‘Why the hell would I want to be a politician? $140k(?) per year for no privacy and the longest work hours ever? Not interested’
Just to name a few
-Get rid of local councils
-Abolish NG
-Introduce one tax on unused land and get rid of the many other taxes that stifle investment and growth in industries
-Cut many institutional government perks, allowances and privileges etc etc
-Cut high ranking positions in institutional government
Cut all income/profit taxes to 15% no exceptions, deductions or creative accounting. Includes all corporations and churches and eliminate all other taxes.
Military spending cut to only include border protection.
Cut all lobbyist contributions to public servants & MPs.
Cut all lines of credits and guarantees to the big 4 banks. Voila! Instant surplus.
Cut the current party by executing them for allowing ng and other idiotic policies. I would invite the other party to rule with the threat of execution if they also tried to implement ng. I would put the 10 billion or so saved on ng to fund my own private army. I would use this to stage widespread execution of all top ranking bank leaders as a general warning of whats to come. I would implement AUs own money, printed by AU government to replace this rubbish we have under control from these criminal banks. I would use the banks to issue it with executions for all that resist. Effectively all banks then come under government control. All investors with more than 2 houses, units whatever, get taken off them and become government property. These get sold to first home buyers for O say 100k. All greedy investors who complain of course get executed. I would free up labour, abolish gst, and people like gina reinhart would be stripped of thier wealth and executed. Mining resources become property of the people. By this time AU is a facist dictatorship that rules with fear, BUT, everyone OWNS a home…..
@13 The question was what would you cut. I don’t think that implied heads!
But then again, if you look at the build up to the French Revolution, it’s not too dissimilar from what’s going on now, so you may be on to something…
Cut income tax to a flat 20% Your earn it you keep it!
Phase out negative gearing policies over 10 years prevent collapse.
Abolish state governments
Close carbon tax department and repeel all legislation for what it is – A SHAME
Stop all foreign aid unless we have surplus funds to make donation
That is a good start!
@15 – I agree with you Yoda, apart from one thing. I’d raise the Carbon Tax – not abolish it. There need to be severe penalties for corporations who refuse to look for renewable ways to offset their carbon emissions. A tax on carbon pollution is a good thing, but it needs to be more draconian in my opinion.
Why ‘abolish’ NG? A bit extreme with extreme consequences.
Here are a few ideas to get the ball rolling.
1. Put a cap on the number of NG properties… say 3 or 4 tops. Grandfather the existing property hoarders.
2. Base the tax deductions on the property income not the taxable income of the property speculator.
Do that and you will have the desired effect without crashing the housing market.
@Matty $140 000 is a lot of money for Australian politicians not to mention all their other benefits. Many of these so called “leaders” earned far less before they entered politics. After their stint in politics some go on various other “junkets” that they have arranged whilst in power.
As for your mining executive there goes another braggart who likes to believe he is some how more capable and then the rest of us. Sadly, due to market failings these “stuffed shirts” manage to command extraordinary incomes.
@ Fred. that is my point about the money. These guys go into politics as the pay is higher than in the real economy.
As for the mining exec….Where did that come from? He was an automotive dismantler, started from naught and built a business over twenty five years to be an amazing business. $140,000 PA is about 10% of what he was earning upon the sale of the business. He easily earns more than that from term deposits these days.
So why would he enter politics? There is no incentive for the people we need, yet there is plenty of incentive for the types we do NOT need.
As much as I dislike Turnbull, he is the exception, in that he had a massively high paying career before politics, he took a massive pay cut to enter. See how there is no incentive for the accomplished.
Then compare that to most of the Labor crowd, no business management history, no investment history, hell some have no industry experience, and they get the same amount of pay as Turnbull.
The entire economy is so distorted. Is it any wonder that genuine Mum and Dad businesses are closing at record numbers?
Want some examples? Here in SA they are trying to close hospitals buy cutting funding grants of $300k PA. They have tried to close country ferries over the Murray for $600k PA. etc etc etc the list is long.
Then they pay some architect $10M to design a FOOT BRIDGE over the dirty stinking Torrens pond….Only to offer up another $40M to build the stupid bridge.
They build a hospital which is private/public, costing SA $2billion…where we pay $2million interest a day….Then at the end of 20 or 25 years, the SA government have the option to buy it back from MQG…….What the hell is going on?
*I have shares in MQG.
The middle class and poor are being squashed into slavery and poverty by the governments they elected. But ‘The Voice’ is more important to most.
DO NOT get yourself caught on the wrong side of this rich/poor divide.
Only allow business and investors, including property investors, to claim expenses up the amount of revenue/income received in the same period. You go into a business or investment to make a profit, not to make a loss, and expecting to be rewarded at other peoples expense. Negative gearing would disappear in this model.
Cut education tax deductions to save negatively geared property speculators?
Yeah makes sense in Wayne’s World
http://www.macrobusiness.com.au/2013/05/budget-sacrifices-education-saves-speculators/
I have been reading all of the posts – would’nt it be good if we lived in a direct democracy where we could vote on these suggestions.
@22 As I’ve said before, as have many others here and elsewhere, put policies on the ballot paper, not personalities. It’ll never happen though – not until someone finally realises what the internet was invented for (no not porn), but for direct democracy. It’ll take some big brains to figure out the logistics, which are clearly complex, but given time, it could work. Until then, we’ll keep putting a cross in pencil next to a name and party affiliation – how quaint.
Just to be controversial.
I am an advocate of negative gearing and whilst I don’t think it should be abolished, I do believe there does need to be some limitations on it. The first one being the number of properties you can negative gear.
I agree totally what Yusuf Says:
May 13th, 2013 at 11:47 pm
All choices carry its own repercussion.
I would choose instead to:
1) Abolish NG
AND
2) Apply tax on sale of family home
This would discourage investor/speculator and reserve homes for genuine buyers that intend to live there.
Cutting CGT is also fine but the effect is not as substantial to the community. People can still live without profit (or incentive) on their investment but can’t live and function properly without a proper shelter.
How about a tax for leaving properties vacant for prolonged perioeds of time, as per this ‘amusing’ article in Adelaide Now a few days ago, and Lleyton Hewitts place. Blimey, almost 10 years later, they cannot seem to get what they paid for it ! Love it how the Dad says the market is not fair to the seller, after years of grants/tax schemes making it unfair to the FHB and buyer in general !
http://www.adelaidenow.com.au/realestate/news/lleyton-hewitt-selling-west-lakes-home/story-fndbnymu-1226645674241
’nuff said
http://www.macrobusiness.com.au/2013/05/the-rise-and-rise-of-negative-gearing/
I would introduce just one lending rule: maximum loan to income ratio, and one tax rule: speculation tax (90% CGT on properties held less than 10 years and sold for profit reasons)
Coming soon???
http://www.abc.net.au/news/2013-05-23/a-manufacturing-sneeze-in-china-points-to-a-nasty/4709932?section=business
1. Cancel negative gearing.
2. Cancel First Home Owners Grant
3. Cancel all pension/lump sum schemes for politicians. Move to a standard 9% SG accumulation scheme, like the rest of us.
4. Remove the contributions cap priviledges that government employees have. For example Super SA members (non management) are treated under the old RBL system and don’t have the contribution limits that everyone else has.
5. Remove salary packaging. No more salary packaging cars or salary packaging home loans and bills for those under the PBI scheme.
6. Raise the age pension, but reduce the age pension asset and income limits. There is no reason why a retired couple should be able to have $1 million of assessable assets and still get a combined $130 per fortnight in age pension or equivalently earn $2,450 per annum of assessable income and receieve the perviously mentioned levelt of age pension.
7. Baby bonus would be scrapped.
8. Extend the capital gains tax 50% reduction period from 1 year to 5 years. Truly incentivise people to hold on to assets for the longer term.
9. Remove the low income tax offset, mature age workers offset, etc. Reduce the number of tax bracket. Maybe tax free to $30,000. 30% to $100,000 and 40% over that.
My objective would be to make things as simple as possible. Remove the loop holes and the confusion.
1. Retain Negative Gearing
2. Only allow negative gearing for *NEW* property
3. Introduce 50% capital gains tax on properties that are not your primary abode (circa 1990)
4. Abolish FHOG
5. Stop screwing around with super every time there is a change confidence is lost
6. Introduce > 55’s work incentive programs for those that want to continue to contribute
7. Block (100% ban) on all foreign property investment