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Fistful of Dollars II

October 15th, 2007

Given how far behind the government is starting, it probably makes sense to lead off the campaign with what has to be its biggest promise, tax cuts costing $34 billion over three years. As I recall, the spending promises already announced total about $9 billion a year, so its hard to imagine that there can be much left in reserve.

Although there’s nothing wrong with announcing a program for an entire term of government, it’s unusual in relation to tax cuts, and I can recall (perhaps with error) at least two instances of such cuts being promised and then taken back. One was Paul Keating’s L-A-W tax cuts in 1993, which (as implied) were actually legislated in an attempt to increase their credibility. The other was the “Fistful of Dollars” tax cut of 1977 (so named for the ads which showed precisely that) promised by the Fraser-Lynch team going into the election and then (if my fading memory serves) taken back by Lynch’s newly-appointed replacement. Now what was his name again?

The obvious question is, how should Labor respond? Now that the government has presented the headline figure of $34 billion, there’s plenty of room for some combination of tax cuts and increased public expenditure, and plenty of time to refine the details. I’ll follow the same plan, and take some time to think.

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  1. BilB
    October 19th, 2007 at 10:21 | #1

    Observa,

    By far, far, far, the biggest risk to food supplies is that farmers cannot make a living at it. Massively wealthy corporations such as woolworths stand between farmers and consumers with a mugwump style philosophy ripping the heart out of the food industry. There are mammoth tracts of unutilised land in this country that are rendered useless by the greed of merchants on the one hand, by the total misallocation for lifestyle change “residential”, and by mining operations such as the Hunter Valley open cut mine which now has an area of 600 square kilometres.

    To suggest that ethanol production is threatening our food supplies is stupid, and you are talking through your hat.

  2. Hughes
    October 19th, 2007 at 10:35 | #2

    I just want to take issue with hc’s comment (way back at the top of the comments list).

    It’s not good policy to collect huge surpluses and then stagger their return. Running balanced budgets is good policy.

  3. mugwump
    October 19th, 2007 at 17:05 | #3

    Boring policy response from Labor, although if you want to make some money on the policy buy ISP stocks. With a 50% rebate for internet for the “kids schooling”, every family will be signing up for broadband and claiming the discount.

    But I don’t know why the opposition thinks taxpayer-subsidized P2P piracy is a good idea.

  4. observa
    October 19th, 2007 at 23:03 | #4

    I’m talking through my hat am I BilB? This is an awful lot of ethanol http://www.news.com.au/adelaidenow/story/0,22606,22613465-5005962,00.html

    But I don’t know why the opposition thinks taxpayer-subsidized P2P piracy is a good idea.

    It’s to help the underprivileged mugwump and to do that you need to understand the makeup of the modern Labor party. I’ll let one of their own describe it for you. Here’s Kim Beasley Snr-

    “When I joined the Labor Party, it contained the cream of the working class. But as I look about me now all I see are the dregs of the middle class. And what I want to know is when you middle class perverts are going to stop using the Labor Party as a spiritual spitoon.”

  5. BilB
    October 20th, 2007 at 05:54 | #5

    Observa,
    clearly big numbers are not for you. But for our farmers, big numbers that pay well are a dream come true.

  6. observa
    October 20th, 2007 at 10:01 | #6

    Whilst I have enormous admiration for our farmers I do have trouble with the big numbers of their broad shoulders and acres needed. So we increased our fuel consumption by 3 bill litres over 5 years despite-
    “The average fuel efficiency for unleaded petrol-driven passenger vehicles in 2006 was 11.4 litres/100km, which was an 18 per cent decrease from 2005.”
    1990 consumption levels aside for the moment, to reduce fuel use to 40% of 2001 levels quoted, means a reduction of 18.5 bill litres pa, or 64% of 2006 levels. All I can say is, forget the weather and get planting chaps.

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