Home > Economic policy > A rose by any other name …

A rose by any other name …

April 30th, 2014

Most of the discussion of the Abbott government’s recently announced revenue raising measure has focused on semantics: is there a meaningful difference between a levy and a tax, has the government broken its promises and so on. All of this is boringly predictable. The last government to treat its election promises as binding obligations was Whitlam’s. Perhaps Rudd would have kept his promises if it weren’t for the GFC (I don’t think he broke many before that), but with that exception we’ve got used to the various theatrical devices associated with ditching promises: Black Holes, debt crises, Commissions of Audit and so on. The reaction of Bill Shorten and the Labor Opposition is equally predictable. The job of the Opposition is to oppose, and in particular to excoriate the government for breaking any promise, no matter how ill advised.

On the other hand, I’m disappointed that the Greens have taken the same line. Their job, in my view, is to use their leverage to promote sustainable social democratic policies, and to oppose regressive market liberal and environmentally destructive policies, regardless of source. So, for example, they were sensible to wave through Hockey’s abolition of the debt ceiling, even though it involved breaking a silly promise. They can’t stop the government breaking lots of promises on the expenditure side, so they should try and achieve balance by supporting sensible proposals to raise additional revenue.

The case in favor of an increase in taxes for higher income earners[1] is obvious. The big cuts promised by Howard in the leadup to the 2007 election, and largely matched by Rudd were unaffordable at the time and became even more so when the GFC led to slower growth in real and nominal incomes and therefore to less of the bracket creep that normally pays for such cuts. Along with Costello’s massive handouts to “self-funded” (but publicly subsidised) retirees the previous year, these cuts are the main reason it has been so hard to achieve a return to surplus after the GFC stimulus was wound back under the Labor government.

So, it makes sense to increase the rate, and to keep it high until bracket creep finally works its magic and restores the revenue raising capacity of the income tax to something like its pre-2007 level. I haven’t done the numbers but it seems as if four more years ought to do it. So, a temporary increase that can be called a levy makes sense. And, if everything else is held constant, an increase in revenue translates one-for-one into a reduction in debt.

Summing up, if Abbott wants to increase income tax on high earners, I’ll support him. And, if he wants to call this policy a “debt reduction levy”, I don’t have a problem with that.

fn1. Doubtless, we’ll get objections that taxpayers on $80 000 a year aren’t really high income earners, although the median wage for full time workers is around $60 000. But the extra tax payable by someone on $80 000 is precisely zero: the levy is only payable on income in excess of that level. Even at $180k, the levy is only $2000/year or about $40/week – a small fraction of the discretionary spending of most people earning this kind of income.

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  1. Michael S.
    April 30th, 2014 at 14:41 | #1

    I agree that the Greens should let it through but with some special concession to further rub Abbott’s face in it – like insisting it be permanent or directed to the the states in part to make up for their lost GST revenue.

  2. patrickb
    April 30th, 2014 at 15:00 | #2

    The problem is one of honesty. If Abbott was saying “Look if you all want to be kept in the manner you’ve become accustomed then you’ll have to hand over some extra cash” but he hasn’t said that. He’s claiming that it’s an emergency brought on by the ALP and that it requires an extraordinary response. This is what irks me and I suspect a number of other people who understand that there are a number of other measures that might also recoup revenue from high income earners but they wouldn’t able to be sold in such a dramatic fashion. And of course there’s always the possibility that Abbott knows that it won’t get up which will allow him to play the victim, a role he seems t relish. All in all I wouldn’t support the plan on the basis that’s it’s a disingenuous, cynical and dishonest ploy.

  3. Fran Barlow
    April 30th, 2014 at 15:04 | #3

    Sorry PrQ … I don’t care what it is called. We Greens are right, in context, to oppose this.

    I don’t even agree with your ‘rose by any other name’ assertion in this case. The case for ‘debt reduction’ is quite poor. Debt service is not unmanageable. The Commonwealth is not crowding out investment or compecting for limited capacity in labour. The currency is probably overvalued by about 10%. Buying into balanced budget fetishism is something which we Greens, and indeed anyone left of centre ought to reject.

    I especially object to this because the regime is casting aside the revenue it would have earned from the MRRT and from the ETS and tossing large sums into an indefensible paid parental leave scheme, and looks set to take apart the RET. It is committing itself to 12 billion in fighter jets, and $40billion in submarines. It is vandalising the NBN at great expense. It will cut company tax — against our strenuous objections.

    Even at the petty level, Abbott, advocate of smaller government, has expanded the PM&C from just under 500 in Rudd/Gillard’s time to over 1700 staff.

    And the corker? Let’s just recall what the current regime, when they were in opposition said about the flood levy proposed by the last regime?

    So no. Just no. The regime is malign, unserious, achieved power whuile openly in league with the enemies of humanity and deserves, figuratively, to be run out of town and have a nest of hornets hurled at its head as it flees. It has no standing to claim even what the Howard regime might have in 1996 or 1998. As odious as those regimes were, they had a shred of competence and had at least won playing by the generally agreed rules. One could support, with conditions, their G&ST and their Timor and Ansett levies — as I did at the time.

    But not this mob.

  4. Fran Barlow
    April 30th, 2014 at 15:05 | #4

    @Michael S.

    Give it to the states? I don’t think so.

  5. Pete Moran
    April 30th, 2014 at 15:06 | #5

    Actually what the Greens have said this morning, as I understand it, is there won’t be any new taxes while the LNP are intent on dismantling the Carbon Price or diverting monies away from education, or if they haven’t removed fuel tax credits first.

    I actually thought it was pretty clear.

  6. Gerard
    April 30th, 2014 at 15:09 | #6

    I especially object to this because the regime is casting aside the revenue it would have earned from the MRRT and from the ETS and tossing large sums into an indefensible paid parental leave scheme…

    Fran, just wondering what you think about where the Greens stand on this PPL scheme.

  7. Pete Moran
    April 30th, 2014 at 15:09 | #7

    Cross posting with Fran Barlow. Thanks Fran very clear.

    (I was fairly confident we Greens weren’t dismissing it simply BECAUSE it is a broken promise).

  8. John Quiggin
    April 30th, 2014 at 15:19 | #8

    @Fran and Pete

    OK, if I understand you correctly, the Greens position implies opposition to any budgetary measure proposed by this government, on the basis that it is part of a package that includes the bad policies you mention.That’s pretty much the ALP position also. Reading your post more generally, you want to extend that to any and all measures proposed by the government (even though the Greens have already voted for quite a few).

    As I said in the OP, this kind of logic makes sense for the official opposition, but not for a third party, and especially not for one that holds the balance of power for the next ten weeks.

  9. Michael S.
    April 30th, 2014 at 15:34 | #9

    Fran Barlow :
    @Michael S.
    Give it to the states? I don’t think so.

    Well I don’t know the exact amount but higher income tax rates will hurt the State’s GST revenue – and the states are often the providers of the most important government services.

    @John

    I don’t see how it’s fair to expect the Greens to do the right thing, but argue that the Labor’s role in opposition exempts them from this. (This is separate from the argument whether it’s in Labor’s electoral interest to reciprocate the libs behaviour in opposition and oppose everything)

  10. Robert Merkel
    April 30th, 2014 at 15:35 | #10

    @Michael S.

    This. If the government wants its debt levy, make it compromise on something else on the way through.

  11. Ikonoclast
    April 30th, 2014 at 15:59 | #11

    I have to agree with Fran. “Buying into balanced budget fetishism is something which … Greens, and indeed anyone left of centre ought to reject.”

    Better ways need to be found to combat inflation than using high unemployment to do it. I would suggest curbing debt money creation (bank lending).

  12. John Quiggin
    April 30th, 2014 at 16:13 | #12

    Comments about deficit fetishism are way off the mark. Focusing on whether or not the budget is in deficit in some given year is indeed silly, and deficits are appropriate at some points in the economic cycle, but in the long run, public expenditure must equal tax revenue.

    If you don’t want higher taxes on high income earners, you have to be willing to tax the poor or cut public services. If you don’t want to admit this, don’t expect me to take your views seriously.

  13. John Quiggin
    April 30th, 2014 at 16:15 | #13

    @Michael S. I agree that it isn’t fair to expect more of the Greens, but it’s still necessary. If they are to sustain their existing support and attract more, they have to be better than the major parties. That said, I fully agree with you and Robert M on the desirability of extracting a price for supporting the levy. That’s exactly what a third party should do.

  14. Ernestine Gross
    April 30th, 2014 at 16:19 | #14

    Finally, the revenue side of the budget is considered and the PM at least talks about income distribution.

    A levy is a tax in terms of who pays and who receives the dollar amounts. Is there a difference in terms of the speed at which the levy rate and the tax rate can be changed?

    While a tally of broken promises can be kept for purely party political reasons, one should not object to a government revising its plans in an appropriate fashion.

    Part of the problem is the habit of specific election promises. They act like key performance indicators with known negative consequences under uncertain conditions.

  15. Peter Chapman
    April 30th, 2014 at 16:32 | #15

    If this is, as some commentators have noted, Tony Abbott’s “Gillard moment”, then the irony is delicious and will be savoured by many. Beyond the short-term entertainment, however, perhaps the various parties will reconsider how they frame and then renege on election commitments, and resolve to take a more thoughtful approach. Absent from the present discussion, of course, is the notion of a “mandate”. What are the chances of all parties lifting their game? The ALP under Shorten is delivering at best a lacklustre performance, and shows no originality, let alone any sign of raising the standard of economic and policy literacy. Wider and longer-term issues of tax reform (including “tax the rich”)? Serious consideration of changing demographics (even Uncle Joe is half right when he says we need a “mature debate” about how ageing will affect the budget)? Growing inequality? The dearth of affordable housing? What are the chances of getting all or any of these matters onto the political agenda?

  16. yuri
    April 30th, 2014 at 17:06 | #16

    I was very critical – publicly – of aspects of the Costello superannuation reforms but couldn’t even get Labor shadow ministers interested in opposing the ridiculous open slather it gave to the very rich who could put $1million plus into super for young family members – even infants – and, if the rules weren’t changed later, allow some genetically or sentimentally favoured youngsters to look forward to tax free incomes of tens of millions of dollars in retirement. In other words, as I pointed out, a sure fire recipe for upsetting people with future policy changes that shifted the goal posts. And there was all that “middle class welfare” that Howard forced on Costello – just like the way Howard was treated by Fraser in the run up to the 1983 election. (Interesting that Fraser now, as well as being grumpy about the US – with reason even if he draws the wrong policy conclusions and talks waffle about international law – has also criticed the Costello superannuation regime – from the virtuous position of the impotent of course: he being too old to benefit).

    I am able to comment on the proposition that those with incomes over $180,000 can properly be levied from a position of near perfect impartiality if not equanimity. Remember it is pre-tax. And remember too that the need for the marginal dollar varies enormously between individuals with nominally similar incomes. The retired judge or senior executive might treat bite of $5000 as a mere fleabite – just a reason for putting off for a year or two an upgrade to her level of opera patronage. Not so gor a 30 year old just finished specialist training or a postgraduate degree and beginning on big mortgage payments and budgeting for all costs associated with having three children who will be educated at fee paying schools for good enough reason.

  17. Pete Moran
    April 30th, 2014 at 17:11 | #17

    @John Quiggin

    It doesn’t strike me as unreasonable for The Greens to effectively say; while you’re dismantling, defunding or refusing to reform existing schemes we helped implement, we won’t be helping you implement a clear second choice.

    I’m otherwise failing to see it as more complicated than that I fear.

  18. Fran Barlow
    April 30th, 2014 at 17:44 | #18

    @Michael S.

    I’m for dismantling the states.

  19. Fran Barlow
    April 30th, 2014 at 18:12 | #19

    @John Quiggin

    Comments about deficit fetishism are way off the mark.

    Plainly not. The key question at the last election outside of “boats” was as usual “economic management” defined as “whom do you trust to bring the budget back to surplus?”

    Both parties ran on this but it was bogus then and it’s still bogus now. There are occasions when the Commonwealth should run a surplus, but outside of a moral panic about debt there is no reason to have one any time soon. Hockey is not promising one any time soon, but he’s dogwhistling as if this is his aim. We Greens need to be pointing the finger at the major parties over what lies behind their dogma. If we start playing their game we are no better in this respect.

    Focusing on whether or not the budget is in deficit in some given year is indeed silly, and deficits are appropriate at some points in the economic cycle, but in the long run, public expenditure must equal tax revenue.

    I’m not denying that.

    If you don’t want higher taxes on high income earners, you have to be willing to tax the poor or cut public services. If you don’t want to admit this, don’t expect me to take your views seriously.

    As you know my position and the Green position, adducing this strawman ill-becomes you. I am, amongst other things, totally in favour of the tax burden being shifted more heavily onto higher income earners, including people on my income. There is an entirely separate question as to how that should happen. I have long said that good process predicts good policy and bere we have neither. This regime is simoly incompetent, indolent, malign and openly mendacious. It deserves no confidence at all.

    In order to mobilise the populist vote against progress it lied insistently and blatantly, promising what it could not deliver while being shielded by the Murdoch Press. Now it hopes that others, us included will simply suck it up and play to its convenience, the better for it kick at humanity.

    I say no way, and I very much hope that my party will do likewise. As far as I’m concerned they won by cheating. Now they can be exposed for the scoundrels they are. Let them take responsibility.

    PS: You mention us lifting the debt cap. This too was consistent with our view that the debt cap was cheap populism. Comments about deficit fetishism are way off the mark. Focusing on whether or not the budget is in deficit in some given year is indeed silly, and deficits are appropriate at some points in the economic cycle, but in the long run, public expenditure must equal tax revenue.

    PS Re the debt cap. We wanted the LNP to essentially admit that the debt cap was about political grandstanding rather than fiscal rectitude. That’s why we voted to abolish it.

  20. Fran Barlow
    April 30th, 2014 at 18:15 | #20

    Hmm … Using an ipad on a crowded train can produce unintended results. Please disregard the remarks between cheap populism and the second unintended post script, which were still on my clipboard and belong to PrQ.

  21. rog
    April 30th, 2014 at 18:19 | #21

    @yuri Costellos Simple Super has been a disaster for the govt and a disaster for low to middle income earners but a bonanza for high earners, self employed and SMSF managers. I believe Costello cynically used super to buy votes.

  22. faust
    April 30th, 2014 at 18:29 | #22

    The levy was pathetic for two reasons: (1) it is a breach of a promise and a sleight of hand by not calling it a tax, and (2) it prevents a radical restructuring of government expenditure and priorities which is needed from the pressure an ageing population will place on fiscal policy.

  23. John Quiggin
    April 30th, 2014 at 18:29 | #23

    FB, I can only say, this line seems utterly unconvincing. If the Greens committed to vote against every piece of government legislation, I guess there would at least be a defensible claim of consistency.

    To vote against good but possibly unpopular legislation, while waving through uncontroversial/neutral stuff seems to me like rank hypocrisy. Your defenses only make it look worse. I can’t imagine a word you and Pete Moran have written that wouldn’t sound better coming from Bill Shorten.

  24. Fran Barlow
    April 30th, 2014 at 18:37 | #24

    Another problem that arises from your position PrQ is that you would have us extract compromises in exchange for supporting the levy when really, the regime is simply not going to entertain any measure we could conceivably want in trade.

    Would the regime consider for example, abandoning mandatory detention and rendition, which earnersis not just inhumane but also hideously expensive?

    Hardly.

    Would they abandon FHC subsidies and put a proper price on carbon? How about a robust mining tax, abandonment of tax concessions on super for high income earners?

    Of course they won’t.

    What about committing to all the Gonski funding and abandoning funding for wealthy private schools?

    Again, improbable.

    For us to expressly ask for this would be absurd, though perhaps worth doing in the spirit of “invitation to treat”.

    So in practice, what you’re really asking for us to help Abbott out in trade for a pat on the head. That makes no sense at all.

  25. Fran Barlow
    April 30th, 2014 at 18:39 | #25

    @John Quiggin

    What makes the levy good, in this context, PrQ?

  26. faust
    April 30th, 2014 at 18:48 | #26

    The only way a levy works for the left is that it gives people the scope to say “see, you didn’t feel that at all and government spending has not been cut”. It breaks the cycle of cutting personal income taxes and creates the conditions for lefties to argue that higher income taxes can be used to fund public services and that they “won’t hurt”.

  27. Alphonse
    April 30th, 2014 at 19:38 | #27

    I’m conflicted. That there are more efficient, pigovian and inequality-unfriendly alternatives is obvious, but this may be the only way, before 1 July, to get a better balance between revenue and expenditure measures.

  28. Mr Denmore
    April 30th, 2014 at 19:39 | #28

    Why aren’t tax expenditures on the table? I don’t understand why it isn’t be considered. According to the Australia Institute report recently, the tax concessions on super to the top 5% of income earners alone cost the federal budget $9 billion a year. Add to that the massive depreciation allowances and other tax breaks for the mining industry at another $4 billion or so.

    I’m with Fran on this. By all means make higher income earners pay more, but don’t do it while maintaining indirect subsidies to the wealthy elsewhere and withdrawing the carbon pricing and resource rent taxes.

  29. Gerard
    April 30th, 2014 at 20:26 | #29

    Another problem that arises from your position PrQ is that you would have us extract compromises in exchange for supporting the levy when really, the regime is simply not going to entertain any measure we could conceivably want in trade.

    What about dropping the PPL policy, which you describe upthread as “indefensible” but which the Greens basically support? Do you think the Greens are wrong on this one? Serious question.

    The thing is very expensive, and if the Greens are planning to waive it through the Senate, they might want to give some thought to higher income taxes to help pay for it.

  30. April 30th, 2014 at 21:02 | #30

    @Fran Barlow

    Tony Abbott on Australia Day 2011 (according to evidence at ICAC yesterday he enjoyed a lovely private dinner with Leigh Sales the previous evening, but that is an aside here) on the topic of the flood levy:

    QUESTION:

    I know you are hoping not to grizzle but a flood levy, some people are grizzling about that. What are your thoughts?

    TONY ABBOTT:

    Look, it seems the Prime Minister is going to call this a ‘mateship tax’ but mates help each other. They don’t tax each other.

    QUESTION:

    And it looks like it’s going to be tacked on to the Medicare levy. Do you think that’s a good idea?

    TONY ABBOTT:

    As I said, I think that we’ve got to help the flood victims. There’s no doubt about that. But a sensible government reprioritises its spending. It doesn’t hit people with yet another new tax.

    QUESTION:

    There were a few levies in the Howard Government, the firearms buyback [inaudible] etcetera. Is it then fair enough that this government puts a levy on as well?

    TONY ABBOTT:

    There’s a world of difference between a government which is exercising very careful, prudent control of the public finances and a government whose spending is out of control.

    QUESTION:

    So where do you think that money should be coming from?

    TONY ABBOTT:

    If you look at the Budget, there’s a lot of fat in it and the reason why it’s so important to have a surplus is because you never know when you might need it, hence the expression ‘to put money aside for a rainy day’. Well, we’ve had some rainy days up in Queensland and the money should’ve been put aside long before this.

    So the short answer is: “It’s different when we do it.”

  31. Christine Black
    April 30th, 2014 at 21:50 | #31

    I don’t understand the Greens position at all.

    The deficit levy/tax is increasing the amount of income tax paid by high income earners. It goes some way towards reversing the trend that’s made our income tax system less progressive – something I thought was Greens policy. Even it’s only temporary, it’s better than not at all.

    Just because Abbott is trying to get rid of carbon pricing and the revenue that goes with it is no reason to also oppose a seperate measure which on its own is good and progressive policy.

    It doesn’t matter whether the ‘Budget emergency’ is real or not (and plainly it isn’t), higher income earners should be paying a larger share of tax.

  32. John Quiggin
    April 30th, 2014 at 21:56 | #32

    @Fran How about offering to support the tax in return for no cuts to disability benefits. That’s something the government might go for. Even if they didn’t accept, the Greens would look a lot better putting that position than playing politics to attract high income voters who don’t want to pay more tax, as they and Labor are doing at present.

  33. graham
    April 30th, 2014 at 22:20 | #33

    objection to the left about the debt levy has been bizarre. He seems determined to balance the budget now and this is the path of least pain.

  34. April 30th, 2014 at 22:38 | #34

    I’m not sure Labor should automatically oppose. With Palmer having a big say in the senate, I’d hope that they would talk to the Libs just to stop Clive getting his greedy hands on stuff.

    Also, when watching the nasty internal schisms in many countries, I can’t help but think that it would be nice not to have an all out war between our major political parties. Maybe a recognition (however hard for me to accept) that the Libs won the election and do have some right to implement their policies. It is worth noting that the Libs in opposition under Turnbull adopted this approach, but dropped it like a hot potato when Abbott took over.

  35. Fran Barlow
    April 30th, 2014 at 22:53 | #35

    @Christine Black

    I should say that although I’m a Greens member, I don’t determine party policy. This news is quite recent, so I’m merely speaking as an individual Green. I don’t always agree with my party as Gerard notes above.

    That said, it really is quite simple. Firstly, nothing like a case for a levy has been made out. Whatever its absolute and relative merits at this time, and count me completely sceptical on that score — as yet, the regime has not even explicitly endorsed a proposal.

    Secondly, and perhaps more importantly, even if the levy were a defensible policy, this regime is indefensible. If it has a raison d’etre, it is to strike at the disempowered and tear down anything associated with the last regime that a left-of-centre person might not wince at.

    Rather than asking whether this or that policy is indefensible or not, one should ask whether any specific service to the regime is ethically defensible since it may tend to increment its ability to carry out its basic desire to inflict harm on the marginalised and line the pockets of its privileged fellow travellers.

    A part of the mission of progressive parties is to promote political education amongst the public. Inclusive governance is unthinkable while the public misapprehends the players in public discourse. In the period 2010-13 the then LNP opposition declared the regime a pariah on the basis that it was recklessly spending and repeatedly claimed that it could get the budget back to surplus just by cutting the fat and waste. It claimed it could spend more on defence, preserve existing transfer payments to middle income earners and introduce new ones, protect the value of pensions, abolish the mining tax and carbon pricing, not introduce new taxes that were not fully offset and much more. It said there was a terrible crisis in public finance caused by the ALP-Greens alliance that they couldn’t wait to fix. They said that only the ALP Greens would introduce new taxes.

    In the more than six months since their swingeing victory, they have not substantially cut spending and are now winking at new taxes, while pretending these taxes are not taxes. The irony has not been lost even on the RW populists the LNP courted. We Greens need to be able to point and say — we told you so. These people are lying swindlers, who played their supporters for fools. Let those who supported them and have not yet abandoned them prove they were not swindled by attempting to deliver on their program. They have a huge majority, so let them take responsibility for explaining themselves and their needs rather than hiding behind people they condemned little more than six months ago.

    If they wish to admit the truth — that their campaign of 2013 was nothing but a collection of barefaced lies and slanders and bigotry covered up by their backers from Murdoch, and give an honest account of the actual problems in public finance and invite a rigorous discussion of the options, then by all means, let’s explore solutions. Until that day dawns however, I say they have not earned a conversation on the matter. To do so would aid and abet the campaign of these criminals against the public, and against that background, of what possible utility is a fairly minor adjustment in tax rates on middle and upper income people?

    As the AFR admitted accidentally the other day, the ‘world is fukt’ and until we have a process that can produce remedies, we ought to work on that rather than tinker with this or that half-baked idea.

  36. Fran Barlow
    April 30th, 2014 at 23:01 | #36

    @John Quiggin

    I am much less interested in how we look than the role we play in shaping politics and insight. Unless and until the regime is discredited for its scandalous and reckless conduct, no worthy goal can be attained or defended. Demolition of this regime’s standing and the standing of its apologists, by exposing their swindling and bigotry and showing its consequences for humanity and even their own supporters ought to be our number one priority.

    Only then can we hope for an audience of sufficient magnitude to break the two-party consensus on doing over the marginalised.

  37. Christine Black
    April 30th, 2014 at 23:13 | #37

    @Fran Barlow

    even if the levy were a defensible policy, this regime is indefensible.

    So even if Tony Abbott puts forward Greens policy (which I note favours “strengthening the progressivity of the income tax and transfer system”), the Greens should vote it down because it is Abbott putting it forward? Seems rather self-defeating (and also inconsistent with the Greens previously supporting some of Abbott’s Bills, as Prof Q pointed out)

    We Greens need to be able to point and say — we told you so. These people are lying swindlers, who played their supporters for fools. Let those who supported them and have not yet abandoned them prove they were not swindled by attempting to deliver on their program.

    On that logic, the Greens shouldn’t have supported the Gillard government’s carbon tax, even though it broadly matched Greens policy, because Julia Gillard said she wouldn’t introduce one. Should the Greens have insisted the Gillard Govt persist with the absurd 2010 election promise to hold a citizens’ assembly first before looking to price carbon?

  38. yuri
    April 30th, 2014 at 23:15 | #38

    @rog
    As I said I was a critic of Costello’s super reforms which the then opposition was just as cynical about. Presumably they were regarded as vote winners. But they did include considerable and commendable simplifications of accumulated complexity and I believe that Cosrello was advised that they wouldn’t cause long run costs (which was probably wrong and, for a former Baptist who wasn’t into profligate spending, pretty odd when it ignored what it gave to the seriously rich).

    But why do you say they were bad for low and middle income earners? And have you taken account of the fact that, thanks to Howard’s vote buying 80 per cent of the retired grt at least some pension and health cards?

    We haven’t mentioned so far that SMSFs were effectually restricted to 4 members to appease the big super fund managers including industry funds and commercial like the bsnks and AMP.

  39. yuri
    April 30th, 2014 at 23:38 | #39

    @Fran Barlow
    Why do you populist lefties do it? Especially when factual BS discredits your case?
    Name me one “wealthy school” in Australia. Or are you content that this piece of cant, a unique redefining of the notion of wealth, should thrive despite it’ evidence of Green dishonesty (or ignorance if you insist)? How can any natural or legal person be described as wealthy despite having negligible private income other than fees for service which are, except occasionally in the very short run, consumed bh the expenses of keeping the school going? Especially when it has no readily realisable assets and the more expensive buildings and facilities it acquires the greater the costs of maintenance. And don’t give me the irrelevant BS about some of the parents of students at schools with the best equipment and facilities being very wealthy. That’s a different point entirely.

  40. Patrickb
    May 1st, 2014 at 00:02 | #40

    @yuri
    Well, here in Perth we’ve got Christchurch, Scotch, Hale, Wesley (boys), PLC, MLC, and St Hildas (girls). That’s not a complete list by any means. I’m sure people in other states could help you out if they can be bothered. It is fairly common knowledge.

  41. Midrash
    May 1st, 2014 at 00:06 | #41

    Professor Q: PM Rudd didn’t break promises? Really?

    He was elected on a promise to speed up our broadband for $4 or 6 billion and then reneged on that and in one of his chataceristically chaotic processes gave us the extravagant NBN. And it was the way be lost people’s trust and consequently his standing in the ALP as a vote winner over an emissions trading scheme post – Copenhagen that led to his defenestration.

    As to his and Swan’s claims to have “saved us from recession” the only credit they deserve is that, in a blue funk in September 2008, they accepted the advice of Ken Henry and team until they recovered their cockiness and gave us the pink batts and school hall building schemes that couldn’t be terminated or scaled back.

  42. May 1st, 2014 at 00:18 | #42

    Greens leader Christine Milne was on ABC AM Tuesday talking about the PPL:

    …we believe paid parental leave should be a workplace entitlement and that is a big cultural shift in Australia because it would say, in Australia, you have a right to be both a parent and an employee.

    So our position hasn’t changed, but we’ve also always said it has to be a fairer and more affordable scheme than what Tony Abbott has proposed.

    But having said that, Tony Abbott has put nothing on the table at the moment so we don’t know what he is actually coming down with and putting to the parliament.

    Isn’t it fair to say that the Greens don’t have a firm view on “it” because Abbott hasn’t presented “it” yet (in any detail which would allow judgment)?

    This is just Abbott’s ‘NDIS’ in one sense – all vague promises of wonder and light with nothing concrete to argue about.

  43. yuri
    May 1st, 2014 at 00:19 | #43

    @Patrickb
    Have you really missed my point so completely – or maybe you just read the opening words?

    If you are content with “common knowledge” rather than the facts you could get from the schools’ balance sheets and profit and loss accounts (whatever they call them) may I nontheless ask why you would apply the word wealthy to any of those schools? How long could they stay open on nothing but their investment income?

  44. JKUU
    May 1st, 2014 at 00:20 | #44

    @Fran Barlow

    I’m for dismantling the states.

    Well, if you did that tomorrow, you’d be left with the Abbott government as the only source of authority in the nation. Would you be happy with that?

    I’m a federalist — power is best when it’s most widely distributed.

  45. Robert
    May 1st, 2014 at 04:28 | #45

    JQ–I think you are being a bit easy on the Labor party. Why shouldn’t they offer to cut the same sort of deal? That way they’d get something they want, and also look fiscally responsible.

  46. Fran Barlow
    May 1st, 2014 at 06:03 | #46

    @Christine Black

    So even if Tony Abbott puts forward Greens policy (which I note favours “strengthening the progressivity of the income tax and transfer system”), the Greens should vote it down because it is Abbott putting it forward? Seems rather self-defeating (and also inconsistent with the Greens previously supporting some of Abbott’s Bills, as Prof Q pointed out)

    Don’t be silly. The regime isn’t contemplating the introduction of Greens policy. The reason for this is obvious — they think our policies are paradigmatically wrong and utterly at odds with their constituency rather than merely sub-optimal. Perhaps even more importantly, the point you and, it seems, PrQ keep missing is the process question. Politics for those of us who believe in inclusion, is not about playing a crafty game of hornswoggling the representatives of the elite into tossing some sop to the excluded in exchange for papering over some inconvenience they may be experiencing. It’s about engaging the excluded in public discourse in ways that allow them to understand what lies behind what the elite propose. You speak as if public policy may be some entirely random process like playing cards or casting dice when the reality is that it’s not random at all.

    Politics is mystifies and disengages most people. We want to engage most people by demystifying it. Only on this basis is inclusive governance possible.

    On that logic, the Greens shouldn’t have supported the Gillard government’s carbon tax, even though it broadly matched Greens policy, because Julia Gillard said she wouldn’t introduce one. Should the Greens have insisted the Gillard Govt persist with the absurd 2010 election promise to hold a citizens’ assembly first before looking to price carbon?

    Of course not. The ALP claimed to stand for similar policy objectives as us on carbon abatement — but in this case their process differed. The Gillard regime did not tell gross lies about itself or this area of policy or us. We were entitled to propose an alternative process for effecting abatement — and the MPCCC reflected that.

  47. rog
    May 1st, 2014 at 06:10 | #47

    @yuri Super (compulsory) is generally bad for low to middle income earners because the nett return on investment is low and the lost income could be better spent on reducing home loans. Instead workers are using home loans for holidays etc then paying down the mortgage with a lump sum upon retiring.

    The financial industry are doing very well out of super.

    The nett result is that the govt has not been relieved of caring for retirees.

  48. Fran Barlow
    May 1st, 2014 at 06:36 | #48

    @JKUU

    Sigh … again, consider process. It won’t and can’t happen tomorrow. There would need to be a process for reconsidering how to deliver those services.

  49. Fran Barlow
    May 1st, 2014 at 06:38 | #49

    @yuri

    Your post is incoherent. Can the rhetoric and try making a specific claim.

  50. Fran Barlow
    May 1st, 2014 at 07:39 | #50

    @John Quiggin

    If the Greens committed to vote against every piece of government legislation, I guess there would at least be a defensible claim of consistency.

    Again, that does not follow. In practice, the regime is unlikely to give us much we can support and posturing against minor quotidian matters seems like a waste of time. We have more important things to do.

    To vote against good but possibly unpopular legislation, while waving through uncontroversial/neutral stuff seems to me like rank hypocrisy.

    Not at all. It’s a question of how best to make use of the limited access we have to public space and the things we regard as defining what we stand for.

    Your defenses only make it look worse. I can’t imagine a word you and Pete Moran have written that wouldn’t sound better coming from Bill Shorten.

    That’s an admission of want of imagination. Bill Shorten has far less standing than we do to attack surplus fetishism since his party were enthusiastic urgers of it. Equally, his party still backs the defence procurement boondoggle. His party gutted the RSPT to placate Big Dirt. His party favours lower company taxes. He was reportedly amongst those favouring abandonment of carbon pricing. His party tried winning an election based on kettling asylum seekers on Manus Island and that at very considerable expense.

    We are in a far better political position than the ALP to assail the regime.

  51. May 1st, 2014 at 07:53 | #51

    Fran
    I’m getting confused by all the alternatives. Why can’t the Greens just do the simple thing and say they’ll support it if Abbott stops trying to abolish the climate change legislation?

  52. rog
    May 1st, 2014 at 07:58 | #52

    Dismantling the states is not a simple matter and would require changing the Constitution in its entirety as the Constitution provides for joint ownership of the Crown and a balance of power between local and national interests. I can’t imagine events so catastrophic to lead to the dismantling of the states and even if it were to be accomplished I can’t see how it would result in a better deal for citizens.

  53. May 1st, 2014 at 08:00 | #53

    Thinking about it more, I see the problem. If you think about all the wrong things that Abbott has done or is threatening to do, it becomes more complicated.

    Could the Greens just say: we support making taxation more progressive in principle, but there is a range of other measures that Mr Abbott should address first.

    And then have a list? He’s never going to agree with them all, but it would make the position clearer – especially if there was an emphasis on climate change and broken promises.

  54. Fran Barlow
    May 1st, 2014 at 08:15 | #54

    @Val

    Fran
    I’m getting confused by all the alternatives. Why can’t the Greens just do the simple thing and say they’ll support it if Abbott stops trying to abolish the climate change legislation?

    {sigh}

    Because Val …

    The regime’s leader has taken a ‘blood oath’ to do just that. We might as well ask him to resign as a condition of supporting what is essentially a thought bubble that his own party room probably hates more than the PPL. IF we could ask that then why couldn’t we ask for all the other things I specified on the previous page?

    Really, this would merely be a figleaf to cover our reluctance to render him aid and comfort. It’s doing what I propose we do now with one intervening step. If the regime wants this for real let them explain the case for it in detail so that its supporters can process what they have voted for in practice rather than culturally or rhetorically. Let the regime propose a deal so they come as supplicants.

    They are the party that has done gross wrong, and repeatedly. They need to own their reckless folly, accepting blame and as Abbott might have it, “seek forgiveness”. Then we can discuss a wholistic response to actual problems rather than a piecemeal response to fantasy ones.

    As I keep saying, without good process, good outcomes are mere chance, are insecure and cannot be duplicated.

  55. Fran Barlow
    May 1st, 2014 at 08:17 | #55

    @rog

    For exactly the reasons you outline, a process of federal mission creep is probably the only way this can be undone.

  56. Christine Black
    May 1st, 2014 at 08:20 | #56

    @Fran Barlow

    Don’t be silly. The regime isn’t contemplating the introduction of Greens policy.

    That’s my whole point – this debt levy/tax is very much consistent with Greens policy. I quoted direct from Greens policy – “strengthening the progressivity of the income tax and transfer system”.

    So you’re saying that the Greens should oppose this because Government’s should first be

    engaging the excluded in public discourse in ways that allow them to understand what lies behind what the elite propose.

    So how much did the Gillard government “engage the excluded in public discourse in ways that allowed them to understand what lies behind what the elite propose”?

  57. Fran Barlow
    May 1st, 2014 at 08:29 | #57

    @Christine Black

    [So how much did the Gillard government “engage the excluded in public discourse in ways that allowed them to understand what lies behind what the elite propose”?]

    The short answer is not at all. That’s our role since we alone amongst the parliamentary parties favour inclusion in practice. The Gillard regime however claimed to favour carbon pricing and ran for office on that promise. The election returned a parliament where this was the consensus. Entering the MPCCC made sense in this context. It helped advance policy rather than retard it. This regime however is bent on vandalising public policy and may well see the levy as a way of advancing that cause, or underpinning it. That is their problem, not ours.

  58. NathanA
    May 1st, 2014 at 09:01 | #58

    I agree with you JQ, the only two positions that made sense were to agree with the levy/tax outright, or propose more tax brackets with higher percentages at higher incomes, inviting Abbott to negotiate. If you concede that there needs to be a tax hike for high earners, then why not do it properly?

  59. Christine Black
    May 1st, 2014 at 09:05 | #59

    @Fran Barlow

    you’re still not indicating why the Greens should oppose something which is basically their policy – to increase the amount that high income earners pay in tax.

  60. patrickb
    May 1st, 2014 at 09:57 | #60

    @yuri
    “Have you really missed my point so completely ”
    Probably, because it’s not very clear. I’m unclear as to what your definition of wealthy is, it appears to have something to do with examining the schools balance sheets so I guess by your definition we’re unable to determine whether they are wealthy or not as we don;t have access to this data. So we have to turn to cruder, but more widely accepted, measures such as observing that these schools have a large number of expensive assets, property for instance, on which they put very well appointed facilities that are peopled by highly paid teaching staff who teach the children of very wealthy people from the surrounding wealthy suburbs. These observations might be contrasted with say Balga Senior High School. I encourage you to take up the challenge rather than speculating over what the state of a wealthy school’s balance sheets might be.

  61. Fran Barlow
    May 1st, 2014 at 10:56 | #61

    @Christine Black

    I have indicated why … at considerable length. If you choose to ignore that, one more post reiterating it seems unlikely to advance discussion.

    Some clues:

    What is our (the Greens) mission? Policy? Process ? Both?

  62. May 1st, 2014 at 11:16 | #62

    @patrickb

    I work at one of the “better” universities, and when students from the wealthy schools come here, they get to use inferior equipment and facilities than they did at school.

    Maybe by some strange definition these schools aren’t wealthy, but in the sense of having vastly better facilities than government schools and universities, they are.

  63. John Quiggin
    May 1st, 2014 at 11:54 | #63

    As regards Labor and the Greens, I don’t expect Labor to support this because I expect less of them. In particular,

    1. Substantively, they are too rightwing/gutless to support the policy itself
    2. As the Opposition, they are indeed supposed to as Fran puts it, “expose [the government] for the scoundrels they are”. Anyone who isn’t convinced by Labor’s efforts in this direction is unlikely to pay much attention to the Greens

    So, coming to the Greens position either they are duplicating the process role of the Opposition, or they are playing for popularity by opposing a measure that is causing the government grief. Poor stuff either way.

  64. Jim Birch
    May 1st, 2014 at 12:48 | #64

    …and what seems worse to me is that the opposition parties are engaging in ideological slogan games that are antithetical to their stated philosophy.

    Everyone wants to live in a country with high taxation – they are much nicer places. No one wants to pay tax. This is classic cooperator/defector game theory in action. Politicians facilitate this essentially schizophrenic position by lying to us and encouraging self-deception: it’s not a tax, it’s a levy; taxes are evil; Labor dunnit; the weather dunnit, the global financial system dunnit, etc.

    If the Greens are serious about a country with higher levels of public projects and a more even wealth distribution their correct approach would be to modify the legislation to rebadge the levy as a tax increase, make it either permanent – or persistent until say three consecutive years of surplus- and then vote for it.

    There are a lot of good arguments for taxation but no one has the guts to make them.

    Personally, I’d rather that tax levels were set by an arms-length body committed to economic management rather than satisfying incoherent voter aspirations, similar to the way that the Reserve Bank controls interest rates, but that is another matter.

  65. Christine Black
    May 1st, 2014 at 12:49 | #65

    @Fran Barlow

    Seems it is as I said – the Greens (at least according to you) should vote against measures that implement their policy if those measures are being put forward by the Abbott government, regardless of what it is.

    I had assumed that if a party supports a particular policy, they will vote in the Parliament in support of implementing it. If the Greens have some other process based meta-layer that gets priority over their policies, I might have to look for a different party.

  66. David Irving (no relation)
    May 1st, 2014 at 13:16 | #66

    @yuri

    How long could they stay open on nothing but their investment income?

    Who cares?

  67. Terry
    May 1st, 2014 at 13:21 | #67

    John, is there not a basic problem with what you are proposing, which is that Greens voters are quite clear that they view the main political enemy as the LNP, and their most plausible long-term ally as being the ALP? 83 per cent of Greens voters at the 2013 Federal election preferenced Labor ahead of the Coalition parties, which has gone up from 70 per cent at previous elections i.e. the “Turnbull Liberal” stand of the Greens has largely disappeared, and they are now clearly a party of the left. In fact, the Greens 2PP preference for Labor is higher than that of the Socialist Alliance (80 per cent). To now reinvent themselves as a quasi-centrist party along the lines of the old Australian Democrats would appear to be a betrayal of the demonstrated preferences of the vast majority of their voters.

  68. Salient Green
    May 1st, 2014 at 13:29 | #68

    The Greens haven’t blocked the Debt Levy yet. They made a good decision in stating they were against it.
    Given that the levy is a broken promise, only temporary, not hitting the top income earners hard enough, and that other taxes are going to be repealed which should not be, billions are going to be wasted on fighter planes and there are many other areas from which revenue should be coming (mining subsidies, investment subsidies, superannuation tax subsidies for high income earners), then the debt levy is an absolute shemozzle as was the CPRS.
    All those reasons are grounds enough to lose an opportunity in the same vein as the CPRS but it’s not lost yet. Just waving the debt levy through gives no opportunity to make deals, hold the government to account or gain political mileage.

  69. Ikonoclast
    May 1st, 2014 at 13:57 | #69

    Our bourgeois democracy protects us against dictatorships. That much is good but it does not actually give us the postive of good governance. We have oligarchs ruling (most of the time) through the two bribed and suborned parties of the economic far right, Liberal and Labor. Until we change the fundamentals we are not going to change anything. First step is to destroy Liberal and Labor through the ballot box. Never vote Liberal or Labor. Never give them 2nd or 3rd preferences if it can be avoided.

  70. Fran Barlow
    May 1st, 2014 at 14:15 | #70

    @Christine Black

    Seems it is as I said – the Greens (at least according to you) should vote against measures that implement their policy if those measures are being put forward by the Abbott government, regardless of what it is.

    Simply restating your claim doesn’t add to its credibility. You keep forgetting about the integrity of the process. When the ALP regime turned the business of implementing garnaut into an exercise in political gameplaying, it was no surprise that what emerged was un unsupportable mess — indeed, that was its point. That the regime paid lipservice to carbon pricing was not relevant.

    When the new regime was elected, a qualitatively better process — one that had integrity — attended the CEF. The outcome still fell well short of what we wanted, but it was manifestly a step forward and we supported it.

    I am a teacher. Sometimes a thought bubble on some new and better way to deliver some syllabus or class management outcome occurs to me. Before it can go from being a thought bubble to a good idea, I must follow a structured process.

    1. Defining the problem

    What problems or constraints am I trying to remedy/mitigate?

    2. Specifying the timeline and identifying resources

    When do I need to be able to implement the solution? What resources (physical, temporal and human) exist to fashion a solution? Who else (if anyone) is confronting this problem and what approaches have they used? What successes have they had? How would these compare with what I have considered?

    3. Identifying constraints

    What constraints (if any) are there on implementing the solution? Who else could guide me on this? Is the solution maintainable, andf capable of being modified if circumstances change?

    4. Benchmarking and evaluating

    How will I determine if the solution has been successful? When will this be audited and tested? By whom?

    5. Reporting

    How will I report the solution to colleagues and other stakeholders?

    Only after I have adequate answers to these questions can a thought bubble become a workable solution to some problem or challenge.

    The regime has done nothing like this and plainly, has no plans to do so. Ergo, there is no case for this. This would be so even if the regime were not a pack of scoundrels and pretenders.

    I had assumed that if a party supports a particular policy, they will vote in the Parliament in support of implementing it. If the Greens have some other process based meta-layer that gets priority over their policies, I might have to look for a different party.

    That is a matter for you, but on your showing in this topic that may be best. If some schyster only has to wink in your direction for you to start wondering whether you should do as he says, then one of the other parties is likely to serve you better than us.

    It’s our objective to empower humanity rather than offering political cover for scoundrels, however hard they wink at us.

  71. Garry Claridge
    May 1st, 2014 at 16:15 | #71

    The Greens support progressive income tax. However, the first step is for a higher tax on personal incomes of over $1M. Hence, the $80K as proposed, is far too low a threshold.

    From the press release the Greens would prefer to support higher tax on big business – my suggestion is a real super rent tax on mining and the banks. The other suggestion is the removal of subsidies for the mining industry. And, a real killer budget item is for fighter jets – it can be removed before any person pays more!

    So, until those are addressed I believe the Greens will not support the levy/tax in its current form.

  72. rog
    May 1st, 2014 at 16:32 | #72

    Higher taxes on the very wealthy only will only stimulate avoidance schemes. France talked about it, now they are having to look at tax cuts.

    Raising the tax free threshold is one way lighten the load for low to middle income earners combined with a progressive tax scale à la Henry.

  73. Rob
    May 1st, 2014 at 16:53 | #73

    I did a quick scan of the Greens news website and couldn’t find anything about the tax/levy/whatever.

    But anyway, I would think there’s no conflict in arguing against the levy in the media, in parliament, etc on the basis that it is sub-optimal to the alternatives (e.g. retaining the carbon tax, mining tax, etc) whilst also “voting for it” in parliament (if it requires such) assuming is it not regressive, and assuming our income taxes are currently too low (on some objective basis, as JQ has suggested they are).

    Rob (Greens member who doesn’t always agree with every Greens policy)

  74. Rob
    May 1st, 2014 at 17:01 | #74

    … continuing from the above…

    The alternative, that a party should (attempt to) block *any* bill from another party because one of their other bills/policies/whatevs is disagreeable is a bit silly. That’s the situation in the US at the moment, where the Repubs vote down anything from the Dems, because “obamacare”. Not really a healthy democracy acting in the best interested of the country, I would say.

  75. rog
    May 1st, 2014 at 17:33 | #75

    @Rob That sounds very much like a secondary boycott.

  76. Christine Black
    May 1st, 2014 at 17:36 | #76

    @Fran Barlow

    When the new regime was elected, a qualitatively better process — one that had integrity — attended the CEF.

    Which is precisely what I said – that you suggest the Greens should put process ahead of content, only supporting legislation which implements our policy if we like the process which produced it. It’s hard enough getting legislation passed which improves the progressiveness of our tax system as it is, without adding some meta-qualification to it. But if the Greens are going to only support legislation if it’s produced by a desirable process, they should at least put that qualified against their policies so people who are thinking of them know they plan to put process purity ahead of policy progress.

    If some schyster only has to wink in your direction for you to start wondering whether you should do as he says, then one of the other parties is likely to serve you better than us. It’s our objective to empower humanity rather than offering political cover for scoundrels, however hard they wink at us.

    Name calling doesn’t really substitute for cogent argument. This isn’t a ‘wink’ – it’s a clear cut proposal to tax the rich. To say that we can’t support something implementing our policy because it’s put forward by a ‘shyster’ is to say that the Greens should not support any legislation put forward by Tony Abbott. You keep saying this isn’t your position, then you outline an argument which makes quite clear that it is.

    As @Rob says

    that a party should (attempt to) block *any* bill from another party because one of their other bills/policies/whatevs is disagreeable is a bit silly.

  77. Fran Barlow
    May 1st, 2014 at 17:44 | #77

    @Rob

    We’re not proposing to block *any* bill. On the other hand, I doubt we will be in the business of letting the regime eat their cake yet have it too.

  78. Rob
    May 1st, 2014 at 17:55 | #78

    Fran Barlow :
    @Rob
    We’re not proposing to block *any* bill. On the other hand, I doubt we will be in the business of letting the regime eat their cake yet have it too.

    Indeed I am using the US to illustrate a “logical conclusion” scenario. I don’t think that would happen here, but it makes me wonder, where does one draw the line?

  79. rog
    May 1st, 2014 at 19:29 | #79

    Ths conversation seems to be about the user pays system and how some users can afford to pay more. The recent audit, compiled by representatives from the Business Council, seems to have excluded business as a user who should pay. One could argue that the Business Council is not merely an objective observer and is actively lobbying on behalf of its members. Followers of NSW ICAC have been exposed to the corrupting influence of business on government and the threat business presents to the democratic process. It may well be too late.

  80. Ikonoclast
    May 1st, 2014 at 22:49 | #80

    LOL, while we are all arguing, the neocons wipe the floor with us.

  81. J-D
    May 1st, 2014 at 23:29 | #81

    @yuri
    You are evidently aware that some schools are far more luxuriously appointed and lavishly equipped than others. I am confident that you are also aware that when Fran Barlow advocates an end to public funding for ‘wealthy’ schools, the schools she is referring to are the most luxuriously appointed and lavishly equipped ones. If you have some substantive objection to this proposal, you are free to make it. It is deceitful to obscure the issue by focussing instead on how Fran Barlow’s use of the word wealthy violates your personally upheld canon of usage.

  82. Fran Barlow
    May 2nd, 2014 at 00:34 | #82

    @J-D

    Indeed. I’ve no problem in principle state funding non state schools in areas that are poorly serviced by state schools. That’s not at stake here though.

  83. Fran Barlow
    May 2nd, 2014 at 00:36 | #83

    @Ikonoclast

    To be fair, it doesn’t occur to me that the neocons give a proverbial.

  84. May 2nd, 2014 at 01:34 | #84

    Professor Q, are you going to write about Mr Piketty’s new book?

  85. Ron E Joggles
    May 2nd, 2014 at 04:45 | #85

    I was flabbergasted, if I heard correctly, that The Greens support Abbott’s bizarre PPL after the insignificant trimming of the upper limit to payments – aren’t The Greens opposed to policies that provide more help to those that need it less, and less help to those who need it more?

    Re Prof Q’s fn1 – I’d feel fabulously wealthy on $80,000 a year; I’d be able to support my daughter’s education properly, buy a reasonable car and even contemplate a brief holiday; $50,000 a year seems like a more reasonable threshold, though it’s out of reach to me.

  86. Fran Barlow
    May 2nd, 2014 at 06:53 | #86

    A day late, but with the CoA in mind

    Arise ye heads of exploitation
    Arise ye paragons of greed
    For avarice thunders extirpation
    Of those who live in need.

    No more the workers’ chains shall bind us
    No more are we in thrall
    Privilege shall rise on new foundations
    What can be bought
    shall now be all …

    Noting May Day and recalling the Haymarket Martyrs and the many who have fallen in the cause of the struggle for the empowerment of working humanity.

    Solidarity ….

  87. John Quiggin
    May 2nd, 2014 at 08:21 | #87

    @John Brookes
    I’m in the Grauniad and will post soon

  88. John Quiggin
    May 2nd, 2014 at 08:25 | #88

    The Greens support progressive income tax. However, the first step is for a higher tax on personal incomes of over $1M. Hence, the $80K as proposed, is far too low a threshold.

    It looks like my disagreement with the Greens is substantive, not process-based. This is an incredibly lame excuse for a progressive policy, identical (ignoring the difference between $A and $US) to the position of the US Republicans. A tax on the component of income in excess of $1m will affect hardly anybody and raise hardly anything.

  89. Ikonoclast
    May 2nd, 2014 at 09:25 | #89

    @John Quiggin

    OK, let us look at income and wealth distribution.

    “Measures that focus on the very top income earners show a strong gain in their share of national income, as is the case in most OECD countries.” – Aust Govt Treasury.

    “… the wealthiest 20% of households in Australia account for 61% of total household net worth, with an average net worth of $2.2 million per household.” – ABS

    I would suggest that a focus on the wealthiest 20% (income and wealth taxes) would go a fair way to fixing the budget. The next 20% could possibly pay a modest income tax increase as well. The lower 60% should either benefit or the revenue could fix the budget if the deficit is considered excessive.

    The real substantive issue of course is why does our system generate inequality which then necessitates transfers? A better functioning and more equitable economy would not necessitate much if any need for transfers. The system of ownership and wealth distribution is flawed in the first place.

  90. May 2nd, 2014 at 09:33 | #90

    @Fran Barlow
    Did you see my other comment (after the one you responded to)? Think I ended up much closer to your position after some thought.

    Though I agree with ProfQ #36 to an extent – setting the bar at incomes over 1 million seems far too high.

  91. Fran Barlow
    May 2nd, 2014 at 09:40 | #91

    @John Quiggin

    I stand by what I’ve said in the past. I’m for taxing people on and under my income progressively more. I’d prefer an infinitely incremental scale so that each new dollar is a new tax bracket.

    It seems that anyone not in the bottom 60% of income earners ought to be paying more and getting less state assistance. Conversely, there should be a lot more direct state assistance to those in the bottom 40% and somewhat more for those in the middle 20%.

    Yesterday’s revelations from the CoA underline that what this regime is about is not progressive tax reform but rather, a shifting of transfer payments away from the bottom 40% and by default, in favour of the top 20%.

    To be talking about supporting a tax measure from this regime is simply to focus on the growth of a sickly sapling in a forest that is in the process of being clear-felled.

  92. John Quiggin
    May 2nd, 2014 at 10:08 | #92

    @Ikonoclast

    If you want the wealthiest 20 per cent to pay substantially more, you need to increase marginal tax rates starting somewhere below the 80th percentile (if you start there, then people at the 80th pay nothing extra at all). That’s going to get you pretty close to $80k for a single earner.

    @fran fact that it’s proposed by “this regime” is irrelevant. Obviously, anything that happens in national policy over the next three years is going to be done by “this regime”. If you’re going to oppose everything (even policies you would support in substance) on that basis, then you should say so and remain silent thereafter. Certainly, there’s no point in banging on about how bad the government is – you don’t need to convince me or the vast majority of people who read these comments.

  93. Ikonoclast
    May 2nd, 2014 at 11:22 | #93

    @John Quiggin

    Fair enough, I agree with your assessment then. But I would like to see the super rich hit a bit more too. There is no good reason that individual billionaires should be tolerated at all.

  94. Terry
    May 2nd, 2014 at 11:44 | #94

    Too many rich hippies who bankroll the Greens would be hit by a debt levy that kicked in at $80K.

  95. Fran Barlow
    May 2nd, 2014 at 11:59 | #95

    If you’re going to oppose everything (even policies you would support in substance) on that basis, then you should say so and remain silent thereafter.

    Plainly not. This regime sought and obtained our approval to abolish the debt cap. There might be other things to which we would not object. If for example, the regime decided to abandon the joint strike fighter deal or the Collins Class submarine replacement, I can’t imagine that we’d oppose that. If they decided Manus was too expensive and decided to process onshore and in the major cities, again, we’d support that, as unlikely as that is.

    But as things stand, this debt levy is a bridge too far.

    It’s also manifestly stupid — $2.4 bn p.a. when there are any number of more simple ways to raise much larger sums of revenue from people on higher incomes — the super concessions merely being perhaps the most obvious.

  96. Fran Barlow
    May 2nd, 2014 at 12:25 | #96

    @Terry

    One day I’m going to meet a rich hippy who supports us. I feel sure it will happen one day. As it stands the people I meet most often are low to middle income baby boomers, (some of whom may well once have been hippies but even I’m too young to have been one) younger tertiary educated people, often in education or the public service, retired people and quite young peopole (17-25).

    As yet nobody has suggested we go for a latte or chardy and I’m yet to meet anyone from The Greens wearing sandals.

  97. Terry
    May 2nd, 2014 at 13:17 | #97

    Do you know Graeme Wood, the founder of Wotif? Or MONA impressario and successful gambler David Walsh?

  98. Moz in Oz
    May 2nd, 2014 at 13:51 | #98

    Fran Barlow :
    One day I’m going to meet a rich hippy who supports us.

    There are quite a number of them around. BZE was bankrolled by a few for a while (may be still), and if you drop the “rich” threshold to include the top 5% of taxable income Bob Brown may even qualify. But drop it too far and a parliamentary salary would push you into “rich”, and we can’t have that. It’s bad enough that half of them start in the top marginal rate (before negative gearing drops them to something more reasonable).

  99. Fran Barlow
    May 2nd, 2014 at 15:36 | #99

    @Terry

    Do you know Graeme Wood, the founder of Wotif? Or MONA impressario and successful gambler David Walsh?

    I’ve heard of both of them but

    a) 2 is a small number, and hardly “too many”
    b) Neither of them has any say in Greens. As far as I know, neither is even a member.
    c) By supporting us they support our policy, which is for more sharply progressive taxation. I’ve never heard either complain about this policy.
    d) It’s actually quite hard to work out when Wood was born but he looks much too young to have ever been a hippy. Walsh was born in 1961, which was around the time the hippy period was also in embryo and at the time of Woodstock he’d have been 9. Apparently he was raised a Roman Catholic, which makes him an improbable hippy. Now he’s reportedly a “rabid atheist” which is still not very hippy. At a guess, I’d say most hippies are deists of some kind or followers of some variant of Buddhism.

    As both seem to be into left-liberal philanthropy, I doubt taxa rates would be an issue for them.

    So your claim that the large wealthy hippy demographic would object seems to fail on more than one basis. If there were one, they haven’t blocked our progressive taxation policy, and the two you cite seem very quiet on the matter and probably haven’t been hippies.

    And no, I’ve not met either, though one day, I suppose I might.

  100. Julia Perry
    May 2nd, 2014 at 22:20 | #100

    Totally agree with John Quiggin. As soon as I saw Abbott’s proposal for the levy I was relieved that at least there was some possibilty for those earning $80,000 plus to ‘share the burden’ of this Government’s bloodbath. When I then heard immediately that the ALP and Greens would oppose it, I laboriously emailed all ALP and Green senators saying that the levy was not a problem, while all the other horrors were.
    Only heard back from Christine Milne, patronisingly telling me that income tax on those earning $80,000 and over was unfair to ordinary Australian families and companies should be paying more tax not individuals.
    Tax is paid by individuals not families (apparently if you’re not in a family you aren’t of interest) and company tax is based on dubious principles and not necessarily redistributive.
    Love you John Quiggin!

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