Update 12/12: This was initially posted here and emailed to QIC on the morning of 10 November. As yet, no response. And, apart from a snark by Andrew Fraser, no public response to my piece in last week’s Fin pointing out that the government’s case for privatisation was entirely spurious
Dear Doug,
As you may be aware, I have been very critical of the “Myths vs Facts” booklet which is, as far as I know, the only document released by the Queensland government to present its case for sales of public assets. In today’s ABC News, you are quoted as supporting the sales and saying
It can curtail its spending on its infrastructure program and let service quality deteriorate, it can raise taxes to pay for the interest bill that’s building up, or it can rearrange its balance sheet – sell those assets which don’t have a particular need to be in Government hands and own assets that should be,
This statement appears to endorse the government’s claims that investment in non-income generating assets can be financed by the sale of income-generating assets, with no need for additional revenue to service the associated debt. In my view, these claims are obviously fallacious, and I would appreciate clarification on a number of questions. I think these questions admit an unequivocal “Yes” or “No” answer, with supporting argument if desired.
1. Do you believe that the “Facts and Myths” booklet presents a fair statement of the arguments for and against privatisation, offering Queenslanders sufficient information on which to make an informed judgement?
2. Do you endorse the statement that ‘Keeping these businesses would cost the Government $12 billion over the next five years. That’s $12 billion spent on new coal trains and new wharves that can«t be spent on roads, schools or hospitals.?
3. Do you regard the statement that “The total return from all five businesses in 2008-09 was approximately $320 million … When the sale process is completed, it is anticipated the Government will save $1.8 billion every year in interest payments” as providing a fair basis for assessing the fiscal costs and benefits of privatisation?
With my regards,
John Quiggin
Note: A previous version was addressed to Bernie Fraser, but Doug McTaggart’s comments appear more directly relevant.
John Quiggin 
SJ,
Perhaps your argument is why socialists should be shunned – you clearly are not willing to read or understand what Terje said.
He clearly identified it as his opinion – not stating it as “an objective, empirically determinable reality”.
Like I said on “Monday Message Board” it is the lefties that seem to be obsessed with competition.
No, Andrew, I read it and understood it. It’s his opinion, clearly stated, of what he thinks reality either does or should look like, having no regard to what it actually looks like.
So what’s your own personal Laffer curve? Kalamanjaro? K2 perhaps?
@Alice
Effective tax rates are about 80% (if not higher) for the upper income brackets i.e. those people that do the heavy lifting in terms of paying for the extravagant welfare state with which this country is afflicted. And the implications this holds for the deadweight loss are truly phenomenal.
Finding the “peak” of the Laffer curve is besides the point anyway, since Terje is correct in stating that this is not the point where welfare is maximised. SJ, that Terje envisages the laffer curve as being shaped like some trapezoidal-parabola is no cause for shunning. Much as I wouldn’t care if you described the shape of it as resembling Mont Blanc, although with the French there’s no point talking about the Laffer curve since they don’t supply any labour, they just sit around eating crepes and smoking all day.
SJ – do you lack opinions about reality?
@Alice
Alice bemoans the day that the public service was made to be profitable; I would have thought that being profitable was of public benefit and therefore a priority.
@Sea-bass
Sea Bass – what do I care about effective tax rates for upper income brackets when they have used every accounting loophole, many neither legal or ethical, to reduce the amount on which they pay tax. Who is that clever accountant being extradited from a tax haven as we discuss this matter Sea Bass – and lets look at the long list of those who do such heavy lifting for the country – theres Steve Vizard, Paul Hogan, Rene Rivkin, Rodney Adler, Jodee Rich, the hih fellow, Sol Trujillo (he exited stage left with his loot), then there was old Packer whos real rate was around 3% oh and Eddy Groves.
It seems the wealthy are peppered with people who know well how to avoid tax on a lot of their income before they get anywhere near the rate you mention Sea Bass. It also seems some of them need to do more heavy lifting (breaking rocks).
Are you naive?
@TerjeP (say tay-a)
SJ LOL – shape of the Laffer Curve – Mont Blancmange.
oops… that post above was meant for SJ Terje!
Alice, IMHO Sea-bass provides entertaining digressions. We all know by now that Terje has this thing about the Laffer curve and takes a particular ‘view’. The ‘view methodology’ has been appropriately treated by SJ.
The point is that so far not one ‘mainstream economist’ has volunteered to answer yes to JQ’s questons and we are still waiting for a reply from Doug McTaggart.
@Ernestine Gross
Im with you Ernestine.
(as a distraction…agree on Sea Bass’s digressions – he has moderated slightly and become a little urbane even!)
@Alice
“Are you naive?”
Perhaps I was, arguing for greater freedom, less regulation and a better overall outcome. But it seems that freedom is a surprisingly hard sell. So now I think I’m about to give up. I’m thinking of doing my postgrad in law (I think they call it a Juris Doctor these days), and learning all the ins and outs of every regulation, and then lobby for more and more regulation and make a fortune small businesses out of their incomes.
Regarding Paul Hogan, he’s already done more than enough for this country. Just think of all the business the Crocodile Dundee franchise created. Just because you didn’t like the film is no excuse for you to take it out on his finances. Hoges, I salute you. We need to petition to get the parasites at the ATO of his back, they’re just trying to squeeze that extra bit of mileage out of the poor guy.
@Alice
“Are you naive?”
Perhaps I was, arguing for greater freedom, less regulation and a better overall outcome. But it seems that freedom is a surprisingly hard sell. So now I think I’m about to give up. I’m thinking of doing my postgrad in law (I think they call it a Juris Doctor these days), and learning all the ins and outs of every regulation, and then lobby for more and more regulation and make a fortune swindling small businesses out of their incomes.
Regarding Paul Hogan, he’s already done more than enough for this country. Just think of all the business the Crocodile Dundee franchise created. Just because you didn’t like the film is no excuse for you to take it out on his finances. Hoges, I salute you. We need to petition to get the parasites at the ATO of his back, they’re just trying to squeeze that extra bit of mileage out of the poor guy.
Hmmm… Unnecessary double posting – just read the second one, where I inserted the word “swindling” between “fortune” and “small businesses”
@Ernestine Gross
I don’t think the economic mainstream would want to have much to do with me. Nonetheless, I agree that there does seem to be something problematic with the idea of selling an asset that generates a constant stream of income and then throwing the money gained into some other public-spending black-hole that doesn’t generate any further revenue – in fact I find myself in general agreement with JQ on an issue, which comes as something of a shock.
However, this only seems to be a problem if they’re promising greater government expenditure. If there were a general cut in spending on various government black holes this wouldn’t be a problem. By black holes, I mean things such as health, welfare or museums (honestly, as if Queenslanders ever go to museums anyway – a sculpture made of empty 4x cans would be more than ample).
@Tom N.
To Quote Tom. NOTE: The first paragraph is Tom N. quoting me from @Donald Oats, comment 32, Open letter to Doug McTaggart:
The scale of the reduction and the pace for Telstra’s transformation (back when it was called Telecom Australia) was in line with what was happening around it. Telecom first introduced the desktop computers on mass, and presumably moved a lot of paperwork onto the IT systems. Also around that time Telecom was taking advantage of increasingly rapid improvements in network infrastructure hardware. Telecom invested heavily in laying down of co-axial cable, and later, fibre-optic cable, overcapacitating in the process, with the express intention of creating a new broadband for Australia.”)
Meanwhile, Telecom instituted a corporate-wide change program, in which they examined each function as it was carried out by staff, and new processes were designed to take some advantage of the corporate IT systems, and to trim down any “overgrowth” along the way. For example, maps, cable plans, and the like were moved from paper to computer, to the benefit of everyone. The flip-side is that as jobs were redesigned or streamlined to take advantage of the IT systems, it also implied that a significant fraction of people would end up redundant – and they were.
For the rollout of new physical infrastructure, and for maintenance of the networks in the field, Telecom severely cut down on the number of line depots, having them only in the larger townships. They also ran down inventory at the depots due for closure or reduced duties. The end result of this was a reduction in QoS (Quality of Service, a measure of how reliable the network is) as the once staffed line depots lost their staff. The removal of inventory from the smaller townships meant that they now had to rely upon a “roving” maintenance crew. The poor maintence staffer lived under constant stress of making it to the next job in time, even if that meant long hours of driving from one town to another. In SA that means covering a lot of ground from job to job, and some late nights.
Management ranks got thinned – and then thinned again during the 90s.
The upshot is that while there was quite likely some labor bloat, and examples of time-sucking paper processes, Telecom Australia went through a weight loss program with a fair amount of discipline and pain. Telecom Australia was doing pretty much what other companies were doing at the time.
I don’t accept the argument about Telecom being inefficient. While near the end of the change process Telecom had cut many thousands of jobs, and reduced inventory lying around, it needs to be remembered that Telecom and other big Australian companies were going through the change from pen-based white-collar work to fully computer based. Therefore, it is a fallacy to take the fact that they could cut jobs as a tacit admission of previous bloat. Job cuts due to automation and the like are an expected outcome (and presumably desirable outcome for the free market true believers).
With regards to the original line depots, the were typically set up so that a rapid respond and repair could – in theory – fix or replace any equipment breakdowns (including the classic farmer or plumber etc putting a backhoe through some SDH cable.)
It is a mistake to look at today’ staffing ratios and to use that to imply that the old, pre-privatised Telecom Australia was bloated. Oh, and did I mention the sacking of much of the scientific research group at TRL in Glenn Waverley, in the late 90s? The research used to be for the “public good”.
Another, perhaps off-the-record, activity that Telecom field staff (mech-aid operators) engaged in, when undertaking phased cable rollout through rural properties, was to placate certain farmers by using the Telecom heavy machinery (D7s and D9s) to “assist” farmers in the maintenance of dams, brush clearance, etc. Note that in spite of legislation giving PMG/Telecom right of way through rural landholdings, farmers would often make it difficult for Telecom employees in the field. Many farmers were strident critics of Telecom workers use of the way-leave system (ie the right-of-way) to construct the next generation of communications infrastructure, ie cable networks.
The semi-privatised Telstra of today is a far more pertinent example of excesses and waste. Remember the Three Amigos? And the widespread use of exit agreements (worth literally millions of dollars to the recipients, eg Amigo numero uno)? Rights and options as incentive rewards? And how about the biggest farmer of them all, Donald McGauchie, who after being the head of NFF – the National Farmers Federation, became chairman of Telstra? Ironic, given the farmers’ negativity towards Telecom/Telstra at the time. Who spent time arguing with the Liberal government and endlessly demanding for it to get (said in hushed tones) a controlling position on any national broadband network. Meanwhile those lucky few with broadband access were being gouged for exceeding a laughable 200MB limit on download – o/s a 10Mb/s download speed with 10GB of download data per month were common. A fair few shareholders don’t have a lot to be happy about, since Telstra became half pregnant.
So, Tom N., I have done as you asked. I’ve looked at the argument of old Telecom being bloated, and I’ve defended my claim that is wasn’t, and furthermore, actually became wasteful once the second round of semi-privatisation was undertaken. I hope you weren’t an investor who subscribed to tranche 2: Telstra heavyweights dialled the clocks of Mum and Dad investors on that equity raising. Ow, it burns, it burns!
Poor old Kenneth Davidson at the “Age”has spent decades proffering the same arguments as Quiggin re Victoria and with the same success.
Its not about infrastructure. Its about consultancies, brown paper bags and sidestepping social and ecological protocols in the interest of whatever small clique or formation that is cougaring a given community resource.
Interesting decisions Garrett’s re Traveston, in the wake of rudd and Henry’s “35 million pop growth at any cost” propositions of last week, tho.
Will the right inside Labor try to overturn Garretts decison?
Is there a section within Labor that wants rational planning back on the books?
Sea Bass, re your response to Alice.
Why is developers freedom so much more important than the freedom of the rest of us, and how can a person be”free”, when a slave to greed and arrogance.
Can a person be “free”, if this comes from the malicious expropriation of others?
@Sea-bass
You were and are still naive Sea Bass ( but I note not crossing the great divide to vitriol). Hoges, bless his soul, through his advisers, descended from the throne of the harbour bridge to be a mere tax cheat. Otherwise he might still be popular…then there was the small matter of absconding with Linda and getting his face rearranged – but lets not dwell on mere trivia shall we?
I think that the tax-reductionists at the top end of the market might occur with a slightly greater frequency than at the mid to low end of the taxable income distribution. However, it is worth remembering that because of the fame that goes with being phenomenally rich, the tax-reductionists (or are they tax-libertarians? Let’s be tax-free!) tend to stand out like the dog’s proverbials. How many of the exceptionally rich class who pay tax in the spirit of the tax law – rather than in the serpentine, twisted, pro-tax-reductionist-only legal interpretation of tax law – also do nice things like big apolitical charitable works and the like, for society’s betterment? Certainly such people aren’t likely to make it onto the public radar, unless they have a PR dept that gives media releases about the good works. Even then, the media is more likely to focus on the seedy-side and to make up a seedy-side to fill a void, if there is one.
Of course, I’m making a generous assumption here: perhaps there are so few such noble characters that you could count them on the fingers of a snake’s hand; however, I’m willing to chance it that there are a few such individuals at least – afterall, in the USA Bill Gates has demonstrated significant charity, however, I’m not privy to his tax audits, so cannot confirm that he meets the criteria in full.
It seems likely that the MSM highlight the few egregious tax cases among famous rich people that are part of the public record. Therefore they don’t necessarily form a representative sample of the rich tax payers.
If the Tax office is able to successfully prosecute the richest of the tax-reductionists, then the amount of missing tax is so large that it could support a reduction of the required income taxes from low to middle income people.
If the big guys pay the tax that they should – both in the spirit of the tax law and in its application – then the littler guys wouldn’t need to pay as much tax to the government.
@Donald Oats
Says “If the big guys pay the tax that they should – both in the spirit of the tax law and in its application – then the littler guys wouldn’t need to pay as much tax to the government.”
Thats why I wonder why some of them keep calling for tax cuts Don. After the big guys first minimise or evade tax, then then get a very good income tax rate by historical standards. Its easy lifting they do, not heavy lifting…and the same goes for a lot of companies that manage to avoid tax in most jurisdictions.
@Ernestine Gross
Ernestine…we are still waiting.
@Sea-bass
Sea Bass – Hoges could hardly be described as “that poor guy.”
paul,
I would agree that a person cannot be free if this comes from the malicious expropriation of others. In this case the malicious expropriation is conducted by the government and we are not free as a result.
It’s not for themselves Alice as they don’t pay much tax. It’s for the battlers and the middle classes that they make this call. The call is driven by their enormous sense of social obligation.
@nanks
Nanks – is there an irony alert missing?
@Alice
an irony emoticon would be handy most anytime
@Donald Oats
Don – we constantly hear about the “bloated inefficient public sector” – but Telstra and the three amigos is a classic example of the bloated inefficient private sector. Now lets see. Who is really fatter than who here? Im so over the one sided arguments like “if its public sector it must be bloated and inefficient” and if its private sector “it must be lean and efficient.”
The last time I noticed inefficient human beings actually work in both and the nature of the organisational structure ie public or private do not determine the degree of “bloated inefficiency”.
There are some huge examples around of private sector inefficiency with managements ripping too much out of the business to pay themselves an indecent salary and bonus and the company having insufficient reserves to fall back on in hard times etc. (Short term fly by night execs! Usually yankee imports)
We could almost call that particular type of private sector inefficiency a “leaky bloat” couldnt we?.
A rising tide lifts all boats..isnt that what some economist said?
Well, not if they are leaky bloats!!
@Alice
Actually I think it was something to do with having a leak – “the trickle down effect”, I seem to recall.
@Donald Oats
I think it was an insider leak Don.
Yes, Alice @21, p2, we are still waiting for a reply to the open letter to Doug McTaggart.
Andrew Reynolds, JQ, an economist, suggested, “the government’s case for privatisation is spurious” .
If state governments are trying to hawk off the public’s silver to insider “developers” and the like, incidentally implementing neolib ideology of small (innefectual) government, you’d have a point, except, as I’ve said before, when governments are in effect”captured” by big business, as the neolib model proposes.
Then these cease to be a government in the meaningful democratic sense, merely a tool for the real “government”; that motley collusion of politicians, capitalists, lobbyists,consultants, media spinners, public servants and brown shirts passing themselves off as”union”, as happened in Tasmania involving Gunns.
If you are repeating the silly American right-libertarian shibboleth about government being the thief because it taxes rednecks and corporate cowboys as well as everyone else, to provide the services a civisation requires to function efficently, nahh!
@paul walter
But long ago neoliberals were “captured” by big business. If neoliberals refused donations from corporations or wealthy “big bussiness” people and provided some critique of big business (for example, spoke out against proposals to give free emission trading permits to big business) then they might be taken more seriously. But probably not. Problem is that they are very selective in the ways they apply their ideology. Their ideology is more typically used to crush workers and benefit the wealthy, when their are plenty of opportunities to apply the arguments the other way around. Why, for example, are they typically in favour of deregulation of labour markets (for ordinary workers) but are relatively silent on the various guild workers – doctors, lawyers, pharmacists and so on (who are more capable of lining their pockets).
Ahhhh…knew I’d forgotten some one.
Lawyers ( like bean counters, but turbulent passions of latter ).
Of course.
…should read “lack of turbulent, etc”!
If increases in revenue automatically led to tax cuts for low income people then the argument might stack up. However the government has had quite massive growth in revenue (the GFC was a mere hickup in terms of revenue growth) and those on low incomes are still paying more taxes than they used to.
If you favour tax cuts for people on low income (which I do) then argue for tax cuts for people on low income. I also happen to think people on high income should get a tax cut so I tend to cast a wider net but that needn’t disrupt unity on the first type of tax cut.
I previously outlined how we could halve income taxes for everybody by 2020 without and decline in real populartion adjusted government revenue.
http://blog.libertarian.org.au/2009/08/18/halve-income-tax-rates-by-2020/
@TerjeP (say tay-a)
As you call for more tax cuts for all Terje – if you read today’s SMH you will note that the private equity firm in receipt of the funds from the Myer Float just moved all the money offshore despite the ATO attempting to freeze one of its bank accounts for a tax debt owed of $678 million dollars. The ATO lost its court case to freeze the account and despite that it was too late. There was only $45 left in the account in question – its already gone. That tax obligation has just been successfully avoided by TPG private equity and the ATO now has no way of getting it, with the private equity firm claiming “it had satisfied all its tax obligations”.
Sure Terje… and you want to give these sort of people an even bigger tax cut?
If we effectively taxed the big guys more, and were able to stop this blatant avoidance through dodgy transfers off shore, the people who really deserved the tax cuts could get one. Shame on the court.
You have only one real objective here Terje and we both know what that is…to ensure the government does not have sufficient income to exist.
Transfer pricing always happens when one country has comparatively higher tax rates. That has always been a problem and the issue about just cracking down on tax rates is that the root cause, the primary driver, for avoiding tax is that the country of origin of the transaction had such a high tax rate at the start.
@TerjeP (say tay-a)
To quote you Terje: “If increases in revenue automatically led to tax cuts for low income people then the argument might stack up. However the government has had quite massive growth in revenue (the GFC was a mere hickup in terms of revenue growth) and those on low incomes are still paying more taxes than they used to.”
The key flaw in your argument is that I am not assuming that increases in revenue automatically leads to tax cuts for low income people. The government must decide that that is how it will use the extra revenue – there is no magic here. Remember, I was merely discussing a possibility that would arise if the tax-reductionists stopped and did what most of the taxable population do, which is pay tax in accordance with the law.
Perhaps I could have been clearer in my last sentence (#19) – I’ll concede that it is possibly ambiguous, although it was clear enough to me 🙂
I pay my taxes in full. The insinuation that I don’t is wrong.
Your example of tax avoidance (assuming it is avoidance) isn’t particularily relevant to a discussion about what the tax rate ought to be.
It is a big leap of logic to assume that because I want lower tax rates I don’t want the government to exist. It is also incorrect. And it should be obvious that it is incorrect because I make a point of showing how revenue growth can pay for tax cuts without any decline in government spending.
@TerjeP (say tay-a)
Says
“Your example of tax avoidance (assuming it is avoidance) isn’t particularily relevant to a discussion about what the tax rate ought to be.”
After I gave the example of how a private equity firm involved in the float of Myer (a long standing Australian dept store – before the private equity firms were let in to run amok – profits from offloading the company by way of a public float – and then transfers the money oseas without paying their tax on that profit???
This is not an isolated case Terje and you say it has no relevance to what the top marginal tax rates should be?? Of course it does. If these high fliers consider wanting to live here (itsaniceplace….) and they insist on dodging corporate tax, then I am damn sure they would be rewarding themselves personally as well from their immoral corporate tax avoidance.
Simple Terje – its relevant because if the ATO cant get the rightful tax before they fly off into the nightsky with it, then ensure that high fliers are taxed higher rates on their income tax.
Do you honestly suppose the executives would not reward themselves handsomely from this theft while they are whinging for lower income tax rates.
If the ATO cant get it on the wing it needs to get it on the round about Terje because thats all this is and this is only one example.
I would suggest to you that corporate tax evasion is a normal everyday occurrence, and tax saved enables higher bonuses and executive rewards bringing it back into the scope of personal tax.
Not irrelevant at all Terje. You might pay your tax, but if you are arguing for a tax cut for yourself and other deciles more deserving – I have no problem with that at all. I have a problem with the antics of the corporates and the rich and their blatant in your face tax evasion.
I have a huge problem with the income tax rates they now pay, seeing as they have been granted large decreases over the past thirty years. Too large and they very much need to rise so that others like yourself who pay their taxes, and who need it much more, actually get some relief.
As I mentioned to you earlier Terje – your sole objective is to reduce tax so that the government does not have sufficient income to exist, because there are holes in your pro tax reduction arguments are across the board, do not recognise current evasion levels (and at which income level they originate from – ie the wealthy tax dodging entrepreneurs). You use the laffer curve but only in a “one way sense” ie large tax reductions have already been granted dince the laffer curve became popular in the 1970s but for you there is no optimal level of cuts, because you keep calling for more….(and more).
Thats illogical.
Alice – your argument is akin to saying that some people cheat on welfare therefore all welfare payments should be as low as possible.
@TerjeP (say tay-a)
Terje – one other point on the matter of corporate tax evasion and income tax rates too low on the rish to deter avoidance initiatives results in exactly the subject of this thread ie you need to link the reasons for fire saling public assets “to balance budgets” and keep a phony AAA rating under a phony budget surplus at all times philosophy and nothing more (not to fix schools and roads and hospitals because you can bet that wont happen) – after these sales are finalised they will dig for more and announce more privatisations.
The NSW Govt and the QLD Govt has already proved that they would privatise the premier if they had half a chance of a getting a decent price, which they dont.
Public services like transport have already reached a point of disarray in our major cities, but particularly Sydney. Just think, 60 years ago we had half the population and public services were greater (public trains, buses, and trams, road building services, infrastructure – also providing employment).
Now – every day across this city (Sydney) millions are sitting in gridlock traffic jams, one per car, spewing expensive petrol fumes into the air. Blind Freddy can see its an unholy mess but where are the funds to correct it?
You libertarians will get us into a bigger, uglier mess (and its ugly enough now), continuing to call for tax cuts and privatisations. There are even Labor ministers now openly opposing the privatisation of Sydney Ferries. Roozendahl is just plain stubborn wrong headed and bloody minded and in the wrong party – like Costa. Seeing as politicians are notoriously slow to pick up on what the voters actually want – this should indicate to you that people want better public transport options, not more PPS toll roadbites or tax cuts.
@TerjeP (say tay-a)
entirely fatuous comment Terje.
Alice,
No – Terje is right. How is an illustration of how one group evaded their obligations (if indeed they did – I have not read all the evidence here) in any way at all relevant to a discussion of what those obligations should be?
@TerjeP (say tay-a)
The reason is Terje – thats usually what libertarian small govt view argues…(“that some people cheat on welfare therefore welfare should be as low as possible…or none at all”) – not me, but by the same logic why arent you arguing that because some (in this case the corporate tax evaiders and wealthy tax minimisation schemes) cheat on taxes, taxes shouldnt be increased???
By the same logic thats what you ought to be arguing.
There is also more to this story (about TPG evading tax and clearing out the account the ATO sought to have frozen, in payment of the $678 million tax bill). It turns out the private Myer family also had its funds in the very same TPG account which the Myer family claims is a fund they use, (invested in the TPG account under question) to also provide tax minimisation advice to other wealthy individuals and families and their so called private “charities.”
Its an everyday occurrence in this country and you call for lowering taxes on the rich??.
By any angle your argument is illogical. You would seek to lower welfare on welfare cheats but you dont see the paradox in the argument (by libertarians) not seek to raise taxes on wealthy tax cheats. Its hypocritical…and ends up at my same point. That your main reason (and the reasons of other libertarians is to seek both tax cuts and welfare reductions and government spending reductions is because of an entirely ideological opposition to government with the objective of seeing it starved of funding and failing altogether).
@Andrew Reynolds
Read todays SMH business section first Andy!
@TerjeP (say tay-a)
I certainly wasn’t insinuating that you specifically weren’t paying tax in full.
I’m referring to a group, known to exist and indeed, the ATO has some statistics on it, who try every trick in the book to evade their tax responsibilities. Now, I’ve been at the high end of the tax rate in the past, and my experience was that the government of the day was very happy to give me an extra couple of grand taxcut in the lead up to elections. I’d much rather that they had kept the money and passed it on to services for people in difficulties related to illness, impoverishment and homelessness, child abandonment, etc. The previous government’s argument that people should be free to spend the money as they wish obviously went down well with a number of recipients.
Unfortunately, not much of the taxcuts found its way to dealing with homelessness, impoverishment, chronic illness and disability, etc. A shitload found its way into consumer paradise, as was the economic intention.
It seems to be the classic tradeoff between choice at the individual level, and choice at the society level (which happens largely through our voting decisions). I think governments of all persuasions have a role to play in making the choice to deal with society’s sticky problems, instead of hoping that enough people individually choose to fund the necessary services.
The individual may think “Oh, I’ll have to get around to donating some money again to continue the disability services for a bit longer.” – they may mean well, but lets just say other personal priorities seem to push the donation back in the mental queue of things to spend the loot on. At the level of democracy, governments can be voted in or out on the basis of their contributions to social problems. It isn’t perfect, in fact it often sucks; however, the alternatives seem a bit – ahem – optimistic concerning individual behaviour.
…
Alice – you’re not demonstrating much ability to follow a logical argument let alone create one. However keep trying.
@TerjeP (say tay-a)
Terje – just answer me these (three) questions then. Would you prefer to see lower welfare spending? and lower government spending? and lower taxes?
Ill bet its the trifecta.
@TerjeP (say tay-a)
Anyway, we are still yet to get a response from Dough McTaggart. A response I feel is warranted unless he cannot fully justify his decisions…except to balance a budget in shortfall in order to keep a rating not worth its name – for what??? –
When you sell assets you may balance the budget, reduce a deficit, or put it into a short term surplus by cost shifting to the private sector (as if there hasnt been quite enough of that already – view private sector debt levels)….but could someone please tell me why we need these AAA ratings when the clear intention of current governments is for governments neither to borrow or invest in (or maintain) public infrastructure?
Why is the AAA rating so important unless Govts know that down the track, when they have nothing left to sell future governments are going to need it, to borrow (but what does the incumbent govt care – they wont be around and have benefitted from the sell off).