TE-BO: Budget 2014 – ‘Taxes’ … the lies told – and the promises broken …
|TE-BO: Budget 2014 – ‘Taxes’ … the lies told – and the promises broken …
| Author: TE-BO – The Eye-Ball Opinion| Date: May 9th, 2014 |
The Abbott Government were so hell-bent on avoiding a repeat of the Gillard slogan – ‘there will be no carbon tax under a government I lead’ – with their own election version of ‘no new taxes’ – some 8 months later and in confronting the 2014-15 Budget crisis – Hockey and his ‘razor gang’ can’t deliver a budget with a better outcome than the 2012-13 A$23.5 billion cash deficit for 2012-13 without increasing or raising ‘new taxes’.
It’s a sad repeat of the Howard rhetoric used to off-set the debt burden left by 14 years of Labor under Hawke and Keating. Then there was the ‘asset sale’ of Telstra, and within an election time frame, Howard had gone back on his word about there never being a GST. By 1998 the GST was taken to an election and mandated. The GST now raises some $57 billion annually towards Federal Revenues after raising A$23.8 billion in 2000-01. Both sides are guilty of broken promises within months of taking office.
Who is responsible for the welfare society – was it not Governments who gifted the welfare to middle class Australia?
According to a story published today – [see below] – more that 50% of Australian family’s pay no tax when their welfare payments are off-set.
You tell me how many ‘welfare’ payments were requested by those who now receive them – were they not initiated by Political Party’s as a result of election promises made to win elections? How then can politicians keep a straight face when they argue about the ‘budget crisis’ and how we have arrived where we are?
Surely politicians have to wear the bulk of the responsibility and if that is so – where is their accountability?
If a CEO of a publicly listed company and the Chief Financial Office sent a Company to the wall they pay the full price for their failings – financially, career reputation, and the shareholders always have long memories. Yet past Treasurer’s and Ministers are never held to account for their mistakes – i.e. Conroy and the NBN fiasco, Swan and the $300 billion debt he left behind, the Howard/Costello middle class welfare and $50 billion superannuation give away dished out during their last term in office, what happens to politicians when they send a Nation to rack and ruin.
It’s a merry-go-round of incompetent politicians way past their used by date, who have little or no experience in financial management other then their own personal finances, being put in charge of the biggest business in the land. All they like to do is spend – and due to Swan’s debt legacy, no new Government can enact policies they would like to introduced – they are hamstrung because of the debt burden and management of a legacy left behind.
How would it work if Political parties had to inherit the financial failures they made in office – if that if that sort of accountability was the law of the land – how much debt do you think each Political Party would be prepared to spend? It’ll never happen – but this limitation on debt increase from one Government to the next would be a start in making Governments accountable for their spending mistakes.
Does anyone know of a tax that has been repealed once instated – payee scales float up and down as does Company tax rates do. But has Sales tax ever gone down, and if so, by how much in relation to increases from its original start point, The same with ‘Excise’, ‘Customs’, GST, FBT, PRRT, MRRT, Alcohol & Wine, Tobacco, Luxury Cars, and a whole host of other indirect taxes.
The crux is that taxes increase to pay for spending programs – a simple solution would be to just stop the spend growth indexed to inflation. It can be argued that ever since inflation became a major economic indicator – Government’s generally increase their budgets for all Departments across Local, State, and Federal Departments by a factor of the inflation [CPI] index.
Who has not heard the stories about Local Councils and the like spending the unspent portion of their budgets in the last few months of their financial year, just so they don’t show a budget saving that might impact on the next years budget. Government Department Heads are always focused on their budgets and the perks they offer to key personnel and the like. If Hockey had a start point to address Swan’s extravagances – he just tells all Departments they have to cop a 10% budget cut unilaterally.
What does he do instead – he green lights a US$15 billion spend on new fighter planes, and we know that there will be cost overruns on these planes of another US$5-US$10 billion in coming years. Then there was the $12 billion on new infrastructure claimed by Deputy PM Truss as the biggest infrastructure spend in Australian history – has he forgot the $40 billion NBN project? Even Truss should sack someone on his staff for that ‘clanger’ …
Look – yes Hockey has to do something – but his tunnel vision approach is a repeat of the same mistakes made by past Treasurer’s who have no experience in the real world of financial management and accountability. The boof-heads at Treasury offer no ‘outside the box’ help because they are all concerned about their own lot and keeping their jobs – and the only way a public servant can do that is to stay under the radar and make no mistakes.
Hockey is only doing what Costello did when he believed that the debt scenario left behind by Keating and Hawke Governments over a 14 odd year period had to be paid back. Costello imposed his own financial vision for Australia by sitting like a ‘king in his ivory tower counting his money’ – he forgot about infrastructure and building for a stronger Australia to take advantage of the mining boom under way during his watch.
No – politicians know how to spend and make promises of new spending and all for a purpose of retaining office, or winning elections from Opposition. They have a theory – you can only make decisions if you are the Government – so winning office is everything and they do that with promises of ‘no new taxes’, ‘better schools’, better ‘health care’, and better deals for pensioners, and the revenue needed to cover these promises is never audited until after the fact.
No – enough is enough – the first step in arresting and making politicians and political parties accountable is to place limits on the amount of new debt that can be created in any Government period. If the Government of the day exceeds this limit then an election has to be called. Forcing Political Parties to account for their unbalanced budgets, similar to Public Company Directors having fiduciary responsibilities to shareholders – is the only way to curtail budget spirals that never come back to balance.
Hockey is predicting 10 years of fiscal deficits – look where America are – their debt was less than US$1 trillion before Reagan came to office in the early 80’s – it now sits above $17.5 trillion – that is a flat-line growth rate of near 100% ever year … since Obama – some six years ago – it’s grown from US$7 trillion to US$17.5 trillion.
You have to laugh at the media’s reporting of the Budget process – it is such a miniscule focus – they do it the way they do it because to do the research would not enlighten more than a few about the changes form year to year. The media coverage is always focused on the big numbers – i.e. the deficit value and less so if it is a forecast surplus.
Over a year there are so many other indirect taxes – i.e. Car Rego, car running costs, insurance and the like, then there is private health insurance premium increases, Local Government rates, public and private school fees, electricity, petrol, and so on. Some are subjected to a subside scheme by State and Federal Governments to ease the burden, but that off-set does not mitigate the annual increase in the cost of living always being above the annual inflation index that income is bench marked to.
It’s a never win game for the householder – even when any tax they do pay is less then the welfare entitlements gifted, finding enough income to cover all expenses requires increase credit card limits to fund the shortfall. Australians and most people do not manage debt well and that all adds to the consumerism that Governments love for the indirect taxes they earn.
A summary of the Taxes collected in the 2012-13 year.
Now if 50%+ of all workers and/or families actually receive more from the Government in handouts then they pay in taxes – who is actually paying taxes. The gross revenues and gross expenditures for payee and welfare payments obviously net each other when the payee taxes collected and the welfare expenditure are calculated. A question I would like answered is who actually pays taxes – i.e. a list of say the top 500 Corporations and their payee, superannuation, sales including net GST, payroll, custom’s, and excise taxes paid.
Some Expenditure items:
These four areas of expenditure amount to some A$250 billion of a total expenditure of A$382 billion some 65% – and all considered essential and ‘hand’s off’ for Hockey to find savings. At least for this budget. But hang on – the NDIS at $20 billion, and the Gonski Education spend were recent additions and we ll knew then hat the MRRT and Carbon Tax was not going to pay for these policy’s. But why spoil a good election promise without having the funds to make it work …
Don’t complain when this mob have to inflict some economic pain to also pay for their failed policy promises – particularly when Labor produced legislation that can’t be unwound – that is like laying land mines and throwing away the map that has their location … what were we thinking giving all this power to a bunch of idiots who know about accountability, and do anything they can to have their ego’s stroked by adoring media shows.
The interesting part will come when we read exactly what it is Hockey dishes up for the public, and compare them with the measures taken to tighten the political expense waste in their own backyard.