Reform of the federation.

[Power Raid]

And this is where democracy falls down.

The majority will not vote for austerity, no matter how much its needed.

People vote to spend public money in a way they would never spend their own. The problem has never been revenue its always spending.

yep but eventually it all collapses and the rich get richer and the poor poorer. we have just seen that in Greece where Citibank flew in their best bankers to rape the nation. so by not dealing with the issue pre collapse, not dealing with the issue during or after the collapse was essentially a vote to be bent over the barrel. this is the failing of democracy where people (and completely understandably) vote for what they want, or what they want to hear rather than what is sustainable.

that is why I believe revenue should be stripped from government control (like the RBA does with interest rates) and that way governments can not pander to the electorate. At the end of the day, revenue is now capped by globalisation forces so it is no great change. the only addition would be the additional constraint of capping borrowings as determined by the new "RBA" entity. by defualt revenue + borrowings - debt repayment = total expenditure. governments would then only decide where and how it was spent as the bucket is finite.

 

[Power Raid]

Just a quick skim of recent budgets...

If you include current payments to the states, education and about half the health budget ( feds can keep the Pharmaceutical benefits scheme and medicare subsidies for example), you're probably looking at something like $100Billion.

GST makes up about $50B, which currently gets cut up according to 'need' and distributed to the states.

The other 50 could be made up from (say) a guaranteed 1/3 share of Income taxes ( That'd actually be ~$54B, but we're going rough figures here). Make that go straight to the states divided by share of population or maybe even by where the income was raised...I'm sure the tax department could work that out easily enough.

yep, it doesn't matter which department does it as long as like the courts or the RBA it didn't have to answer to the government

 

[Pessimistic]

And this is where democracy falls down.

The majority will not vote for austerity, no matter how much its needed.

People vote to spend public money in a way they would never spend their own. The problem has never been revenue its always spending.

Id like to know where austerity was when governments were bailing out big investment houses ?

In the rightist view of history, that little episode is a "page left intentionally blank"

Then when governments are in trouble, the fat cats say they are mollucoddling the poor and working classes too much

Then we get flippant phrases like spending like drunken sailors ?

Shouldnt we get with the times and say spending like coke addled finaciers ?

 

[Power Raid]

Id like to know where austerity was when governments were bailing out big investment houses ?

In the rightist view of history, that little episode is a "page left intentionally blank"

Then when governments are in trouble, the fat cats say they are mollucoddling the poor and working classes too much

Then we get flippant phrases like spending like drunken sailors ?

Shouldnt we get with the times and say spending like coke addled finaciers ?

this is a complex area as one rule doesn't fit all bail outs but the ultimate principle should remain true. that rule is; the government is not a charity. by that I mean, where financial institutions do not form part of national financing infrastructure they should have been left to fail. where they do, that is they are too big to fail then they should be bailed out but not for free. the bail out should have been for equity or convertible bonds or straight debt.

Again we find ourselves with governments who try and mollycoddle our societies as if we are so weak we can't absorb a bit of pain.

The longer term solution to overseas banking failures is not bail outs but reform. these reforms were implemented by keating and refined under the howard years and as a result we didn't have the same issues as overseas banks. thus why we didn't need to bail out our banks and better still our own banks bought back foreign owned banks like bankwest at a song.


flippant phrase? have you heard how flippant our governments roll off $Bs in spending on consumables and crap? How could we spend $300B more than we earned during the greatest boom in Australian history and have nothing to show for it. On top of that we spent another $300B but apparently we have something show for it, which includes programs like the nbn so it doesn't show on the balance sheet. On top of that we spent the tax revenue which I am guessing would be around $300B-400B per annum. I appreciate the government is a large organisation but if they are spending $Bs more than they earn and have no clear plan to repay the debt or have a surplus, I think there is a cause for concern.

I would suggest putting 5-17yo's into a generation of debt before they have left school is more than flippant, more than reckless, it is cruel.

 

[Play by Numbers]

And this is where democracy falls down.

The majority will not vote for austerity, no matter how much its needed.

People vote to spend public money in a way they would never spend their own. The problem has never been revenue its always spending.

Austerity is not needed in Australia though.

 

[Play by Numbers]

The longer term solution to overseas banking failures is not bail outs but reform. these reforms were implemented by keating and refined under the howard years and as a result we didn't have the same issues as overseas banks. thus why we didn't need to bail out our banks and better still our own banks bought back foreign owned banks like bankwest at a song.

The money for bankwest didn't come from the CBA, nor from commercial loans.

 

[Play by Numbers]

yep but eventually it all collapses and the rich get richer and the poor poorer. we have just seen that in Greece where Citibank flew in their best bankers to rape the nation. so by not dealing with the issue pre collapse,

The issue in Greece wasn't spending, it was supply side issues. Greece refused to reform it's tax system. Austerity will do little good and is not what is needed.

People need to start paying income tax as do businesses and at a higher rate. However, this is a cultural issue, tax evasion and avoidance are rife and accepted in modern Greece.

Australia could do a number of things to fix the ballance sheet, which have been discussed. These would prevent cuts to social services and dodgy privatisation, but we wont .

 

[B4Bear]

I think it is hard to dispute the RBA has done a great job handling inflation, currency and interest rates. I would like to see two new functions outsourced from governments hands to independent government bodies, like the RBA, to handle revenue and revenue distribution.

1) revenue being tax reform, rates and total budget incomes
2) revenue distribution being the split between the states and the federal government. Importantly the this function is limited to who gets what but not what they spend it on (that is left to the respective governments).

Have a real close look at the Roman Empire and France (per-revolution) at what happens when taxation is removed from the government and controlled by an external agency; be it private enterprise or an independent agency.

 

[Max zero]

Austerity is not needed in Australia though.

Depends on what you mean by Austerity. Something as simple as slowing the growth of spending can be considered austerity.

People say our debt isn't that bad. Well how much does it have to get to before it is? When can we start caring about it?

We couldn't save ANYTHING during the biggest boom in Australia's history. If not then then when? It seems just breaking even on a budget is considered a monumental achievement, the idea of actually paying off the debt isn't even on the radar.

Like I said people spend public money in a way they would never spend their own. The idea of having any type of savings is a pipe dream.

 

[Max zero]

Have a real close look at the Roman Empire and France (per-revolution) at what happens when taxation is removed from the government and controlled by an external agency; be it private enterprise or an independent agency.

And how many examples of governments are there who have stuffed things up because they controlled revenue? We wouldn't need to go back a thousand years to find them either.

There are pro and cons to every system. From my perspective the last few decades have not shown the idea of government controlled revenue in the best light.

The fact is democracy is doomed once people discover that they can vote themselves more money. I think we have passed that point in many western countries.

 

[Power Raid]

Have a real close look at the Roman Empire and France (per-revolution) at what happens when taxation is removed from the government and controlled by an external agency; be it private enterprise or an independent agency.

I am not sure of the relevance given the different times and totally different economies

what is certain is if we continue down this path we all know a car crash will occur

 

[Power Raid]

The issue in Greece wasn't spending, it was supply side issues. Greece refused to reform it's tax system. Austerity will do little good and is not what is needed.

People need to start paying income tax as do businesses and at a higher rate. However, this is a cultural issue, tax evasion and avoidance are rife and accepted in modern Greece.

Australia could do a number of things to fix the ballance sheet, which have been discussed. These would prevent cuts to social services and dodgy privatisation, but we wont .

yep

good point for greece but Citbank flew in their best to rape and pillage not collect taxes. albeit it is now a requirement for banks to collect taxes and stop evasion.

but it doesn't change the fact that in nations where tax is collected with relative success but the country can not deliver a surplus as the country live within its means. this is where a little self control and restraint will avoid the need for austerity but countries can not deliver that because democracy is about winning votes from the "give me free s**t" voter.

 

[B4Bear]

I am not sure of the relevance given the different times and totally different economies

what is certain is if we continue down this path we all know a car crash will occur

Because, where a profit is to be made, human nature has not, and will never change.

 

[Power Raid]

The money for bankwest didn't come from the CBA, nor from commercial loans.

yep but it is now back in aussie hands at half or a third of market price


a classic example of patient money taking money from the impatient and reckless

 

[Power Raid]

Austerity is not needed in Australia though.

give it time

 

[Power Raid]

Because, where a profit is to be made, human nature has not, and will never change.

I would imagine the entity to be like the RBA so the risk is mitigated and managed

 

[Pessimistic]

Depends on what you mean by Austerity. Something as simple as slowing the growth of spending can be considered austerity.

People say our debt isn't that bad. Well how much does it have to get to before it is? When can we start caring about it?

We couldn't save ANYTHING during the biggest boom in Australia's history. If not then then when? It seems just breaking even on a budget is considered a monumental achievement, the idea of actually paying off the debt isn't even on the radar.

Like I said people spend public money in a way they would never spend their own. The idea of having any type of savings is a pipe dream.

Too much surplus means you are over taxing

 

[pokerspiv]

Id like to know where austerity was when governments were bailing out big investment houses ?

In the rightist view of history, that little episode is a "page left intentionally blank"

I can't think of a single right-wing commentator who thought bailing out the banks was a good idea.

It was Obama that did that, remember?

 

[pokerspiv]

The issue in Greece wasn't spending, it was supply side issues. Greece refused to reform it's tax system. Austerity will do little good and is not what is needed.

People need to start paying income tax as do businesses and at a higher rate.

This makes no sense at all.

If the problem isn't spending, what do they need tax revenue for?

It's spending that creates the problems. If governments spent less than they earned (like all financially responsible people do) then they would never have to worry about debt.

 

[Taylor]

...and the opposition mouthpieces will promise to cut taxes to spend the money hoarded to win the next election.

 

[madmug]

...and the opposition mouthpieces will promise to cut taxes to spend the money hoarded to win the next election.

Thats our democracy. Those in opposition try to sound all responsible & oppose the Government on pretty well all fronts with a negative approach. When in power they start to 'invest' in vote buying & bitch that the opposition are being negative, just like they were! Then they spend like drunks to win the next election. Even little 'Honest' Johnny did it.

The BS proposed by Abbott is just so much 'stuff'. He simply wants to force a rise in the GST. That is, he wants to off load tax rises to the states & keep his own nose clean. As an example the $7 GP co payment would have had the effect of seeing people go to the Hospital emergency centres for attention. That is simply cost shifting to the states.

Any rise in broad based taxes will disproportionately affect lower income people. All Abbott really cares about is slugging low income families to 'balance' the Federal books.

Why doesnt he just sort out middle class welfare? The answer is obvious, its about votes.

 

[Taylor]

Even our "lower class" families are living the high life compared to the world.

 

[madmug]

Even our "lower class" families are living the high life compared to the world.

Poverty in Australia is certainly relative. But this is a 'rich' country. Many people are struggling to pay bills & live poor quality lives. Their kids dont get off to a good healthy start to life, consequently they get stuck in the same rut.

So do you live in a low socio-economic environment? Do you work with people from 'struggle street' Do you think things are ok as they are?

 

[Play by Numbers]

This makes no sense at all.

If the problem isn't spending, what do they need tax revenue for?

It's spending that creates the problems. If governments spent less than they earned (like all financially responsible people do) then they would never have to worry about debt.

It makes plenty of sense.

 

[Taylor]

Poverty in Australia is certainly relative. But this is a 'rich' country. Many people are struggling to pay bills & live poor quality lives. Their kids dont get off to a good healthy start to life, consequently they get stuck in the same rut.

So do you live in a low socio-economic environment? Do you work with people from 'struggle street' Do you think things are ok as they are?

I do think things are good as they are.

I think we have been cashing the future cheque for years by shifting production overseas to save costs and keep prices down, now those countries are growing their own middle class and their own cost of living will increase along with wages, subsequently our own cost will increase and THEN we will be on the tough road.

I'm not interested in ignoring the 99% of the world we don't live in to justify ever greater consumption back home. Education and health are paid for here. We are forever above the rest of the world as long as that is maintained.