Comments on Peter Martin "Election 2016: GDP growth nowhere near as good as it seems, but it'll do for the prime minister", 1/06/2016
It seems there is a need to incorporate the very different effects on the living standard of changes in the terms of trade in the GDP measure. This is because that changes in the terms of trade is quite qualitatively different from changes in domestic relative prices irrespective they are inflationary or deflationary.
While changes in prices generally have the effects of transfering wealth from one group to another, the effects have quite different impacts if they occur through changes in the terms of trade.
Changes in prices purely domestically, the transfer of wealth is within a country and therefore they total wealth of the nation has not changed.
When changes in the terms of trade, the transfer, however, is between two different nations. As a result, the nation's wealth will increase if the terms of trade increases and it will decrease with the deterioration in the nation's terms of of trade.
To conclude, there should be some measure to distinguish these two kind of changes in relative prices to capture the changes in the terms of trade on a nation's living standard for any given real GSP growth as currently measured.
Showing posts with label Australia. Show all posts
Showing posts with label Australia. Show all posts
2016-06-01
Australian dollar, industry policy and economic transition
Comments on Shiro Armstrong "Asian integration a key part of Australia’s economic transition", 29/05/2016
The author argues that “As the dollar strengthened and productive resources shifted to the mining sector, manufacturing became less competitive and many industries suffered or shut down.”
Australia do need to find its comparative advantages!
The author argues that “As the dollar strengthened and productive resources shifted to the mining sector, manufacturing became less competitive and many industries suffered or shut down.”
That can only be partly true, as the falling Australian dollar in recent two years will not in any way to stop the closure of the only remaining car manufacturing plants in Australia.
As a result, there are more important factors than the fluctuating Aussie dollar in determining manufacturing in Australia.
The issues with the future submarines to be manufactured by the France, possibly with some part of that making process in Australia, may not necessarily represent a good policy, if Australia can not maintain a car manufacturing plant while attempts to be part of manufacturing and maintaining submarines. It may be actually a loss if Australia does not have that comparative advantages in doing the submarines, if the standard trade theories are to be believed!
It could be an example of poor industry policy at the taxpayers expense.
Australia do need to find its comparative advantages!
2016-04-28
Good answer to"Japan and Australia ramp up defence engagement in the South China Sea"
Comments on Tomohiko Satake "Japan and Australia ramp up defence engagement in the South China Sea", 28/04/2016
The award of building the 12 submarines for Australia to the French provides the best answer to this post.
I happened to met some people who were doing some jobs for the Australian government and they jokingly put it: "we are back to the Second World War when we were allied with France and fighting against Japan and Germany".
Afterall, history may repeat itself in a crude and unrelenting way! It is ironic, isn't it?
That perhaps summarises the insanity of the former Prime Minister Tony Abbott's earlier failed approach to the big project. Some have said that that was one of the issues that Abbott was seen as unsound and prong to funny and poor judgement.
Were Mr Abbott got his own funny way, Australia would lose out greatly. Some may say that Australia's interest would be sold out.
The award of building the 12 submarines for Australia to the French provides the best answer to this post.
I happened to met some people who were doing some jobs for the Australian government and they jokingly put it: "we are back to the Second World War when we were allied with France and fighting against Japan and Germany".
Afterall, history may repeat itself in a crude and unrelenting way! It is ironic, isn't it?
That perhaps summarises the insanity of the former Prime Minister Tony Abbott's earlier failed approach to the big project. Some have said that that was one of the issues that Abbott was seen as unsound and prong to funny and poor judgement.
Were Mr Abbott got his own funny way, Australia would lose out greatly. Some may say that Australia's interest would be sold out.
2016-04-18
Time for wisdom, judgement and courage now for the PM
Comments on Michelle Grattan "It’s certain – Australians off to the polls on July 2 for double dissolution", 18/04/2016
It now will be a test of Turnbull’s wisdom, judgement and courage, possibly in the two opposite ways, that is, to call or not to call a double dissolution election.
Yes, he has threatened to have a double dissolution election and now has got the trigger. But that does not mean a double dissolution is in his and the government’s favour of winning the election if it goes for such one.I
f he really cares about winning the election, wisdom in conjunction with the most recent polls may suggest that the best action to take may not be a double dissolution election and that requires courage to reverse his earlier threat for having one.
Will he do it or not, that will be the question now until he announces one way or the other.
in that respect, it may not be that certain at all, but we will see what happens from now on.
It now will be a test of Turnbull’s wisdom, judgement and courage, possibly in the two opposite ways, that is, to call or not to call a double dissolution election.
Yes, he has threatened to have a double dissolution election and now has got the trigger. But that does not mean a double dissolution is in his and the government’s favour of winning the election if it goes for such one.I
f he really cares about winning the election, wisdom in conjunction with the most recent polls may suggest that the best action to take may not be a double dissolution election and that requires courage to reverse his earlier threat for having one.
Will he do it or not, that will be the question now until he announces one way or the other.
in that respect, it may not be that certain at all, but we will see what happens from now on.
Importance of justice and the foundation of justice
Comments on Editors, East Asia Forum "Australia’s fraught decision on submarines", 18/04/2016
This editorial is well balanced.
The following point from Tatsumi's post this week was quoted: ‘the bid for SEA1000 is important for Japan in the overall context of deepening security ties with Australia’. Japan’s ‘2013 National Security Strategy identified Australia as an important security partner not only as a fellow US ally, but also as a regional partner that shares Japan’s key strategic interest in upholding an international order based on the fundamental norms that have underpinned the post-WWII world. Such norms include the rule of law, freedom of navigation and the non-use of coercive measures to assert diplomatic positions’.
The norms mentioned there are based on the so called post-WWII world international order, as Tatsumi stated. Some of the foundations were unjust, because some territories which had belonged to different countries were given by the Americans to its allies including Japan, particularly as the world gradually became divided into the American led and the Soviet led two opposing camps, with some in between. Certainly some Chinese have held the view that some of its former territories were dealt with in such deals between the Americans and some of its allies or its controlled subordinating countries.
If the foundation of the current international order is unjust, then is the argument to maintain this order just or justified?
We can write another story in which someone has stole other peoples' properties then after that that person argues for the rule of law and the protection of existing property rights, a seemingly quite 'just' prevailing order. We also have some accomplices has a strong force and police the existing order!
This editorial is well balanced.
The following point from Tatsumi's post this week was quoted: ‘the bid for SEA1000 is important for Japan in the overall context of deepening security ties with Australia’. Japan’s ‘2013 National Security Strategy identified Australia as an important security partner not only as a fellow US ally, but also as a regional partner that shares Japan’s key strategic interest in upholding an international order based on the fundamental norms that have underpinned the post-WWII world. Such norms include the rule of law, freedom of navigation and the non-use of coercive measures to assert diplomatic positions’.
The norms mentioned there are based on the so called post-WWII world international order, as Tatsumi stated. Some of the foundations were unjust, because some territories which had belonged to different countries were given by the Americans to its allies including Japan, particularly as the world gradually became divided into the American led and the Soviet led two opposing camps, with some in between. Certainly some Chinese have held the view that some of its former territories were dealt with in such deals between the Americans and some of its allies or its controlled subordinating countries.
If the foundation of the current international order is unjust, then is the argument to maintain this order just or justified?
We can write another story in which someone has stole other peoples' properties then after that that person argues for the rule of law and the protection of existing property rights, a seemingly quite 'just' prevailing order. We also have some accomplices has a strong force and police the existing order!
New emperor's new cloths re security order in Asia
Comments on H. D. P. Envall from ANU "Strategy under the surface of the Australia–Japan sub deal", 18/04/2016
I sense the undertone of this post is to strengthen the so called 'trilateral alliance' of the US, Australia and Japan to encircle or tackle China.
The author may benefit from reading the following by a respected Australian journalist or media commentator, Michael Pascoe: "Australia shouldn't pay price for 'pivot', available on the Canberra Times website, April 18 2016 - 12:50PM, http://www.canberratimes.com.au/business/world-business/australia-shouldnt-pay-price-for-pivot-20160418-go8rat.html.
It presents facts as opposed to the often argued and hyped what is 'right' under existing security order in Asia.
Those hypocrites have been exposed as another version of Emperor's new cloths story.
Michael Pascoe's article should be republished on the Eastasiaforum, as a well respected and independent Australian journalist and current affairs commentator.
The Eastasiaforum has, regretablly and unfortunately, published many distorting articles, not based on facts but reflecting biased views serving the purposes of some circles.
It is unclear whether the editors have thoughtfully and dutifully sought factual based responses to those articles.
I sense the undertone of this post is to strengthen the so called 'trilateral alliance' of the US, Australia and Japan to encircle or tackle China.
The author may benefit from reading the following by a respected Australian journalist or media commentator, Michael Pascoe: "Australia shouldn't pay price for 'pivot', available on the Canberra Times website, April 18 2016 - 12:50PM, http://www.canberratimes.com.au/business/world-business/australia-shouldnt-pay-price-for-pivot-20160418-go8rat.html.
It presents facts as opposed to the often argued and hyped what is 'right' under existing security order in Asia.
Those hypocrites have been exposed as another version of Emperor's new cloths story.
Michael Pascoe's article should be republished on the Eastasiaforum, as a well respected and independent Australian journalist and current affairs commentator.
The Eastasiaforum has, regretablly and unfortunately, published many distorting articles, not based on facts but reflecting biased views serving the purposes of some circles.
It is unclear whether the editors have thoughtfully and dutifully sought factual based responses to those articles.
Early election will be a loser for the government
Comments on Peter Hartcher "Fairfax-Ipsos Poll: Malcolm Turnbull a cautious PM, and voters are punishing him for it", 18/04/2016
I suspect that the best action for the Mr Turnbull the PM from now on would be defer the early election push, so to give the himself and the government a bit more time to reverse the decline in its popularity and to return to a more certain winning position late this year.
I would certainly advise the PM to go down this road and to have some thing done to impress the public and the voters. The following would contribute to that:
1. Have the budget well prepared and done to be an excellent budget for the election year, not only in terms of election sweetening, but also containing some election winning measures or policies.
2. Do something to win the public over for the next six months, including things like a tax reform package or at least one or some important and memorable item
3. Have a meaningful and achievable reform item to the federation
4. Make some inroad into the development of Northern Australia
5. Identify weaknesses of the opposition and nail down on them, to make the opposition on the run
If the above can be done successfully, the election will be unlosable and will be in the bag. It will be a revival of the PM's satisfactory rating once he would have shown real actions.
On the other hand, it would be extremely uncertain to win the election on early July and the most likely outcome is a hung parliament that would be damaging not only to the current government but also the nation.
So there is so much at stake and I hope the PM will be wise enough to have the election late this year as opposed to an election in July.
Having said that, I am politically neutral to the two main political parties.
I suspect that the best action for the Mr Turnbull the PM from now on would be defer the early election push, so to give the himself and the government a bit more time to reverse the decline in its popularity and to return to a more certain winning position late this year.
I would certainly advise the PM to go down this road and to have some thing done to impress the public and the voters. The following would contribute to that:
1. Have the budget well prepared and done to be an excellent budget for the election year, not only in terms of election sweetening, but also containing some election winning measures or policies.
2. Do something to win the public over for the next six months, including things like a tax reform package or at least one or some important and memorable item
3. Have a meaningful and achievable reform item to the federation
4. Make some inroad into the development of Northern Australia
5. Identify weaknesses of the opposition and nail down on them, to make the opposition on the run
If the above can be done successfully, the election will be unlosable and will be in the bag. It will be a revival of the PM's satisfactory rating once he would have shown real actions.
On the other hand, it would be extremely uncertain to win the election on early July and the most likely outcome is a hung parliament that would be damaging not only to the current government but also the nation.
So there is so much at stake and I hope the PM will be wise enough to have the election late this year as opposed to an election in July.
Having said that, I am politically neutral to the two main political parties.
2016-04-11
Ideas on the "ideas to fix Australian taxes"
Comments on Miranda Stewart "Ideas for Australia: Five ideas to help fix Australia’s tax system", 11/04/2016
While many points in the post are probably valid and good, some points are debatable.Firstly, in terms of income tax, why not consider a flat or much flatter tax structure to simplify the current income tax?
This is particularly in the context where the author also argued for broadening the GST base to cover everything and to increase the rate to 12.5%. To do that with the GST is not too different to have a flat income tax.Secondly, company income tax rate, there should be a debate what is best in terms of the tax rate.
I personally have significant doubt on the often argued benefits of lowering company tax rate, notwithstanding the capital mobility argument.The argument on tax on superannuation contribution is highly questionable and dubious, particularly in terms of using individual’s marginal tax rate.
The argument on negative gearing is also questionable. So much for now and may comment further down the track.
For the universal paid parental leave of 6 months and universal childcare for those who working, what would be the pay rate for the mothers or fathers for that matter, and what level of assistance for universal childcare from the government using taxpayers' money? The rates are the key and without appropriate rates such talks are pointless.
Further, the equal share in both personal income tax and the GST between the federal and state governments may give too much revenue to the states. And yes, any increase from the current federal revenue to the states should definitely contingent on the states to abolish some the most inefficient taxes.
The states have not delivered the promise or requirement as specified in the inter-governmental agreement for the GST. As a result, the public is justified to be suspicious of promise to abolish taxes without actions undertaken.
The relative shares of income tax and the GST should be based on some objective measures in terms of services and other obligations of each levels of government and should not left to the politicians alone. There should be an independent body to decide that, or to have referendums to decide.
Income tax should be indexed to the total income level, so the the ratio of total tax revenue to the income is virtually fixed. Again, if there is a need to increase tax, let referendum, that is, the voters to decide.
PS: in reply to comments on the first part of my comments by Robert:
"Lincoln, I don’t know about you, but for the last 50 years my taxation has been calculated by a computer, and automatically deducted and passed on to the ATO - again by a computer.
I have never once been fussed by a regressive or progressive tax calculation. Computers can handle any of them. The real issue is whether you think taxes should be paid by those who can afford them, or by those who cannot.
As to the GST, yes, it is a flat tax applied to pretty much whatever you chose to spend your after-tax income - unless you are rich, of course, in which case the tax you pay is pretty much voluntary.
You need to be more specific in your comments."
Robert, please see more comments from me below that may clear some of your questions. Progressive taxes are more than for high income earners to pay more taxes, they are paying proportionately more from their income. A flat tax means the more one earns the more tax they would pay.
While many points in the post are probably valid and good, some points are debatable.Firstly, in terms of income tax, why not consider a flat or much flatter tax structure to simplify the current income tax?
This is particularly in the context where the author also argued for broadening the GST base to cover everything and to increase the rate to 12.5%. To do that with the GST is not too different to have a flat income tax.Secondly, company income tax rate, there should be a debate what is best in terms of the tax rate.
I personally have significant doubt on the often argued benefits of lowering company tax rate, notwithstanding the capital mobility argument.The argument on tax on superannuation contribution is highly questionable and dubious, particularly in terms of using individual’s marginal tax rate.
The argument on negative gearing is also questionable. So much for now and may comment further down the track.
For the universal paid parental leave of 6 months and universal childcare for those who working, what would be the pay rate for the mothers or fathers for that matter, and what level of assistance for universal childcare from the government using taxpayers' money? The rates are the key and without appropriate rates such talks are pointless.
Further, the equal share in both personal income tax and the GST between the federal and state governments may give too much revenue to the states. And yes, any increase from the current federal revenue to the states should definitely contingent on the states to abolish some the most inefficient taxes.
The states have not delivered the promise or requirement as specified in the inter-governmental agreement for the GST. As a result, the public is justified to be suspicious of promise to abolish taxes without actions undertaken.
The relative shares of income tax and the GST should be based on some objective measures in terms of services and other obligations of each levels of government and should not left to the politicians alone. There should be an independent body to decide that, or to have referendums to decide.
Income tax should be indexed to the total income level, so the the ratio of total tax revenue to the income is virtually fixed. Again, if there is a need to increase tax, let referendum, that is, the voters to decide.
PS: in reply to comments on the first part of my comments by Robert:
"Lincoln, I don’t know about you, but for the last 50 years my taxation has been calculated by a computer, and automatically deducted and passed on to the ATO - again by a computer.
I have never once been fussed by a regressive or progressive tax calculation. Computers can handle any of them. The real issue is whether you think taxes should be paid by those who can afford them, or by those who cannot.
As to the GST, yes, it is a flat tax applied to pretty much whatever you chose to spend your after-tax income - unless you are rich, of course, in which case the tax you pay is pretty much voluntary.
You need to be more specific in your comments."
Robert, please see more comments from me below that may clear some of your questions. Progressive taxes are more than for high income earners to pay more taxes, they are paying proportionately more from their income. A flat tax means the more one earns the more tax they would pay.
2016-04-06
Farcical headlines and discussions about federal student loan debts
Comments on Timothy Higgins et al "Higher education policies could result in big increase to federal debt: experts respond", 6/04/2016
The headlines in the presses and news reports are all about the 500% increase in the so called costs to the government, such as this statement in this post: "the annual cost of HELP loans to the government will rise more than six-fold over the next decade, to $11.1 billion in 2025-26", but few have talked about the side of the savings associated with those deregulation policies and the increase in the interest rates for indexation of the students' debts.
For example, the effects of increase in the interest rates for indexation would be to increase the government's return with the same amount of student debts and that is compounded year after year. Why people don't point that out that would be good for the government if one look at purely from the point of nominal returns in the investment in higher education. Just imagine if the government could charge an infinite interest rate and how much return that would be!
Secondly, with the deregulation to allow universities to charge higher fees, the government's current level of subsidy to higher education will be decreased, right? And that will be a huge saving for the government.
Thirdly,
Thirdly, the effects on students and their life in the future will need to be considered. All talks are about the effects (and that is focused on only a small part of that unfortunately, as I mentioned above), and few have included on how that will impact on students and also its equity effects on different people including the likely flow on effects on whether the same level of participation in higher education could be maintained and whether some particular groups particularly disadvantaged one will be impacted disproportionately.
The headlines in the presses and news reports are all about the 500% increase in the so called costs to the government, such as this statement in this post: "the annual cost of HELP loans to the government will rise more than six-fold over the next decade, to $11.1 billion in 2025-26", but few have talked about the side of the savings associated with those deregulation policies and the increase in the interest rates for indexation of the students' debts.
For example, the effects of increase in the interest rates for indexation would be to increase the government's return with the same amount of student debts and that is compounded year after year. Why people don't point that out that would be good for the government if one look at purely from the point of nominal returns in the investment in higher education. Just imagine if the government could charge an infinite interest rate and how much return that would be!
Secondly, with the deregulation to allow universities to charge higher fees, the government's current level of subsidy to higher education will be decreased, right? And that will be a huge saving for the government.
Thirdly,
Thirdly, the effects on students and their life in the future will need to be considered. All talks are about the effects (and that is focused on only a small part of that unfortunately, as I mentioned above), and few have included on how that will impact on students and also its equity effects on different people including the likely flow on effects on whether the same level of participation in higher education could be maintained and whether some particular groups particularly disadvantaged one will be impacted disproportionately.
2016-04-03
APS underperforming senior executives
Comments on Henry Belot "John Lloyd warns underperforming public servants on individual accountability", 2/04/2016
It is not just junior staff may under-perform, some managers including fairly senior ones also undoubtedly under-perform that cause the whole units under them to under-perform. Many senior managers don't have senior management skills and cannot innovate either. They have not graduated from a lower manager role.
Further, there is a culture for senior managers to protect their close friends of men/women. As a result, they blame other staff for their own incompetency.
It is not just junior staff may under-perform, some managers including fairly senior ones also undoubtedly under-perform that cause the whole units under them to under-perform. Many senior managers don't have senior management skills and cannot innovate either. They have not graduated from a lower manager role.
Further, there is a culture for senior managers to protect their close friends of men/women. As a result, they blame other staff for their own incompetency.
Vertical and horizontal fiscal imbalance and the PM policy process bubble
Comments on Richard Eccleston "Modelling shows why premiers are wary of Turnbull’s tax proposal", 3/04/2016
The PM's proposal for the States and Territories to levy their own income taxes, unsurprisingly, hit snags of State and Territory leaders, not just because of many of its potential faults, but more importantly also because of the poor processes the PM has got into.
How could such a significant change to Australian taxation and federation financial relations labelled by the PM as a reform to the Australian federation in generations be announced by the PM only one day before the COAG meeting, with no prior consultations at all?
It reflected either unprecedented creative genius, or perhaps sheer stupidity!
Certainly it was not the way national policies should be made at the top of the Australian government.
Having said that, virtually all the issues raised in this post could potentially resolved without too much difficulty. That is to say, the States and Territories could be allowed to have the capacity to raise their own income taxes in whatever rates they each deem as suitable and desirable, then the federal government only provides enough fund for horizontal fiscal equalisation.
Giving the States and Territories the capacity to levy their own income tax would resolve vertical fiscal imbalance. Horizontal fiscal equalisation, in a way similar to what Canada does, would achieve horizontal fiscal imbalance.
The PM's proposal for the States and Territories to levy their own income taxes, unsurprisingly, hit snags of State and Territory leaders, not just because of many of its potential faults, but more importantly also because of the poor processes the PM has got into.
How could such a significant change to Australian taxation and federation financial relations labelled by the PM as a reform to the Australian federation in generations be announced by the PM only one day before the COAG meeting, with no prior consultations at all?
It reflected either unprecedented creative genius, or perhaps sheer stupidity!
Certainly it was not the way national policies should be made at the top of the Australian government.
Having said that, virtually all the issues raised in this post could potentially resolved without too much difficulty. That is to say, the States and Territories could be allowed to have the capacity to raise their own income taxes in whatever rates they each deem as suitable and desirable, then the federal government only provides enough fund for horizontal fiscal equalisation.
Giving the States and Territories the capacity to levy their own income tax would resolve vertical fiscal imbalance. Horizontal fiscal equalisation, in a way similar to what Canada does, would achieve horizontal fiscal imbalance.
2016-04-02
Our national political leaders need leadership skills
Comments on Michelle Graton "The implosion of Turnbull’s ‘big idea’ will raise further doubts about his substance and style", 2/04/2016
To resolve the so called vertical fiscal imbalance is one issue and defining both expenditure and revenue responsibilities and make each government responsible to their actions/policies (accountability) is another and a different issue. The mistake by the PM is that he wanted to hit such two birds with one stone and the State and Territory Premiers and Chief Ministers didn't like the PM approach. As a result, the PM failed badly.
I think the States and Territories would probably only like to focus on the first issue, that is, to get more revenues from the Commonwealth as untied grants, that is, a fixed share of income tax. They clearly didn't like to be seen as having to raise more revenue in their own name to pay the bills for education and health.
The PM should now be a bit of more statesman like, and agree with the States and Territories for them to have an agreed and fixed share of revenue from personal income tax, and possibly the revenue from company income tax. If that is done, it would be possible to resolve the vertical fiscal imbalance, should the shares are appropriately determined.
The PM, however, needs a better and carefully considered approach to the second and more thorny issue of real and effective accountability, that is, linking spending responsibilities with revenue responsibilities. What occurred this past week was simply not good enough for the PM.
Where was his leadership and judgement for him to rush such a ill-prepared tax and federation reform plan? Where is the role played by his advisers including from both the POM and the PMC?
I suspect they were probably not well consulted or not consulted at all. If that is true, that would not be too different from the chaotic situations that was accused of the former PM Rudd, as reported or argued by some of his ALP former colleagues.
It seems that our national leadership is lacking leadership skills and is failing the nation badly, when the nation's top political leader behaves like what they have shown us! It is so miserable and pitiful, not just for themselves but for the nation as a whole, because the nation suffers as a consequence!
To resolve the so called vertical fiscal imbalance is one issue and defining both expenditure and revenue responsibilities and make each government responsible to their actions/policies (accountability) is another and a different issue. The mistake by the PM is that he wanted to hit such two birds with one stone and the State and Territory Premiers and Chief Ministers didn't like the PM approach. As a result, the PM failed badly.
I think the States and Territories would probably only like to focus on the first issue, that is, to get more revenues from the Commonwealth as untied grants, that is, a fixed share of income tax. They clearly didn't like to be seen as having to raise more revenue in their own name to pay the bills for education and health.
The PM should now be a bit of more statesman like, and agree with the States and Territories for them to have an agreed and fixed share of revenue from personal income tax, and possibly the revenue from company income tax. If that is done, it would be possible to resolve the vertical fiscal imbalance, should the shares are appropriately determined.
The PM, however, needs a better and carefully considered approach to the second and more thorny issue of real and effective accountability, that is, linking spending responsibilities with revenue responsibilities. What occurred this past week was simply not good enough for the PM.
Where was his leadership and judgement for him to rush such a ill-prepared tax and federation reform plan? Where is the role played by his advisers including from both the POM and the PMC?
I suspect they were probably not well consulted or not consulted at all. If that is true, that would not be too different from the chaotic situations that was accused of the former PM Rudd, as reported or argued by some of his ALP former colleagues.
It seems that our national leadership is lacking leadership skills and is failing the nation badly, when the nation's top political leader behaves like what they have shown us! It is so miserable and pitiful, not just for themselves but for the nation as a whole, because the nation suffers as a consequence!
2016-02-07
Payroll tax and company tax, and informed tax reform
Comments on Michelle Grattan "Turnbull points to problems in raising GST", 5/02/2016
It is strange for the PM to argue that payroll tax is efficient and at the same time also argue that company tax rate should be reduced. The two arguments are contradictory. It appears that the PM has been ill advised or not been advised but he only talk out of his own intuitive feel.
Comparing payroll tax with company income tax, the only difference is the degree of the impact on business, with payroll having a greater impact on business. That is because when without payroll tax, that amount would be profit and business pay income tax on that amount as opposed to pay the full amount when payroll tax is imposed.
It would be better if significant tax reforms or increasing taxes be put out much earlier in an election cycle, so it give plenty and adequate time to the public to consider them and make their mind on whether they would support or not support them.Leaving significant reform policy proposal to the last minute does not show enough respect to the voters!
It is strange for the PM to argue that payroll tax is efficient and at the same time also argue that company tax rate should be reduced. The two arguments are contradictory. It appears that the PM has been ill advised or not been advised but he only talk out of his own intuitive feel.
Comparing payroll tax with company income tax, the only difference is the degree of the impact on business, with payroll having a greater impact on business. That is because when without payroll tax, that amount would be profit and business pay income tax on that amount as opposed to pay the full amount when payroll tax is imposed.
It would be better if significant tax reforms or increasing taxes be put out much earlier in an election cycle, so it give plenty and adequate time to the public to consider them and make their mind on whether they would support or not support them.Leaving significant reform policy proposal to the last minute does not show enough respect to the voters!
2015-12-11
Treasurer Morrison's excellent stance on tax reform
Comments on Michelle Grattan "COAG finds agreement on terrorism but still looking for common direction on tax", 11/12/2015
The Treasurer, Scott Morrison, should be commended for arguing that the main problem for governments are spending not revenue and that tax reforms should be undertaken to improve the efficiency of the tax system but not for increasing the overall level of tax intake. Let’s hope he will stick to it and will be supported by the Prime Minister, Malcolm Turnball.
The states, if they wish, should levy their own taxes. Why can’t any of the states and territories, levy their own GST, if they think they need the revenue? Whoever levy additional GST, they should face their own electorate for their action to increase taxes.
Alternatively, they could increase and/or expand their land taxes. Land tax is an efficient tax.
The Treasurer, Scott Morrison, should be commended for arguing that the main problem for governments are spending not revenue and that tax reforms should be undertaken to improve the efficiency of the tax system but not for increasing the overall level of tax intake. Let’s hope he will stick to it and will be supported by the Prime Minister, Malcolm Turnball.
The states, if they wish, should levy their own taxes. Why can’t any of the states and territories, levy their own GST, if they think they need the revenue? Whoever levy additional GST, they should face their own electorate for their action to increase taxes.
Alternatively, they could increase and/or expand their land taxes. Land tax is an efficient tax.
2015-08-16
A new brave Australia - competition
Another reference article, by Ross Gittins "Competition is the key to a brave new Australia", the Canberra Times, 15/08/2015.
Well, in a speech last week Fraser spelt it out. But first he noted that the key element of market-oriented reform is that it almost always involves heightening competition. He illustrated the point by summarising what happened during the golden age of micro-economic reform in the 1980s and '90s."
Read more: http://www.canberratimes.com.au/business/the-economy/competition-is-the-key-to-a-brave-new-australia-20150814-giyzok.html#ixzz3iybsq0yG
To quote the first two paragraphs to give us an idea what this article is about:
"Under its newish secretary, John Fraser, Treasury has a new slogan. It is proud to be "fiscally conservative, market-oriented and reform-driven". So just what reform does Treasury advocate?
Read more: http://www.canberratimes.com.au/business/the-economy/competition-is-the-key-to-a-brave-new-australia-20150814-giyzok.html#ixzz3iybsq0yG
2015-08-05
Aged pension too disadvantages own savings for superannuation
Comments on Sally Rose "Million-dollar super targets labelled scare campaign", 4/08/2015
The aged pension is too discriminatory against savings from own superannuation contributions, in terms of once a person reaches the threshold, he/she does not get any aged pension. Just compare two persons with almost identical situations in terms of wages and salaries, but one saves, say 5%, more for superannuation and the other doesn't. If the person with own contributions to super just reached the threshold income for aged pension. The person will have the same income with his/her superannuation as the other one with aged pension. The same outcome, but the person with additional contribution to own superannuation has sacrificed its living standard for almost nothing. Worse still, own superannuation may not be index as generously as the aged pension.
Is it fair? Obviously it is not.
As a result, there should be some reforms to the aged pension system to encourage people to save without adversely affecting their entitlement to aged pensions.
The aged pension is too discriminatory against savings from own superannuation contributions, in terms of once a person reaches the threshold, he/she does not get any aged pension. Just compare two persons with almost identical situations in terms of wages and salaries, but one saves, say 5%, more for superannuation and the other doesn't. If the person with own contributions to super just reached the threshold income for aged pension. The person will have the same income with his/her superannuation as the other one with aged pension. The same outcome, but the person with additional contribution to own superannuation has sacrificed its living standard for almost nothing. Worse still, own superannuation may not be index as generously as the aged pension.
Is it fair? Obviously it is not.
As a result, there should be some reforms to the aged pension system to encourage people to save without adversely affecting their entitlement to aged pensions.
2015-08-04
Yes to an independent umpire to enforce parliamentary entitlement rules
Comments on Alan Fels "Wanted: an independent umpire to set and enforce clear parliamentary entitlement rules", 4/08/2015
The proposal to have an independent body to enforce the rules for parliamentarians is a good one. It should be carefully considered and included in the recommendations in the review announced by the Prime Minister Tony Abbott.
The current practice of having the Department of Finance to do such similar work means it is toothless tiger, given that there have been so many misuses already exposed and highly publicised. One can only imagine how many there are more misuses that have not been exposed.
To have the head of the Remuneration Tribunal as the co-chair of the review is a joke, given that the tribunal in the past has granted outrageous increases in the pay to parliamentarians, something like dozens or even around 50 percent in one go.
Those were not consistent with community or public expectations. That tribunal has lost its creditability due to those ridiculous magnitudes of increases.
As a result, the tribunal needs fundamental reforms to reflects community standards and expectations.
The proposal to have an independent body to enforce the rules for parliamentarians is a good one. It should be carefully considered and included in the recommendations in the review announced by the Prime Minister Tony Abbott.
The current practice of having the Department of Finance to do such similar work means it is toothless tiger, given that there have been so many misuses already exposed and highly publicised. One can only imagine how many there are more misuses that have not been exposed.
To have the head of the Remuneration Tribunal as the co-chair of the review is a joke, given that the tribunal in the past has granted outrageous increases in the pay to parliamentarians, something like dozens or even around 50 percent in one go.
Those were not consistent with community or public expectations. That tribunal has lost its creditability due to those ridiculous magnitudes of increases.
As a result, the tribunal needs fundamental reforms to reflects community standards and expectations.
2015-08-02
A crude joke - the head of the Remuneration Tribunal as co-chair to review politicians travel entitlements
Comments on Michelle Grattan "Bronwyn Bishop finally resigns as speaker", 2/08/2015
It is disappointing to have the head of the Remuneration Tribunal John Conde included in the review panel as the co-head, along side with former head of the Finance department David Tune.
The Remuneration Tribunal has long lost its creditability due to its granting of extremely generous salary increases to Australian politicians in the past when the government in both main political persuasion did not allow the increase in the wages and salaries of APS employees to allow for inflation, and ask them to demonstrate productivity improvement.
As a result, to have the head of that tribunal to review the extraordinary costs of politicians's entitlements, about half of billion dollars as reported recently is a bit of joke, given the tribunal's role in the proliferations of politicians remunerations.
It is a crude joke to have the head of the Remuneration Tribunal as the co-chair to conduct such a review. The Remuneration Tribunal and the politicians seem to have extraordinarily conflict of interests.
Perhaps there should be a review of the Remuneration Tribunal actions in the past in the context of the wages and salaries of APS employees.
I have no knowledge how members of that tribunal are appointed, but they seemed to act out of steps with the Australian community in general.
It is disappointing to have the head of the Remuneration Tribunal John Conde included in the review panel as the co-head, along side with former head of the Finance department David Tune.
The Remuneration Tribunal has long lost its creditability due to its granting of extremely generous salary increases to Australian politicians in the past when the government in both main political persuasion did not allow the increase in the wages and salaries of APS employees to allow for inflation, and ask them to demonstrate productivity improvement.
As a result, to have the head of that tribunal to review the extraordinary costs of politicians's entitlements, about half of billion dollars as reported recently is a bit of joke, given the tribunal's role in the proliferations of politicians remunerations.
It is a crude joke to have the head of the Remuneration Tribunal as the co-chair to conduct such a review. The Remuneration Tribunal and the politicians seem to have extraordinarily conflict of interests.
Perhaps there should be a review of the Remuneration Tribunal actions in the past in the context of the wages and salaries of APS employees.
I have no knowledge how members of that tribunal are appointed, but they seemed to act out of steps with the Australian community in general.
Equivalence between ETS and a carbon tax
Comments on David Hodgkinson, and Rebecca Johnston "Politics aside, a simple carbon tax makes more sense than a convoluted emissions trading scheme", 2/08/2015
While the two do have significant differences, they also share some commonality, or equivalence. For example, the ETS implies a equivalent price or tax to the carbon tax when the target of emissions is set as the exactly same that a carbon tax would achieve. Of course, there are other conditions that would need to meet. For example, the ETS must be a national and include all emissions sources where the carbon tax would apply to and the ETS market needs to be efficient and there is only one national price.
While the Abbott politics has hit hard on carbon taxes imposed by ALP government, there is no point to deny the equivalence of an well functioned ETS and a carbon tax.
To do it is just too cowardly in the wake of the very effective attack on the ALP government's carbon tax. Those who attempt to battle the Abbott anti carbon tax mantra should do better than that.
While the two do have significant differences, they also share some commonality, or equivalence. For example, the ETS implies a equivalent price or tax to the carbon tax when the target of emissions is set as the exactly same that a carbon tax would achieve. Of course, there are other conditions that would need to meet. For example, the ETS must be a national and include all emissions sources where the carbon tax would apply to and the ETS market needs to be efficient and there is only one national price.
While the Abbott politics has hit hard on carbon taxes imposed by ALP government, there is no point to deny the equivalence of an well functioned ETS and a carbon tax.
To do it is just too cowardly in the wake of the very effective attack on the ALP government's carbon tax. Those who attempt to battle the Abbott anti carbon tax mantra should do better than that.
2015-07-31
Rational debate on Australia-China free trade agreement is needed
Comments on James Laurenceson "Why fears over the Australia–China FTA are overblown", 31/07/2015
Thanks for the author to clear the air and to explain what the Australia-China Free Trade Agreement is about and particularly some of the issues that unions are trying to oppose.
There have been a lot of arguments, many of which are biased and based on the worst scenarios including Australia does not enforce on what they are specified in the agreement and should and will if the government or its relevant agencies carry out their duties normally.
Those arguments, including some on the Conversation website show hysteria and desperation, try to stir up nationalistic sentiments.
They ware completely unwarranted from the point of any rational analysis.
Thanks for the author to clear the air and to explain what the Australia-China Free Trade Agreement is about and particularly some of the issues that unions are trying to oppose.
There have been a lot of arguments, many of which are biased and based on the worst scenarios including Australia does not enforce on what they are specified in the agreement and should and will if the government or its relevant agencies carry out their duties normally.
Those arguments, including some on the Conversation website show hysteria and desperation, try to stir up nationalistic sentiments.
They ware completely unwarranted from the point of any rational analysis.
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