Hi Madhava, can I suggest you check out Prosper Australia, if you haven't already. I believe you will find we are an organisation very close to your heart.
The more people that ask the questions you are asking, the closer we may come to one day seeing a push for real tax reform.
Aug 25, 2022·edited Aug 25, 2022Liked by Cameron Murray
Re Greece, yeah Australia’s biggest import is overseas holidays at about $10k pa per Aussie pre Covid (yes it’s an import, but only bring back memories and pictures lol)
I’m sure this will swing down when our mining exports dwindle and dollar falls. Likely we will piss away our windfall resources without any sovereign fund like Norway since royalties to states seem to be pissed away on day to day operations
Alternatively we tax resources more for a sovereign fund, I would have though that has the same effect - weaker dollar and less overseas holidays or nah?
What is the downside to more taxes on exports seriously.. The mining simps say it will make us uncompetitive/inviable. That’s fine, mine it later when prices are up and it is viable
Behind every economic conundrum lies a political problem... or something like that, at least when it comes to Australia. Yeah obviously the whole economy (and public policy) is slanted towards houses and holes, because that's where all the political power is.
Big multinational resource companies (largely US owned) can take down governments. In case anyone has forgotten, when the Whitlam govt tried to nationalise the mines, the PM was removed from office. Kevin Rudd and the mining tax is a similar story.
Big property also killed off any serious reforms to property tax concessions at the federal level for another decade - or perhaps it was just Clive Palmer? Again most voters own land, and so can be rounded up to defend the status quo.
As for Big super, the unions did a deal with the devil and sold their soul to the financial sector in return for something resembling relevancy, not really in a good way. Now we end up the progressive side of politics defending a managerial class of white collar rentiers who "know how use your money better than you do".
We don't have a big enough political power base from tech companies and other innovators etc. to push in the other direction. The US ended up with that in part because of the indirect subsidies that come from externalities of its military R&D spending etc. Not sure about Europe... S.Korea/Japan are a bit different again.
The frustrating thing is a lot of the policy direction of which way we need to go is obvious, but the road blocks are political, especially at the federal level. Strangely state governments seem to have made the most gains in recent times e.g. Windfall gains tax in VIC, QLD coal royalties etc., Contributions reform in NSW (tbc).
I am pro super. It succeeds (or will in a decade when retirees have a full career of super) in its policy goal to eliminate Aged Pensions (aus gov largest expense)
Consumers are pushed to spend as much as possible. No way will they save enough for a retirement potentially longer than their career!
A sovereign fund sounds like one big uncompetitive one. Just force compliance and financial advice so people aren’t fooled by fraudsters like hostplus with their pile of unlisted investments they don’t write down.
I'm late to this one ... volume of email ... anyway, interesting rant. Thank you. Lots of things wrapped up in this one ... starting point is perhaps, 'what is the role of government?'
I'd suggest not much beyond border maintenance, law and order, possibly basic hospital and emergency care (they've proven useless an long term illness), and management of monopoly assets. Does this mean mining assets should be owned by 'the people' ... possibly, but would the government be capable of running these assets? I'd doubt it, which leaves a problem without a good solution.
There is a national obsession with real estate speculation. I'm not sure you can force (or necessarily want) the VC funded startup 'Ponzi and risk shifting to retail investors' scheme to replace it, but it seems logical that more energy and capital in building and making things would be preferable to our current setup.
It's a cultural thing in some ways, but we do have a huge small business sector (where most people are employed) that operates reasonably well (if you ignore the 12-15% new starts and failures each year) if these people are left alone to just 'do stuff'. For example, you could not lock them out of the businesses in flu season in case they get the flu ... just a thought.
On property, we are miles outside the long term averages or rent to capital values, or average dwelling cost to average earnings, for example. Watch Australia's 1m landlords start ripping up cash as their negatively geared dwelling cash flows go 'under water'. It will, unfortunately, result in another shift of wealth upwards as distressed assets are bought with cash. In the next period they'll realise that a 22 year upward cycle is not 'normal'. Negative Gearing creates no additional housing stock when it's applied to existing dwellings (nor new houses beyond the first few years), which is required to fix the problem if it's a supply issue ... but is it if there were 1,000,000 dwellings vacant in Australia on census night. I don't know and can't work this out.
On Super, see Kelty and Keating's recent public statements regarding super and influence ... it's not about your retirement, nor was it ever. It's about jobs for people who who leave politics (or support the right team) and the creation or huge amounts of power with ... your money. It's kind of like tithing, but not voluntary and they are probably Atheists.
Hi Madhava, can I suggest you check out Prosper Australia, if you haven't already. I believe you will find we are an organisation very close to your heart.
The more people that ask the questions you are asking, the closer we may come to one day seeing a push for real tax reform.
Super is a con. And just another Polly invention so Australians with super can those of us without super.
Re Greece, yeah Australia’s biggest import is overseas holidays at about $10k pa per Aussie pre Covid (yes it’s an import, but only bring back memories and pictures lol)
I’m sure this will swing down when our mining exports dwindle and dollar falls. Likely we will piss away our windfall resources without any sovereign fund like Norway since royalties to states seem to be pissed away on day to day operations
Alternatively we tax resources more for a sovereign fund, I would have though that has the same effect - weaker dollar and less overseas holidays or nah?
What is the downside to more taxes on exports seriously.. The mining simps say it will make us uncompetitive/inviable. That’s fine, mine it later when prices are up and it is viable
Behind every economic conundrum lies a political problem... or something like that, at least when it comes to Australia. Yeah obviously the whole economy (and public policy) is slanted towards houses and holes, because that's where all the political power is.
Big multinational resource companies (largely US owned) can take down governments. In case anyone has forgotten, when the Whitlam govt tried to nationalise the mines, the PM was removed from office. Kevin Rudd and the mining tax is a similar story.
Big property also killed off any serious reforms to property tax concessions at the federal level for another decade - or perhaps it was just Clive Palmer? Again most voters own land, and so can be rounded up to defend the status quo.
As for Big super, the unions did a deal with the devil and sold their soul to the financial sector in return for something resembling relevancy, not really in a good way. Now we end up the progressive side of politics defending a managerial class of white collar rentiers who "know how use your money better than you do".
We don't have a big enough political power base from tech companies and other innovators etc. to push in the other direction. The US ended up with that in part because of the indirect subsidies that come from externalities of its military R&D spending etc. Not sure about Europe... S.Korea/Japan are a bit different again.
The frustrating thing is a lot of the policy direction of which way we need to go is obvious, but the road blocks are political, especially at the federal level. Strangely state governments seem to have made the most gains in recent times e.g. Windfall gains tax in VIC, QLD coal royalties etc., Contributions reform in NSW (tbc).
Il separate my comments
I am pro super. It succeeds (or will in a decade when retirees have a full career of super) in its policy goal to eliminate Aged Pensions (aus gov largest expense)
Consumers are pushed to spend as much as possible. No way will they save enough for a retirement potentially longer than their career!
A sovereign fund sounds like one big uncompetitive one. Just force compliance and financial advice so people aren’t fooled by fraudsters like hostplus with their pile of unlisted investments they don’t write down.
I'm late to this one ... volume of email ... anyway, interesting rant. Thank you. Lots of things wrapped up in this one ... starting point is perhaps, 'what is the role of government?'
I'd suggest not much beyond border maintenance, law and order, possibly basic hospital and emergency care (they've proven useless an long term illness), and management of monopoly assets. Does this mean mining assets should be owned by 'the people' ... possibly, but would the government be capable of running these assets? I'd doubt it, which leaves a problem without a good solution.
There is a national obsession with real estate speculation. I'm not sure you can force (or necessarily want) the VC funded startup 'Ponzi and risk shifting to retail investors' scheme to replace it, but it seems logical that more energy and capital in building and making things would be preferable to our current setup.
It's a cultural thing in some ways, but we do have a huge small business sector (where most people are employed) that operates reasonably well (if you ignore the 12-15% new starts and failures each year) if these people are left alone to just 'do stuff'. For example, you could not lock them out of the businesses in flu season in case they get the flu ... just a thought.
On property, we are miles outside the long term averages or rent to capital values, or average dwelling cost to average earnings, for example. Watch Australia's 1m landlords start ripping up cash as their negatively geared dwelling cash flows go 'under water'. It will, unfortunately, result in another shift of wealth upwards as distressed assets are bought with cash. In the next period they'll realise that a 22 year upward cycle is not 'normal'. Negative Gearing creates no additional housing stock when it's applied to existing dwellings (nor new houses beyond the first few years), which is required to fix the problem if it's a supply issue ... but is it if there were 1,000,000 dwellings vacant in Australia on census night. I don't know and can't work this out.
On Super, see Kelty and Keating's recent public statements regarding super and influence ... it's not about your retirement, nor was it ever. It's about jobs for people who who leave politics (or support the right team) and the creation or huge amounts of power with ... your money. It's kind of like tithing, but not voluntary and they are probably Atheists.
More questions than answers, but my 2 cents.
Cheers