05 May 2013

On the table

If you're going to quibble with the Budget, you need to answer six questions (the headings of the following lists). What follows here is not costed and not really aimed at securing either a surplus or a deficit, and cherry-picks the Henry Review to some extent. There is a lot of vague language here but you get that in other documents of its type, even the ones with lots of graphs and tables. While there is nary a single pie-chart or histogram in what follows, it is far better researched, well-considered and more principled than the Hundred Brain Farts of a more lavishly-resourced outfit I could name. I'm hoping the following results in a net gain to the bottom line and the nation in all sorts of ways:

Here's what I think is important from government:
  • Openness and adaptability to change
  • Education
  • Healthcare
  • NDIS
  • Productivity
  • Research
  • Free movement of people who aren't out to attack our society (whether they have an Australian passport or not, and includes putting white bigots under the same scrutiny as, say, brown Muslim jihadis)
  • A Defence Force that is nimble and packs a punch where diplomacy fails
  • Better care for wounded veterans and other victims of post-traumatic stress
  • Integrity in tax and justice systems
Here's what I don't think is important:
  • Defence/intel bloat
  • Handouts to farmers or industry that take the place of prudent risk management
Here's where I'd cut spending (or, why should I go to prison for refusing to fund ...):
  • Offshore processing. Too expensive, achieves nothing. Labor gave it a go and it didn't work, and would have solid grounds to attack the Libs for reintroducing it. Sri Lankan and Afghan dissidents are not a threat to Australia.
  • Combined funding of ASIO, ASIS, ACC and AFP: budget cut by 15%. Insiders know where the bloat is, they should fix it.
  • Defence materiel: cut by 20%, make it happen (e.g. drones for northern surveillance instead of manned aircraft).
  • Joint Strike Fighter? Forget it, Sukhoi S-22 is the machine everyone's afraid of so let's get that instead. The US will forgive us eventually.
  • Donations to the car industry; gone (or, introduce this).
  • Donations to aluminium and steel smelting phased out over five years.
  • Reduce private health rebate to 0 over five years, don't privatise Medibank Private until then.
  • Halve diesel rebate, abolish other fiscal incentives on fuel usage (e.g. current FBT system requiring cars to burn given amount of fuel by 30 June).
  • Naval vessels built in Australia are not to be as labour-intensive as current plans require: increase in plan/build phase but reduced operating costs.
  • The way to cut middle-class welfare is not to yank it away but to remove any social cachet it might have. Family Tax Benefits, housing and other forms of assistance should be paid only to those on below-average incomes.
  • Public funding of political parties: gone.
  • First Home Owners' Grant: gone.
  • Tourism operators spend more money lobbying than upgrading their own facilities, so give them time-limited incentives to upgrade and reduce unproductive junkets and cash hits from government.
  • When meteorologists travel the country to advise farmers of sustained extreme weather events, those who ignore forecasts should not have recourse to public subsidies.
  • Cut parliamentary debates so that speeches can be tabled rather than having members read speeches for the sake of pantomime, leaving time for members to speak when required.
  • Members not granted an overseas study trip each year, except if research forms part of committee, bureaucratic or academic research work; any research findings that can be found by Google-type search should oblige members to reimburse the Commonwealth for their junket.
Here's where I'd raise/introduce new spending:
  • Graduates of foreign universities who are native speakers of key languages (e.g. Indonesian, Spanish, Arabic), and who have been educated at tertiary level in those languages, to be eligible for three-year scheme: half the time to learn how to be a primary or secondary school teacher (including English training as required), the other half the time teaching. Offer reciprocal schemes for Australians wishing to live/teach overseas. No, this is not the "Colombo Plan" the Coalition have sketched out, it's far more substantial than that. 
  • Newstart increase by 25%.
  • Increased incentives for occasional childcare.
  • Maintain level of support for arts funding, but introduce training for gallery/theatre staff in theory and to engage in debates, subsidise transport to art galleries and theatres, increased emphasis on arts as tourism drawcard.
  • Infrastructure bonds for transport and communications infrastructure, capped to minimise risk to government.
  • Relocating Immigration/UNHCR assessors throughout Asian countries, not necessarily limited to capitals if host countries agree.
  • Customs to take over baggage handling at airports, and to conduct preliminary screening on board aircraft at point of take-off before entering Australia, to expedite passenger and baggage throughput at Australian ports.
  • Increase funding for Gov2.0, small-scale IT services for government services, including health and disability support; foster Canberra as innovation hub for information management and IT (including apps development).
  • Include Tasmania in the regional tax allowance system and reduce taxes to companies that base themselves in and operate from there, for the sake of employment and innovation.
I would bring State/Territory and local government Departments of Health, Disability and Ageing into the Federal Government, with:
  • 50% increase in mental health funding over five years.
  • Dental coverage within Medicare.
  • National cancer screening scheme.
  • National centre for post-traumatic stress disorder, including veterans and their families - and, yes, refugees - with a view to global leadership in this area.
  • No decrease to GST takings for any state that agreed to cede health powers.
Here's where I'd raise taxes/cut rebates:
  • Super-profits tax on organisations that dominate their industry, e.g. banks, retail conglomerates, and yes the media.
  • Tax RSL Clubs to fund care for veterans, because the dills who run those bloated outfits have lost sight of what their mission is and palmed it off to the government.
  • Non-profit organisations paying compensation to victims of institutional abuse to be levied with a financial penalty as a way of improving internal systems.
  • FBT on vehicles in line with Henry Review, except reduced to 0 in three years not five.
  • GST exemptions removed, including on food.
  • HECS-style scheme on AIS set at a rate that would cover 50% of its operating costs in the first year.
  • Increase penalties for ACCC, APRA, ATO, FWA and environmental protection, including bounties for investigations.
  • Remove rebates for mining exploration, combine with general tax breaks for start-ups. Rebates on mining taxes for quality of environmental and cultural management.
  • Tobin tax. Worth a shot.
  • Halve negative gearing on residential property (except where housing supply lags population growth, e.g. Sydney, Albury-Wodonga, SW WA), cap it to 7 years.
  • Donations on fertiliser: cut by 20% a year over five years. Ban fertilisers derived from fossil fuels and subsidise replacements from urban sewage.
  • No offsetting farm losses against other income. Hobby farms should be just that, not tax havens.
  • No duty-free tobacco products, increased duty on tobacco products made outside Australia.
  • Increase tax breaks for health research and tie it to foreign aid: Australians as healers.
  • Increase tax breaks for art and education of non-relatives (to encourage charitable giving to education).
  • Capital Gains Tax on inheritances from estates in the top quintile.
Here's where I'd cut taxes:
  • Until I read Recommendation 9 c) in the Henry Tax Review, I had no idea that Fringe Benefits Tax was levied on toilets, office furniture, and stationery. Those facilities should be excluded.
  • Raising tax-free threshold on income tax.
  • Incentive schemes on gifts above a certain amount (say $1m) which is congruent with government policy goals.
  • Reduce corporate tax in line with payroll. If you're serious about creating jobs (govt) and complaining that labour costs are unbearable (some of the lazier employer advocates) this is where you'd offer tax relief.
  • Tax deferments on start-up businesses, including artistic endeavours and mining exploration.
Yep, that's pretty much it. No evidence of vast wealth to be unleashed with more significant tax cuts than that.


  1. Ants nest well and truly poked. :-)

  2. Lots of very interesting and, I suspect, positive ideas here, Andrew. Some are being implemented by the current government but I would like to see a lot more. But nothing at all about the environment and, particularly, AGW. Is there a reason for that? Surely AGW is an economic threat and just as surely investment in renewable energy technologies will pay handsome dividends in a few years to come.

    1. Not really sure where to start, open to suggestions ...

  3. GST base broadened and rate bumped to 15%, the 5% for commonwealth not states. Those on low incomes to be overcompensated etc like with the carbon tax—this prevents the extra GST cutting household spending. Take back payroll tax from States, set decent thresholds and rates, collect then hand back to States.

  4. I agree with most of those with one strong exception.

    I believe political parties require public financing.

    Without public financing I really fear that Australia would become like the US, where corporate lobbyists and donations almost completely dictate national policy (see the most recent failed attempt at gun control despite the support majority of the public).

    I fear a oligarchy of a small rich and powerful dominating politics with their wealth. I would argue that we already have that problem now (to a lesser extent).

    I would prefer that political parties were only funding through government payments per vote and personal donations (capped per member).

    1. Ian Milliss6/5/13 8:00 pm

      I'd agree, ban all donations of every sort to political parties, make them completely reliant on public funding. That gets rid of the biggest area of policy corruption in one go.

      And for good luck, start taxing all churches, treat them the same as any other business.

    2. Look at the crap parties spend their money on and reconsider.

  5. I didn't see the politically explosive one of negative gearing, but otherwise I think it's an excellent list and at least a starting point for some sanity in taxation.

    I hadn't heard of the Tobin tax previously, but it makes sense. One of the problems in the early 90s with financial deregulation was the rapid way money swirled in and out of the country at the mercy of currency speculators and for no economic benefit. It may allow decisions to be made separate to the whims of barrow boys on the make.

  6. @johnnykaras5/5/13 10:52 pm

    Lots of great suggestions; how about these:

    Taxing churches? (their non-charitable activities)

    Getting rid of the school chaplaincy program?

    Progressive corporate tax system?

    Also, I reiterate what anonymous pointed out about AGW. And what about the NBN?

    1. How about a ban on religious institutions funding of or donating to politicians

    2. Agree with axing school chaplaincy, and the ban on religious donations. Super tax on oligopolies was best progressive company tax.

  7. Where's the NBN ...SA thought overland telegraph was important enough to spend >50% of their income on it ...and they were correct..

    Social & economic benefits enormous ...& without it we would become a 'hick' country + a laughing stock in the region...

    1. NBN is off the budget, so that's probabaly why it's not listed.

      I'd like to see research/spending in renewable energy sources - with our environment, I see this as an opportune area to invest in.

  8. I agree with everything in your piece Andrew, except th same one as bobalot mentioned.

    I can think of no easier way for a Corporatist (or if you prefer its other name, Fascist) state to develop than by only allowing political donations from "private" interests.

    Unlike bobalot, though I would ban ALL political donations, large or small.

    Other things that could be added to your list:

    >Tax the Churches. Tax their property and sharehodlings, and every other business they are involved in except PURE charity work.

    >Tax all monies held in overseas tax havens at a rate of $2 for every dollar "offshored". The owners of these funds will have 30 days to repatriate their money, or face this penalty. Those refusing to comply will be stripped of their citizenship and deported to wherever their money lives.

    Those will do for starters.

  9. What about making all mental health care covered under medicare? Many of the mentally ill find it difficult or impossible to pay for the care they need, and I see no reason for the government to make a special exception to disadvantage them.

    Denticare is just common sense.

    1. Agreed re mental health. Employed people requiring care often go on sporadic and then extended sick leave without pay (before they lose their jobs). Most of them don't seek early intervention because of the cost, so they go into denial that they really need help until it's too late and their savings are exhausted. Earlier intervention would help them recover a lot faster, become productive again more quickly, and possibly not lose their jobs.

    2. Mental health care can include accommodation outside healthcare facilities, which Medicare doesn't seem to provide. I'm not prescriptive about which agency does what tbh.

  10. Interesting list. There's certainly a lot for politicians to play with if from Henry they ever get the nerve.

  11. Sending people away without due process was declared to be flat out illegal by our own high court, they have now wasted $500 million to jail just 699 innocent people for no reason.

    What is worse is they knew it would be an expensive horror show and didn't care.

  12. Brain fart...?

    The correct urban meaning is

    Please excuse the deragotary word here:


    That I.P.A list is intellectuall rape Andrew

    The Hoopla also listed it as a feature story..

  13. What about Marriage Equality...??

    1. I support it but it isn't big spending either way.

  14. You're way off with your call for a Russian jet. Just not going to happen, and more to the point, can't happen.

    The airframe that flies around is just a platform carrying sensors, radios and weapons. All of which, in our current armed forces, is either American or interoperable w US systems. A sukhoi would be completely isolated, and therefore completely useless.

    You might as well advocate Huawei encryption systems.

    1. Of course, it was tongue-in-cheek and I get the US integration requirements. I just think the JSF is a waste and was seeking to shift the thinking to the most suitable equipment.

  15. Slightly off topic, but just wondering if the Sydney Uni Libs are comprised solely of Engineering postgrad and first year Commerce students?

    I was going to ask if they're the stupidest people on the planet but that just seemed kind of rhetorical.

    Oh, and yes to the above comments about the need for public funding of political parties. The alternative is too dangerous.