Keating: slug workers more to pay for ageing?

ScreenHunter_2357 May. 09 10.43

By Leith van Onselen

Former Prime Minister, Paul Keating, seems to be losing his marbles in his old age, last night recommending that Australian workers get slugged another levy to cover “geriatric” care for people aged 80-plus:

“We have to have, I believe, a commonwealth insurance scheme for the 80-100s with a calibrated, precise product, which guarantees people income support, aged care and aged accommodation”…

When asked how to fund it Mr Keating suggested: “a longevity levy of a kind — 2 or 3 per cent of wages”…

“You pay it at an early age and it simply goes into a pool.”

Let me get this right. Instead of arguing to broaden Australia’s taxation base by say raising the GST and indirect taxes, and/or implementing taxes on land and minerals, Keating has effectively recommended accentuating Australia’s extreme reliance on inefficient personal income taxes, and in the process making Australia’s diminishing pool of workers shoulder even more of the tax burden?

However, Keating’s war on workers did not end there. He also recommended lifting the compulsory superannuation rate to “at least 12%”.

Needless to say, lifting the superannuation guarantee to 12% would be a retrograde move. Not only would it effectively reduce worker’s disposable income even more, it would also cost the Budget dearly.

Without reforming the system of tax concessions, which taxes superannuation contributions at a flat rate of 15%, higher income earners would gain even bigger tax benefits under Keating’s proposal, whereas those at the lower end of the tax scale would receive minimal benefits (see below table).

ScreenHunter_151 Nov. 07 09.11

Tax concessions on superannuation already cost nearly as much as the Aged Pension ($44.8 billion compared to $44.9 billion for Aged Pension), and are growing more rapidly, meaning they will become an even bigger Budget drain over time. Keating’s proposal would enlargen the Budget black hole, while doing little to boost superannuation savings for lower income workers – those most likely to be reliant on the Aged Pension.

If Keating was fair dinkum about raising retirement savings, he would instead argue to replace the 15% flat tax with, say, a flat 15% concession. This would have the benefit of: 1) providing all taxpayers with the same taxation concession, thereby improving equity; 2) boosting lower income earners’ super savings, thereby reducing reliance on the Aged Pension; and 3) reducing overall costs to the Federal Budget.

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Comments

  1. How about legalising euthanasia? Perhaps a lot of the very elderly requiring a lot of medical care would rather go off on their own terms than be kept alive artificially while their mind and world crumbles around them. A healthcare study in Canada showed that 21% of health funding was spend on 1.1% of the population – primarily the elderly whose chief expenditures are hospitals and aged care facilities.

    Not all of these people are ready to go of course, but those who do wish to go voluntarily should be allowed the choice to do so without the legal and social stigma.

    As an aside – it’s interesting that a progressive social policy could potentially satisfy the needs of conservative economic policy.

    • ceteris paribus

      This coupling of euthanasia with medical health costs is the type of offensive comment that puts people right off euthanasia legislation.

      I support a voluntary euthanasia code for those in terminal situations, experiencing unmanageable pain or distress.

      But discussIng other people’s euthanasia for utilitarian considerations is “off like a dirty sock”. Any consideration of euthanasia is a highly personal matter between a person and his/her physician. Why are we having this sort of careless, fascist conversation on an economic blog?

      • Because we’re reading careless suggestions from self interested older people who seem like they have no limits to their compulsion to extract every last ounce out of the working to support their lifestyle in retirement.

        There comes a point when people say enough is enough. We’ve had these points in the past and it rarely ended well for the so called self interested and elite.

      • You’re the one who sounds like the offensive fascist.

        Keating was saying he expects his kids to live until 90-96. Yeesh, I’ll be happy to take a bullet to the head before I get that old.

        I think 85 is a reasonable age before things get really disgusting.

      • Galah,

        Imagine this fictional family. Both parents are professionals, working, “plugged in”, paying taxes, and soon forced to pay more taxes, prospects of ever higher education costs, university fees to skyrocket (just watch) living costs in Melb/Syd among the highest on Earth, ‘retirement age’ now set at 70 (and the goal posts will surely be shifted again as retirement age nears), rent/mortgage costs absolute madness, healthcare costs increasing, levies, wage reductions and/or employment insecurity, pension? surely they know we’ll die before we get that.

        Why the F would the young stay in this country? Plugged into goop pods (like some ‘matrix’ dystopia) to sustain the ones who had it all, for free and retire with obscenely expensive bits of land under their feet?

        F that. Exit strategy planned.

      • CP how is it fascist? There are plenty of extremely ill suffering people who want to end their suffering but are physically incapable of doing so. If anything is fascist it is preventing doctors (or anyone) from assisting them with their wishes.

        If you want to sell euthanasia legalisation to conservatives, what better way that to appeal to their own selfish fiscal conservative side?

      • Researchtime

        Totally agree – Actually I think Keating has a great point – and the bravery to suggest such a thing, I think he should be commended.

        The real problem with euthanasia is not the initial argument, which is relatively sound in theory, in practice. Its a bit like abortion, every starts out saying its only for incest, then expanded rape, now in the UK its used on virtually pre-born babies who just happen to be the wrong sex.

        Euthanasia in Europe is throwing up some interesting dilemmas. Belgium now allows chronically ill children to be euthanised. Recent study found that the threat to frail elderly and disabled people from relatives tempted to get rid of them under the guise of euthanasia has grown dramatically in the wake of the economic downturn. Elderly people in the Netherlands are so fearful of being killed by doctors that they carry cards saying they do not want to be euthanised. There was a case including a pair of identical twins, who were born deaf, who seeked euthanasia when they found out they would also likely go blind. There was also a particular gentleman requested assisted suicide after his sex change operation left him feeling “like a monster;” an anorexic woman suffering memories of childhood trauma. The fact that in some countries, there is euthanasia for psychological suffering… is bonkers. Slippery slope. Any depression – simple, go to your local clinic…

        Ask the question, do you trust your kids??????

      • Researchtime, I suppose I have to do more research but it seems strange to me that those countries have allowed euthanasia of physically capable people who could potentially take their own life if they so choose.

      • this is off topic, but in some societies (in ancient times) the younger generation would just dump their old people in the mountains to die
        (the younger generation couldnt support them as they were a drain on resources)
        its sad but no joke..this is what some of them did….

      • this is off topic, but in some societies (in ancient times) the younger generation would just dump their old people in the mountains to die
        (the younger generation couldnt support them as they were a drain on resources)
        its sad but no joke..this is what some of them did….

      • People who think the issue in this country is liberal vs. labour vs. the greens are totally deluded.

        The division is between the baby boomers and everyone else:

        * 15.2 million working age people (67%) support 3.22 million people over age 65 (14.1%).
        * However, of the 3.22 million people over 65, 2.3 million (71%) are on the Age Pension. Of these 2.3 million welfare recipients, 1.7 million live in their own homes deriving $96 billion of unrealised gains on their primary residences every year which will never be subject to $1 of tax.
        * For the more wealthy people over 60, they have superannuation funds which are completely tax free – so people over 60 with $10-20m in their super funds making $1-2m a year do so completely free of tax.

        However, despite being the most costly segment of the population (pension welfare, PBS, healthcare), it seems completely beyond every politician (who are mostly over 50) to think of ways to tax people over 65 on their significant wealth.

        Instead? They want to tax working age people who have not yet accumulated the wealth, and who will be living a lot longer in a country where the pension is denied to them.

        Time for a new political party to represent Generations X and Y?

      • I can’t say it any better than Ortega. He has summed up the late 30s view of the world perfectly. We’ve had enough already!

      • Rather than run away, why not take over.

        A generation X party in the senate could hold the balance of power in the senate and start closing down this diatribe

  2. Sounds more like the compulsion use of already saved Super money to buy deferred lifetime annuities.

    Putting 3% aside of the SG to go to life companies to protect against superannuants when/if they run out of their savings when reach 85.
    A soft form of compulsion to income streams and annuities rather than lump sums.

    • migtronixMEMBER

      It’s another gift to FIRE pure and simple. In a tontine scheme nobody gets the principal back.

      • “Soon after leaving Parliament, Keating found successful work as a businessman, becoming a director of various companies and a senior adviser to Lazard, an investment banking firm.”

        http://en.wikipedia.org/wiki/Paul_Keating#Retirement_and_later_life

        http://web.archive.org/web/20100412105433/http://www.lazard.com.au/advisory-team.aspx

        “Lazard is a global financial advisory and asset management firm that engages in investment banking, asset management, and other financial services primarily with institutional clients.”

        — Wikipedia

      • migtronixMEMBER

        Ha ha you’re getting spam filtered Ramastar

        But really who do you think Laz advices?

      • Ah. Thanks migtronix. That explains it.

        Maybe I got to unconventional even for the unconventional economist.

        Lazard doesn’t advise life companies if that’s what you’re implying. They’re a pure investment bank/asset manager.

        In fact AMP or Challenger or One Path would be direct competitors to Lazard. Lazard will lose assets that could be managed if the money that could be used to buy those assets is pumped unchecked into annuities.

        Lazard would actually probably advise against PK’s plan for compulsion on deferred annuities and probably advocate for index funds, managed funds or absolute return strategies that it can profit from.

      • And then there’s this —

        “Goldman Sachs Group Inc., Deutsche Bank AG and JPMorgan Chase & Co., which bundled and sold billions of dollars of mortgage loans, now want to help investors bet on people’s deaths.

        Pension funds sitting on more than $23 trillion of assets are buying insurance against the risk their members live longer than expected. Banks are looking to earn fees from packaging that risk into bonds and other securities to sell to investors.”

        http://investmentwatchblog.com/goldman-and-jpm-death-derivatives-emerge-from-pension-risks-of-living-too-long/

        Now consider the unthinkable … that is, unthinkable for any other than the likes of Goldman, et al.

        What happens when, oh let’s say, a war, or perhaps, a plague, a virus, primarily impacting the elderly, sweeps the nation/world?

        Who cleans up, when your parents/grandparents happen to perish earlier than was speculated?

        Usurers = pure evil.

        EDIT: @mig, the very youngest, and very oldest, typically are most vulnerable to perish in the event of either.

      • migtronixMEMBER

        @op8 problem always is how to knock off the unproductive and wealthy whilst leaving the productive milking cow intact. Wars and viral infections are sort of indiscriminate…

        … Socialised medicine on the other hand….

        Usurers are prohibitively costly to a just society.

  3. did not end their

    I know I’m atrocious at the integrity of what I submit, but I work on a less that perfect dumb terminal and I’m acutely dyslexic.. but fiverr for proof reading might be money well spent.

  4. migtronixMEMBER

    Agreed he seemed to be advocating some sort of tontine scheme for over 70s, what the hell?

      • GunnamattaMEMBER

        You wont find many more fervent adherents of PJK than I. But basically I saw those comments as suggesting the marbles were indeed not in place.

      • They will have to pass a law at some point prohibiting the young and productive from leaving the country.

      • Actually, having watched the whole interview now, the old bastard is a sharp as he’s always been, and he’s picked something up that no-one else has. Ok, so the 2-3% longevity levy is a bit daft, but the main thrust of his argument is that the estimates of the cost of superannuation concessions is just plain wrong. He reckons Treasury has been telling fibs.

        TONY JONES: But the Treasury’s own modelling is fuelling this debate, the equity debate. The figures they put out in the MYEFO statement in December show that super tax concessions cost the budget, according to them, this year, more than $34 billion, rising to well over $50 billion in 2016-’17.

        PAUL KEATING: Yeah, well of course they realise now that they’ve overdone it and the Treasury’s now walking away from those estimates with all speed. They’re in reverse gear and backwards. It’s like one of those films you see on fast time – they’re walking backwards in fast time, because in the January, 2014 Tax Expenditure Statement we have this little phrase that says, “Previous additions of the Tax Expenditure Statement have stated that tax expenditure estimates are not strictly additive, for example, because the removal of one tax provision will affect the utilisation and use of other concessions for behavioural reasons.”

        TONY JONES: Well you’re going to have to put that in common parlance.

        PAUL KEATING: What they do is they’ve constructed the straw man phony case. So let’s say someone’s got – make it simple: $100,000. The Treasury says, “Now, if we didn’t have to cover tax concessions for that $100,000 super and the fact that we are costs X, what would that $100,000 be doing? Oh, it would be in a bank account.” Now in a bank account, let’s say it’s you, Tony. You’re talking about $100,000. Tony Jones pays his PAYG – PAYE tax on his monthly income and out of your after-tax income, you then put money in a bank account and you leave it there and the interest is taxed at full marginal rates. So you get taxed at full marginal rates on the way in and you leave your $100,000 or $200,000 sitting in a bank account. The fact is, no-one will leave it in a bank account. If the tax concessions weren’t there for super, they would negatively gearing a house, they’d be buying margin loans in shares in Westpac or BHP or the Commonwealth Bank or doing tax-preferred things. So this sort of simplistic nonsense notion the Treasury have had that the yardstick with which you compare the tax concessions is the simplicity of people simply leaving their money in a bank and paying full marginal tax rates on it is a complete nonsense. So now they’re …

        TONY JONES: Look, I’ll just interrupt you there for one minute, ’cause I’ve got – ’cause you actually did send me these tables before. There is a table that appears in the MYEFO statement that talks about the $50 billion figure being the figure in a couple of years time, cost to the Treasury. Then, there are the other document that they’ve put out which seems to undermine that completely. What is actually going on here?

        PAUL KEATING: What they’ve done: they’ve built the straw man and a lot of people are now running – see, you’ve got journos in the (inaudible) and people in the (inaudible) say, “Well, look, there’s $30 or $50 billion here of tax expenditure we could use for something else.” This is completely false. Completely false. So, this is the – I mean, look, “An experimental estimates of superannuation tax expenditures”. I mean, the Treasury’s even driven to put out an appendix, “Experimental estimates”. They can’t even estimate it. They cannot even estimate it.

        TONY JONES: These documents, I’ve got to say, they’re quite hard for a layman to understand. But does the Treasury to come to a conclusion with how much foregone revenue actually is there because of the superannuation tax concessions?

        PAUL KEATING: Well, I’ll just read this little bit for the record. It says, “This likely change in taxpayer behaviour, the revenue foregone approach does not do this. As a result, it is important to note – important to note – that revenue foregone,” – that’s a loss to the budget, “tax expenditure estimates should not be interpreted – not be interpreted – as the budget impact or benefit of removing a tax expenditure, i.e. for superannuation.”

        TONY JONES: OK. So did they come up with any figures?

        PAUL KEATING: In other words, the Treasury finally is debunking its own myth about the cost of superannuation. They’ve massively overestimated the cost of superannuation because if people weren’t using the superannuation tax concessions, they’d be negatively gearing a second apartment, a flat, a house, buying shares with margin loans and doing all the things that clever people do.

        TONY JONES: OK. But do they come to any conclusions at all as to how much is actually foregone …

        PAUL KEATING: Yeah, they have.

        TONY JONES: … in terms of tax revenue because the figures of $34 billion this year or $50 billion in a couple of years’ time, they’re pretty dramatic figures.

        PAUL KEATING: They are. I’ll find it for you. I’ve got it here. They say on one basis it’s a cost to revenue of $15 billion on a revenue foregone basis, and on an expenditure basis, it’s a gain to revenue of $6 billion. So, they’ve got a minus $15 billion cost to revenue and a plus $6 billion gain to revenue. That’s the new estimate.

        TONY JONES: Yeah. Alright. Briefly, what do you say …

        PAUL KEATING: That’s the new estimate.

        Of course, we should get rid of all the rorts not just super.

      • Lorax, you’re spot on, well Keating is. If you actually read the TES (Tax Expenditure Statements) they do have all sorts of qualifications between ‘revenue gain’ approach compared to ‘revenue forgone’ and if tax expendiutres should be measured against a income or expenditure benchmark.

        It’s all guess work and changing one of the above makes a big difference on what the so call ‘cost’ of super tax concessions are. But it’s too easy to run with the headlines that it costs $32b FY 13/14 and not dig a little further.

        PK has, and it comes to a shock to people to hear it, when it really shouldn’t.

      • TONY JONES: Yeah. Alright. Briefly, what do you say …

        Briefly, your cue …

        One day Macrobusiness, the next, the ABC. Probably make more sense than many of their guests.

      • GunnamattaMEMBER

        Agree Lorax, when you sit through the whole lot it appears that he is more fervent on the scalping Treasury for outrageously feeble estimates line than pushing an extra tax on the young – but he does have that wrong.

        Yes, some closer examination of the role of Treasury in this government/policy slicked path into an economic policy corner – nicely articulated by DLSs tightening economic straightjacket yesterday – wouldnt go astray.

        …….anyone with kids really should be helping them to become bilingual and to expect to be working OS if they want to do anything of substance with their lives.

  5. 12%, or more SGC isn’t a bad idea with a couple of tweaks.

    Full marginal tax rates -15% on pension payments. (or perhaps full, will 0% in, and tax in earnings)

    It is income period. it’s source was a quarantined trust with tax concessions.

    It is income, we have the concept of tax on income.

    The second would be a mandate of investing in NEW business in Australia.

    Why Fortesue had to go offshore for funding ??

    $1.4 trillion yeah? in super funds.

    A mandate of 5% is $70 billion.

    That’s a $10 million capital for 7,000 different things.

    One of them will return a winner in terms of growth, and many 6% in terms of income.

  6. Tassie TomMEMBER

    We are already paying for the elderly one way or another.

    All that PK has really advocated is raising taxes and calling it a levy, which is exactly what Abbott is about to do.

    If PK actually wanted his beloved Super to be effective up to the age of 80 then he should advocate things already discussed on MB (include PPR in assets test, tax lump sum withdrawals, reward rather than penalize low income earners for contributing to Super, etc.)

  7. two plus twoMEMBER

    Just a few thoughts on this paragraph:

    “If Keating was fair dinkum about raising retirement savings, he would instead argue to replace the 15% flat tax with, say, a flat 15% concession. This would have the benefit of: 1) providing all taxpayers with the same taxation concession, thereby improving equity; 2) boosting lower income earners’ super savings, thereby reducing reliance on the Aged Pension; and 3) reducing overall costs to the Federal Budget.”

    1. A flat 15% concession might be equitable, but you are comparing it to the inequitable progressive income tax system. Can’t have it both ways.

    2. Would be interested in seeing if any data supports this hypothesis, but even with 15% assistance, are lower income earners ever going to save enough to offset a decreased reliance on the Aged Pension?

    3. Increasing the burden on tax payers/decreasing disposable income/reduce private spending/reduce private saving.

  8. Leith, I’m sure you didn’t fail to notice that in Keating’s interview last night he also accused Treasury of incorrectly inflating their original estimates on the cost of those concessions, accusing them in effect of having built a straw man.

    “Yeah, well of course they realise now that they’ve overdone it and the Treasury’s now walking away from those estimates with all speed. They’re in reverse gear and backwards”

    What say you ?

    • So Keating is saying that Treasury has overestimated the cost of superannuation concessions, and now they’re disowning these estimates?

    • Keating argues that if the money wasn’t going into super, it wouldn’t sit in a bank account with tax paid at the full marginal rate, it would go into other tax-preferred assets (e.g. a negatively geared house, shares on margin etc) so the savings to the budget would not be as much as claimed.

      To that I say, get rid of all the rorts not just super!

    • I reckon super concessions should be overhauled just for equity reasons anyway (see Leith’s favourite table above).

      • Yes, agreed, but with the concern that the wealthiest will become discouraged by the lack of incentive to save into super, lurch into an existential crisis, and start blowing their money on hookers and expeditions to Peruvian ayahuasca retreats. What good is equity when the bedrock of your society loses their incentive to work and save ?

      • intertubernet

        “start blowing their money on hookers and expeditions to Peruvian ayahuasca retreats”

        Struggling to see the downside here, Spleen.

      • migtronixMEMBER

        @Intertube

        “start blowing their money on hookers and expeditions to Peruvian ayahuasca retreats”

        Struggling to see the downside here, Spleen.

        Are you really?!? Because I don’t want my favourite haunts rooned by those people!!

      • ceteris paribus

        Yes, of course, the tax expenditures should be overhauled to be more equitable, as per UE’s case. the argument of being unable to predict the behavioural change in investment practice has been out there and discussed for ages.

        Keating is just blurting out this widely understood limitation in estimating tax expenditure savings to divert attention away from the increasing recognition that “his” super scheme failed the equity test. (mind you, Costello’s tinkering made it much, much worse.

        Keating was the best Liberal Treasuer this country has ever known. Did well on the Mabo stuff too, it must be admitted. But he was far too enamoured with his mental picture of himself “pulling the big levers” to be of much use to his own side of politics.

      • GunnamattaMEMBER

        Well I came out being able to get rid of

        Concessional taxation of employer Super Concessions – 66.6 Bln
        Concessional taxation of Super entity tax earnings – 69.9 Bln
        Including owner occupied housing in pension assets test – 28.0 Bln
        Means testing family Tax Benefit – 19.4 Bln
        Halve Diesel Fuel rebate – 12.0Bln
        Abolish CGT – 3.3 Bln (which I think is a bullshit figure)
        Scrap PPL scheme 8.8 Bln
        Tax Private Trusts – 4.0 Bln
        Cut APS by 12K – 4.8 Bln
        Private Health ancillary rebate – 1 Bln

        then on top of that I would get rid of Negative Gearing on residential real estate.

    • migtronixMEMBER

      As if gripped by a syphalitic fever and delusion the treasurer, frothing at the bit, engages in a poorly sourced class and generational war.

      Think George III and England losing the colony’s 😉

  9. I don’t understand these rich conservatives don’t slug me with taxes people. C’mon people no man is an island, everyone’s got to pay their way. Taking care of the elderly is your social responsibility.

    • Renting young working people definitely should not be responsible for any elder living in a multimillion house. His own children should be responsible as they will inherit the mansion. We are not living in socialism.

      • Sorry forgot the sarc tag. “We are not living in socialism” Which country do you live in?

  10. Boy! The superannuation scheme has become a real flop, who’d ‘ave thought it would all be eaten by fees.

    Well! Now that I’m retired, I want you to join me in this insurance scheme, where you pay for my retirement. I pay an annuity over 5 years, you pay annuity over 50 years. That’s a fair go.

    I personally guarantee, whilst I’m alive, that it won’t be eaten away by fees.

    • migtronixMEMBER

      As 3d says repositioned over time, meaning you give up more for longer to get a lot less back…

  11. We need to do something that reflects increasing life expectancy. Most of the people now alive will live well past 100. The whole thing needs to be rebuilt.

      • The whole work/retirement income interface needs to be sorted out. We will obviously have to lift our savings/investment rates and make the economy a lot more productive and we will have to offer people incentives to stay in work as long as they’re fit and well.

        Quite obviously, making people commit so much of their incomes to housing is just plain silly. Housing will need to become a lot more affordable and designed to suit far more flexible family configurations.

  12. Billybob McBob

    Income =\= wealth. Million dollar mansion and a few hundred grand in the bank, no worries have an age pension. But god forbid anyone should try to actually earn anything to get anywhere, they’ll grab the lot. Fk the lot of em

  13. Keating is right to say Treasury is vastly overstating the cost of super to the Budget by doing its comparison against the alternative asset class with the most punitive tax treatment, namely cash instruments.

    The bit he forgets to say is that aged pension costs in future are reduced via the forced saving in super as opposed to relying on individual marginal propensity to save.

    His longevity tax is effectively a state run lifetime annuity business where Government taxes individuals, taxpayers backstop the Government but private sector profit margin and reserving costs are cut out of the business model. But is wide open to political rorting as the Government would be managing the asset pool.

    The funny thing is that state organs have been piously sponsoring life extending programs for years around smoking, drinking, speeding and increasingly obesity, without regard to the damage such activity is doing to the Budget’s pension and aged care costs. Hockey would improve his fiscal position by removing funding from the health chatter lobbies as well as deferring age pension entitlements.

  14. If Keating was fair dinkum about raising retirement savings, he would instead argue to replace the 15% flat tax with, say, a flat 15% concession. This would have the benefit of: 1) providing all taxpayers with the same taxation concession, thereby improving equity; 2) boosting lower income earners’ super savings, thereby reducing reliance on the Aged Pension

    These two points cannot be overemphasized. If Keating really believes the problem is as great as he implies then the problem is far greater for those on lower incomes than it is for those on higher incomes. This means that measures to improve superannuation equity (such as the above) should be the first priority. It is astounding that people such as Keating have never got this.

  15. Keating was an enemy of the working man and still is. He lowered wages and goosed house prices via unsound financial regulation. Now he wants to lower wages some more to support his dodgy superannuation scheme.

    He will never admit to being wrong. His reasoning is that rorters of his super scheme would otherwise be rorting negative gearing. Now tell me again… who reinstalled the negative gearing rort in 1987 in a failed attempt to lower rents?

    • migtronixMEMBER

      So right Claw, you forget to mention Awards – how well has that worked out for wage stagnation?

  16. “Let me get this right. Instead of arguing to broaden Australia’s taxation base by say raising the GST and indirect taxes, and/or implementing taxes on land and minerals, Keating has effectively recommended accentuating Australia’s extreme reliance on inefficient personal income taxes, and in the process making Australia’s diminishing pool of workers shoulder even more of the tax burden?”

    What’s astounding to me is that it’s arrogantly assumed the young will willingly bleed harder to keep this whole mess going. No debate, no discussion, no consultation, no carrots, only whips for the young families who will sear and sweat at the coalface.

    I am not kidding when I say that I see a moment when immigration controls will be made to work in reverse.

    Malcolm Fraser’s recent bombshell interview with Mann about his book, will come as a massive wake up call to the young.

    The era when the benefit of living in Australia outweighed any cost is coming to an end.

    • Expect a mass exodus to one of the half-dozen countries with lower taxes.
      The US is one (provided you get a green card and you have enough income to pay your health insurance premiums),
      and the others are …… ?

      • If the deputy sheriff ever accomplished something positive, his sending of 4RAR and SASR into the middle east and central Asia essentially sealed the deal on the E-3 visa.

        Like a 457 visa to the USA and Alberta province (for 1 year) with no upper age limit.

        10,500 limit per year, I suspect that quota ceiling may be reached shortly, for many years to come.

      • migtronixMEMBER

        Chile, Switzerland, the nordic countries are high tax but high standards (they have their high immigration policies so jump on board).

        That’s what gripes me about paying tax, it’s how much I have to spend just to live as well!

        A question I always have is can a tram/train ticket inspector ever recoup in a year in fines even just their salary? Highly doubtful. So is the mere presence of them making enough to cover the short fall? Is there data on this? Because if there isn’t it’s pure ideology to make people “obey” providing a negative economic value (hello drug war!).

      • drsmithyMEMBER

        10,500 limit per year, I suspect that quota ceiling may be reached shortly, for many years to come.

        It’ll be interesting to see. I know they’re never come within a bull’s roar of its annual quota since it was introduced – an E3 application is basically guaranteed success so long as you meet the criteria.

        I do regret not getting a GC in the couple of years I was living in the US. If I knew then what I know now, I would have made more effort to do so.

      • drsmithyMEMBER

        Chile, Switzerland, the nordic countries are high tax but high standards (they have their high immigration policies so jump on board).

        Switzerland a high taxing country ?

        A question I always have is can a tram/train ticket inspector ever recoup in a year in fines even just their salary? Highly doubtful. So is the mere presence of them making enough to cover the short fall? Is there data on this? Because if there isn’t it’s pure ideology to make people “obey” providing a negative economic value (hello drug war!).

        Er, what ?

      • migtronixMEMBER

        Switzerland a high taxing country ?

        No the nordic countries.

        A question […].Er, what ?

        Yeah I don’t know either…

  17. “Keating was an enemy of the working man and still is”. I’m starting to really like this group and frankly I am surprised that so many like minded people have emerged.

    Where were we all when Keating was doing his thing? There was zero effective opposition.

  18. fewlishMEMBER

    The often missed component here is the medicare levy! – don’t see the 1.5% minimum being added to concessional contributions, do you?

    Think of the amount of money being passed through super and getting the additional concession of not paying the medicare levy, then think of the cohort that are doing it most and where they are placed to enjoy the benefits of Medicare… mmmm……

  19. A 5% death duties on any one over 80 to pay for geriatric care, like a reverse HECS debt.

    That’s my two bobs worth

    • Totally agree. 1.7 million Age Pension recipients owning their own homes generating $95 billion annually of unrealised gains – seems like they can pay for their care themselves, and if they want the state to pay for it, then the state can collect on the debt later!

  20. People who think the issue in this country is liberal vs. labour vs. the greens are totally deluded.

    The division is between the baby boomers and everyone else:

    * 15.2 million working age people (67%) support 3.22 million people over age 65 (14.1%).
    * However, of the 3.22 million people over 65, 2.3 million (71%) are on the Age Pension. Of these 2.3 million welfare recipients, 1.7 million live in their own homes deriving $96 billion of unrealised gains on their primary residences every year which will never be subject to $1 of tax.
    * For the more wealthy people over 60, they have superannuation funds which are completely tax free – so people over 60 with $10-20m in their super funds making $1-2m a year do so completely free of tax.

    However, despite being the most costly segment of the population (pension welfare, PBS, healthcare), it seems completely beyond every politician (who are mostly over 50) to think of ways to tax people over 65 on their significant wealth.

    Instead? They want to tax working age people who have not yet accumulated the wealth, and who will be living a lot longer in a country where the pension is denied to them.

    Time for a new political party to represent Generations X and Y?