Bowen: “Age of tax entitlement must end”

Via The Guardian today comes Shadow Treasurer Chris Bowen:

Seven years ago this April, my predecessor as shadow treasurer, Joe Hockey, got to his feet in London to declare the “age of entitlement” over. He didn’t declare any specific policies, just that budgets were under so much pressure that people who receive support from governments needed to get used to less support, more standing on their own feet.

As his successor as shadow treasurer, I actually agree with where he was coming from. The problem was twofold, however: the Liberals didn’t have the gumption to announce who would be hit by his policies in advance (in fact, they actively misled people by promising no cuts to health, education, the pension and the ABC and SBS).

The second problem was that when they did tackle the age of entitlement, in the 2014 budget, they targeted people and services that could least afford it: pensioners and basic and important public services including health and education.

Labor has taken a different approach. Not only have we been absolutely upfront and explicit about our plans, we’ve identified those areas of the budget that haven’t received enough attention in the debate and have been under-analysed by governments.

Primary school civics students are taught that the federal government funds health and education, defence and foreign affairs. But they won’t know that, for some of these areas, the government allocated more money to tax concessions – many of which were created years ago and have been left in “set and forget” mode.

Did you know, for example, that the federal government spends $8bn on childcare, but $11.7bn on negative gearing and capital gains tax concessions?

It spent $5.2bn on public schools in 2014-15, but $5.9bn the same year on being the only country in the world that sends tax refunds to shareholders who haven’t actually paid any tax?

Or were you aware that the federal government spends $1.8bn on Tafe and skills but forgoes $2bn a year because we let family trusts distribute income to family members tax-free or at lower tax rates?

Our pledge to tackle these tax expenditures means the Liberals can run a scare campaign against Labor. That’s a given that we were fully aware of when we announced the policies.

Aussie tax concessions (rorts) are indeed out of control:

The riposte comes from Treasurer Josh Frydenrort at The Australian:

Josh Frydenberg last night told The Australian “Labor’s not listening; Labor doesn’t care”, and ­accused the opposition of “arrogantly” ignoring the concerns of self-funded retirees.

“Bill Shorten is obsessed with class warfare and pitting one Australian against another for political gain,” the Treasurer said. “His retiree tax is designed to punish aspiration and those who have taken personal responsibility for their own retirement.”

With the Coalition it is only ever class war if workers fight back, never if the rich buy policy for their own ends. The truth is nearly all of this tax rorting goes to the rich denuding workers of essential government service funding:

Bravo Labor for tackling the rorts and thanks to an imploding Coalition for ensuring it gets done.

Comments

  1. As a lifetime liberal voter (well up to the Wentworth by-election anyway!) I agree with what Chris Bowen is stating here.
    Reform the tax system.
    Simplify the tax system.
    Heck, introduce an alternative minimum tax like in the USA if your deductions are too high. There are far too many people who spend their whole life trying to figure out rorts – let’s pay our fare share and move on.

    • He has huge balls. Only fair if MB gives him a ballschin to match the scomo poo hat from now on?

      Saw BBs with plaquards hassling Shorten – “Hands off our money Bill”. This is the problem with short term political gains leading to long term government expenditures, voters think it is ‘their’ money after a while.

      Anyway this is long overdue for Aust, I just hope they have thought this through or his balls are going to get whacked. In private the calculators will come out even if everyone thinks it is a great reform in public. Good on them but they are sounding way too confident right now. Get in first, then do what you want- like normal.

    • I reckon Andrew Leigh is even better. Heard him defend these policies against the might of the vested MSM and he whacked them. Tough sh1t Greenwood!

      • Although the Liberal Party claims to be ‘economically’ minded (having not moved on from the 1950’s left/right rhetoric), they don’t come even vaguely close to the current Labor Party. Realistically, the Libs have been off the mark for decades, but only now are people realising the gaping chasm in capability between the two.

        Andrew Leigh is actually quite an accomplished economist. He holds his own with some of the best in the business. I’m not sure if it’s a pity or a blessing that he’s now into politics.

      • Leigh lost me after his stupid rant about foreign ownership of Australian companies which fundamentally misunderstood how custodians work.

      • Incorrect. They pay the bulk of the tax.
        I agree with Bowen’s points about negative gearing, franking credits and trusts but I also find the ill-informed “rich people pay no tax” line beloved here tiresome and ignorant.
        Nobody here defines rich and most, like Brenton, seem unaware that high income earners already pay the majority of personal tax raised.

      • The pay the majority of tax because they have the majority of income. It’s not rocket surgery.
        The question isnt whether they’re paying ‘a lot’, it’s whether they’re paying an appropriate amount.

      • how many years have you been living on this website, and you still don’t get it?

        High income =/= High wealth

        Tax income and you entrench wealth inequality (there is no way to catch up)
        Tax income and you discourage productivity

        Tax income and you simple encourage people to speculate on assets for capital gains, because that becomes the only way to get rich

        Disappointing you are such a simpleton

    • More pointedly, beyond the moral lens, what percentage of voters – in marginal seats – are affected by the franking cash splash, CGT and negative gearing boondoggles.

    • Jason, I pay a lot in tax each year currently, nearly 80K or so…

      “Bill Shorten is obsessed with class warfare and pitting one Australian against another for political gain,” the Treasurer said. “His retiree tax is designed to punish aspiration and those who have taken personal responsibility for their own retirement.”

      There is some truth to this statement from Frydenberg, a lot of surgeons, doctors, engineers, etc.. have worked hard and paid a lot in taxes over the years, so their investments usually pay more in returns. I agree we need reform, but a lot of these people will never receive a pension, so they are self sustained. I agree though, trim the fat and the excess and the overly generous aspects, but don’t punish successful people who have worked hard and invested wisely at the same time.

      Otherwise we’re just another socialist regime..

      • Gav,
        80K tax per year puts you at min. $230K (excluding super). Thats a lot of dough…. Keep it up!

      • Do the financial benefits of having a well-paying job need to be supplemented by the taxpayer while schools and hospitals go underfunded? You’ve worked hard to nab yourself an excellent income to support you and your family. Is that not reward enough?

        The surgeons, doctors and engineers you allude to will have incomes that benefit greatly from the taxpayer purse through healthcare and infrastructure spending – directly or indirectly. So isn’t it fair that those who can afford to contribute to the public spending that they benefit from, continue to help these important services remain adequately funded?

        A favourite quote of Abbott’s was “government should only do for people what they can’t do for themselves.” On this occassion I couldn’t agree more with the bloke.

      • hate to break it to you mat, but all money comes from the government ultimately

        except money the banks create so we can bid against each other to buy houses: does that mean real estate agents and property investors are the only true capitalists?

      • @Virus – My base salary is more like $170k but I get stock/equity + bonuses on top which brings me up to that range. I’ve been trying hard for a few years to keep it up. But there are times I’m ready to give it all up. I keep saving saving saving for a home, but the tax man keeps taking a good chunk of my earnings.

      • @Mat – I don’t disagree, but at a certain point taxes become a disincentive to keep working harder, at least in a job as an employee. Maybe not as a business owner, but for each amount more you earn you get a higher and higher rate of tax applied. I actually feel I’d like to earn less and pay significantly less tax. I am considering going to part time in future. Possibly after buying a house (if my mortgage payments are substantially less than my current rental payments) – which is my plan really…life is for living not working working working all the time, which is what I’ve done the last 5 or 6 years. As a result yes I’m paid a lot, but i find that you get to a point of diminishing returns.

      • @Coming
        If you’re talking Mickey Mouse money, then yes, it is ultimately granted to the citizens via a mechanism of government.
        If you’re talking (real) ‘capital’ then the Govt has nothing to do with it.

    • He will face the same entre into leadership that left-leaning Jacinda did; and right-leaning (Sir) John Key did before her. It makes little difference ‘who’ gets in but what happens after that. Someone will take Chris aside and read him the same riot act that Jacinda and John probably both got read – along the lines of ” Get back to your country and get your people borrowing again! And as for this malarky of ‘we need to do what’s right for NZ/Aussie’? Well, forget that too. It’s what’s good for us bigger economies that matter, not yours, and if you dare countermand these instructions, just wait and see what we can do to bring your economy to its knees”
      No hope…..

      • The same Bowen that opened the FIRB floodgates…

        Yeah, nah. Don’t believe the hype. As Janet says, and paraphrasing Bill Hicks, they’ll all be shown the footage of the JFK assassination from a new, unknown angle by some powerful people. It’s worked so far for Trump because he’s so rich and arrogant, Bowen doesn’t strike me as the type.

  2. The MB Labor love-in continues. Why? He’ll be no better than Friedenterd.

    Had his chance under Rudd in two portfolios and made everything worse. Member of the NSW Labor Right whivh has produced many esteemed CCP Kowtowers. Will never forget the foreign buyers treachery he started as Assistant Treasurer.

    Won’t be voting for either Labor or Liberal.

      • “bUt tHe lNp” who cares. I hate them equally as well.

        The current neoliberal debacle we have goes all the way back to Keating/Hawke and every government since. Bowen is no different, already has the track record and will be business as usual. Shorten will have the shortest honeymoon period known to man.

        I look forward to the Glorious Bowen Foundation picking up the CCP void Julie Bishop leaves when they lose.

      • Yep. We wiped out Labor in Queensland, then wiped out the LNP and it’s business as usual. The party duopoly is the problem.

    • We shouldn’t quickly forget the response of the Labor Government under Rudd to the Henry Review. A fantastic detailed tax/transfer review that was boiled down by Labor to a disastrous ‘super profits’ marketing pitch leaving a mess of epic proportions. (There was nothing wrong with the idea of a MRRT but it’s implementation by Labor as a cherry pick from the Henry Review was some special kind of pathetic).

      • The really sad thing is that Henry also provided a blueprint to fix the anomalies in the tax system around investing.

        He said that all investment income and deductions and gains and losses should be discounted by 40% (or some other number) – that way there are no (or fewer) arbs around type of investments and deductions relating to them. He also said that such a change might be politically difficult. The silly thing is, it is surely no more politically difficult than the range of changes that the ALP are currently proposing but which are an infinitely inferior “solution”.

      • Yes, as part of a complete reform. “For the longer term Australia should look more closely at moving to a business level expenditure tax. A few countries have adopted this alternative form of company income tax base in recent years, following widespread academic study. Adopting an expenditure tax base would change the dynamics of how Australia attracts international capital and overcome some of the problems of income taxes. However, it would inevitably give rise to other issues.” World wide, profit (taxable income) has been gamed to such an extent that tax systems based on this are now almost meaningless – as Michael West easily shows with the top 40 tax dodgers.

  3. As i dropped my kids off at the local primary school this morning and looked at the demountable buildings making do as ‘permanent’ classrooms you realise just how easy it has been to syphon cash out of the revenue base. Michael West is working through the top 40 tax dodgers again, it makes for interesting reading: https://www.michaelwest.com.au

    • I would take anything that West says on tax avoidance with a grain of salt. If nothing else, he is one of those who consistently compares revenue to tax paid. Plus he includes trusts (which are flow through entities) and entities that use prior year tax losses.

      • That’s total garbage – West is good at his game and gets through a great deal on a shoestring. Revenue should definitely be considered in the context of profit and taxation, as the main game now is transfer pricing/debt structuring the profits out. As to trusts as flow through vehicles somehow getting off scott free, the whole point of looking at the trust is to show the overall revenue for the entity that has been structured tax effectively.

      • West’s heart is in the right place but his consistently simplistic analysis weakens the value of his main message.

      • West’s audience is not tax specialists, they know how the structures and schemes work, it’s highlighting the total ineffectual character of the corporate tax system and the role of the parties involved in gaming it.

  4. Chris Bowen seems to be repeating John Hewson’s Fightback strategy. The question then becomes: do the Libs have a 2019 version of Paul Keating. Scummo? Maybe, he seems to be an overachiever so he might surprise on the upside but he lacks the machismo of Keating. One of the great killer lines from Australian politics.

    https://www.youtube.com/watch?v=lEsN4-XLE2k

    The Hungarian? The Austrian? Nope and nope. And the Nats and the conservatives are totally shot, with another Qld conservative apparently being caught out.

  5. Oh my god… this guy is actually speaking the language of the peeps. How long before 2GB, Sky and all the other frothing boomers try to tear him down? There’s a generational shift in this election, more millennial’s than boomers, I dont think the uninformed grasp how important this election could be – it’s like the changing of the guard. Labor is mainly Gen X these days, Shorten is old gen X himself, things could be changing for the better.

      • Lol I’m too much of a cynic to actually believe Labor getting in will change too much, they’ll sweep in on a wave of hope and initial popularity, then it will all turn to shit like it has in the past with them – at least in the way they are portrayed in the media, it depends who the opposition leader is and their front bench. If Toxic Tony is still around I fully expect the negativity he artfully portrays will still have great influence and make for a swift downfall of these “socialists” in the Labor party.

      • He’s a politician – marketing is about 80% of what he does. A politician that can’t market their ideas is as useless as the proverbial on a bull.

      • The point is not that the party hacks are all paid salesman now (which of course they are), it is that this is just improved marketing, the underlying product has not changed.

        Dastyari was a Senator for the ALP solely because he was a sharp revenue raiser – seriously a Senator! It beggars belief.

      • Yeah, but given the other side couldn’t sell water in a desert, when that’s the fundamental skill that’s needed, it’s difficult to feel confident in their ability to do anything at all. Politicians with any sort of competence at anything are so rare that seeing one make a basically decent speech is almost miraculous.

    • “this guy is actually speaking the language of the peeps”

      Yeah, nah, my bet is he’s talking sh1t.

    • Ross Greenwood (Boomer entitlement cheerleader #1) has had the Shadow Assistant Treasurer Andrew Leigh on his program a few times and gets taken to the cleaners in the argument. Leigh is impressive.

  6. Yes, Labour is dong more than the current government in reducing tax breaks for those with high incomes and assets. But (unlike the rest of the world) the real biggies remain largely untouched: Superannuation concessions (still massive), no federal taxes on the family home, no estate/death duties and foreign multi nationals in multiple sectors, paying a relative pittance in taxation.

  7. Ok. What are we doing about the luxury car tax? Rate increases by stealth? Electricity hikes? If we’re going full bore socialist let’s get it all on the table…

    • Yep, I thought something similar seeing those oldies in QLD having a go at Bill for removing their tax refund rort. Roughly none of them would ever vote for Labor.

  8. ‘Age of entitlement must end’ says a Pollie. Are they cutting back the $127 a day to turn up to parliament? What are they cutting back on? Apart from the proles….

  9. GunnamattaMEMBER

    I like the talk, but will only become a convert when I see the walk.

    To me it appears they will start well with Negative Gearing and CGT concessions. They are what he says – they have been upfront, and they are definitely targeting the upper end of town. His point about shareholders who have never paid tax is another – all strength to them – and nobody should be in any doubt that family trusts are a vehicle for rorting the tax system (as Superannuation has become).

    If they address all of those (which I believe they will, if not to the degree that some of us think they should) then for me that is a definite reason to vote ALP from the get go.

    But after that will start the questions. What will they do with the private health rebate? Will they allow people full access to the aged pension after they have taken a Super lump sum and salted it away or blown it? Will they look at the amortization schedules of gas cartels currently selling Australian LNG at loss leader prices on global markets and avoiding taxes with the amortization of white elephants, or the same with electricity retailers doing the same off amortization of gold plating the systems they bought from the public? And then, what will the ALP do about politicians entitlements, the mega real estate property portfolio Australia’s politicians have, and the S144 compliance so demonstrably failed in recent times?

    I am more than happy to see Bowen talking about entitlements. But like many I want to really see progress about doing something about them.

    • Absolutely. This has been a consistent theme for the last few years in Australian politics, certainly Rudd was a great example. The marketing is A-grade and moves with peoples expectations but the substance does not change. It’s just so easy for the parties to figure out what people want to hear and play to it, changing the actual stuff is much much harder.

    • Don’t be the pest Gunna. That would be more than enough for the beginning. More than anyone has done in the last couple of decades.

  10. Running interference for his paymasters as usual

    No mention of taxing wealth

    Continue to tax income to entrench hoarding, promote inefficiency and reduce economic mobility

    • most people couldn;t handle the quantum of change you’re talking about

      start somewhere, good on them for getting can-do and doing that

      some people will never be happy.

      at least it’s not lnp

      • I think people could handle a lot more than you claim

        This is worse than status quo: it’s deliberate misdirection

  11. Seriously MB? I know your heart’s are in the right place, but this guy. He’ll be lunching with the same corporate donors, rubbing shoulders with the same wealthy people, and looking to secure the same board seats after his polticial demise as every other scummy politician. Plus he supports the sale of Aussie assets to o/s (Graincorp IIRC).

    Plus, as far as I can tell, he’s just another self-serving clown who’s never had a real job in his life.

    • Compared to what? The choices are thin on the ground and with politicians its always a matter of choosing the least awful.

  12. The age of entitlement is more entrenched now than ever, somehow the government via the tax payer must pay more and more each year to the entitled, in 2015 the welfare budget was just over 150 billion…fast forward to 2019, just under 200 billion! Where do people think this money comes from ? it doesn’t come from the “least that could afford it” that’s for sure, it comes from mugs like me, the modern day surf. My tax rate is 37% + 10% GST + state taxes + local taxes = the government taking more than 50% of the lions share of my endeavor’s. Labor or liberal makes little difference, the outcome is the same, take from those that have, to provide for those that don’t.

    • I have been pretty lucky and have worked damn hard. I am happy to pay for those genuinely in need. But I’m sick of paying for those who have made welfare an intergenerational lifestyle choice.

      Some people’s “work-life balance” needs major recalibration.

      • But I’m sick of paying for those who have made welfare an intergenerational lifestyle choice.

        This accounts for SFA of the welfare budget.

      • Not really a conclusion you’re in a position to reach.

        2/3 of the welfare budget is the pension, disability support and veterans support. About 5% of it is to the unemployed (decreasing YoY even just in nominal terms). Most of the remainder goes to family support.

        What percentage are you claiming goes to “generational lifestyle choice” and based on what evidence, given un/under-employment running in the mid-teens, massive low-skill immigration, extensive exploitation of low-wage workers, and all the historical and contemporary evidence that in the presence of full-employment policies, those who choose not to work represent a minuscule fraction of the workforce ?

      • The government and Centrelink and the welfare lobby all have a strong vested interest in understating the amount of fraud.

        Unlike its international peers, Centrelink does not even bother to estimate the amount of fraud it oversees. You think I’m joking. But I’m not.

        https://aic.gov.au/publications/tandi/tandi421
        “Unlike the UK Department for Work and Pensions, Centrelink does not provide estimates of fraud but reports on detected errors and fraud prosecution actions and outcomes.”

        Staggering isn’t it. Hands out nearly $200B pa. And when asked “How much money do you think is fraudulently claimed”, the best Centrelink can come up with is “Gee, dunno.”

        Centrelink refers 5000-10000 people pa to CDPP for alleged fraud. The conviction rate among these prosecutions varies between 98.6 – 98.9%. This extraordinarily high conviction rate indicates the CDPP has a compelling case for the very few cases prosecuted. It also suggests these few cases represent one end of the bell curve, and there are many more cases that never reach court.

        The same could be said for speeding drivers of course:
        “What % of drivers speed within a given week?” Lots.
        “How many are caught?” Not many – a few unlucky or stupid drivers.
        “What is the outcome for those few issued fines?” Almost every driver pays up – the evidence is usually compelling.
        “Does the fact that only a few infringements are issued mean speeding is uncommon?” Ummm, no.

        https://aic.gov.au/publications/tandi/tandi421
        Bajada (2005: 184) concluded that, ‘there appears to be a significant number of people in Australia fraudulently accepting welfare benefit payments while in receipt of subterranean income’. From a different perspective, Peter Saunders, from the Centre for Independent Studies, has argued that, although ‘the welfare lobby insists fraud is not a serious problem’, surveys of the unemployed show that up to 75 percent are not genuinely willing to search for or accept available jobs and are therefore, in a sense, ‘fraudulent’ (Saunders 2003: 11–12; see Colmar Brunton Social Research 2002: 20).

        Look at the proposal for smart cards for welfare in Ceduna. The government (yes, the same government that states welfare fraud is not common) is well aware that most welfare $ in some places are spent on alcohol and drugs and gambling and prostitution etc. So the idea is that welfare payments will be loaded onto credit cards that would only be accepted at Woolworths or whatever. The idea is that the welfare $ would be spent on its intended purpose – you know, things like food for the family etc. Well, it hasn’t taken long for enterprising welfare recipients to realise these credit cards can be used to purchase things like iTunes cards, and these cards can then be exchanged for any vice.

        Looking beyond welfare, we know there is widespread tax evasion. Every year the ATO points out the problem areas it is targeting and warns us all there will be increased scrutiny and better data matching and more audits.

        https://www.ato.gov.au/media-centre/media-releases/individuals-tax-gap-of-$8-7-billion-highlights-need-for-action/
        So the ATO estimates it is missing $8.7B pa because individuals are “not fully compliant” with the law. Note this is personal income tax only – there is a whole lot more more missing tax from businesses.

        So if we are collectively avoiding tax for self-gain, it seems inevitable we are also defrauding welfare for the same self-gain.

        Then there is non-financial fraud where there is no financial advantage but where people are willing to be dishonest in order to advantage themselves at the expense of everyone else.
        Take the disability mobility parking scheme
        https://www.dailytelegraph.com.au/newslocal/north-shore/police-crack-down-on-disability-parking-permit-scam-on-north-shore/news-story/3bfe7854e03ef14382b005831cf56926
        Fraudulent misuse use of these passes is “surprisingly widespread.”

        The same attitude is present in the welfare cheat, the tax cheat, and the parking permit cheat. Seeking a personal advantage while imposing a disadvantage on everyone else. And these cheats are everywhere.
        .

      • So as expected. Nothing but disingenuous arguments (eg: the welfare budget at $175b is as close to $150b as it is to $200b), anecdotes and right-wing hyperventilating.

        Let’s not forget you are (or “were”, since the goalposts have apparently shifted to any form of “welfare fraud”) focusing on “intergenerational” “lifestyle choice” welfare.

        Complaining about people not looking for work is largely meaningless when un/underemployment is in double figures – what work ?

        If we had a full employment policy (that was actively pursued) and still significant proportions of the workforce on welfare, you might be able to start making an argument about “fraud” and “lifestyle choice”. But we don’t. What we have is one of the most tightly targeted and policed welfare systems in the world, which is probably costing more in overheads than it’s saving, and is largely implemented in its modern form with the objectives of a) victimising and stigmatising the unemployed and b) diverting attention from the real problem of not enough jobs.

        Centrelink refers 5000-10000 people pa to CDPP for alleged fraud. The conviction rate among these prosecutions varies between 98.6 – 98.9%. This extraordinarily high conviction rate indicates the CDPP has a compelling case for the very few cases prosecuted.

        As highlighted in the report you linked, the conviction rate is high because:

        The system of referrals to the CDPP also ensures cases go through an independent filtering process. Only the strongest cases are pursued, as indicated by the very high conviction rates achieved in the tough arena of the criminal courts—with a standard of evidence ‘beyond reasonable doubt’.

        Also from the report you linked:

        Marston and Walsh (2008) studied 80 social security fraud cases in two Magistrates’ courts. They found that the average amount involved was just over $10,000. The largest amount was $30,105 and the lowest was $162. There were no cases of identity fraud or elaborate scams. In their view, the findings ‘challenge the stereotype of the organised criminal willingly defrauding the Commonwealth Government for large sums of money’ (Marston & Walsh 2008: 297).

        And:

        The UK Department for Work and Pensions estimated that in 2008–09, approximately 2.2 percent of all benefit expenditures, or £3b, was overpaid as a result of fraud and error (DWP 2009). Half of this, about £1.1b, was attributed to fraud, although this was based on a sampling procedure rather than convictions. The figure represented an increase, from a low of £0.6b in 2005–06, despite concerted efforts by the department to stop fraud (NAO 2008).

        In the United States in 2008–09, the Social Security Administration Office of the Inspector General (2009) received 129,495 allegations of fraud and closed 8,065 cases, with 1,486 criminal prosecutions. These activities involved over US$2.9b in ‘questioned costs’; with US$23.3m in recoveries, US$2.8m in fines and a further US$25.5m in settlements, judgement and restitution orders.

        So in the UK an estimated 1% of welfare expenditure is fraudulent. In the US, nearly 130,000 complaints resulted in about 1500 – or a bit over 1% – producing convinctions.

        Like most conservatives, you are laser-focused on the rigorous pursuit of minor transgressions by the little people, so the big end of town can continue to get away with pillaging society.

      • “Like most conservatives, you are laser-focused on the rigorous pursuit of minor transgressions by the little people, so the big end of town can continue to get away with pillaging society.”

        Really. So that is what I think is it. So now you are playing the man and making (very incorrect) assumptions about my ideology.

        That Marston and Walsh study that showed the average size of welfare fraud was about 10k. You do realise that 10k is about the average annual tax paid by the average wage earner. So one fraudster completely wipes out all the tax paid by an average worker for that year. So yes, I think your point highlights the scale of welfare fraud.

        Joe Public usually gets most things right. And right now, Joe is sick of working hard trying to support a family while being being screwed over by all and sundry from intergenerational welfare cheats to the big end of town. And that sentiment was one of the reasons Trump got elected.

        Anyway lets agree to disagree without becoming disagreeable.

      • Really. So that is what I think is it. So now you are playing the man and making (very incorrect) assumptions about my ideology.

        Yeah, really. Because you’re regurgitating boilerplate Daily Telegraph “lazy dole bludger” rhetoric.

        Best not to get too high and mighty about “playing the man” when you’ve already been doing it, as well.

        That Marston and Walsh study that showed the average size of welfare fraud was about 10k.

        The average of 9 people defrauding $150 and one person defrauding $18,650 is $10,000.

        You do realise that 10k is about the average annual tax paid by the average wage earner. So one fraudster completely wipes out all the tax paid by an average worker for that year. So yes, I think your point highlights the scale of welfare fraud.

        Not that taxes really have any relationship to welfare, but even ten thousand fraudulent welfare recipients of $10k “average” only represents ‘wiping out” approximately 0.1% of the 10.5 million “average workers”.

        I think the scale of welfare fraud is adequately demonstrated as insignificant.

        Anyway lets agree to disagree without becoming disagreeable.

        LOL.

        Disagreeing suggests there is some level of opinion or uncertainty involved. The evidence is clear that large-scale systemic welfare fraud by anyone – let alone “intergenerational” recipients – is an insignificant component of the welfare budget. You can try and argue your feelings projected onto “Joe Public” say otherwise, but in the real world it’s simply wrong. The vast majority of unemployed on the dole are unemployed because they can’t find work, not because they don’t want to work.

        Every conservative Government in every western country for probably the last forty years has gone looking for large-scale, systemic, welfare fraud. None have found any, not even in countries with far more generous and less rigourously enforced systems than ours.

      • “The average of 9 people defrauding $150 and one person defrauding $18,650 is $10,000.”

        Huh???? A statement to which there really is no possible answer, other than please don’t go into either economics or finance.

        I suspect you were a resident or CMO or something in my ED once. Perhaps an AMEC candidate? Not a very bright one either.

        If you insist on playing the man smithy, bring it on.

      • Yes, fair point. I did the example the first time with only 2 people and forgot to change all the numbers when I went back and edited.

        Regardless, the point is clear. A mean of ten thousand can have a lot of small amounts and only a handful of large ones.

        It remains that all the evidence – across multiple time periods and regions – points to “intergenerational” “lifestyle” welfare fraud as being insignificant.

    • Is it that you earn many hundreds of thousands of dollars a year, or is it that you don’t understand how marginal tax rates work ?

      • You only have to earn about $280,000 per year to hit a 37% average tax rate (if you include the Medicare levy which pays for all the free healthcare for all the imported scammers sharing cards)

      • The former, then.

        (Fair cop, I back-of-the-enveloped an average 37% tax rate at a bit over $300k.)

  13. Tax dodging entitlement has to end, true.

    Equally however, the age of welfare entitlement has to end.

  14. ErmingtonPlumbingMEMBER

    All income should be taxed on exactly the same progressive Tax scale.

    Why should I pay a Sh!t load of tax on 160k per year, when digging holes, risking Hepatitis, falls from rooftops, breathing in molds and asbestos under houses etc etc providing an essential service, When some old Cnt with a huge (tax free on the way in) superbalance can “Earn” exactly the same amount of money, Tax free !!! for doing FK ALL !!!!
    Providing a service to no one and making Zero contribution to society.
    Its usually these types of retired Cnts who whinge the loudest about “Dole bludgers” and single mums.
    Like I said Knts! With a capital K

    • GunnamattaMEMBER

      Onya Brother.

      We will know they are serious when they address pensions, access to pensions, and the assets of those accessing pensions, and any assets they may have handed on to spouses, children, trusts or sundry other tax lurks.

    • Yep. Labour is well and truly over-taxed and wealth and passive income under-taxed – you’d think the Labor Party would want to do something about that 😉

  15. Progressive income tax is an important part of the tax mix but it would be nice to hear Mr Bowen talk about taking action to end the trickle down monetary model.

    By that I mean a monetary model whereby 95% of the money supply is the result of credit creation by the private banks which is little more than bank credit granted to those who own substantial assets or are in the processing of acquiring them.

    A model where the majority of money creation is tied up with bank lending for asset speculation inherently means that money only gets out into the broader economy (and household wallets) if it trickles out and down from those lending transactions.

    The Federal Budget is more than sufficient to create whatever public money the economy requires and that would involve nothing more than taxing less than expenditure and the RBA monetizing the required deficit (interest free rather than usury from inception).

    For the most part that would mean money being pumped out at the bottom of the economy from where it can trickle up to those ‘worthy and virtuous’ wealth creators if they can persuade the original recipients to open their wallets.

    Progressive income tax would then be an effective way of recirculating from the top of the economy to the bottom where it could recommence its journey back upwards. Like salmon returning up river to the spawning grounds ?

    A monetary model where most money commences its journey at the top of the economy or proximate to it will always struggle with greater problems of inequity and money and economic resources congealing in fewer and fewer hands.

  16. John Howards Bowling Coach

    While Bowen says a lot of good things I worry about him being part of the ALP China group. I met him last year in the shuttle train in Beijing Airport and his advisers up there were giving him a briefing on China during the journey. I so wish I had spoken up during that 5 minutes and poked holes in all the mistruths they were speaking. I actually think they believed it, but the tales they were telling of China and our ‘friends’ where so far from reality I worry they are like so many, captured by the fairy tales.

  17. Having mastered time travel, I just popped back to say..
    I can’t believe he made all these statements before the election then went against them once they got in.

    see y’all in about 15 months. 🙂

  18. The Australian is in full force rallying he boomers against Labor.

    Rupees Murdoch has got a lot to answer for actively enabling the worsening inequality by convincing poor people to vote against their best interest.

  19. Wanna know one of the major reasons why the working peasants have to pay so much income tax?

    Companies like Stockland (SGP.asx):
    Profits totaling something like $3-4 billion over the past few years.
    Dividends to shareholders, growing consistently from $0.242/share in 2015 to $0.27 in 2018 (running at a yield of ~7%).
    Tax paid? Zero.

    The sheer size of tax avoidance by corporations means that taxes on incomes and GST have to pick up the tab. Simple.

    We have marginal tax rates of >45%, instead of half that, because we exclude immense chunks of our economy from pulling their bloody weight.

    • Stockland is predominantly a trust – they don’t pay tax. Instead tax is paid at the shareholder level.

      It isn’t really very different to companies who pay tax and then pay a franked dividend.

      This is why Michael West does himself few favours by overreaching on his tax avoidance crusade.

      • Stapleds generally have been abused and the government introduced new rules last year to attack the most egregious of behaviour which has seen high levels of structuring for non-resident investors (in fact, I am off to hear a talk about the new rules now).

        That said, property stapleds are generally seen as low risk (and by and large won’t be affected by the changes).

      • Australia is still relatively unique in allowing stapled structures, the imputation system reduces the risk for arbitrage so they have slid under the net. It’s true the main risk is from non-resident entities, but they are opaque structures and could be considered unnecessary for a functioning tax system.

  20. Frydenberg never has anything positive to say and it always putting words in other people’s mouths, things they didn’t necessarily say.

    I wish more MSM would hold him to account for it.

    My favourite JoFrey press conference is still the one where Jay Weatherill ripped him a new one for telling bald faced lies right in front of him about the power outages and expecting him and the people of SA to suck it up and accept it.

  21. Bowen’s franking credit policy is idiotic, but is politically expedient for Labor.

    The reintroduction of the Budget Repair Levy is inequitable in its proposed form, but a typically lazy and unsurprising move.

    Otherwise his proposals seem pretty reasonable, if only he’d contain his ego and listen to reason on room for improvement.

    But I suppose you don’t rise to those political heights by doing that.

  22. Doesnt change a thing. Labour is still second last in my preferences. Heard this shit before and got rorted.