The Federal Politics Thread

[Wayno]

Party politics to the side, a major economic lever is reducing company tax. Both major parties know this to be true. I'm voting to bring this into effect ASAP.

Both parties have at various points claimed this be true, but the opinion of serious economists and other experts regarding big company tax cuts is far less affirmed. I would look further into that before basing my vote on a (Coalition) policy that probably won't deliver any benefit to the economy let alone to the lives of most Australians.

Yep tricky to confirm these things outright. Regardless, it's the only clear architectural policy i've observed this election cycle. Other policy promises, from all parties, are shrouded in greyness.

[monotonehell]

Party politics to the side, a major economic lever is reducing company tax. Both major parties know this to be true. I'm voting to bring this into effect ASAP.

Both parties have at various points claimed this be true, but the opinion of serious economists and other experts regarding big company tax cuts is far less affirmed. I would look further into that before basing my vote on a (Coalition) policy that probably won't deliver any benefit to the economy let alone to the lives of most Australians.

Yep tricky to confirm these things outright. Regardless, it's the only clear architectural policy i've observed this election cycle. Other policy promises, from all parties, are shrouded in greyness.

As far as economic levers the government have; they have two
* Raise or lower taxes
* Raise or lower spending
Company tax is a small part of the first lever. Most economists agree that the effect of lowering company tax is minimal on the economy as any extra profits are small and remain unspent. The argument that the company will then employ more staff is not supported by evidence. The argument that the company will then invest in more activity is also not supported by evidence as the revenue freed is minimal. Meanwhile multinationals just offshore it all.

As far as a policy that provides results - it's a pretty limp one.

Let me refer you to an image I posted earlier on this page..

Now that may be an image generated by the Labor Party, but those are facts on there are they not?

Voted to cut age pensions: Not honest. The legislation changed two things. One - it increased the minimum amount a pensioner can hold before their full pension was cancled and replaced by a part pension. That's actually giving more pension to people at the lower end of the scale. Two - this is the "cut". The taper rate was increased from $1.50 to $3 on those holding more than around $800K on top of their home. So it helps those who don't have substantial savings/super.

Voted to defeat a call to support the local ship building industry in SA: This one you will have to jog my memory about.

Voted to change senate voting to help the coalition: This is a good thing. It's not to "help the coalition". It's taken the corruption of "preference whisperers" out of the voting system. Where a vote for one party becomes a vote for another. Now voters are forced to think about allocating their own preferences instead of complex and tricky preference harvesting happening. You may have noticed a lot of the fake parties have disappeared this election. The ones that were set up to harvest protest votes for the parties that were being protested.

If people really want to make a protest vote, forget Greens and Xenophon. They should vote for all the smaller minor parties.

Careful what order you protest vote. You've lumped a load of looneys and one issue parties in there. Many of who just vote with the Coalition's worst policies anyway.

[SRW]

Party politics to the side, a major economic lever is reducing company tax. Both major parties know this to be true. I'm voting to bring this into effect ASAP.

Both parties have at various points claimed this be true, but the opinion of serious economists and other experts regarding big company tax cuts is far less affirmed. I would look further into that before basing my vote on a (Coalition) policy that probably won't deliver any benefit to the economy let alone to the lives of most Australians.

Yep tricky to confirm these things outright. Regardless, it's the only clear architectural policy i've observed this election cycle. Other policy promises, from all parties, are shrouded in greyness.

How do you view Labor's proposal for limiting negative gearing and capital gains concessions? Or implementing needs-based funding in education? Dissimilar examples, I know, but both things that are more likely to actual cause uplift in the economy not to mention impact positively on people's lives. I don't mean to advocate for Labor, so this is all rhetorical really. It's just one of the curious things I find about elections in how people receive and respond to campaign messaging differently.

[Wayno]

How do you view Labor's proposal for limiting negative gearing and capital gains concessions? Or implementing needs-based funding in education? Dissimilar examples, I know, but both things that are more likely to actual cause uplift in the economy not to mention impact positively on people's lives. I don't mean to advocate for Labor, so this is all rhetorical really. It's just one of the curious things I find about elections in how people receive and respond to campaign messaging differently.

Yep good examples. Happy to continue this party-agnostic chat

Negative Gearing & Capital Gains Concessions - i'm not 100% sure of labor's proposed policies, but do think NG overly benefits the wrong demographic (higher income earners). Change here would cause economic ripples - so tweaking should be clear, targeted, and incremental over time (my 2 cents). Same goes for superannuation being used as a tax minimization tool, rather than a mechanism for funding retirement needs of those that need it. Tweaking here would also bring broad economic benefit as cash not going to super would generate more tax and the difference would be forced into other areas of the economy - a good overall outcome I think. As an aside I do find it amusing that the Liberals proposed trimming super-related benefits for the demographic that typically vote for them, but those people have nowhere else to go (vote-wise). lol.

Needs-based funding in education - this is an interesting one. The whole education topic (similar with health/hospitals) is overly focused on funding, too little on results. Also too many advocate throwing more money at the problem - which (i believe) will simply waste more money and simply encourage further funding requests. The education and health sectors both need an accountability enema. I could go on here but a classic example is doctor friend of mine. He performs operations (cutting people open) in his own private practice and also does similar each week in a public hospital. In his private practice he neatly partitions work by person (assigning clear roles and responsibilities) and his team is small, efficient and effective. In the public hospital he has 3 times the number of staff assigned to him with confusion reigning supreme and people complaining of too much work.

[Maximus]

If I may chip in... whilst I'm logged in... for the first time in a while...

Re negative gearing... irrespective of opinion, I wish people (mainly the media, I suppose) would at least get the basic facts correct before tendering an argument. Negative gearing isn't some sort of cash windfall that many seem to make it out to be. And, in any case, the argument isn't actually about negative gearing, it's about the tax deductibility of expenses incurred in property investment -- rules that don't just apply to property investment, but to pretty much any investment. These expenses can be deducted irrespective of whether the investment is negatively, positively or neutrally geared -- the 'gearing' simply refers to the outcome, rather than the method. If you are negatively gearing an investment, it by definition means you are losing money on that investment. Any tax benefit received will always be less than the loss incurred. If anyone thinks this is a good investment strategy, then by all means go for it. (Yes, I do realise that in many cities the appreciation in value of the house outstrips the operating losses incurred, but this profit is only realised when the investment is sold.)

[urban]

Negative gearing is also used by many rich people to offset the costs of their hobbies. A lot of beach houses, micro wineries, hobby farms for example are set-up as businesses with small commercial arrangements that are never expected to come even close to returning a profit. The owner then gets a very nice tax return because their holiday house made a very large loss.

[claybro]

Negative gearing is also used by many rich people to offset the costs of their hobbies. A lot of beach houses, micro wineries, hobby farms for example are set-up as businesses with small commercial arrangements that are never expected to come even close to returning a profit. The owner then gets a very nice tax return because their holiday house made a very large loss.

What, and the beach house, micro winery and hobby farms just appeared by magic? No they are physical infrastructure requiring builders, electricians, plumbers, architects, council planners, rubbish collectors, service station operators, country IGA checkout operators, bank tellers, machinery agents....the list goes on.
Would you rather the "rich" person put their money into some overseas investment fund directly and short cut all this local employment activity?

[monotonehell]

Negative gearing is also used by many rich people to offset the costs of their hobbies. A lot of beach houses, micro wineries, hobby farms for example are set-up as businesses with small commercial arrangements that are never expected to come even close to returning a profit. The owner then gets a very nice tax return because their holiday house made a very large loss.

What, and the beach house, micro winery and hobby farms just appeared by magic? No they are physical infrastructure requiring builders, electricians, plumbers, architects, council planners, rubbish collectors, service station operators, country IGA checkout operators, bank tellers, machinery agents....the list goes on.
Would you rather the "rich" person put their money into some overseas investment fund directly and short cut all this local employment activity?

It's similar to how some business owners set up a private self managed super fund (SMSF) and "sell" the businesses premises to the SMSF. The business pays a lease to the SMSF for the property, the owners get superannuation revenue, both entities get tax benefits. Seems... wrong somehow.

[claybro]

Negative gearing is also used by many rich people to offset the costs of their hobbies. A lot of beach houses, micro wineries, hobby farms for example are set-up as businesses with small commercial arrangements that are never expected to come even close to returning a profit. The owner then gets a very nice tax return because their holiday house made a very large loss.

What, and the beach house, micro winery and hobby farms just appeared by magic? No they are physical infrastructure requiring builders, electricians, plumbers, architects, council planners, rubbish collectors, service station operators, country IGA checkout operators, bank tellers, machinery agents....the list goes on.
Would you rather the "rich" person put their money into some overseas investment fund directly and short cut all this local employment activity?

It's similar to how some business owners set up a private self managed super fund (SMSF) and "sell" the businesses premises to the SMSF. The business pays a lease to the SMSF for the property, the owners get superannuation revenue, both entities get tax benefits. Seems... wrong somehow.

So again, why just kick the business owners or "the rich". What about all the tradies and average wage earners who claim so very dodgy work "expenses" to minimise their tax earning thousands in returns from the tax dept. I would suggest this is just as much a drain on the tax system as what you are referring to. Only difference is the employed trady is not the one who has puts his nuts on the line to borrow money, to start the business and employ people. Point being, every smart person-rich or poor tries to minimise their tax within the law loopholes. Does this also seem wrong somehow?

[Goodsy]

So what we need is a tax system that lowers taxes across the board, removes loopholes so people can't hide money, raises enough money to fund public initiatives, pay for the maintenance of old and construction of new infrastructure and have enough left over to reduce the deficit and put Australia back into surplus.

Or maybe we just need more taxpayers in general

[urban]

What, and the beach house, micro winery and hobby farms just appeared by magic? No they are physical infrastructure requiring builders, electricians, plumbers, architects, council planners, rubbish collectors, service station operators, country IGA checkout operators, bank tellers, machinery agents....the list goes on.
Would you rather the "rich" person put their money into some overseas investment fund directly and short cut all this local employment activity?

Then why not make private residences tax deductible. Then everyone who works will spend more money on physical infrastructure. Think of how many builders, electricians, plumbers, architects, council planners, rubbish collectors, service station operators, country IGA checkout operators, bank tellers, machinery agents etc would be employed then!

The trickle-down theory has been shown to be bulls%#$ time and again. The majority of extra money in the pockets of the lower paid ends up being spent in the local economy, while extra money in the pockets of the wealthiest is more likely to end up overseas.

GoodSmackUp is right. We need a tax system that lowers taxes across the board and removes loopholes.

[claybro]

[quote="urban"]Then why not make private residences tax deductible.

It already is in the form of first homeowners grants and stamp duty concessions for new constructions. Despite what you are being sold by one side of politics, they are well aware of the benefits of trickle down economics particularly when it comes to new dwellings.

[urban]

Stamp duty concessions are in the order of $15k at time of purchase only. Tax deductions on a hobby farm or beach house can be $100k per year or more.

[claybro]

Yes but how many in reality are claiming $100000 per year in tax deductions for their beach house or hobby farm, as opposed to the number of new dwellings obtaining the first homeowners and stamp duty concessions? There are probably whole beachside communities built on tax avoidance via negative gearing. But someone had to construct all those beachside McMansions, the brickies, roofies, painters.. the roads, the power, the sewers. Those tradies pay tax. My point being that everyone is quick to bag the supposed rich for using negative gearing to their advantage but quite happy to accept hefty concessions to other forms of tax "avoidance" themselves. Negative gearing, stamp duty concessions and first homeowners grants, as well as tax deductions are used just as much by the average punter as they are by the rich. Why discriminate If they are used to encourage local building and business, therefore employing more taxpayers. Loss making investments that generate no local activity is another matter entirely, but not what was being bagged here.

[Wayno]

The trickle-down theory has been shown to be bulls%#$ time and again. The majority of extra money in the pockets of the lower paid ends up being spent in the local economy, while extra money in the pockets of the wealthiest is more likely to end up overseas.

GoodSmackUp is right. We need a tax system that lowers taxes across the board and removes loopholes.

Consumption tax, ala GST.