JohnB2 December 17, 2014 at 2:34 am

Firstly to the other JohnB, and I’ll call myself “JohnB2” from now on to prevent confusion. I honestly have no idea at all what delusional world you have stepped out of but I’ve never been here before. And if not here then it would be the height of insanity to even assume that another JohnB that you met a year ago on a random site on the internet was me. I can only presume that you have no need for exercise with all the jumping to conclusions that you seem to indulge in.

To the main points that many have brought up. I have to agree about the international taxation, it’s not just Google, but Apple and a host of others. I’m not sure how much is covered by international rules and treaties but frankly, if the profit is made here it should be taxed here. This will mean a major overhaul, Apple use the “licencing fees” bit where the Oz branch has to pay exorbitant fees to Ireland and those licencing fees are tax deductible. There is nothing wrong with this per se and licencing fees and royalties are part and parcel of doing business however the exploitation as a loophole has to stop.

Some have mentioned Super, but taxing that is not an answer, ever. The long term problem we have (and this has been known for 30 years at least) is that with an ageing population the number of pensioners compared to taxpayers is going to seriously blow out. When pensions were brought in around Federation (some States already had them) you worked, retired at 65 and were dead by 75. To pay for it we had a strongly growing population and some 5 taxpayers per pensioner. This is no longer the case and will get worse, I’ve seen projections that as soon as 2030 we will be down to 1 taxpayer per pensioner. Obviously unsustainable. Super is the way out of the trap, the more people who can fund their own retirement from Super the more money that is available for those who cannot fund themselves. Rather than a cash cow to be milked it is a tree that requires nurturing. Imagine a world where we had eliminated the need for pensions?

And it’s easy to poke “the rich” who have lots in their Super, so long as you don;t understand the concepts involved and never do the maths. I think that most would accept that a pension of 2/3 the average weekly wage would be an acceptable level of income after retirement. (And it makes the figures easier so I’ll use it.) With the current average income at $75k per annum, 2/3 would be $50k. Assuming a 5% interest rate on your capital, how much money do you need to invest to return $50k? Easy $1 Million. So if you have $1 Million in Super you can retire on $50k per year which sounds fine until…

Inflation eats away at your income. If inflation runs at 3% then in 24 years your $50k will only have the buying power of $25k today, which won’t be good as your medical expenses will be going up and up as you get older.So rather than $1 Million you actually need more to inflation proof your income. $50k this year, $51.5 next year etc and this is just to tread water so to speak.To add that $1500 next year means that instead of $1 Million to provide your income you actually need $1,030,000 and this figure has to increase each year as well. The requirement is that $80k per year (in initial dollars) has to be earned in interest to pay a $50k pension and inflation proof that income.Still using a 5% interest rate this means that $1.6 Million is required today to fund a retirement income today of $50. Still think that $2 Million in Super is a lot of money?

Sorry for the length but this is important for our children and grandchildren. Unless we want to bequeath them a nation where they work all week to provide the pension money for somebody else and there is literally no money for roads, schools, education or anything else we need to act to get as many people as we possibly can to self fund their retirement. And that also means closing the hole that says you can take your Super payout, blow it on world cruises or whatever and still get your pension. Above a certain line that’s it. You’re self funded and if you blow that’s your problem. This might sound harsh, but that is why we gave Super funds tax breaks in the first place, to provide the individual retirement income.

Similarly it’s nice to hit the miners but let’s serious. JohnB that submission performs a lie of omission by restricting itself to “Tax” and not including “Royalties” to imply that mining companies aren’t paying their fair share. But $2.8 Billion was paid in Royalties and land rents to the Qld Govt this year, WA got $6.176 Billion, a full 22% of the State income was from the mining sector, but they aren’t paying their fair share? People also need to realise that it’s not the amount of income a company earns that is important, but it’s percentage return on investment. A profit of $100 million sounds like a lot (and it is) but it’s not worth the time if it’s a return on a $5 Billion investment. Shareholders are entitled to a return on their money and if they don’t get it they will go elsewhere. If it’s easier to do business in Africa than Australia and provides better returns then they will leave. And they will take 22% of Western Australias budget with them, as well as all that lovely income tax that was paid by their now unemployed workforce. We could tell them to just “F*ck off” but that is generally known as “Biting off your own nose to spite your face”.

There is also the point that spending $2 Billion in diesel subsidies to make sure that a sector that provides thousands of jobs and at least $8 Billion in Royalties plus other taxes is a good deal.

ScotchMistery, do you have proof or just rumour that “businesses with over 100 employees” are not in general honest in their tax returns. Dishonesty in filling out tax documents is a Federal crime and should be reported to the ATO. Have you done so? If not, why not? If you have any evidence then it is your duty to the nation to share it with the ATO.

I’m kinda with you on the 457s, they need serious reform to make sure they are used for the purpose stated. The Reort in September suggested changes but there is apparently some problems in the Senate and legislation is being summarily rejected by some persons.

The idea of fining companies who don’t have “enough” trainees is being very free with other peoples money and assumes the correctness of your position. Perhaps if we simply limited the places in useless University courses and gave that money to TAFEs? We are churning out graduates without a thought as to what the market is going to be employing in the future. I remember an article some time ago about a young lady with a PhD who couldn’t get a job with her qualifications. I have idea why she couldn’t find a job, I would have thought that experts in 16th Century German Folk Dancing would be in high demand, but I guess I was wrong. In this I believe it is grossly unfair to put a student into debt, or even if free to encourage someone to waste 4 years of their lives to get a qualification that won’t help them in the workplace. We shouldn’t be creating an over supply of qualified people.

Fully agree on the bank foreclosures. I’d go further and say we should create a new Commonwealth Bank. It should make a profit, but this should be limited, similarly fees and charges should be fully justified. Give people a chance to vote with their feet and put a brake on the runaway fees being charged by the “Big 4”.

I disagree on the Carbon Tax. Aside from punishing those least able to afford it, on ecological grounds it is less than pointless. The only thing that places Abbotts “Direct Action Plan” ahead of Gillards “Carbon Tax” is that it will do exactly nothing for less money. 300,000 people had their power cut off in Germany last year because they couldn’t afford to pay the bills, an estimated 15% of the Irish are in “Energy Poverty” where they are forced to choose between eating and turning on the life saving heat. “Excess Winter Deaths” in England and Wales topped 31,000 in 2012/2013. Was that because old people were frolicking in the snow or because they couldn’t afford to turn on the heat? I think any action we take won’t make a spec of difference except to give people warm fuzzies, but perhaps you could share your knowledge and tell us what difference it would make to Global temperatures if we had a fully functional Carbon Tax. What would we get for shipping billions of dollars to overseas carbon markets?

The tax sheltering and investment properties is an interesting idea, but I suspect the devil would be in the details. As I said earlier I believe in super and collecting properties is one form of that. There is also the point that in many cases those “3 investment properties” are simply 3 more mortgages.

On debt, perhaps you meant “over 15%” rather than under? Our Sovereign Debt is financed by bonds and the majority of those are held by Australians or Australian Institutions. I say the majority because circa $161 Billion are held by foreign investors or Institutions. Who holds them and where is actually immaterial to the point, which is that they represent a loan and interest is paid on that loan. You can’t seriously believe that people are saying “Oh Australia, you’re a nice place, here’s $100 Billion. Pay us back when you can and don’t worry about paying any interest”.

Personally I prefer to measure debt against Govt. revenue as that is what pays it off, not GDP. Nor is the level of debt per se a problem. The problem occurs when debt is combined with deficit. To hold a debt at any level is to freeze it (ignoring inflationary pressures) and this can only be done if the budget is balanced. Pick any level that you want as a target, but if you aren’t balanced when you get there you will go over. Money doesn’t magically appear out of the air. Deficits are funded by increasing the debt. You can of course keep the debt percentage stabilised while having a deficit provided the economy is growing at a fast enough rate, but hanging our economic future on our major partners not having a few bad years is not a smart course of action.

Like many things a National Debt is a necessary evil but I simply think it smart to minimise it. At our current level we are paying some $12 Billion+ per year in interest. That’s enough to fully fund the Federal part of the NDIS. Monies paid in interest are lost to the government and people of this country (except for the shareholders of the companies that hold the Bonds) and we should get better value for our money. A government, like a person can go into huge debt if it’s for a purpose and there is a plan to pay it off but we shouldn’t be increasing debt to pay for everyday ongoing spending. While it’s true that we aren’t as bad as some nations it is also true that all those economic basket cases once stood where we are now and decided not to do anything about it. If we follow their example we will wind up in the same place.

And to keep the McCarthyists satisfied; “I am not now, nor have I ever been a member of the Institute of Public Affairs or the Centre for Independent Studies” 😉

1.30 am. ‘Night. Sleep well