54. Everything

Hi. I am Greg and it has been 4 weeks since my last Grumble.

Please excuse the Catholic confessional introduction especially as it’s the Protestants now apologising because some of its Knox Grammarians took the motto of “doing the manly thing” the wrong way and were ignored or allowed to go on abusing children – probably for the same reasons that the music industry did not take Gary Glitter at his word when he asked if his pre-pubescent audience wanted to touch him there. We look forward to a nuanced government response which presumably will see the expansion of the state government Screening Unit to cover musicians and Presbyterians.

Meanwhile, there has been outrage from the anti-some-capital punishment campaigners over two Australians facing execution for drug smuggling in Indonesia. Now apart from the collusion of Australia’s police force in this debacle, I simply wonder why these two lives should mean so much more than the thousands each year whose judicial murder by our major trading partners and friends goes unremarked?

And on the subject of nationalism and dodgy analysis, we had the government’s Intergenerational Report trying to make us into the unlucky country which apparently will no longer be able to afford the health and welfare services of a decent society. And on that subject we’ve also had the McClure report into the future of welfare which either seemed to have forgotten about independent young people or contained a fairly radical proposal to cut off income support payments for any young person under 22 who is not residing in the family home (presumably surrounded by a white picket fence).

I’m still not sure about what is planned, but talking of government reports, there was also the state government review of South Australian taxes which led to a one-day media frenzy about one proposal while the rest of the thoughtful Discussion Paper got forgotten.

But of course it is a good time to forget things with Mad March’s Festival for the arty, Fringe for the hopefuls, cars that go brmmmm for the masses, and Womad for the self-righteous internationalists who can pretend to be African, Cuban, or Romanian for a day (or at least an hour).

And there, under introduced trees and over-abundant flying foxes we had a not very funny comedian ignoring structural power and vested interest and patronisingly telling us that we just need to talk to people differently about climate change.

But that was ok because if you live where I live, you might not have got to the famed parklands anyway because the government decided to repair the rail lines over the long weekend – because let’s face it our public transport system is only really for getting people to and from city offices on workdays? I mean, it is not like anyone would ride to Womad or anywhere else and want to catch a train home.

Much better to drive, particularly as the head of our Motor Accident Commission wants to make it safer for us by removing all trees within sight of any road because apparently these arboreal terrorists are leaping out in front of cars and adding to the road toll.

What was that about climate change?

I am Greg, I am grumbling.

This Grumble can be heard online or by podcast.
First Broadcast: 10 March 2015

34. Taxes and GST

Hi. I am Greg and I want to grumble about taxes. It’s a familiar theme – in fact, my first Grumble here was that constantly cutting taxes erodes the revenue base and leads to cuts in vital services.

But since then the political debate has moved. The Federal Treasurer is now saying taxes will never cover projected levels of spending, the Head of Treasury is openly canvassing increasing the GST and the Governor of the Reserve has also weighed in on the tax reform.

Of course this is a bit weird when the government is pursuing the abolition of the mining super-profits tax and pushing to sell-off assets like Medibank Private – which, while boosting the coffers in the short term, would leave a revenue hole over time.

However, at least we are beginning to have a debate about how we fund services, without pretending there is a magic pudding that can provide comprehensive government services with low taxes.

But I am still grumbling because it remains an economists’ debate – devoid of analysis of power and the impacts on real people who will lose income support or services.

At least many business groups have moved on from dreams of low or no taxes and are calling for a comprehensive overhaul of the tax base. But hey surprise, they favour increasing the main tax that business doesn’t pay – the GST.

But if we were to increase the GST, who would be most affected? Generally consumption taxes impact most on the lowest income earners as a larger proportion of their household budget goes on consumption, rather than savings or investment.

However, it is not that simple.

GST revenue could be increased simply by raising the rate – say from 10% to 12%. Or it could be increased by extending the range of items it applies to. One option mooted is to extend it to health costs. This would impact disproportionately on people living with chronic health conditions, many of whom are on low incomes.

By contrast, extending the GST to education would be progressive as those who can afford private education would pay more than low income households in the public school system.

And there could be other suggestions – what about increasing the GST rate but removing it from necessities like utilities. That would ease the burden on low income households.

But I suspect that progressive tax change is still not really on the agenda.

I am Greg and I am grumbling.


This Grumble can be heard online or by podcast.
First Broadcast: 8 April 2014

15. Climate Changes and Taxes

Hi. I am Greg and I want to grumble about climate change and taxes. Ok, this is a recurring grumble, but it is particularly topical this week as Tony Abbott’s legislation to scrap the carbon tax is introduced in the Federal Parliament. This was a flagship policy of the election campaign and we were promised that it would reduce electricity prices and ease cost of living pressures – his Bill to reduce our bills.

Except that now key business leaders are saying that we won’t see any big price reductions. Where were these voices during the election campaign I wonder? And where was the reporting of the current wave of economists who think that putting a pricing carbon is more effective and efficient than the proposed direct action approach to reducing carbon pollution. And that is without even questioning the manifestly inadequate pollution reduction targets of both schemes.

But the hip pocket question remains: will our power bills come down if we are without a carbon strategy – sorry, I mean a carbon tax? I don’t know, but I do know that carbon prices were always only a small proportion of the massive recent hikes in energy prices. Adelaide’s electricity prices went up 18.2% in the quarter immediately following the introduction of the carbon price, but only about a quarter of this increase was down to the carbon tax and the general inflation rate increased by only 1.5%. For most households, and particularly for the poorest households, this increase was more than covered for by the government’s compensation package.

The good news is that even if the carbon tax is scrapped, we will keep the compensation package. It is currently worth about $7 a week for pensioners, less for some other income support recipients. It’s not much, but it seems only reasonable to keep it after last week’s announcement that the Federal government would give the richest households a huge bonus by dropping the proposed tax on superannuation earnings over $100,000 a year (ie. for those whose super-pot is a couple of million dollars). And they announced that at the same time as announcing the dumping of the rebate support for low income earners’ contribution to super.

Who knows, after that bit of robbing from the poor to give to the rich, maybe the government figured it owed the poor one.

Shame about the planet though!

I am Greg, I am grumbling.

This Grumble can be heard online or by podcast at https://radio.adelaide.edu.au/gregs-grumbles-15/

First Broadcast: 12 November 2013

13. Payroll Tax

Hi, I am Greg and I want to grumble about tax, and payroll tax in particular. Taxes are never popular, but payroll tax is particularly unpopular, being labelled as a tax on employment. However, given that it helps pay for vital state government services, the Productivity Commission speculated that it might be better accepted if it was called a hospital or schools levy.

But in any tax debate, we have to remember that Australia is not a high taxing country by world standards – the 4th lowest in the OECD, and South Australia is not a high taxing state. As a share of the economy, state taxes are about the same as the national average, and per head of population state taxes in South Australia are $300 a year less than the national average.

However, state taxes – especially payroll tax – have long been a bugbear of business and this week the Liberal Party promised a big cut in payroll tax from 2015 if they are elected in March.

I think payroll tax does need an overhaul, but I am not sure I would have done it the way the Liberals have proposed. They are not promising to cut the rate of tax, just to raise the threshold for when businesses start paying the tax. 8,000 more businesses will be exempt from the tax, but any threshold creates a tax disincentive for businesses expanding over the arbitrary threshold. I would have preferred a broader based tax with a lower tax rate for all businesses.

But I also think that simply playing with rates and thresholds is a missed opportunity for tax reform. One of the biggest problems facing workers today is insecure work. Far too many people are struggling on short term contracts or in casual employment. This creates uncertainty and stress for staff, and limits their ability to access loans, housing and to plan and build a secure life. If payroll tax relief is called for, wouldn’t it be better to offer it to employers who offer more secure forms of employment than to employers who maintain workers at the margins but who sneak in under an arbitrary threshold?

Obviously this proposal needs discussion and modelling of its effects – not least because many low paid casuals rely on the loading in their pay to make ends meet. But if we are going to have an election based just on cutting taxes, then I am going to grumble.

And looking at the opening pitches of the election campaign, I am Greg, and I am grumbling.

This Grumble can be heard online or by podcast at https://radio.adelaide.edu.au/gregs-grumbles-13/

First Broadcast: 29 October 2013

1. Taxes

Hi, I’m Greg and I want to grumble about taxes. I know everyone grumbles and about taxes, and nobody wants to pay them, but I want to grumble about people not paying tax. We are about to have 5 weeks of an election campaign with politicians mostly promising to cut or abandon taxes.

But taxes are important. They pay for our schools, universities and hospitals, for our roads, trains and buses, for our police and our public spaces, for environmental protection and for sports and big public events. And dare I say it, they pay for defence and border protection! Taxes also pay for social services for those in need, and they pay for pensions and for a safety net for those who can’t support themselves. In short, taxes underpin the social fabric of our society.

But you would not think that listening to the public debate. Just look at what happened recently when the government moved to close a rort in the Fringe Benefits Tax. Outcry. It was simple proposition – that people should not get a tax benefit by having a car paid for by their employer. Everyone else has to earn the dollars, pay their tax on that income and then buy a car. But some people got a car as part of a salary package, and that was counted mostly as a work vehicle and not as part of their income. And now, oh my god, they have to keep a log book if they want to claim it as a work vehicle, or pay tax the same as everyone else as part of their income. Howls of protest from the parasite industry that has been built around this rort. Unfair, the end of the car industry and civilisation as we know it!

Please.

But there will be more of this stuff during the election. So what I want is every time a politician talks about cutting taxes, I want them to name the service they will cut, the homeless or domestic violence shelter that will shut, the species that will die, the train that won’t run or the section of road that won’t be repaired, or the social security payment which will fall further behind the cost of living. And then we can have a real grumble about taxes.

This Grumble can be heard or downloaded at: https://radio.adelaide.edu.au/gregs-grumbles/
First Published: 6 August 2013