Budget 2018

Discussion in 'Four Corners' started by I Bleed Maroon, May 8, 2018.

  1. madunit

    madunit Super Moderator Staff Member

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    The amount of savings you think it will generate are not worth the hassle in the first place, especially given they are understaffed as it is.

    Perhaps blatant ignorance isn't the .... nevermind.
     
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  2. butchmcdick

    butchmcdick Guest

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    Hello. Hello hello how low
     
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  3. Spanner in the works

    Spanner in the works Bench

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    Sure, as long as the majority stays in Australia, it's at the right time in the context of current economic situation, and as long as we are putting in place the safeguards to protect us against a sniffle - or indeed influenza - in the global economy.

    Are we doing that? Our interest rates are at a record low, we are only just holding on to our AAA rating, and we are holding huge volumes of debt - both public and private. What to do if there's a local or global recession? We have no ammunition.

    Here's a chart. It's US unemployment figures since 1948 from the Department of Labor. It's one example of what is a significant risk over the next 18 months. When it pops - and it is primed to do so - it won't just be a sniffle:

    https://data.bls.gov/generated_file...LNS14000000_1948_2018_all_period_M04_data.gif

    This spreadsheet, from the Bank of International Settlements, shows debt to GDP ratios updated to March 2018. If we take the number from 30/09/2007 in column IS, China's debt to GDP ratio was 147.4 per cent. If we look at the same point in September 2017, it was 256.8 per cent.

    The IMF, at the start of this year, looked at China's credit boom. It also compared this boom against other booms, where credit-to-GDP increased by more than 30 per cent over the past 5 years, identifying 43 cases where it has done so. In just 5 cases it ended without a major growth slowdown or an immediate financial crisis.

    China's debt has increased since 30/09/2012 to the same point in September 2017 by 65.4 per cent.

    The problem with China, at least one of, is that it is a middle-income country: its GDP per capita (PPP) is just over $15,500, as compared to Australia, which is just over $46,000. The argument will go that Australia can service its debt just fine. But there comes a time when China's debt bomb potentially explodes, and considering this income base, one might rightly ask how do they recover and how do we respond? They are our biggest trading partner after all, and by quite some way (around 20-25 per cent for China, and around 10 per cent for the US, from memory).

    That's our two major trading partners. Then there's other risks like the Iran/Israel issue, Putin, the South China Sea, an oil shock, global debt, including within the corporate sector, etc etc. You know what the median bond rating is now? BBB-. It is literally one notch above a 'junk' rating. No one knows what's going to happen when QE ends, but given the debt issues we have, eventually someone or some group is going to be left holding a stinking bag of excrement. China holds 28 per cent of world debt stock.

    Personally, on a middle-income salary, I want us to start building up that buffer for the next crisis, rather than giving me what amounts to two cups of coffee each week. Give my share to the low income families where it really will help them, and don't hold them to ransom so you can get your full package through parliament, while also locking in future governments to a huge loss of revenue when we just might need it. When that crisis hits we need to be prepared - and we aren't.
     
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  4. Surely

    Surely Moderator Staff Member

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    Well that is true, unfortunately a lot of it will go overseas because we don't produce anything anymore

    Until we start to sort out things like bureaucratic red tape , and things like energy costs we won't anytime soon either.

    When you look at our dollar it truely is overvalued, we are a massive welfare state that produces nothing, the stuff we manage to sell overseas is the subject of numerous environmental challenges everytime a company wants to invest.
     
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  5. Bandwagon

    Bandwagon Moderator Staff Member

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    I think it's worth noting that regardless of how the tax package passes, no future government is "locked in" to honouring it.

    About all there is there is a political time bomb should circumstances warrant an easing back or removal of tax cuts , particularly given that some of these cuts are scheduled to be implemented potentially three elections from now. That's a lot of water to go under the bridge.

    Realistically, it's anything that far out can only be viewed with a cynical eye, as pretty much politics rather than economics, I mean it's out beyond the forward estimates, so there is not even any costings contained within the budget.
     
  6. Spanner in the works

    Spanner in the works Bench

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    Here's Iran and Israel potentially kicking things of with an Iranian rocket strike on the Golan Heights:

    https://www.smh.com.au/world/middle...first-direct-attack-ever-20180510-p4zegd.html

    Aren't we looking at spending quite a lot of money in the next few years to meet our IEA requirement of a 90 day strategic reserve to avoid the impact of an oil shock, a blockade in the South China Sea or Strait of Hormuz, etc?

    What will this situation, plus the addition of Iran and Israel, do to oil prices, both here and globally? Right when OPEC and Russia are pulling back production and oil prices are already up 60 per cent since June.

    We have under 50 days of fuel in reserve - less than 21 of which are crude oil and fuel. The last time I checked the IEA stats a week or two ago, it was 47 days in total, and you know how much of that was held by the public? Zero. Not even one day's supply.

    But it will be okay, because we can pay market prices while freight sits on the dock.

    I don't want taxes cut. I want that revenue to be used instead for issues like this.
     
  7. Surely

    Surely Moderator Staff Member

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    That's very shortsighted, what about all the CO2 emissions reduction ?
     
  8. Surely

    Surely Moderator Staff Member

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    I will double the tax cut amount and pay the debt off quicker

    Great reply bill

    Who's buying it
     
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  9. Bandwagon

    Bandwagon Moderator Staff Member

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    Are you buying the tax cut ScoMo's giving you in 2023?
     
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  10. Surely

    Surely Moderator Staff Member

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    Nope because he won't be there
     
  11. Bandwagon

    Bandwagon Moderator Staff Member

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    So where does that leave us?

    I'd say in terms of reform of the tax system, that there is the crux of it, because it basically eliminates bracket creep for many years for a shit ton of tax payers. That's the very same bracket creep that governments have relied upon since the dawn of time to to eventually cycle budgets into surplus.

    So, I'd say that there two things in play here politically, one that the government have in their own forecasts given Shorten 80 Billion to play with now as long as they (the opposition} oppose the governments corporate tax cuts.

    And two, that the government have in their long term personal tax cuts attempted to place a political land mine for Shorten, by trying to sell it as "future certainty" for tax payers who are a big part of the swing demographic. Because if he is to differentiate the opposition from the government, and be remotely believable, he will have to oppose them
     
  12. Jimbo

    Jimbo Immortal

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    Shorten also re-laid his own land mine on Thursday night - his absurd 50% RET

    Don't underestimate how unpopular that will be outside of inner-city Sydney and Melbourne
     
  13. Bandwagon

    Bandwagon Moderator Staff Member

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    That may or may not be the case, however I think you may over estimate how the voter demographics influence how hard this hits either of the majors,

    There's still plenty of support out there for a strong RET, it obviously isn't there in coalition heartland, the devil will be in how it goes down in western Sydney, and the outer rings of Melbourne and Brisbane.

    After 5 years of the green energy boogey man from the government, with energy prices still constantly trending upwards, it may well be that that voters just decide it aint green energy that is the culprit here after all.
     
  14. Surely

    Surely Moderator Staff Member

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    I’m glad I’ve got solar, it really helped running the heating last night.
     
  15. Bandwagon

    Bandwagon Moderator Staff Member

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    That's nice.

    I suppose it was of no use in summer with the cooling?
     
  16. Surely

    Surely Moderator Staff Member

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    It’s great who needs coal.

    The beauty is even in winter in late autumn it still seems to be producing decent power between 10am and 4pm
     
  17. Smack

    Smack First Grade

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  18. Spanner in the works

    Spanner in the works Bench

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    ScoMo sounds like he is about to explode or go postal. I don't think I've ever seen an unhappier Treasurer after a Budget?
     
  19. SpaceMonkey

    SpaceMonkey Coach

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    Seriously does anyone on a middle income give a f**k about $10 a week tax cuts? It’s a joke and the money would be better off spent on giving Newstart a raise (100% return back into the economy there) where it would actually be appreciated by people for whom $10/week makes an appreciable difference.
     
  20. Spanner in the works

    Spanner in the works Bench

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    Or paying down the debt, which costs us $15-20b each year in interest alone. Need to raise funds to combat the revenue change so that debt doesn't increase. Don't get that debt under control for the next crisis, we'll all need Newstart.
     
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