Budget 2018

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

  1. Danish

    Danish Referee

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    The only way a UBI works is if it completely replaces all other forms of welfare. Just a straight payment of a set amount into every citizen’s bank account at a set interval.

    Once you start playing around with it to decrease/increase it based on income, circumstance etc, you end up with all the same garbage administrative waste that any other welfare system has.
     
  2. butchmcdick

    butchmcdick Guest

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    Suddenly debt is not being spoken about
     
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  3. Bandwagon

    Bandwagon Moderator Staff Member

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    And thank f**k for that.

    Here we are with a budget that is still in deficit , yet it's built on tax cuts across the board, and little in the way of savings. What we have instead is a reliance upon growth to increase revenues.

    Of course there are no howls of "debt and deficit disaster", from any quarter.

    If anything demonstrates the purely political reasoning behind such calls when we had a government of a different flavour, it is the dearth of them now and the direction of the current government's budget.

    And why?

    Because as has been argued repeatedly, it doesn't really matter all that much, The government is borrowing money at historically low interest rates, they are expecting GDP growth and inflation to rise, which will basically wipe out the value of interest paid on debt, or at the least reduce it to the point it is immaterial.

    Hence they have also budgeted for large increases in infrastructure spending, which I'm certain they believe will add greater value to our economy than the drag of the resulting interest payments.

    For those that still want to bang on about big numbers when it comes to interest payments, here's a neat little illustration where we are sitting historically on that score.

    https://data.worldbank.org/indicator/GC.XPN.INTP.RV.ZS?locations=AU

    That's interest payments as a percentage of revenue for the last 40 odd years.
     
  4. Spanner in the works

    Spanner in the works Bench

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    My issue isn't the volume of debt per se, nor the interest, but rather the fiscal position we are in to respond to the next crisis. Does any one trust Treasury's estimates - or any economists estimates for that matter - when we're talking about a ten year tax policy?

    No one can possibly predict what will happen geopolitically or in the world economy in 2 years time, let alone 10, and with our lack of ammunition to respond to any crisis - a housing bubble pop, US or Chinese debt problems, US unemployment, a long-term US Government shutdown, a global trade war, Iran and Israel, etc - I don't think this 10 year package should go through without some very serious scrutiny.

    The problem I have is when we come to say (either hypothetically or in the next crisis):

    "Right, we're in the shit, let's borrow some money to get capital flowing through the economy to keep unemployment with a 6 in front of it, and our YoY growth with a 2 in front of it."

    Are we actually in a place to do that? Can we keep unemployment stable and growth steady in the next crisis? When we do borrow, what happens after borrowing costs increase when we lose a notch or two from our credit rating? And with the additional capital flowing through the system, how does the RBA respond in terms of our interest rates - and in the context of our extraordinary private sector debt levels - how many people are left in deep financial stress?

    To me, without raising funds to pay for an income tax cut, then you need to ask questions on whether this is the right move in the context of our current fiscal situation, and some real risks in the global economy that could cause more than a sniffle. To me, given this new found cash that everyone has - $10 a week and $140b over ten years - it would be better to not lower taxes for middle and upper class workers, and invest it directly in Australia by lowering debt instead of seeing that cash shift offshore.
     
  5. Bandwagon

    Bandwagon Moderator Staff Member

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    That's all fair enough, it depends I guess on how you see the mid term economic outlook. For mine I am neither particularly concerned about debt, and I am in favour of lowering personal taxes.

    Ultimately, I think the main proviso in the short term is to display the ability to return the budget to balance. Which in truth means attaining a believable surplus within the forward estimates.
     
  6. Surely

    Surely Moderator Staff Member

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    Depends what you spend it on, productive infrastructure is good, pink batts and $900 cheques not so much.
     
  7. Spanner in the works

    Spanner in the works Bench

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    Nearly made that point earlier. Fundamentally agree with Rudd's approach of pumping money into the economy, but it has to in the right volume and format. In addition to infrastructure, would've preferred:
    • instant asset write offs in some scale; and
    • The establishment of a credit system where if you pay for something at certain Australian businesses - rego, power bills, water, groceries, insurance, etc - you provide the invoice to the ATO (or wherever) and they refund you to a certain amount.
    At least that way the money (largely) stays local, or there's something to show for it.
     
  8. Jimbo

    Jimbo Immortal

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    Precisely

    And that has been the conservative case all along, despite the left's attempts to dishonestly redefine it as 'all debt is bad'
     
  9. Spanner in the works

    Spanner in the works Bench

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  10. Surely

    Surely Moderator Staff Member

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    Power prices are double what they should be

    You want to see growth get rid of that anchor on the economy
     
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  11. Jimbo

    Jimbo Immortal

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    'But poles and wires...'
     
  12. Surely

    Surely Moderator Staff Member

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    Yeah and state govt cash cows.
     
  13. Spanner in the works

    Spanner in the works Bench

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    Food is number two on the ABS' household expenditure stats (behind housing). Get me cheaper Mongolian lamb and I'm there.
     
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  14. SpaceMonkey

    SpaceMonkey Coach

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    You do the latter simply by adjusting tax brackets. So over say, 80K your additional tax paid equals the UBI making your total net income the same as what you’d have received before.
     
  15. SpaceMonkey

    SpaceMonkey Coach

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    The batts were badly implemented but given power prices are your constant bugbear and they were largely intended to reduce power bills I’d have thought you’d have been in favour.
     
  16. Surely

    Surely Moderator Staff Member

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    Lol yeah let's insulate that abattoir that'll reduce the costs
     
  17. Bandwagon

    Bandwagon Moderator Staff Member

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    Lolz

    What a load of horse manure.
     
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  18. cerberus

    cerberus First Grade

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    the biggest anchor on the economy is a government . that does not implement evidence based policy .
    time to stop bullshitting sures and get out of the way .the libs have f**ked us for far to long .
     
  19. Surely

    Surely Moderator Staff Member

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    Just got my first bill with the new 5kw system added to the existing 2kw system

    Ergon don't want to pay the lousy 10c per kWh on 772 kWh

    Saved $60 per month, you can stick your green shit up your arse.
     
  20. cerberus

    cerberus First Grade

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    So your crying because the libs cut your subsidy for doing the right thing .
    They won't build another coal fired plant because their not cost effecient .
    Mate and how good has privitization been .
    Cheers
     
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