Budget

Thoughts on the Budget (Federal, not the $3 one    ).

Please keep answers to the topic and polite, not political.

I'll wait and see what is in it first.

Something has to be done about the rate of growth of the debt but I think the problems include
- too much spending with a significant amount on non-productive or inefficent expenses included a bloated public service, over regulated industrial systems
- too much tax free money being handed out - FTB's, child care, "middle class welfare" etc
- too many people pay no nett tax - the tax base must be widened
- use of tax minimisation strategies are getting wider - e.g. trusts, family companies, SMSF that result in lower tax levels being paid, income splitting etc.

I am in favour of spreading the GST to include education and medical services. A problem the government has got is that most low income earners e.g. pensioners pay little or no tax so they cannot be compensated by a reduction in tax if the GST goes up or includes fresh food that is currently exempt.

Another thing I would look at is the tax free status of superannuation once a pension has started. I find it ridiculous that a person with a million dollars in super at aged 65 can earn $70,000 a year and not pay a cent in tax and get a health card.

The trouble the government has is that once they give something away when times are good, people regard it as a right and get upset if they lose their entitlement when things get tough. In hindsight, the Howard government was too generous and the Rudd/Gillard one too profligate.

Personally I think this focus on government debt is plain ridiculous. Our deficit is minimal compared to most other nations.

When I see my middle-class McMansion owning facebook friends ranting about the government's out of control spending it makes me shake my head in disbelief.

They are the real threat to the economy IMO:  

http://www.abc.net.au/news/2014-05-07/household-debt-the-big-threat-to-australian-economy/5435844

People are spending far beyond their means, aspiring to large scale possessions that our parents and grandparents would never have even considered and getting themselves up to their eyeballs in debt to 'live the dream'.

Then they cry foul over the fact that they both have to work and receive no assistance for childcare, that living costs are too high, blah blah blah.

I reckon middle class welfare should be means tested against household debt personally, and those who are trying to make their way while still living within their means should be rewarded with assistance rather than those who get themselves into difficult situations and then expect the government to bail them out of it.

UncleHuey wrote:  
- too much spending with a significant amount on non-productive or inefficent expenses included a bloated public service, over regulated industrial systems

Interesting point this one UH.

As someone who works in the public service, all be it in local government, I find that the systems of accountability have now become so extensive and laborious that productivity is suffering severly.

IMO we now have a system whereby we have become so accountable, that we have ceased to be productive.

What do I mean by this?

I work at a manager level and I would estimate that 40-60% of my time is spent being just being accountable. Paperwork, forms, tenders, workplace health and Safety, leave forms, records management, budget requirements etc., all in triplicate.

I'm not saying all of these aren't necessary, but the scale has just got beyond a joke.

So the ratepayers of my local govt area are paying say $40k a year of their public money for me to make sure I don't make a mistake and cost them public money. That doesn't add up.

We need to be smarter about our public service processes IMO and do better at weighing up the risks versus the costs it chews up avoiding them (risks to personal health are in a different category of course).

Couldn't agree more, GN.

Gingernuts wrote:

We need to be smarter about our public service processes IMO and do better at weighing up the risks versus the costs it chews up avoiding them (risks to personal health are in a different category of course).

And not just the public service.
This is one of my frustrations from a private sector point of view too.

Gingernuts wrote:Personally I think this focus on government debt is plain ridiculous. Our deficit is minimal compared to most other nations.

When I see my middle-class McMansion owning facebook friends ranting about the government's out of control spending it makes me shake my head in disbelief.

They are the real threat to the economy IMO:  

http://www.abc.net.au/news/2014-05-07/household-debt-the-big-threat-to-australian-economy/5435844

People are spending far beyond their means, aspiring to large scale possessions that our parents and grandparents would never have even considered and getting themselves up to their eyeballs in debt to 'live the dream'.

Then they cry foul over the fact that they both have to work and receive no assistance for childcare, that living costs are too high, blah blah blah.

I reckon middle class welfare should be means tested against household debt personally, and those who are trying to make their way while still living within their means should be rewarded with assistance rather than those who get themselves into difficult situations and then expect the government to bail them out of it.

r

Well said I couldn't agree more.

Australia's credit rating at the moment is AAA (triple A) as good as can be.
These ratings are given by international credit rating agencies and are a guide as to a governments credit worthiness, not given to a bad payer of debts.
Also interest rates are lower than ever in my lifetime, not something you would be privelaged to in a struggling economy.

sorry boys & girls, they'll do what they want so i don't care & all i care about is Glenelg beating IATW & Mickyj's team on Sunday, not that we have much hope

bayman wrote:sorry boys & girls, they'll do what they want so i don't care & all i care about is Glenelg beating IATW & Mickyj's team on Sunday, not that we have much hope

You'll be looking for the other "Budget".

Gingernuts wrote:

UncleHuey wrote:  
- too much spending with a significant amount on non-productive or inefficent expenses included a bloated public service, over regulated industrial systems

Interesting point this one UH.

As someone who works in the public service, all be it in local government, I find that the systems of accountability have now become so extensive and laborious that productivity is suffering severly.

IMO we now have a system whereby we have become so accountable, that we have ceased to be productive.


We need to be smarter about our public service processes IMO and do better at weighing up the risks versus the costs it chews up avoiding them (risks to personal health are in a different category of course).

Very well put GN. A boss of mine used to use a car spinning its wheels analogy - lots of action, very little progress. The country need an effective and efficient public service and it does appear we are clogging it with paperwork whose main purpose seems to be to create work for other paper shufflers.

The current level of public debt is not a major concern, it is the rate it is growing that is an issue. We are locking ourselves into some very expensive programs. NDIS and Gonski will add close to $20 billion in debt by the end of the decade and then keep increasing and the NBN is looking more like costing $90 billion rather the estimated $40. With an ageing population requiring more spending in welfare and medical costs (which are 2 of the fastest growing and expensive areas anway) nett public debt is set to skyrocket. I think the fact that it has gone from zero 4 years ago to a projected 400 billion by the end of the decade is the concern.