[Redlom Xof]

With the Australian government declaring the 'age of entitlement is over' and initiating cutting funds to education, health, social services and welfare in its budget, we're spending $14 billion on 58 new f-35 fighter Jets and now I found this story ....



"TREASURER Joe Hockey wined and dined world financial leaders at the G20 conference in Washington at a celebration that cost taxpayers $50,000 to fly out ­celebrity chef Shane Delia."

"Despite declaring “the age of entitlement is over’’ in the Budget, Mr Hockey’s own Treasury department paid the TV chef to fly business class and airlift truffles from Australia to Washington DC last month.

"A spokesman for Mr Hockey said the dinner represented “excellent value for money.’’

http://www.dailytelegraph.com.au/news/i ... 6921367229


If labor can't win the next election, they will never win one again. ( Partly sarcastic)

[GandalfTheGrey]

Its a joke. While those at the lowest end have their welfare entitlements hacked and slashed, the middle class is still very much entitled to the greatest rorts of all - tax concessions on superannuation and negative gearing. The budget "crisis" would be solved overnight and then some if these two rorts were fixed.

Its a fucking joke.

[Bounce]

Global ratings agency Standard & Poor’s has warned that Australia’s AAA credit rating could be reviewed if the Abbott government fails to carry through its budget assault in the face of widespread popular opposition.

Summing up the dictates of the international financial markets, the threat provided the headline—“AAA credit rating at risk”—in today’s Australian Financial Review. An accompanying front-page editorial demanded the dismantling of the welfare state erected since World War II.

Removing the triple-A credit rating would make it more expensive for Australian governments to borrow on the money markets, and place a question mark over the country’s financial and banking system, which depends heavily on foreign capital inflows.
In what amounts to an intervention into Australian politics, S&P declared that it would have “some pause for concern” if the government proved unable to deliver its vow to eliminate the $48 billion budget deficit within a decade, because of the deep public hostility that has erupted to last Tuesday’s budget.

Interviewed by the Australian Financial Review, S&P sovereign risk analyst Craig Michaels said there was no “immediate” risk to the AAA rating, but he put the government on notice. He expressed concern that the backlash against the budget could mark a “fundamental shift in the community’s attitude to what they expect from government.”
The opposition to the budget is not a “shift” in attitude, but a strongly-felt resistance to the slashing of welfare entitlements, and the other budget imposts, that will mean destitution for wide layers of the working class, and the erosion of public health, education and social programs.
The more detail that has emerged from the budget, the more the hostility has grown. It is now clear that, in addition to the $80 billion to be stripped from health and education funds to the states over the next 10 years, immediate cuts to hospital, dental and other medical grants of about $3 billion could see hundreds of hospital beds shut down and other critical services terminated as soon as July 1.

Detailed modelling has also shown that families in the poorest 20 percent of the population will experience an average 5 percent cut in disposable income, with some welfare recipients losing up to 15 percent, and the unemployed under 30 losing all income support for six months at a time, while those in the wealthiest 20 percent will suffer a cut of just 0.3 percent.

S&P’s intervention exposes the fraud of the claims by Labor and the Greens that this offensive is driven by an “ideological” obsession on the part of Prime Minister Tony Abbott and Treasurer Joe Hockey. S&P’s warning is the voice of global finance capital speaking: Australian capitalism is no exception to the social counter-revolution of welfare and wage cutting that has been unleashed in Europe, America and worldwide since the economic breakdown of 2008.

“We’re looking for action,” S&P’s Michaels insisted. “We’re looking to see government improve budget performance over the next few years.” If “sizeable budget deficits were considered acceptable at the political and community level, then we might reassess, certainly, government commitment.”

Similar to the rest of the world, Australia is having austerity imposed upon it. Unless there is a quantifiable change in government (labour, lol), Australia will loose a lot. University cuts has continued since Gough Whitlam and it will continue. I face a 100,000+ debt if I do law in the current situation. It will be worse if the budget passes, and I'm sure it will be worse in 10 years. People bemoaning Abbotts' budget seemingly are forgetting that a privatised government will always act this way. Labour/Liberal/Greens/Pup won't save us.

[redcarpet]

Most of the budget won't pass in the Senate. The ALP only approves of one of the main proposals, the income tax increase. But not the rest.

[SolarCross]

The welfare / warfare state is neo-feudalism and is destined for collapse just as old style feudalism did. The serfs were told if they obeyed their rulers they would be looked after but in the end they were betrayed. The tax cows now are told the same and look see they are being betrayed by their masters.

The choice will soon be upon the citizen-serf to either take control of his own life as an individual (laissez faire capitalism) or take control of his own life as an equal member of some commune (communism), being the passive and duped pet of bureaucratic overlords just won't be an option anymore, and good riddance.

[Swagman]

Similar to the rest of the world, Australia is having austerity imposed upon it.

Population demographics dictate that Australia cannot afford the social programs that the last generations have become accustomed to.

The number of active income tax payers as a proportion of the population is about to take a significant plunge.

Australia's population had a significant surge post WW2 (1945 - 1955). These baby boomers are just now starting to hit the retirement age 65. Over the next decade a huge proportion of current income tax payers (mostly high income earners that pay large volumes of income tax) are going to drop out of the workforce and some will draw the aged pension and others although self funded will no longer be paying any significant income tax.

The proportion of working age people is projected to fall, with only 2.7 people of working age to support each Australian aged 65 years and over by 2050 (compared to 5 working aged people per aged person today and 7.5 in 1970).

Source Intergenerational Report 2010

The Whitlam Govt had 7.5 tax payers per retiree to cover the expenses of universal health care and free university education and this is set to decline to 2.7.

Do the maths. Maintaining anywhere near the same social programs is impossible without massive income tax increases.

The children sitting on the shoulders of their parents at last weeks 'austerity' protests are the ones that will be paying double the marginal tax rates that the current tax payers pay unless the Govt cuts back.

That is the budget crisis that is being denied. That is the source of Hockey's declaration that the Age of entitlement is over...

The Govt has done what was required. They have been ultra responsible instead of ultra popularist. If it doesn't act now there will be one hell of alot less social programs in the future.

Unless there is a quantifiable change in government (labour, lol), Australia will loose a lot. University cuts has continued since Gough Whitlam and it will continue. I face a 100,000+ debt if I do law in the current situation. It will be worse if the budget passes, and I'm sure it will be worse in 10 years. People bemoaning Abbotts' budget seemingly are forgetting that a privatised government will always act this way. Labour/Liberal/Greens/Pup won't save us.

It certainly will be one hell of alot worse in ten years....... if the budget doesn't pass.

$100K to a lawyer is chicken feed. Ambulance chasers can make that in no time.

[GandalfTheGrey]

Population demographics dictate that Australia cannot afford the social programs that the last generations have become accustomed to.

Population demographics dictate that Australia cannot afford the tax cuts and tax rorts that neither side of politics is willing to even mention.

The sort of social programs that Abbott is slashing are arguably an essential - and easily affordable given the right prioritizing - component of an advanced first world country. Negative gearing and unreasonable tax rorts are not.

[Solastalgia]

The Aboriginals will be hurt the worst by all of this. Around a half a billion bucks is being cut from their social programs that were hardly existent in the first place. These people are the most dependent on social programs. They have nothing. What little they get from the government is their only life line...now being cut.

[Swagman]

Population demographics dictate that Australia cannot afford the tax cuts and tax rorts that neither side of politics is willing to even mention

I agree...and also tax reform.

Increasing the GST for example is essential but would be political suicide and impossible to get through the unrepresentative swill of a Senate. Our flawed democracy. Govt's are schitt scared of the mob.

An increase of 5% to 15% would give the Govt around an extra $18 Billion PA in revenue after providing $7 Billion in compensation to Welfare recipients.

An increase in marginal tax rates also is inevitable but improbable and also impossible to get through the unrepresentative swill.

The problem of such a policy is what it would do to consumption demand.

The sort of social programs that Abbott is slashing are arguably an essential - and easily affordable given the right prioritizing - component of an advanced first world country. Negative gearing and unreasonable tax rorts are not

Examples? Where do you draw the line?

[pugsville]

GST hits the poor far more than the rich.

While the commonwealth budget deficit was a problem that needs addressing it was well short of a crisis. The Welfare levels of current spending and their growth is very sustainable. Is Military sending at this increasing rate sustainable? The Budget deficit could be addressed in many many different ways, the Abbot government has decided to do so but slashing welfare spending that will live the poor, the unemployed, the sick , the old and disabled worse off. They have labeled the budget as "fair and honest". It is neither. A single young professional earning 150K is not asked to contribute virtually anything. The cuts will in the main hit very hard to those that can least afford it, and often in direct contradiction to what abbot said before the election.

heres a bunch of tax concessions that mostly lets rich people avoid paying tax, not saying all of them should go but there are plenty of areas for significant savings.

- super tax concession $35 billion.
- mining companies diesel rebate $5 billion.
- private health cover tax concessions $6 billion.
- private schools $6 billion.
- negative gearing $13 billion.
- novated car leases??
- major corporations like Apple, News Corp, Google, Starbucks avoiding Australian tax by sham transactions.

http://www.afr.com/p/national/tax_break ... iAKE0WppcI

[redcarpet]

A consumption tax is hard to avoid though. Increasing taxes on income to make the rich pay more isn't going to be 100% revenue guaranteed. Maybe 80%..........

[Swagman]

GST hits the poor far more than the rich.

That would certainly be the case if welfare and low income earners were not compensated from the proceeds of the increase. You need to take into account that it's the poor that get the benefit of the tax revenues that the GST generates.

Arguably the GST captures more revenue from high income earners as they naturally spend more.

Simply put an increase in the GST of 5% to 15% would give the Govt around an extra $18 Billion per year in additional revenue after providing $7 Billion (which is simply 5% of the welfare expense) in compensation to Welfare recipients / poor.

In this situtaion they would be no worse off financially but would receive the lion's share of the $18 Billion additional Govt revenue is then provided in public services.

The GST is broad based and just about all countries will an aging population issue have one of some sort.

A single young professional earning 150K is not asked to contribute virtually anything

That's true, but how much is "anything"? Such a person already contributes $45,000 per year in income tax + potentially another $10K in GST to the tax man?

[pugsville]

Make no mistake, the economy is a resource allocation system, and the the Higher incomes are people who reap most of the benefits from the functioning of the system. My point is the Hokey repeated said that it was tough, hard decisions , "sharing the pain", this budget asks very little of the majority of middle to well off income earners, (and maintains a generous system of concessions to them, that cost MORE than the welfare system) while asking for radical , heavy and substantial cuts to those less well off.

Though through the super concession, novated car lease and negative gearing it's possible that many "high income earners" could well be playing less than the putative tax rate.

Proportionally low income earners spend more of their income. Shifting tax from income tax to GST will shift tax from high income earners to lower income earners. Many high income earners can claim all sorts of "business" expenses.

While compensation is one answer I'm a bit reluctant to make the tax system more complex in general I'm in favour of a much simpler tax system. The one compenstation I would be in favour of is raising the tax threshold. In general I think there are far too many tax deductions and concessions. I think in general they should be minimised.I also think that all income support should be combined into one simple income support payment that focuses on need. While we're at it can we fold the entire job network as just a complete waste of space.

I think Labour have been poor. Both in the election campaign and the budget reply they should have proposed an alternative vision, a way to restore the Budget, there was no "crisis" but there were problems that needed addressing. In the main they have failed to do so. (note the Coalition also failed to deliver any detail on what they were going to do before the election)

[redcarpet]

Abbot resorts to name calling in budget debate.

"Australia's whinger-in-chief" is more of an appropriate description of Mr. Abbot himself. He can't handle criticism.