GST rise - should Turnbull honor Abbott's promise?

Right, let's get back to business.

The GST has to be considered. Should we take it to an election? What do the experts say? Funds aren't flowing into governments sufficiently to fund all necessary infrastructure projects. I suppose we could use the end of the resource boom as an indicator.
Hey, I wonder if governments are using this as a strategy to build business confidence and conjour up a rise in investment. If governments stimulate the economy with extra cash flow seeing private enterprise is unwilling to take the Intitial step, it may just give us a much needed thrust for another 10 years. It's a balancing act obviously but would be interesting what the experts say.

 

Reeking of desperation, you make me giggle Gazza. Sad but funny!

 

Hey slippery,

Nice hear from you, I would be interested to know how you consider the health of the nation with a blanket GST... At present it is almost cheaper to buy ready-made and so called TV dinners than to buy fresh due to the fact these less healthy foods are generally imported at a reduced rate and pass through far less hands to get to the consumer... By placing GST on Fresh foods will price it outside the realm of many who will look to far more unhealthy foods for the family, thus increasing the demand on the health system increasing the cost of healthcare...

I know you suggest removal of taxes and increases in welfare... I just wonder if it is enough???

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And you provide nothing but your own disgusting ignorance, so perhaps you should slither back to your rock... I so nobody supporting YOUR depraved views so I don't think you have anything to talk about...

 

Do governments let the economy run its course? Do we need a readjustment? Is there another recession we need to have around the corner?

Actually it's a great thread M2 to be honest despite the little hiccups along the way. It a thread in which we can start to find answers, but not from self proclaimed experts but real economic experts. This discussion will become intensified very shortly you would think. Maybe, information provided will point to the dangers of increasing the GST and maybe governments will be all a little too happy to continue to increase it. It is obviously a combination of issues and some that have been raised.

 

tv,
yes that would be an interesting start, which taxation system is right and fair.
I believe that food and medicine should be taxed almost (if not) zero, as those are things we cannot live without.
For other goods, we might see a system like they had in France some years back (not quite sure if still in place), where luxury items were taxed at around 30%. E.g., you buy a Merc and you pay for it.
Would it be fair and/or desirable? I don't know, bed time now,
regards

 

Mate you are/have been making a huge fool of yourself. Better go do your home work and give some thought to your school work tomorrow. You have demonstrated time and time again your lack of comprehension of the topics being discussed on this forum. Wake up boy, every adult on this forum can see your childish idiocy.

 

Hi Garry.

Yes food is one of the largest and most difficult considerations moving forward. Not only for the reasons you suggest but also because as the future of trade expands so does the Chinese appetite for fresh Aussie produce, and this will inevitably drive the price of fresh food up. I believe this to be a greater threat than local tax pressure on fresh food, but coupled together could have a crippling effect. This Garry is a much broader conversation and in my opinion very important.

Ideally healthcare would be paid for, but i do take your point on an increase in demand due to poor choices and or no options, thus renewing pressure once again. I do not completely buy the idea that people are purchasing pre made meals because of price, i think laziness plays a large part in this also.

As far as being able to cover welfare increases through increased revenue.
Well you would have to hope that through the abolishment of all inhibitive state and federal add ons that business must endure these days, you would see an increase in business adventure and substantial growth, thus creating unparralleled job creation, and therefore relieving a large portion of the welfare burden that we currently see.

Garry smarter men than me will have to create and debate this, but one thing i know for sure is if we dont do something soon to alleviate the lack of public revenue, we will see a massive reduction in our way of life and our standard of living.

Lets face it a GST increase will happen, no matter how much honest Bill denies it. My only hope is that they debate the pros and cons thoroughly, regardless of how long it takes, and deliver us a fairer and more easily delived system. This should be a thorough overhaul of our tax system, not just a rate hike.

 

Hi TV,

A government has to actually steer an economy, build it, manage and nurture it. Unfortunately we have had a run of governments either unable or unwilling to do so in fear of public backlash, led by an unscrupulous media devoid of ethics. So therefore we have had a decade or more of weak governments letting the economy free wheel, now look where we have arrived.

Do we need a readjustment? TV we are and have been for the last few years experiencing a readjustment, and may do so for a little bit longer. Successive governments have hog tied our economy to the resources sector. When you have all or most of your eggs in one basket, what happens if you drop it? So yes we are currently experiencing a readjustment, and rightly so considering our reliance on resources.

Recessions are part of economies, when you experience growth you will eventually experience contraction, and when contraction is prolonged, you create recession. However that then leads to growth, this with a better tax system is hopefully our near future.

The key is business confidence. Right now private sector is dissolutioned. If confidence can be re installed, growth will invariably follow, but unless some of the shackles are released from business, that confidence will remain low.

 

Slippery,

Just as you point out, laziness is major contributor to buying fresh but we cannot rule out that some fresh foods are being priced out... BUT that is really another discussion which includes the mentality of governments to subsidies exports while not taxing imports...

Smarter men should create and debate this, the problem is we are talking about the current ALP/Greens/Coalition and frankly I don't see any. I must say I have been biased away from all sides of politics at present since ALL have shown that propensity of popular politics when at the present time hard decisions that are most unpopular need to be made.

I know GST will need to be raised but I absolutely believe that Government MUST balance the books before attempting to simply gather more revenue from the people to cover their wasteful ways. The ALP continue to remain on a spending spree in a hope to win back the electorates and the Coalition are not prepared to address the hard decisions of what needs to be done to get the problems of uncontrolled spending back in line…

Things will be interesting, but I still stand opposed unless true and fair recompense be made for the people who can least afford any increases in taxation…

 

Why does the government need more revenue? Why can't they live within their means? If they can't live within the revenue they now have there is every chance they won't be able to live within an increased revenue stream. I think the whole public service ethos needs to be turned around.

 

So much work to do across the board, each area needs its own attention - and that is just the current system.The APS needs to be trimmed and streamlined, corporate tax avoidance needs to be fixed, welfare fraud needs to be tackled etc. We probably get enough now, its just too much is wasted I reckon.

Obviously being slightly right I see the problem of the Gov just getting more cash means the ALP will just fill up the APS beyond its optimum, appeal/buy the welfare crowd again, and empower Union powers against business... just to try and reinforce their hold on power. I guess those on the left think the LNP waste it on wars or something.

But I guess that is all sort m00t at a fed level, because the GST goes to the States in entirety AFAIK. Which sort of makes sense, I can imagine a scale of responsibility ranging from the feds setting the business landscape, the States set the consumer activities, and the councils manage the low end service provision. So since the GST is from consumer activity perhaps that is where it belongs. Maybe it needs to be spent within a purvue of areas dedicated to promotion of that domain of activity - that might stop it being wasted, from a systematic view.

I'd even go further and say perhaps theoretical ideal is LNP fed, ALP State and whatever for Council - from that ideological perspective of the relevant parties only.

 

There is a lot to consider and if those that were involved in the beginning of GST had of sat and gave it more thought perhaps we wouldn't be where we are today. I am seeing hysteria in some quarters and we have only just begun a conversation, it really is in it's infancy as far as planning goes and I would not expect anything until the next term of government.

Shorten has surely made a iron rod for his own back by stating the ALP will surely oppose an increase regardless. I know he is not the sharpest tool on the shelf, but politically he did not have to say anything. A more stupid politician I can not remember, makes Abbott seem like a Rhodes Scholar... LOL.

There is no doubting we are the most stupid race of people on earth, and I am not sure how we arrived at this point, or perhaps we were always this stupid, and we have just been lucky. Over the past ten years I have travelled widely and have had the opportunity to witness how other races do things and how they make diamonds out of rocks. All I see here is how we turn diamonds into rocks.

Each time I return and talk to people in communities I realise how fat and shameful we have become as a people. How self centred we now are, how ignorant of the realities of life, and how we have truly lost the idea of what is important in life itself. In part I really hope we have a buster and have to face some hard truths about ourselves, but then many people will suffer and that will not be good.

This will be a great thread if we all have a conversation and not bicker childishly like the politicians we deride. This subject affects all of us and political leanings need to be placed to one side, only then can a fair outcome stand a chance.

 

Hi AM,

"Why can't they live within their means?"

Simple answer is that they are idiots. The government is the biggest business in our nation and we pay the CEO half a million ??? What kind of candidates do you think we are going to get. The old saying... You get what you pay for.

"Why does the government need more revenue?"


I do believe you already know why the government needs more revenue. No arguments about our bloated public service and their constant waste of funds.

 

sf,
a good comment I think, except for the last sentence. Why do we always need business as the driving force? Why can't it be sustainability as the greater goal, in favor over the profit making outcome?
Cheerio

 

Slippery, it is always nice to hear clear voice and level head.
I am one of those who display hysteria on this subject due entirely of my cynicism. Abbot was elected on a ticket, I truly believed the Coalition would not play the populist vote under his governance and well look at what the party did… what is done now, is done and well I cannot be optimistic with any government who simply wants to play populist politics. I believe you pointed to such poor management yourself previously. BUT then we hear from the new treasurer who sounds far more incompetent than Swann and that is saying something… As I say, I don’t see any smarter people discussing this issue than We on this forum…

 

Newsflash Cats, sustainability is business these days. Without business you have no employment. You have to stop thinking of business as purely corporate, business comes in all shapes and forms.

In the early part of mankind if you had a cornfield and needed eggs, you would swap a box of corn with the local chook guru for some eggs....... That is business Cats. It's not always corporate.

 

Hi slippery, welcome back.

I agree with many comments you have made. However, I don’t believe that increasing small businesses will ever have the capacity to generate enough employee income and tax revenue to sustain Australia. Especially when you consider the amount of immigration into Australia verses the small business ratio. There are only so many coffee shops and cafes Australia can sustain at one time before it reaches saturation point, and as we all know, one in two businesses flop within the first twelve months of opening. Relying on small business is an out-of-date method that relies on personal taxes to sustain a countries social requirements, and continuing with this antiquated philosophy is where so many political parties and politicians have failed the citizens over the decades. They then turned their attention to mining, but that is just selling off major parts of the business that's gone forever, isn't it - not manufacturing or making anything special to sell out of the mining products derived the business?

Australia has been Governed by so many idiots over the past few decades, that’s its shameful sight to witness. Its especially shameful when many of these politicians claim they are good business people, and have accrued personal fortunes worth many millions of dollars. These people should have a sound/basic knowledge of business methodology, and understand that not every business model fits every business. Herein lies the problem. Australians have been inflicted with a group of politicians for the past four decades, who’s main concern and ambitions have been to generate personal wealth for themselves and their families during their political careers and after their retirement; rather than generate wealth and prosperity for the benefit of the Australian citizens and country. This is about as obvious as the nose on your face.

If anyone doubts politicians have been generating personal wealth for themselves during their careers, and positions of power after their retirement, then they need look no further than a year 10 economics assignment on business. The ABC’s of a year 10 assignment tells anyone that if a business does not make something to sell, then the business is doomed to fail. For how many decades has Australia stopped making things to sell, and become a country of imports? Stopped major manufacturing; stopped major agriculture, and hence stopped employing large volumes of its citizens, due to politicians making foreign imports cheaper to buy - not competitively priced with the goods/products manufactured and made in Australia, but sometimes up to five times cheaper.

How is allowing cheap imports into your country that are not even competitively priced with the goods manufactured within your own country supporting the manufacturing industry in your country, and more to the point; supporting local employment, which will generate taxes and support the economy. LOL

I suppose politicians think the people making these cheap imports made in foreign countries are paying Australian taxes, and supporting the Australian economy. LOL

Oh wait, one more coffee shop should do the trick.

 

Slippery,

It has been so frustrating that under successive governments people would attempt to justify wasteful spending. Howard, the fair weather PM, could afford to waste money due to the fact he sold off assets to repay debt. BUT his budgetary measures were short sighted at best and while at the time produced the fast cash in the long run it isolated the revenue ability for government for mitigation measures in crisis. Rudd also wasted great’s amounts of money for similar result and... Well we all know the history...

BUT it is increasingly clear neither party has learnt its lessons and continue to promote their short sighted economic policy to promote their own job. This mentality is not party political, all areas of politics has demonstrated their willingness to spend money to buy votes in their own way.

ONE most telling thing is that when the GST was introduced the governments of the day basically lied about what taxes would be removed and what would not. Also, we see corruptions to the compensations for business and people made by misinformation of the parties to promote their own particular agenda.

In example the fuel rebate…
Greens run about complaining that this is corporate welfare, the ALP and the Coalition continue to increase and swing it to give extra funding leaving them to be blackmailed by business over a situation that should have been better thought out at conception and only exist due to the fact the government lied about what taxes would be removed. The fuel rebate is to compensate for paying a tax on a tax which is unconstitutional… The Howard government knew they would lose a challenge if it was brought so what better way is to pay business off. Of course the poor and middle class are unable to raise the funds to challenge, so they pay the most for this government deception.

I do not believe we can trust these particular politicians to bring fairer and better taxation policy as they continue to clearly demonstrate their demand for more taxation to support their wasteful spending, NOT a true wish to do what is best for the people they supposedly represent…

 

Hi CD,

firstly in an ideal GST based revenue system, there would be no income tax and there would be no taxes on businesses. Purely goods and services driven, and even businesses require goods and services.

A lot of fledgling businesses go under for a number of reasons. one is that they have never done adequate due diligence, another is that they are burdened with so many add ons that it is sometimes a case of the too hard basket and " why try only to continually get kicked in the guts" attitude that invariably occurs during hard times. If doing business was easier then perhaps you would see more start ups, thus providing employment and growth.

You seem to be rather negative toward a business driven economy ? if an economy is not business based it can only then be government based, and we all know that as Communism. So I am a little confused as to what you are meaning when you say, "Relying on small business is an out-of-date method ". It is the only method of a free economy. I know it seems like a capitalist based economy is unfair and exploitive, but perhaps that leans more to the way it is managed moreso than the actual conceptual nature of the system itself. In my opinion a capitalist based economy is the only way a true democracy can work. Watch out here comes the socialists !!! lol.

The increase of more small businesses will have an effect on the unemployment rate and help regulate market pressure purely by competition and choice. But this can and will not happen under our current thought process. Employment benefits in more ways than just financial. the mental benefits are great, and in most cases are not taken into account when costing out an entire economy. Most economists crunch numbers purely, but economic strategists take a more holistic approach and actual place a monetary benefit on mental wellbeing in an economy. A nation excited by vision and concept will always out perform a nation of pessimistic outlooks.

lets face it we have been in a dark cloud for some time

 

It's not all doom and gloom, Australia's terms of trade is sitting at 83 index points, down from 118 points in 2013. It's still not bad when you consider the average TOT since the 50's is around 65 points and has actually grown in the last couple of quarters. We have been talking about Australia's economy declining all too readily on this forum and for quite a few years but yet it's still chugging along and seemingly reinventing itself to a degree without any major catastrophes.
Obviously investment is low due to confidence, and is much lower than predictions, which has some shaking in their boots. If business investment has halted dramatically we obviously need the governments economic defibrillator. We can carry on about wasted tax dollars and look at other measures to keep finances in check but these issues are but small in the bigger scheme of things, you would think. Look, at the end of the day we just need a stable economy, It doesn't have to be bloody BOOMING. It's not all doom and gloom but can improve. An increase in GST may help us cover our backside and provide just that little bit more confidence maybe. As this conversation snowballs in realms far higher than this forum, hopefully we will have a clearer picture of what impacts an increase in the GST will have. The key to navigating through this is watching out for political snares.

 

Hey M2,
I feel uncomfortable with increasing taxes because of wealth but certainly believe tax breaks such as superannuation that benefits the wealthy over low income should be investigated and targeted. Maybe, if all sides of government are too weary about changing superannuation then maybe the only option is to target goods and services in the high end. Just a thought.

 

Hey Slippery,

Obviously didn't go back far enough through comments. I'd commented already above but one thing that I'd probably add is that we have to separate booms from normality and stability. I think we are finding it hard to get boom times out of our heads as representing the norm. Also, as I've stated it seems as though other industries are picking up such as, the services industry already overtaking mining as top dog, obviously because it had dropped fairly dramatically. Education is another huge export apparently and is on the rise.

Just one other thing, I could be wrong but my thinking is that small businesses growth comes from the dog wagging its tail, but when it comes to small business becoming export players then the positioning and function is different. While our dollar is low it's obviously time to push our quality products out there you would think.

 

Yes, ATTITUDE! The attitude of most workers toward their jobs, the attitude of most people toward working and the attitude of the public service.

 

And the Attitude of governments.

Can anybody defend these current lots now??? State governments are now bickering over WHAT taxes to raise and HOW to spend that added revenue. Talking about tax reform??? No, unfortunately it appears my cynicism has been proven correct; this was simply a meeting to find the best way of gouging the people to fund the slush funds of both state and federal government.

Frankly it is about time these clowns were sent a message before Australia continues down the line of another decade of poor governance.

 

I agree TV that we seem to have short memories and only seem to remember back ten or so years. Good times come and go. I do and have invested heavily in real estate over the years and am very close to being able to retire on the back of this some 15 to 20 years early( trying to disguise my age here). I have never invested in mining areas no matter how generous the perceived benefit. Mining is not our future, and truth is it never was, but greed fogs the clearest of minds. I see our future in CLEAN.

Clean food, clean energy, and clean technology. We are in an envious position but we all must work to the common goal. Learn something from China, play the long game, not the short fix. To do this we have to not only encourage domestic investment but also foreign. We just do not have the population to fund our future completely through domestic investment. We must nurture local enterprise and somehow re-establish our manufacturing base, as impossible as that seems right now. We as consumers must invest in ourselves and rethink supporting overseas companies. They seem cheap, but if you really think about it they cost so much more than you could imagine.....jobs and the future of generations to come. I dont know about you lot, but thats too higher price for me.

Unfortunately the fastest growing industry in Australia right now is government. This is very dangerous, because once they own a majority of livelyhoods they can do as they feel(facism/communism). Services are great but can disappear in a flash, either by overseas outsourcing or just plain technological advances.

I am not comfortable with exporting our current education system, as i believe it is very sick. It is hard for me to support something that has taken us from number one in numeracy and literacy and pushed us down the list to eighth and crashing fast. There is no equalibrium in our education system currently and quite frankly it plays far too much politics and perhaps should concentrate on bringing better standards to its fraternity and delivering a better education to our children. Our education system has slipped too far to the left, even further than the ALP itself has, and is more interested in promoting a socialist Shangri La than actually educating our kids. When they give a child the same prize as the winner, for not trying in a running race, something is rotten, and that is our education system.

TV as i said to Cats, business comes in many different forms and you have actually already alluded to it when put forward the services sector as potential growth. For so long we have seen small business as retail, bricks and mortar stores run by mums and dads, but in essence small business is anything from Smithy's window cleaning to MacBurgers. It is just how we look at it.