Budget for Packer’s mugs

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The enews of Prosper & Earthsharing Australia
may 2014

Welcome to our new look

Welcome to the new Evolving Economics e-news, combining both the Prosper and Earthsharing Australia e-mail subscriber lists. The two groups represent different focus points: Prosper on tax efficiencies and housing, Earthsharing overlaps a little, primarily messaging for younger, greener types interested in housing, infrastructure and true cost economics. Thank you for your patience – it has been a little while since we sent an email. Now let’s get into the interesting stuff!

Federal Budget – for Packer’s Mugs

 

The first few words in the Treasurer’s budget speech could have been written by a Georgist

“This Budget will help build a more prosperous nation.

Every generation before us has contributed to the quality of life that we enjoy today.

Prosperity isn’t a matter of luck.

Prosperity is not a gift. It needs to be earned.

Unfortunately that’s about as close as it got to addressing the unearned incomes those who own natural resources or licensed monopolies enjoy. No mention of housing, let alone land. Negative gearing didnt rate a word, neither did the billions made in unearned incomes by miners, bankers or the staggering $484bn that we as home (land) owners benefitted from last year. Nor was there discussion on how the 2% ‘budget repair levy’ will encourage more tax planning, away from productively based incomes and into speculatively based capital gains. Pensioners too will no doubt be forced to engage in such behaviour, just to survive. Gavin Putland sums up the tax expenditures leaking holes in our budget with the wryly named Top 10 reasons why you have to work until you are 70.

Some of the #Budget2014 tweets posted or re-tweeted via @earthsharing

Curbing pension payments from 2017 to spur more property speculation, driving the wealth gap as students pay more for uni #Budget2014

#Budget2014 in short – ‘tax policy certainty’ assured with switch away from taxing unearned incomes (mining) and onto Packer’s mugs 

Rich kids in #PrivateSchools get $8.8bn #PublicSchools get $4.8bn? I try so hard not to swear…but…#FFS!!!

dont look now (budget website crash doh) but tax take as GDP % keeps rising into 2017, from 23.6 – 24.9% #Budget2014

The age of entitlements continue for the @HIAhousingvoice. No voice for FHOs – just lean into $600k debt #auspol #budget2014

Blessed are the daughters of battler mining billionaires, for they will inherit the subsidies. #auspol #Budget2014

Reorientation away from taxing the privileged and towards Packer’s mugs – those high income earners who still pay tax #Budget2014

#communityradio has been spared tonight and will continue to be funded http://www.committocommunityradio.org.au  #Budget2014

‘We must not leave our kids worse off’ but looks the other way on #aushousing. FHO’s borrow $300k? #Budget2014

‘Prosperity has to be earned’ except if you are a property speculator or miner #Budget2014 #auspol #rentseekers

location location location #ThreeWordBudget

Kerry Packer’s famous statement ‘only mugs pay taxes’ may well come back to bite this Hockey budget. Of interest is the $80bn cut to state funding, a strategy timed to force state governments to either beg for an expanded GST or use their own tax bases more effectively (with an enhanced Land Value Tax).

Coming events

Tuesday, May 27, 6.30 – 8pm – new members and those interested in new economics night – an informal gathering at our Punch Lane offices to discuss any economic issues, concepts or politics of the day.

David Collyer will host the evening for a roundtable discussion. Perhaps you require further detail on  economic rent – why is it so important? Or what can we do about the influence of donations on the political process? Come and relax amongst like minded people trying to make sense of this world.
RSVP to assist our planning. 

Tues June 24, 6.30 – 8pm – Bob Keall from Resource Rentals Association of New Zealand will be in town presenting his latest on global economic trends in The Way Forward Under Rentier Rule. As a genuine storyteller, Bob will be an absolute pleasure to see in action. Lock in that date, more details soon.
RSVP – donation to cover refreshments.

Evolving Rentiers

As we engage in the state and federal budget media cycle, we’re concerned at the brazen rent seeking agenda.

The Commission of Audits was purely a positioning paper for further privatisations – handouts to the privileged as outlined in Commission of Auditing Rent Seekers.

If the Abbott government was serious about budget deficits, they would address tax expenditures. The IMF placed Australia as the worst in the OECD. The income washing by those in their pension phase (over 55) through their super account one day and out the next to achieve a 30% income tax discount is a rort that must end. There’s $30bn alone there. Trust funds are another untouchable by our Treasurer, Mr Entitlements, Joe Hockey.

The Victorian State Government must reform housing related policy urgently. The state budget announcement saw an $11million infrastructure spend reliant on further privatisations in Rural Finance and the Port of Melbourne. We need to change the narrative so that privatisation is understood as ‘code for failed public revenue raising, requiring short term electioneering slush fund’. The $27bn building blitz could barely make it any more obvious its an election year. And to see the Melbourne Rail tunnel will swing by Fishermen’s Bend, where a number of major Liberal Party donor developers are rumoured to own large land holdings, makes ones head spin.

Infrastructure spending seems to be a common theme but without an effective financing mechanism, this just locks us into more expensive financing for increasingly irrelevant public interest projects. 

Senate Housing Affordability Inquiry

Since we last communicated, the Senate Affordable Housing Inquiry has published all submissions.

The website reveals at least seven submissions from Prosper members and related supporters. Download the various policy reform approaches:

Prof Frank Stillwell – (PDF 162 KB)
Ashley Holmes – (PDF 192 KB)
Phillip Soos, Paul Egan for Prosper (PDF 578 KB)
Saul Eslake (largely based on his Henry George dinner presentation – (PDF 227 KB)
Catherine Cashmore – (PDF 137 KB)
Cameron Murray – (PDF 925 KB)
Karl Fitzgerald for Eartsharing (PDF 210 KB)

A random selection of the 211 submissions sees a number with similar reform agendas. Michael Basso, who we have no connection with, delivered this excellent submission.

 
Reading

Catherine Cashmore has been in form recently with her piece on Our Interrelated Property Cycles – easy ‘windfall’ gains – but, what’s the Consequence? Hear Catherine on a recent Renegade Economists show discussing the state of the Australian market. What stage of the economic cycle are we in?

Talking cycles, check Philip Anderson’s new project – the Anderson Project – launched via the 90,000 strong database of the Daily Reckoning. Sign up here to support Phillip’s good work as he deciphers rent seeking as an investment strategy, in the meantime educating many on the perils of such economic parasitism.

Fred Harrison has released 10 theses ranging from the Dynamics of the Statecraft of Greed to Just Prices and the Riches of Nature. There’s few better than Harrison for clarity.

David Collyer has been cross posted in macrobusiness on REIWA: Abolish Stamp Duty for State Land Tax and WA shows tax reform leadership.  Well, I hope so.

Superannuation the next sacrificial lamb in failed infrastructure model was my contribution via Online Opinion.

Rounding Off

David Collyer’s next edition of Progress Magazine is in its final drafting and should be in members (and trial subscribers) mailboxes later this month.

The Renegade Economists has recorded top-level interviews on infrastructure with Melbourne Uni lecturer Chris Hale (value capture), the recent Michael Hudson interview on Thomas Piketty going viral  and Dr Michael Vardon on the latest release of the Australian Environmental-Economic Accounts. Talk about evolving economics!

Last week’s show discussed with journalist Margo Kingston the democracy for sale tendencies in Australian politics as revealed by the New South Wales ICAC (Independent Commission Against Corruption). Most of the corruption is tied to the lure of windfall gains delivered by the bureaucratic golden pen tick of re-zoning. This week, one of Australia’s leading economic commentators, John Daley from the Grattan Institute will give his insights on the Federal Budget.

For those on twitter and interested in the link between property and politics, please keep an eye on #icac and follow @earthsharing @dontbuynow. We also would like some more followers at our Linked In page.

By understanding the economic principles we discuss, so much more can be deciphered from the news cycle.  Please support our work by joining for just $30 as we continue to assist the evolution of economics. If not, lay some comments on our websites.

thanks for your time,

Karl Fitzgerald
Project Director

3 Comments

  1. THEO14-05-2014

    All budgets do nothing more than target the weak and benefit the rich. This is called legal corruption. Change for the better only comes from massive financial difficulties and nothing else. I cannot entirely blame any government for its behaviour. The blame lies solely upon those who vote for them and therefore this country is doomed

  2. Karl Fitzgerald
    Karl Fitzgerald15-05-2014

    Perhaps all is not lost. The bad taste this budget has left in many people’s mouths may well be another step towards deep seated analysis.

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