My Ten Cents Worth

31 Comments

Best impersonation of a blow up doll.

Best impersonation of a blow up doll.

By now most of you are probably fed up with the social media white noise about the Federal Budget. I’m betting you came here to get some light relief and perhaps a serve of tasty crumpet. Sorry blog fans. I feel very strongly about some of the issues raised last Tuesday and am compelled to spill my opinions here on this page. Its not as if anybody cares what a pampered Eastern Beaches housewife thinks – but here goes.

Here’s my ten cents worth (plus a 0.02 cent deficit levy).

To start with, there is no budget emergency – yet. The nations finances are in reasonable shape. According to the IMF (if you give a toss what they say) “gross debt is expected to peak at around 32% of GDP in 2015 and is among the lowest in advanced nations”. By way of comparison the US debt currently stands at 104.52%, the UK at 90.60% and Japan at a whopping 237% – those my friends are budget emergencies.* When I was in stockbroking companies with our level of debt would have been labelled “conservative” and urged to borrow more. (Those pre-GFC days were some crazy times).

Having said that Australia’s debt has grown rapidly since the GFC and its prudent to nip it in the bud now before it gets any worse. In that regard I have sympathy and respect for what the Liberal Party is trying to achieve. Unfortunately its the way they are going about it that has me in a lather of concern. The already gaping chasm between rich and poor in this country is about to widen in my view. I’m about as socialist as Barrack Obama’s ass (what a fine slender butt it is) but I do believe we should aim to have minimum standards and a levelish playing field. The current Budget tilts the playing field in further in favor of the better off.

Obama world's only crumpety politician. (That's sexist isn't it?)

Obama world’s only crumpety politician. (That’s sexist isn’t it?)

The measures I am most peeved about are:

1) Cuts to the unemployment benefit for the under 30s.

For those without family support this could be catastrophic. Giving jobless young people no lifeline will force some onto the street and even into crime. Sweat shop conditions will spring up as unscrupulous employers take advantage of the desperate. At the same time inexperienced young people are at a competitive disadvantage to older workers who will be subsidized to the tune of $10K for employers to take them on.

The whole thing reeks of extremist ideology gone mad rather than a tangible benefit to the bottom line. If the Liberals wish to discourage “welfare bludging” a work for the dole scheme would be preferable to cutting these people off altogether.

2) Medicare co-payment of $7

My family is able to pay this and I am willing to do so if it funds quality healthcare in this country. Yet it will discourage welfare recipients (and in the case of under 30s non welfare recipients) from getting medical attention. Unhappily being sick and impoverished tend to go hand in hand so this measure is a double whammy to the disadvantaged. I’m not against to the user pays principle per se but strongly believed that certain groups like aged and disability pensioners should be exempt.

3) Deregulation of University Fees

This is the thing I am most pissed about. Interest rates on the the HELP scheme are about to leap and Universities will soon be free to charge whatever the heck they like for their courses. This is likely to increase the cost of a degree substantial and erect yet another barrier to the less well off getting a tertiary qualification. We could end up with an American scenario whereby the children of the wealthy pay to go to “Ivy League” institutions and the rest are relegated to sub-standard Community Colleges.  Not only is it inequitable, its short sighted. We’re going to need highly skilled people to compete internationally in the future but we’re constraining our ability to produce them.

Here are some alternative scenarios I see as better to the current goings on. None of them are ideal but I’d prefer them to kicking the poor in the guts.

1) Raise the GST to 12.5% – 15%. You know its going to happen anyway.  Compensate with an equivalent increases in welfare payments and tax cuts at the lower end. Plough the resulting income bonanza back into health and education.

2) Reduce the defence budget and wind down our overseas military engagements – this should be a no brainer.

3) Slash funding to elite private schools. Its not class warfare. Its simply reallocating limited resources to areas of real need. While we’re at it – School Chaplains can sod right off.

4) Crack down on family trusts.

5) Company tax to remain at 30% – rather than cut to 28.5%*. Say farewell to the parental leave levy and

6) Keep the paid parental leave scheme the way it is. It is reasonable that all carers receive the same amount regardless of their previous salary. In fact I’d go a step further and means test it against the partners income. Why should the wives of Macquarie Bankers receive tax payer funded handouts?

7) Negative gearing – Sayonara.

8) Look at taxing super annuation returns.

9) Limit the NBN roll out to business districts, schools and hospitals.

10) A carbon trading scheme – remember that old chesnut?

Thanks for reading to my ignorant and simplistic arguments. I welcome your dissent.

Love

Mumabulous

*countryeconomy.com

*If GST is increased then it is reasonable to reduce company tax.

Wondering what Mal Turn really thinks of it all.

Do you think he’s planning a coup?

31 thoughts on “My Ten Cents Worth

  1. Do I think Malcolm is planning a coup? One can but hope.

    Agree entirely. The School Chaplain interview on ABC 702 had me yelling at the radio in fury!

  2. Love it and couldn’t agree more – I heard the gang on Roast TV giving stats about the IMF’s view. The university fees scares me, having lived in the US it’s very obvious who can and can’t afford go – sucks so much! GREAT RANT

  3. Nice call on Malcolm. I hadn’t thought of that….we shall see….

  4. I agree 100% and as an American who has lived here 15 years and is now a citizen I have watched Australia follow America into bad directions before (health care especially) but the education one would be disastrous. As someone who had to choose my school because it was where I got the best financial aid package (combo of loan, grant and on campus job) it sucks to live in a world with unaffordable tertiary education!! – deb xx

    • For many getting an education will simply be financially unviable and this will lead to a deskilling of the population. We’ve already got a skills crisis in some areas – technology, engineering, medicine. The governments measures will make it worse and Australia will become less internationally competitive.

  5. Great post – well said !!! And I agree – the gap will continue to get bigger between the haves and the have nots. The education thing is what scares me – when we were looking to immigrate here, they didn’t want any medical people – now we have a shortage of them !! Clearly no forward thinking in place !!
    Have a great day !
    Me

  6. I want to argue with you but I’m afraid I can’t (except maybe on taxing super.. you mean existing super funds, right? In which case yes, totally i agree. Because of the BUTTloads of cash people have stashed away in there un-taxed currently. Not contributions… cos I’d never make them otherwise, and nor would most under-40s, creating a massive future problem re welfare/pension). Can’t even disagree on the coup front. I’ve been waiting for it for months now. I kinda wish he’d hurry up.

    • Yes – was thinking that the government (whoever it may be) should at least examine the possibility of taxing the returns on Superfunds above a certain level. I dont want people’s retirement savings taxed out of existence!

  7. He’s just got such an angry, aggressive face that Joe. Doesn’t exactly win many hearts. The budget won’t really affect us much as we’re Kiwis so have virtually zero entitlement here anyway but some of it’s measures seem so shortsighted. Medical research at the expense of basic, frontline medical care? And as someone pointed out on QandA last night, who is going to conduct all this research if no-one can afford to go to university to learn HOW to conduct said research?

  8. I’m so disappointed, particularly regarding the co-payment and the Government’s decision to apply it to everyone – including children (and including for immunisations). When immunisations are free under Medicare, struggling families sometimes still can’t afford to get to the Dr or child health clinic to have their child immunised. An extra $7 would cut out even more families’ ability to be immunised. And immunisation works on herd immunity, so the fewer of us immunised, the wider diseases will spread. It seems that this has been an incredibly ill-thought out move and I don’t think it will make it through the Senate.

  9. I have mixed feelings about the budget. I wish I knew more to understand. I understand about the debt levels but debt is still debt. It has to be fixed up somehow? We often base our views on what we know in our little world. If anything, the budget has given me a fire in my belly to look at ways to increase our income. I’m a bit hopeless at the moment with another bub on the way in July and I won’t be eligible for any payments because I haven’t worked. It will be interesting to see what gets passed through the senate.

  10. God I love it when people who actually understand economics have rants, because really theres not much people can come back and argue with. I agree with all your points and the future that it’ll create. I understand they have to try and reduce the debt, but I don’t think it should be done at the expense of the less fortunate. Everyone is arguing about how $7 isn’t much, but when you add up if a family got sick and each individual had to go to the doctor all paying $7 each, then $7 for any blood tests needed, then the extra $ for prescriptions on top of that – it can quite quickly become a lot of money. So many people will avoid going to the drs and the roll on effect from that and all the other measures will put us in a worse situation than we are now. I so hope most of it will go through the senate.

    I also love the fact that their excuse for breaking their election promises is that labor put us in this budget emergency and they have no choice so its not their fault – ummm ok their so called budget emergency didn’t just magically happen between them getting elected and now so I’m pretty sure it already existed when they made those said promises in the first place?! Also if it did happen since they got elected then THEY would be at least partially to blame…? WTF

    • *WONT go through the senate I meant, obviously. (thats what happens when watching a baby and typing at the same time).

    • I find it ironic that much of the unsustainable “middle class” welfare was instituted by the Howard government in the first place. That’s not to say the ALP wasn’t wasteful with the cash splash (which may or may not have saved us from the GFC), handing over of billions to failing corporates and the mishandling of the mining tax. Both parties contributed to the situation but not many commentators acknowledge that. Anyhow – I agree that the $7 GP co-payment is unlikely to get through the senate. Interesting times.

  11. I am happy to admit a major lack of savvy when it comes to financial matters, but on some points here I completely agree with you. Likewise, I can pay $7 for the GP – but what if I had a chronic illness? Or was old, or young with no income? And what’s up with this ‘medical research facility’ that all our $7 payments will go towards? I don’t buy it. And, most importantly, why, oh, why don’t any of our politicians look, or speak, like Barrack Obama???

  12. I have a chronic illness but, because of some loophole with the number of specialists I have being spread across different ‘aspects’ of my condition, I don’t qualify for the exemption for the Medicare co-payment. I know there’s an annual cap, but still, it’s going to hurt. Financially instead of just physically. And I’m someone who can afford to pay it, even though it’s difficult. I really feel for those on low (no) incomes facing this.

  13. Double thumbs up.

  14. Ive been wanting Malcolm to have a crack for years #Libspill – Surely he must have the numbers and he would be such a great leader! Someone we could actually be proud of in the international field. I actually think the premise behind the budget is good fiscal policy and had to be done, but like you would question what they have done. We are so fortunate that my family won’t be affected greatly by this, so maybe thats why I’m not jumping up and down, but I know there are plenty that will be and I think that they have targeted some groups that are already doing it tough. Will be interesting to see what happens in the Senate!!!

    Hello from #teamIBOT

  15. Great post Mumabs and I agree with all your suggestions. My biggest bug-bear withe the $7 co-payment is not just that certain groups will no longer be able to afford to go to the doctor, but those people will then have no other choice but to go to the already crowded and back-ed up hospital emergency departments.

    And the new PPL is a joke! As you say, it should be left as is and the extra money they would have put in the new scheme be funneled in to making childcare even more affordable. At the moment there is no point for many women in going back to work because such a huge amount of their wage would go to childcare fees.

  16. I so agree with you on all of these points. My partner and I were talking about the Newstart cuts last night and the government really has the 6 months around the wrong way. If they want to cut the welfare cycle then there needs to be more incentives for people to move off the dole. Maybe they need to put a time frame on how long you can access Newstart and during that time give the people access to courses etc to help them build their skill sets. 30 is also such a mature age to be putting the 6 month no access on. Most people have kids, cars and/or houses by then, they aren’t fresh out of school and often don’t have the ability to just move in with mum and dad.

  17. Everything you’ve said makes perfect sense to me. I feel sorry for the poor buggers who will be left behind, in poverty.

  18. I just stood up and applauded!!!!
    Yes, yes and so YES to everything!!

    PS my biggest gripe is why the heck are private schools funded by the government????
    And why is not all medicare/parental leave/family tax etc etc all means tested anyway? Seriously if you cannot give your kids a good home life and education on $150,000 a year plus (when many do so on just $30,000 a year) you might need some budgeting lessons…

    So much of this budget and its strategies seems to be creating the two tiered society system of old, the poor and the rich and no middle ground….

  19. Hear, hear, Mumabulous! It goes back to that whole “fear factor” this government’s using to justify their decisions to us Australians. Like you said, what budget emergency??? This budget has been the most blatant of “keep the rich, rich and the poor poor”

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