April 17, 2014 | Valerie Yule

Some budget thoughts from a literacy researcher

These are some thoughts from Valerie Yule, a regular OLO author.

Hockey could cut

* middle class welfare e.g. parental payments at the rate of usual income, even if high. All payments at the lowest rate.

*negative gearing

*payments for buyers of first housing as that only makes housing prices higher, and rewards the owners of housing

*baby bonuses after the second child, as that rewards people with more children than they can cope with

*some of the white beneficiaries of white organizations to help aborigines

*defence spending on so many submarines and expensive airplanes.

*numbers of staffers that members of Parliament can have

*government cars kept small and changed less often

*government advertising that could be replaced with media News that doesn’t have to be paid for

* election costs by making sensible voting laws – e.g. you can vote for 4 candidates above the line in Senate elections.

* education costs only to bring the lowest government schools up to medium income of all schools

* prevent sectarian segregation and social dislocations by no government payments to religious schools – I realise that this is out of the question!



He could make higher taxes

*for the wealthy

*introduce death duties

*companies not treated the same as individuals

*for tobacco and alcohol

* advertising where juveniles can see it.


He could nationalise all lotteries and gambling so that the nation would get all profits = billions.


No CEOs or directors to have total incomes over $1million – government to have the residue from former sums.


* Cut traffic congestion by not allowing closing and selling of city schools which prevent all children being able to walk to a government school.

* Keep Medicare Private which can pay every year, and helps keep premiums of competing insurance schemes down

* Find some way of making single-person large cars pay. (A second small car should be possible – shared, perhaps)

*No subsidies for growing rice, which water-short Australia should not grow.

* Schools only have to get new textbooks for old subjects every three years or longer, unless a conceptual breakthrough occurs.

* People are warned that in a later budget they will have to pay more themselves for hospital treatment if through alcohol, tobacco, fighting, adult diabetes, obesity.


Posted by Valerie Yule at 8:01 am | Comments (9) |
Filed under: Economics


  1. Agree in principle, but with some modifications-

    (1) Eliminate baby bonuses completely.

    (2) “Some of the white beneficiaries of white organizations to help aborigines” -I’ll leave that to indigenous Australians.

    (3) *defence spending on so many submarines and expensive airplanes.” How many is “so many”? This is a highly technical subject.

    (4) Really ‘sensible voting laws’ would implement proportional representation and eliminate preferential and compulsory voting.

    (5) All politicians’ salaries should be determined by their constituents, say, at regular yearly review of their performance, none of this socialist, tribunal nonsense.

    (6) “No CEOs or directors to have total incomes over $1million” Rather than a fixed sum it would be easier to set a ratio between the salaries of the highest and lowest paid employees in an enterprise.

    (7) Removal of the automatic tax-fee status for religious organisations, Churches should have to justify that a particular activity was charitable in order to claim tax free status.

    (8) Increased penalties for white collar crimes, and the removal of the corporate veil in cases of negligence for example.

    Comment by RussellW — April 17, 2014 @ 10:11 am

  2. Agree with most of this Valerie, it’s such a treat to be greeted by so much plain and simple common sense, which by the way, is hardly common, but arguably one of the rarest qualities on the planet, or at least in the halls of power!
    Submarines and planes?
    Well, we could shelf our order for planes, and simply replace that with the much less costly, latest model Harrier jump jet, on the grounds of skyrocketing prices, not covered by our original contract.
    Moreover, it is as simple as a helicopter to fly?
    Anyone who can drive a car, could learn to get it airborne in five or ten minutes?
    All we need is something reasonably quick, very maneuverable; and capable of carrying and delivering a serious payload.
    And given we would assemble it here, and have the knowledge, we could add in the missing stealth characteristics?
    VTO aircraft can take off from anywhere, even frigates, that can also accommodate a helicopter.
    Our main reasons for wanting these aircraft, is coastal surveillance and search and rescue, something greatly assisted by being able to move quickly, hover, and land and refuel on nearby vessels!
    We for our sheer continental size, just don’t have too many planes; and the Harrier, can be deployed from almost anywhere!
    China, to our near north is engaged in a worrying massive military build up, and has begun to become quite belligerent, in our customary territory and that of nearby neighbors!
    A bit reminiscent of Rule Britannia, maybe?
    It would be very foolish not to respond by beefing up our defense, repeat, defense capability.
    Our homeland defense is based largely on the never defeated Austrian model, guerrilla warfare, and remaining a extremely costly thorn in the side of any territorial aggressor!
    The Nazis never attacked Switzerland, on the grounds that the terrain didn’t suit their blitzkrieg and it was an armed camp, with weapons in every home.
    Well, they were closer to the problem at the time than Britain!
    Well, we could drop our own manufacture and buy off the shelf, as a cost saving measure?
    If we choose that option, then that replacement needs to be both nuclear powered and tried and tested!
    As already alluded to, is our incredibly large coastline and consequent porous borders.
    Our main reason for needing subs is intell gathering. And nothing would be hurt, if they could achieve speeds on or under the water, in excess of 40-50 knots, in an emergency. Only the nuclear option provides that!
    I mean, take marine rescue.
    Shipping and airplanes are often hampered by surface conditions, and may not be able to sail or fly for days?
    That however, is rarely the case for subs, and nothing would be hurt if they could outpace any and all shipping!
    Moreover, they are equipped with some very sensitive sonic listening capabilities.
    We should be able to build our subs here, we have finally managed to learn how!
    What we don’t have is the requisite nuclear expertise!
    And there are some current options, that make the nuclear option far safer than traditional flammable diesel, which we and the rest of the world is rapidly running out of. However, we have 700 years worth of uranium! Thousands, if we stopped exporting it!
    I like your Idea with regard to CEO’s and simply taxing their excesses out of existence.
    If that ever becomes a problem, there are plenty of super competent Asian CEO’ who’ll work for the mere pittance of around a million per?
    Negative gearing?
    We stand alone as the only fiscal idiots who have one.
    And describing it as welfare for the rich, is more that accurate or apt!
    We currently throw in excess of five billion per at this anomaly, but can’t afford decent affordable childcare!
    If only our erstwhile Leaders were as pragmatic as you Valerie, we wouldn’t have a budget deficit or any unmet need!
    Have you ever considered moving to Tasmania?
    The climate is not too different to England, and your rare common sense and pragmatism is sorely needed down there.
    Alan B. Goulding.

    Comment by Alan B. Goulding — April 17, 2014 @ 10:32 am

  3. I agree – if Valerie were PM we wouldn’t have any unmet need.


    Thinking outside the box.

    Of course we DID see negative gearing taken away some years ago. There was no unmet need of course as per the above plan, but there were suddenly many fewer rental properties available either, and rents went up quite a lot. Still, no-one died of it so there must have been no unmet need.

    Just one example though – I am sure all the others would result in no unmet need in the same way.

    Comment by Chris — April 18, 2014 @ 6:57 am

  4. Chris,
    We plow, hand back, over 5 billion per, of taxpayer funds into negative gearing.
    It strikes me, that even if we removed it, already entirely unaffordable/unreasonable rents simply could not rise?
    People can and do move to affordable accommodation, with the oldies, or so far out, that the daily commute is 6 or 7 hours! Empty units or apartments earn very little money!
    Further, the costs of the roads and lost production, far and away, hugely outweighs, providing sensible low cost accommodation!
    If we just spent the same, (reclaimed) negative gearing money, say just in Sydney initially, [where rents rose the most, when negative gearing was briefly removed,] was invested in quite massive low cost low rent housing. Alongside existing rail corridors and on resumed land.
    Greedy landlords would be left with no other option, than meeting the market or new supply and demand paradigms!
    Look, and excluding land, creating high rise concrete towers over ten stories, reduces the average unit cost, to under $50,000.00 per? [That land could be paid for, with one or two finished units?]
    Governments can borrow for around half of that imposed on private operators; and the tender process could be employed, to give the private sector, a genuine look in!
    Unit costs can be contained, particularly, where white goods etc, can be sourced in bulk and from the global market!
    What’s missing here mate, are pragmatists like Valerie in power and making decisions!

    Comment by Alan B. Goulding — April 18, 2014 @ 10:59 am

  5. Alan, excuse me if I seem a bit patronising, but a bit of experience does that.

    You plans are wonderful. Forge right ahead. I will be along in moments to offer my support and spectate on the results.

    Comment by Chris — April 18, 2014 @ 4:44 pm

  6. Alan, the idea that negative gearing is a loss to the treasury is one of the great furphies, and stems from a flawed model of how house financing works.

    When a property is positively geared, it is generally because the owner has borrowed less and therefore has a lower cost base. The owner pays tax on his surplus. The lenders pay tax on their interest income.

    When a property is negatively geared it is generally because the owner has borrowed more and therefore has a higher cost base. The owner makes a loss, that he partially offsets by paying less tax on his other income. For most owners at the moment that is a rate of 30%. However, the lenders are paying tax at a higher rate than in the first example because they have more income.

    When you take account of the fact that investment lending rates are around 6% and gross return on rental property is around 4%, a difference of 50%, then the Commonwealth is probably better off.

    Particularly as you also need to take into account the tax situation in home ownership where no tax is paid on either the imputed rental income, nor the capital gains.

    If you really want to fix a tax hole you’d change the tax treatment of the family home.

    Comment by Graham — April 19, 2014 @ 9:05 am

  7. On a another note, we would get much better value for our tax payer money if question time at Parliament would be structured more like a high school debate, and less like a primary school yard. Non acceptance patronising, immature sarcastic banter – penalised financially replaced with pragmatic, constructive passionate debate. Efficiency of decision making would improve dramatically.

    Comment by Daniel — April 19, 2014 @ 10:49 am

  8. No Graham, that’s is not what I’d do, but rather, jettison our current complex tax system in its entirety.
    And replace all of that convoluted complexity, and the time wasting it requires, and all of the unproductive work it creates or entails, with a single stand alone unavoidable expenditure tax, everybody paid, without exception or exclusion and according to their essential spending patterns. Meaning, the poorest would pay the least!
    Given it would be the only tax extracted, via the banking system and their main frames; and transferred to treasury overnight. It would allow us to remove PAYE, PAYG, payroll tax, fuel excise the ubiquitous GST etc, thus reducing the total tax burden on all Australian tax payers.
    Including landlords and reducing any need whatsoever, to continue paying compliance costs, which at an 7% averaged, costs the average bottom line, more than the tax rate that would replace it
    The GST could be replaced with a direct funding model and complete regional autonomy.
    Just this much change, would add as much as 30% to the health and education coal face.
    This sensible reform would stop all avoidance, which is quite massive and sees, over an annual 100 billion plus lost to internal revenue, and in effect, creates the continuing revenue shortfalls that are part of the current structural deficit!
    Saying we can’t change is as nonsensical as saying we can’t move to another house arguably, only on the quite risible grounds, we don’t want to?
    And as for negative gearing, we seem to stand alone as the only fiscal idiot that has one.
    Anyway, real tax reform and massive simplification, will simply end the need or reason to have one.
    The real reform referred to would allow, even those who only need negative gearing to shelter some income, considerable savings, and no continuing valid reason to negatively gear anything!
    The tax rate, given the broadest possible base, could be very small, and marginally varied state by state or region by region, where and when necessary, to alone and much more rapidly, control all inflation or stagnation!
    Meaning, interest rates could be lowered to historical lows, and then set and forgotten, to turbocharge the non-mining industry, and indeed, to make housing more affordable for the average Joe or Sydney Landlords?
    Cheers, Alan B. Goulding.

    Comment by Alan B. Goulding — April 19, 2014 @ 11:49 am

  9. As an after thought, if you left the states with alcohol and tobacco excise, along with any and all capital gains, and just outlawed stamp duty etc, we’d stop their current practice of front loading at the start of housing or apartment building/construction, with stamp duties and several dozen other fee or charges, that do little else, after the almost obligatory double handling, but produce cascading costs; and limit their tax extraction involvement, to the end or sale of the bricks and mortar investment.
    Thereby removing some or all of the front end loading, that jacks up the price of a new house by as much as $150,000, before so much as a single sod is turned!
    Moreover, this much change would encourage essential and long overdue streamlining, end all double handling and create inherent cost reductions; and indeed, make the hugely overdue roll out of very rapid rail an imperative! Which by the way, could actually be more or less paid for, by the later sale of resumed and then rezoned land?
    Some of which would be have to be earmarked for high rise development, along those new rail corridors, if only to repay all the initial outgoings, land acquisition etc!
    Alan B. Goulding.

    Comment by Alan B. Goulding — April 19, 2014 @ 12:14 pm

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