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Turnbull’s Trump-like divisive budget
Volume 32 #49
May 16, 2018
Council’s books With councillors holding closed-door meetings to select a new general manager (GM), Council’s upcoming budget has made an appearance in the agenda for the upcoming May 17 extraordinary meeting. To put a simple figure on it, staff say they expect a surplus this financial year of $15,800. Wahoo! That’s slightly less than what a councillor is paid per year and demonstrates either we are on a knife edge or that there’s extreme flexibility within Byron Shire governance. Overall, operating revenue in the staff report is estimated to be $80,318,500 while expenditure sits at $80,748,400. The $15k figure is reached after adding depreciation, grants/contributions, loans used, asset sales and taking away capital works and loan principal repayments. The Special Rate Variation/rate rise is factored in of course, which for 2018–2019 is estimated to be $2.495m. There was also $219,100 unexpended cash from 2017/2018. Available cash for Council sits around $1.16m.
Revenue Revenue to enable Council to provide services is sourced from rates (21.84 per cent), which does not include water and sewer charges. ‘Annual Charges’ does include water and sewer charges, and make up 18.26 per cent of revenue. Within annual charges, water and sewer supply services (fixed), domestic and commercial waste, stormwater levy takes up the major portion of annual charges. Capital grants and contributions comprise 22.29 per cent. ‘User charges and fees’ clocks up 28.3 per cent. According to staff, that includes water and sewer consumption charges, Holiday Park Fees, Pay Parking Fees, property rentals, landfill fees, DA assessment fees and charges, construction certificates, compliance fees etc. There are a few percentages attributed to interest/investments, grants and other revenue.
Expenditure Operating expenditure breakdowns illustrate that ‘materials and contracts’ make up the largest cost at 40.74 per cent, while employee benefits and oncosts make up 31.34 per cent. Depreciation and amortisation is at 16.32 per cent with borrowing costs at 5.4 per cent and other expenses making up 6.2 per cent. As for capital expenditure, it’s no surprise that roads and drainage make up 55.08 per cent and sewerage 14.19 per cent. Water is 13.7 per cent and other expenses include libraries, depot services/fleet management, RMS, projects/ commercial development, Cavanbah Centre, facilities management, children’s services, open spaces and recreation, waste management and holiday parks. The report reads, ‘Of the $36.718m for capital works related to the general fund, $28.044million is allocated towards roads and drainage projects including $11.214m allocated to the Byron Bay bypass.’ A revised rating structure is proposed, which will possibly impact upon how much rates landowners pay, along with a seven per cent increase in waste charges. According to staff, this increase is owing to the ‘QLD waste levy implementation for depositing waste to landfill sites, increased recyclables gate fees proposed by Lismore City Council resulting from changes China has made to recyclables acceptance (contamination levels and product acceptance pricing), contaminated land studies that require funding.’ The seven per cent increase will also fund the ‘Implementation of revised rural domestic waste collection service options.’ Additionally, a new loan borrowings scheme is proposed, where $3.899m of a $6m borrowing program will be considered ‘over next three financial years to fund a bridge and culvert replacement program.’ And don’t forget the Community Solutions Panel’s recommendations will also be adopted into the budget. A tentative date for a public meeting to thrash this all out is scheduled for Wednesday June 6. Hans Lovejoy, editor News tips are welcome: editor@echo.net.au
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10 May 16, 2018 The Byron Shire Echo
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cott Morrison’s budget has been greeted as underwhelming, which is probably the way he likes it. The goodies are unnecessarily complex – the tax cuts aren’t really tax cuts, they are built in to your 2018–19 return as an offset, which means they will appear in your kick only if and when you are entitled to a net refund. No big sugar hit there. There are no real losers, apart from black marketeers, migrants, the unemployed, climate scientists, recipients of foreign aid, and the ABC, along with a basket of other deplorables who do not normally vote for the coalition, but, as Peter Dutton might say, they are all dead to him. However, hidden in the low-key first bid for election is an almost revolutionary and definitely reactionary overview, which deserves rather more consideration. The centrepiece of the Enterprise Tax Plan, socalled, is to be the abolition of the progressive system of income tax, which has endured in Australia for more than a century, and its replacement with what is in effect a flat tax plan. Income tax has always been predicated on the idea that the richer you are, the more you pay – the rate of tax imposed rises with the income of the taxpayer. There have been many distortions, mainly through exemptions manipulated by the wealthy and their lawyers and accountants. And of course the scales need constant revision against the scourge of bracket creep. Morrison intends to end that with a nuclear option: remove the key middle layer altogether, leaving some 94 per cent of earners paying 32.5 per cent or less in seven year’s time. There will still be a small bulge at the top: the remaining six per cent will pay 45 per cent, and pay a large chunk of revenue, and so they should – in theory. In practice they will con-
CHESS
by Ian Rogers The Australian teams for the Batumi Chess Olympiad in September have been selected and feature the largest turnover of players since 1974. The Open team sees 18-yearold Anton Smirnov, hitherto undefeated at Olympiads, fulfil his destiny and take over on top board for Australia, displacing the players who have led the team at the last five Olympiads, Zhao Zong Yuan and David Smerdon. Smerdon declared himself unavailable for Batumi early on, while Zhao was finally overtaken by Smirnov on the world rankings earlier this year. (Zhao, a new doctor who is in Coffs Harbour for GP training, may yet be forced to withdraw if unable to gain time away from work.) Australian Champion Max Illingworth may be a little disappointed to be placed on board three, but his deliberate inactivity since winning the national title may have counted against him. Below Illingworth are two debutants from Melbourne, Bobby Cheng, 21, and James Morris, 24, whose strong form in
tinue to avail themselves of the lurks and perks provided by government – dividend imputation, negative gearing, capital gains concessions, superannuation advantages and trust funds to name but a few – so they should not suffer unduly. The forgotten people, as former treasurer Peter Costello bizarrely calls them, have not been forgotten, but heavily protected. And those close to the top – those on just under $200,000 a year – will get a massive windfall gain at the expense of everyone else, especially those on $40,000 a year who are to pay exactly the same rate.
importantly, the government gets no political credit from announcing a tax giveaway. Malcolm Fraser tried a brief experiment with tax indexation in his early days (before John Howard became treasurer) but decided it wasn’t worth the trouble. Since then no-one else has been game to try, and Morrison is not even vaguely interested; he appears to be morphing into an economic fundamentalist. ‘It’s their money, you muppets,’ he bellowed across the parliament when Labor called the tax cuts a handout to the rich. He all but echoed the libertarian mantra that all taxation is theft.
The idea that last week’s budget can be set in stone for future governments to follow is fanciful. by Mungo MacCallum Any criticism of this blatant inequity will, of course, be dismissed as class war, the politics of envy, and indeed it has been in a barely coherent editorial in The Australian last Friday, which spluttered with rage at the prospect that Labor might deprive them of the loot. The elitists at our national daily have their own class war to pursue in defence of the politics of greed. But there is a better way to deal with bracket creep; it’s called tax indexation, whereby you don’t change the tax rates, you lift the tax thresholds as inflation demands. That way people still keep the same proportion of their money but the system remains progressive – and a great deal fairer than Morrison’s demolition job. The only serious problem with tax indexation is that politicians don’t like it: the automatic and comparatively painless increases in revenue bracket creep offers are removed. And, more 2017 and 2018 has been enough to displace Olympic stalwart and Grandmaster Moulthun Ly. The Women’s team sees only two players remain from Baku 2016. Heather Richards retains top position, despite the challenge from newly eligible Women Grandmasters Julia Ryjanova and Zhang Jilin, both having been resident in Australia for two years. Adelaide’s Giang Nguyen also retains her position but the final place on the team surprisingly went to veteran IM Irina Berezina; Australia’s leading player at seven Olympiads – though only one after 2006. Other 2016 teams members absent from the 2018 team are Alex Jule, who has lacked consistency, and Biljana Dekic, who did not apply because her rating has dropped significantly since Baku 2016, the 67-year-old’s twelfth Olympiad. Pending appeals and withdrawals – usually related to work or the cost of travelling to the Olympiad – Australia’s teams, marginally younger than in 2016, look capable of performing well beyond their seeding.
But of course, he is happy to grab a swift 23.9 per cent of everything that isn’t nailed down, because he can. And given that Morrison is still pushing for a budget surplus and smaller national debt he is not going to give back too much of the taxpayers’ money. However, the rhetoric is clear: if Morrison and Turnbull can push their radical tax platform through the senate – very far from certain – it will increase inequality in what is an already fracturing society. And this, of course, is how Bill Shorten hopes to frame the debate. Forget the pie-in-thesky promised in seven years’ time: with at least two and probably three elections to contend with before 2024, the idea that last week’s budget can be set in stone for future governments to follow is fanciful. There will be much more to be said between now and the forthcoming general election, let alone those to come.
But it is not sufficient for Turnbull to dismiss Shorten’s platform for bigger cuts, more money for schools and hospitals and the prospect of a surplus surpassing the government’s as ‘unfunded, uncosted and unbelieva-Bill,’ which even our articulate prime minister realised was a bit clunky. Shorten has not yet revealed his detailed estimates, but there is no reason to believe they will be either unfunded, uncosted or unbelievable. Apart from removing some of the lurks and perks mentioned earlier, which will put many billions in the exchequer, he will have Turnbull’s corporate tax cuts to bank in future years – unless, of course, they are to be regarded as uncosted and unfunded, which would be a stretch even Matthias Corman would struggle to explain. There is an argument to be had over the competing agendas, amounting almost to ideologies, between the two sides but on early indications Malcolm Turnbull is not getting into policy, he is concerned only with insults. Conflating the budget debate with the dual-citizen saga, our prime minister screams about lack of credibility, UnbelievaBill, boom tish. And he may get away with it for a while, especially in the run-in to the by-elections nobody wants. But sooner or later he will have to tell us just how and why he thinks giving away hundreds of millions in revenue in the near future will really actually build a stronger economy. At this stage it sounds even more vacuous and improbable than Donald Trump making America great again. Still, Trump got away with it, so perhaps Australian voters may be inclined to forgive and forget the divisive, wasteful and largely pointless five years since the coalition came to government. Or less charitable and more realistic, they may not.
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