Alan Kohler is one of Australia’s most experienced commentators and journalists. Alan is the founder of Eureka Report, Australia’s most successful investment newsletter, and Business Spectator, a 24-hour free business news and commentary website. He also hosts Inside Business, a half-hour Sunday programme on the ABC, is the finance presenter on the ABC News - and producer of the nightly graph (or two).
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Comments on this article
Comments PolicySurely there's only one way to clean up this mess. (See Gillard must mop up Swan's mess, June 25).
The only way to deal with an incompetent treasurer is to remove him from the job.
As a Queenslander, I, along with family, friends and neighbours reacted with sheer disbelief when the last federal election saw Kevin Rudd and Wayne Swan elevated to such important positions.
From past experience with both of them here in Brisbane, we knew that they were not up to the job.
We didn't have to wait for Swan to show his ignorance of the projected inflation figures (at his first major presentation).
We were not surprised to see Swan publicising a graph with incorrect information about how much tax the miners paid last year. The man is clueless and we all know it. It just amazes us that it took the journalists so long to realise it.
Ken Henry created a Keynesian mess. The stimulation was too big to stop a recession that wasn't going to hurt us means a bigger hit later, unless new sources of revenue can be found to cover the ongoing losses. (See Gillard must mop up Swan's mess, June 25).
When the GFC hit it was time to agree to stimulate but do nothing. Australia would have sold commodities to the stimulators.
We needed a real liar and conniever, someone capable of fooling the IMF. Someone like Bob Hawke or John Howard would have done nicely.
It amazes me that hardly anyone sees that the deficit spending, given the credit for keeping us out of recession, was comprised of funds which were either borrowed or taken in taxes from the very same community into which this money was pumped. (See Gillard must mop up Swan's mess, June 25).
The money was spent by government on things which we the citizens would not have chosen had we been able to keep it.
We would either have saved it for a rainy day which would have meant more investment when conditions were appropriate or spent it on projects which we currently preferred over those that government chose given its political agenda.
Now, we are saddled with bum projects and have lost forever (or many years) the ability to fund things we prefer.
No one has written about the sleight of hand in the reduction in company tax to 28 per cent, which only affects foreign companies and shareholders. Most Australian shareholders will be paying at least 31.5 per cent tax on their dividends, which means the government will bill them an extra 3.5 per cent tax. Those who pay less tax will obviously receive a smaller refund due to the franking credits being franked to 28 per cent. Most small business taxpayers in trusts or companies will need to pay dividends to their shareholders and pay the top-up tax and so they will not see any benefit from the reduction in company tax rate.
The RSPT bogey is out of the box so going into an election saying it will all be sorted out later just creates the sort of uncertainty Tony Abbot will love to trumpet about. (See Gillard must mop up Swan's mess, June 25).
The mining industry has brazenly brought down a prime minister and they aren't going to help the negotiations with a party that supported that which they fought so hard.
Most Australians will be disturbed with the idea that the mining industry has this sort of power and may be inclined to vote against any party who is perceived to be bowing to it.
I really didn't understand the rationale for the RSPT other than the reasonable point that Australians should get a fair share of the value of resources.
No one ever explained what a fair share amounts to, who is entitled to it and in what proportions.
If the argument is that Australians should get a greater share of the wealth from Australia's resources, then I don't understand where a simple issue like that turns into a tax on profits instead of a charge for the resources.
Australia would then get a reasonably, reliable income stream that is not subject to currency fluctuations, transfer pricing and other variables.
Because minerals extracted from one site may be more expensive to mine than from another site, and thereby be a deterrent to the business case for the more expensive mine, the government could negotiate a price for resources from each site, taking into account the cost of mining and company-provided infrastructure for transport and loading.
Since when were taxation decisions taken in consultation with the affected parties?
I don't see you clamouring for the cigarette industry to have a say in whether or not smokes should go up by $4 a packet.
Of course affected parties are not going to like it, but it's dangerous when a powerful lobby group wants to dictate policy.
The reality is the RSPT plays a very minor role in Wayne Swan's claim to getting our country back in the black in 2012-13.
According to government budget figures, the estimated individual tax for 2009-10 is $123.35 billion. In 2012-13, Mr Swan says it will be $164.8 billion. That's a cool $41.45 billion extra, or a 38.6% increase.
In the same period, company tax is supposed to contribute an additional $26.23 billion.
If Mr Swan's figures are right, who needs the RSPT?
While he has convinced most, including all the journalists of Australia, of a need to focus on 2012-13, what about the deficits he accepts for the years leading up to that date.
They are $25.637 billion for 2008-09, $49.007 billion for 2009-10, $32.822 billion for 2010-11 and $8.115 billion for 2011-12.
In cricket, it is called taking your eye off the ball and that is exactly what everyone in this beautiful country of ours is doing.