Crean draws a line in the sand on our Super

Simon Crean has completely washed away any lingering notion that he was merely a Gillard stooge in the recent failed leadership spill by openly criticising Labor’s looming changes to superannuation legislation.

The feeling that we are in for yet another policy brawl within the ALP was only exacerbated by a seemingly combative appearance by Dr Emerson on Sky New last night.

The Australian reports Crean’s principled objection to any changes to super today in an article entitled Simon Crean to fight plan for superannuation tax changes as internal rift deepens.

As this article is once again behind Evil Rupert’s Evil Paywall™, I will summarise it for those of you who chose not to pay for your news.

Simon Crean has deepened the rift within Labor over looming budget changes to the superannuation regime, declaring he would oppose any move by the government to tax earnings on super accounts.

Launching an attack on Labor’s inability to frame serious policy debate, the senior party figure would not comment on whether he would cross the floor to vote against any changes.

But he called on the government to explicitly rule out changes that retrospectively taxed earnings generated by super accounts, saying it was “tantamount to taxing people’s retirement surpluses to fund our surplus“.

Mr Crean delivered his ultimatum shortly after Trade Minister Craig Emerson called for a discussion on lifting taxes on the superannuation accounts of the “fabulously wealthy”, highlighting the rift in Labor ranks over values and policy substance after last month’s leadership crisis.

Crean is not the only Labor stalwart who has openly criticised the Gillard Government’s approach to superannuation policy following the recent failed leadership coup, with both Martin Ferguson and Bill Kelty voicing concerns about retrospectively taxing superannuation in order to balance the Government’s faltering bottom line.

Even Bernie Fraser, former Reserve Bank governor, Treasury secretary in the 1980s under the Hawke government and a former voice of the industry super movement, said yesterday

…the government’s rhetoric on class warfare and on foreign workers was divisive and desperate but argued that a “good case” could be made for re-examining super concessions for high-income earners.

“It’s very true,” Mr Fraser said of the criticism. “I share the same concern and frustration as to how Labor has lost its way over recent years compared to the Hawke-Keating years, which were devoted to making the whole country and the whole community better off.”

As many other commentators who are far more qualified than I have pointed out,  no “good case” has been made by the Gillard government to tax superannuation, regardless of the respective balances of people’s funds.

Crean continued to not only walk the walk, but talk the talk….

“I will oppose anything that seeks retrospectively to tax people’s accumulated earnings in superannuation,” Mr Crean said.

“..But if the question is the need to ensure the sustainability of the system in the future, then frame the debate properly about what is sought to be achieved and let’s have that debate.

One of the big criticisms I have of this government is that it has failed to frame the debate in its terms. And you are always behind if you fail to frame the debate in your terms.”

Mr Crean would not be drawn directly on whether he would cross the floor but said any attempts to retrospectively target super earnings should be explicitly “ruled out”.

While the article discusses potential changes to the super for what Dr Emerson described as the “fabulously wealthy“, it does note the negatives of any such move..

An alternative strategy would be to increase the tax on contributions to super by high-income earners from 15 per cent to 30 per cent. However, this would not raise as much money.

So it seems it is all about how much money can be potentially raised by increasing taxes on peoples super, as opposed to some noble socialist cause.  It was Margaret Thatcher who famously said in 1976 that

…Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.

Perhaps we should first start to look for “savings“, as Wayne Swan egregiously describes any proposed changes to taxation, in the extremely generous superannuation entitlements of our top public servants and politicians before they look to raid everyone else’s retirement savings.

As the article suggests

One of the problems with raising the tax on earnings is applying it to defined benefit schemes, such as the generous schemes for politicians and public servants that have been closed to new entrants.

If Wayne Swan is defeated at this year’s election, he is eligible for a parliamentary pension of $168,106 a year.

Julia Gillard, if defeated in September, would be eligible for a pension of $177,520 a year.

A worker not on a defined benefit scheme would need to build up a superannuation lump sum of up to $5.6 million to secure the same amount.

I wonder if Dr Emerson would regard Swan and Gillard as falling into this new class of the “fabulously wealthy“, or is that definition only reserved for those of us that actually work for a living?

Anyone got a spare $14,000?

Government debt.

It’s one of the policy areas that is being vigourously debated at the moment by both parties but as anyone who has a basic understanding of statistics will tell you, statistical data can be made to dance any merry old dance, depending on who is calling the tune.

What the ALP would have you believe is that, comparatively speaking, Australia’s current net government debt is very minimal.  But this is only when we are compared with some of the world’s most toxic levels of government debt.

A recent Facebook post from the ALP’s page would have you believe that our debt is minuscule in comparison to everyone else and everything’s going to be alright, Jack.

This is from the party that told us that by 2013 the budget would be in the black by the tune of $1.5 billion.  Julia Gillard promised when she went to Rooty Hill in 2010 that failure was not an option and that they would not fail.

Unfortunately, Wayne Swan’s ability to balance the budget is non-existent and that iron clad promise has now been scrapped.  So the budget’s not going to be in the black by $1.5 billion in a few short months.  So where does that leave us?

Analysis by Bank of America Merrill Lynch shows that Australia’s 2012-13 net debt estimate rose from $54 billion to $144 billion.

But having thrown the promise of a balanced budget out the window, the Bank of America Merrill Lynch forecasts that Treasury would raise that estimate by $21 billion in the May Budget, taking the net debt level to $165 billion.

Respected economist Saul Eslake commented on the ability of the Government to be taken at it’s word:

“The government is starting to develop form when it comes to over-estimating the improvement in its budget balance,”

“So what!” I hear you say. Well it means a lot to be honest.

If these figures are correct then Government debt levels will have blown out by 80 per cent from what they estimated in 2010.

That is an increase of $6,237 for every worker since 2010 and represents a staggering $14,238 worth of debt for every working Australian.

If you want to understand exactly how much debt we have and just how fast we have rung this debt up, check out this post entitled Swans Excessive Debt Curve from another respected economist Sinclair Davidson who, unfortunately for the Government, can see straight through the statistical manipulation of Wayne Swan and calls a spade a spade.

The chart below of quarterly data from the Government’s own website on Gross Outstanding Debt of the Commonwealth (central) Government tells the sorry tale that faces Australia.

As NWA said way back in the day – Don’t believe the hype!

Labor = Taxes, more taxes and even more taxes

Yesterday I read the most astounding article in The Australian – End low-tax virility contest by Patricia Karvelas.

I must warn you though, once again it is behind Evil Rupert’s Evil Paywall, so unless you have already coughed up some dough for your news you probably wouldn’t have heard it reported in the rest of the mainstream media.

And no wonder when you hear what Sen. Doug Cameron was talking about yesterday.

In true Labor fashion, Cameron was spouting on about how the Labor Party should…. wait for it… raise even more taxes to pay for Labors wonderful social welfare initiatives, which are currently unfunded because they have already wasted over $300 billion in less than seven years and the country’s piggy bank is empty.

So much for Rudd’s fiscal conservatism.

Let’s see what Big Spending Doug has to say for himself and the Labor Party that he represents so wonderfully.

Senator Cameron has challenged his party’s leadership to increase tax on super contributions for high-income earners, crack down on trusts, raise the mining tax and introduce other taxes to pay for social welfare initiatives.

“A mere 0.7 per cent increase in the ratio . . . would raise sufficient for us to realise our aspirations to be a good society.”

Senator Cameron said even if Labor did increase taxes, Australia would still be the fifth-lowest taxing country in the OECD.

Regardless of where we stand in comparison to other countries, I would hazard a guess that most Australians probably think that they already pay enough taxes. I know my wife and I do,  almost 40 cents in the dollar to be exact. Anyone who says they are happy to pay more taxes obviously has too much money to care about losing more of it to the tax man.

And when he says “our aspirations” is he talking about all of us, or an ever shrinking band of unionists and green tinged lefties who represent no one but themselves?

Let’s get this straight, my wife and I are not “rich” by any stretch of the imagination and we certainly don’t qualify for any of the government largesse that seems to be readily available for some other people  in our society. But we struggle just as much as the next “working family” to get what we want in our lives.

• We drive a 15 year old car, a hand me down from my folks that is so clapped out we call it the Old Grey Ghost.
• We struggled and went without to save up our money to buy a block of land
• We then struggled some more to save up to build the house on that land, all the while we were paying rent as well.
• We struggled and went without to save up our money to pay for our own wedding.
• We struggled and went without to save up our money to have our baby.
• And currently we are struggling and going without to just put food on the table while I look for a new full time job after leaving my last job, which was driving me insane.

But now that we are temporarily on only one wage there is no government assistance for us because apparently my wife earns too much.  Could of fooled me, because we never seem to have any money after we pay all our bills and meet all of our financial commitments.  We don’t depend on anyone else but ourselves to look after the things that we want in our lives.

• No unemployment benefits to help bridge the gap in the short term, despite being both of us being net contributors to the support of others for over 15 years.
• No rent assistance for us either, despite having a $400,000 mortgage that always has to be paid otherwise the bank will foreclose on our dreams.
• No family assistance to help pay all the myriad of doctors bills and medical tests that go with trying to have a baby.

Now, I dont necessarily want any government handouts because I think the sense of entitlement that many Australians have is extremely unrealistic and extremely unsustainable, especially so given that we have a rapidly ageing population as well as importing another cohort of intergenerational welfare recipients into this country, whilst demonising productive workers who actually contribute to our society in a meaningful way.

Heck, we take responsibility for our own lives to the point that I am even doing night time work as a bloody carpet cleaner to make ends meet while I look for “proper” work and undertake further study/training to further up skill myself and make myself even more suitable for full time work.

I’ve found out in recent weeks that there are so many jobs out there that many Australians consider “below” them, hard low paying jobs that are done increasingly by people who have only just arrived  to our country legally or are just travelling through because they all actually understand first hand that there is no such thing as a free lunch… unless you qualify somehow for a handout from the ever increasing welfare state here in Australia.

And Labor want to slug us tax payers again to pay for their wonderfully utopian ideas for a “fairer” Australia?

Tell me what’s fair about taking money from someone who has earned it from the sweat of their own brow and giving it to someone whose only sweat is from sitting down for so long that they dont even know what work is anymore?

What’s fair about being a taxpayer  for 15 years and contributing to the welfare of others but not receiving any support when you actually need it to get back into the game?

The never ending Age of Entitlement and the assumption that someone else has to pay for things you want has to end.

If you want something, then you have to work for it, not take it from someone else who has.