Governments collect it – yet they still don’t get it!  A taxing conundrum of greed!

Governments collect it – yet they still don’t get it! A taxing conundrum of greed!

Kevin Rudd has the naming rights for Politics Parade where what remains to be seen is whether or not his stimulus package becomes a revolutionary highway or a dead-end? Credentials for his curriculum vitae have recently changed from ‘economic conservative’ (Kevin 07) to his latest self proclaimed identity of (wait for it) Australia’s leader of “social democracy”. Talk about a fair weather sailor – he linked the Liberal Party to the neo – liberalism that brought about the global financial disaster and yet on the other hand we hear that Australia is best placed to ride out the financial crisis.

As quick as a flash the Howard (neo –liberalism) financial pantry has been emptied and the heat in the kitchen is hotter and hotter. It has now been revealed that December economic growth contracted by 1.2 per cent (according to the Westpac/Melbourne Institute). These figures indicate that Australia too is at recession growth levels.

Wayne Swan (arguably Australia’s greatest ever Treasurer) wrote his blog in The Daily Telegraph yesterday “that’s why the Rudd Government has acted so decisively to support jobs and growth, and cushion Australia from the worst impacts of the global recession. Yesterday retail sales figures showed our Economic Security Strategy really helped to support the retail sector at the end of last year, at a time when retail was in plummeting in other countries.” Nomura economist Stephen Roberts said it was quite a soft result considering the amount of stimulus injected into the economy.

I have long argued that if Payroll Tax was abolished, job security would be strengthened so it came as little surprise when the Australian Chamber of Commerce and Industry (ACCI) took this tax to task this week. ACCI chief said “past recessions tell us that once unemployment goes up, it does not come back to pre-recession levels. Society pays an ongoing price.” We are a small business and are fined well over $100,000 each year simply for employing staff. No doubt Australia’s greatest ever Treasurer missed Payroll Tax in his “Nation Building and Jobs Plan” stimulus package – but there again he has never employed anyone. Payroll Tax delivers state and territory governments approximately $14 billion so how many jobs would $14 billion buy? Guess who doesn’t get it? That would be Fort Fumble (Federal government).

Would you be surprised to learn that Kevin Rudd secretly agreed to let his fellow state Labor counterparts off the hook over $3 billion a year in state taxes by secretly dropping their agreement for receiving GST? The new agreement allows states and territories to keep levying stamp duties on business real estate deals. Peter Costello said that the new deal was actually a Rudd Government tax increase. “Businesses will be paying twice and therefore the public will be paying for the higher taxes.” Do you call that responsible government?

Our rental crisis continues and will only get worse with the global recession and last month recorded the highest increase since 1988. The latest figures from the Australian Bureau of Statistics show that the annual rate of growth across Australia surged 8.4 per cent. So in comes Fort Crumble (State government) where investors are now finding that their tax has jumped as a result of the new premium rate. Bear in mind if you own multiple properties the threshold can only be applied to one property and now should your individual/combined value exceed $2,250,000, your rate (fine) goes from 1.6 per cent to 2.00 per cent in 2009. This explains why rents keep escalating as investors are taxed out of the equation. Guess who doesn’t get it? That would be Fort Crumble!

They do however get some things at Fort Crumble and former union boss John Robertson, now Prisons Minister, awaits his $500,000 (tax payer funded) office fit – out. No doubt in his newly created position of Special Minister of State he can justify such expenditure. After all, our economy is booming and Fort Crumble has a massive budget surplus! The fact that it is stone motherless broke should not be construed as ‘reason for concern’.

Rest easy – Fort Fumble has ruled out tax increases with Australia’s greatest Finance Minister, Lindsay Tanner, assuring constituents that tax revenues will rise again automatically as growth returns. “Without having to change any tax rates they will rise again automatically.” Brilliant – just brilliant and thanks Lindsay for sharing Fort Fumble’s answer to its budget deficit recovery package. Pure genius!

Australia’s greatest ever Prime Minister Kevin Rudd won’t rule out a very early election and Anna Bligh who has to call an election before September 2009 had a bummer of a day when Chris Bombalas dropped a bomb – he won’t contest the next election! The “bomber” now joins eight other pollies who have left the Queensland Labor decks of the “Titanic”’.

Australia’s greatest ever “social democrat” Kevin Rudd would be concerned that Queensland and NSW Labor need more than botox to win the next elections. The Australian National University released its discussion paper “Are State Elections Affected by the National Economy? Evidence from Australia”. The discussion paper was written by Andrew Leigh and Mark McLeish.

They used data from 191 state elections. These are amazing statistics:-

“In the early – 1990’s, the Australian economy entered its deepest downturn in the post war era, with the national unemployment rate reaching nearly 12 per cent in early – 1993.

• During the period 1992 – 1995, six of Australia’s eight states and territories ousted their government.

• By contrast, the mid – 2000s saw the Australian economy enjoying strong growth and falling unemployment.

• During 2003 – 2006, Australia’s unemployment rate averaged 5 per cent. In these years, no state or territory government was ousted from power.

• Were the state leaders who lost office in the early 1990’s unfairly punished for the state of the national economy?

• And were some of those who kept office in the mid – 2000’s unfairly rewarded?

No wonder Australia’s greatest ever Prime Minister and Treasurer are fast tracking an early election.

Or maybe I spend too much time reading reports? No wonder Peter Costello is sitting tight and Malcolm Turnbull is struggling in Politics Parade.

I bet you get it!

Cheers ^__^

This week’s Mosman real estate, Cremorne real estate and Neutral Bay real estate sales

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