Economy gets big tick (TheAge)

[Giardiasis]

Only half correct.
PAYG Bracket creep is the other half.

Sure, but that is a result of inflation, not of changing tax rates. Point is inflation is something acceptable to voters, setting higher tax rates is not.

 

[mld]

Here's

Yes, Keane's piece on middle class welfare is very good, and I'm on board with his definition of middle class welfare being any money given to a tax payer that doesn't need that money to live. Anyone receiving money from the government when they could survive without it is basically a bludger.

 

[KnightersRevenge]

Yes, Keane's piece on middle class welfare is very good, and I'm on board with his definition of middle class welfare being any money given to a tax payer that doesn't need that money to live. Anyone receiving money from the government when they could survive without it is basically a bludger.

How do you feel about tax avoidance?

 

[Tiger Rob]

I'd thought I'd made it clear, they spent nothing on infrastructure, thats where the nothing come in. They spent sh!tloads on un-means tested, middle class welfare, thats where the p!ssing up against the wall comes in. No contradiction, very clear, very simple. But don't take my word for it Willo, that pinko organisation the IMF says the same thing, (they also said Rudd was wasteful, so there you go).

Thaw where the philosophies differ. Liberals believe in private investment. Labour believes in public investment. I'm neither here nor there on it, except when the public investments are poorly made.

 

[tigersnake]

Probably easier to deal with the here and now. You can't do much about rewriting history. I think everyone can pull out a story or two from Fraser, Hawke, Keating and Howard. Not much point being a revisionist. It's probably fair to say they all had their good days and bad.

I wonder how much we're paying on all welfare now. I think it gets bigger each year doesn't it? Here's an interesting article


Why Labor now owns middle class welfare
by Bernard Keane
Federal
Much of the criticism of middle class welfare has been directed at the Howard government, which in 2000 overhauled the family payments system to establish Family Tax Benefits A and B as part of the tax system overhaul.

Family Tax Benefits are not middle class welfare per se, of course. The bulk of FTB payments go to lower-income households. But it becomes middle class welfare — a term John Howard loathed — when you don’t restrict access to FTB to people on low incomes.

What’s a low income? Well, full-time adult average earnings at the end of 2010 were just under $69,000 pa. So let’s agree households on over $100,000 a year don’t qualify as low income, however much they may tell journalists they “don’t feel rich” and “struggle to make ends meet”.

In the first year of Howard’s new FTB payments system, payments were forecast to cost just under $10 billion.



Family Tax Benefit payments (actual except for 2011-12) and 2000-01 payments indexed, $b

In this week’s budget, 11 years on, they’re forecast to cost $18 billion in 2011-12. FTB payments have risen much faster than inflation (I used an index of 3.5%). And some of the biggest growth was in 2008-09, the first Rudd government budget when, despite curbs on eligibility for both the baby bonus (a tiddler of a program at around $1 billion a year) and FTB, spending leapt $2.8 billion. That’s because FTB is a favoured vehicle for governments to bribe middle-income voters in the run-up to elections.

If FTB payments had merely grown at normal indexation rates, we’d have had over $26 billion extra in the budget over the last decade.

In short, FTBs are now Labor’s as much as they are Howard’s, which makes the “war on the middle class” rhetoric from News Limited and its journalists even more risible. Howard might have carefully nurtured a sense of entitlement amongst Australians, but Labor has, rather than tackling it, adopted it. One of the strongest defenders of middle class welfare — or family payments, as he calls it — this week has been Wayne Swan himself, despite the witless illustrations to be found in the pages of The Daily Telegraph.

In this, Swan stands outside Labor tradition. The strange ideological flip that has the Coalition supporting unmeans-tested handouts while Labor — purportedly — cuts them back first emerged in the 1980s, when the Hawke government introduced means-testing for pensions, and the Howard-led opposition screamed in outrage, even while it ran televisions ads in the 1987 election campaign accusing Labor of handing out welfare to the undeserving. In fact, in the Hawke-Keating years, Labor was the party of rigour when it came to welfare.

But attitudes toward welfare have always been based not on the policy rationale for it, or on who needed it, but on who was receiving it. People who actually needed welfare have always come under ferocious scrutiny, while those who didn’t have got away decidedly easier.

Forgive the nostalgia, but Australia has, clearly, changed, and not for the better. In the Australia I grew up in in the 1970s, the middle class was proud of its self-reliance, proud that it received no handouts, from government or anyone else. Welfare was seen in some quarters as left-wing income redistribution, bordering on socialism. This partly fueled the remarkable wrath directed at the unemployed under the Fraser government, with incessant media coverage of lazy surfers spending all day sitting on a beach, funded by unemployment benefits.

The language was different, too. People talked about “welfare” and “the dole”. Now, of course, we talk carefully about “transfer payments” and “family payments”. I mean, goodness gracious, no one earning $140,000 would like to be told they’re on “welfare”.

A personal note: I suspect I absorbed those seemingly quaint sentiments, despite being raised in a low-income household. I retain to this day an aversion to unearned income. Don’t get me wrong, I love money — some of my best friends are money — but I don’t want it if I haven’t earned it. That’s probably why I don’t gamble, in addition to the fact that I regard games of chance as a tax on the innumerate. Or maybe it’s because, apart from a brief period early in my parenting years, I and my partner never qualified for any handouts. Perhaps my ongoing fury at middle class welfare is just a lifelong exercise in downward envy.

But whatever the case, clearly, my puritanical streak is at odds with the sense of entitlement and of handout entrepreneurialism abroad in the community, in which any and all handouts should be harvested.

Because, it’s not merely that governments hand over nearly $20 billion. If you’re eligible — if your household income is below $150,000 — you don’t receive the payments unless you apply to the Family Assistance Office. High income earners — families earning over $100,000 a year, let’s say — have to choose to get FTB. That is, high-income earners make a conscious decision to take handouts from government, despite their relative wealth compared to most of the population.

Of course, it’s entirely legal for them to do so, and the prevailing sentiment is quite the reverse of pride in self-reliance — a failure to hunt down every single handout for which you’re eligible is almost a personal failing, doing the wrong thing by your family, almost unAustralian.

As I noted yesterday, however, it’s our children and their kids who will pay the price for this indulgence. They will pay via higher taxes to support us in our dotage, in a fiscal framework in which structural deficit and inbuilt generosity remain prominent features at the point where the impacts of an ageing population are going to start to become apparent. That’s the irony of the argument that middle class welfare rewards people for raising children. Middle class welfare isn’t merely an issue of equity, or of quaint olden days values of self-reliance, but more particularly a growing fiscal problem that we’ll pass on to the very kids we’re using as fig leaves to justify indulging ourselves.

And in the Australia I grew up in, people who took welfare when they didn’t need it were called “bludgers”. It’s not clear why, despite the entitlement mentality on display in the media this week, that same term shouldn’t be applied to households earning substantially over $100,000 a year who choose to receive Family Tax Benefit payments. Aspirational, maybe. Working families, yes. But bludgers, as well.

But of course, that would never do.

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Another opinion piece for what it's worth. Even though he supplies some facts, no doubt it will brushed aside by a few. ;D


Does anyone have a definition for low and/or middle class? Do we have an "upper class"?
Or is it really low, middle and high "income" earners they really mean?
If can anyone tell me how it's defined. Is it the same as the government definition for tax or welfare?

Great article Willo, thanks. Agree with it. The headline is misleading though. Howard owns it. Labor has tried, minimally in my opinion, to put the brakes on middle class welfare (MCW), via introducing means testing, that can't be disputed. As Mld correctly pointed out, it is extremely difficult to take something away that people are used to having. Labor would love to do more, but are effectively snookered. IMO they have been a but gun-shy on the issue after the Latham supposed 'class war', and the very effective News ltd hatchet job he copped. Jumping at shadows. (I'm not a Latham fan BTW, but he was wrongly hung out to dry on that particular issue, but a lot was down to his own political ineptitude).

I agree totally with the sentiment that we have lost our self reliance. Remember the News Ltd-led outrage when the ALP first mooted means testing? It was unbelievable, people on $200K whinging and sooking and crying poor, it was pathetic, embarrassing, why was that not branded as un-Aussie?. And News Ltd was pushing an agenda that that was all OK, the sense of entitlement that Keane talks about. I also agree with the def of MCW, and mld's post above.

To be clear, I'm not saying there is a Lib-Good/ ALP bad opposition on this issue. The ALP have promoted MCW, its just the extent and the no-means testing of the Coalition that I object to the most. And as Keane says, handing money to people who don't need it no-questions-asked, while demonising and making the people who do need it jump through endless hoops.

 

[poppa x]

Can that be explained in the context of this thread poppa?

No.

 

[KnightersRevenge]

No.

Succinct, honest, to the point. Love your work Poppa!

 

[Tiger Rob]

Best example I've seen that IMO clearly explains what is really happening with government spending.

 

[Tiger Rob]

Further to my previous post...

Numbers collected by another person from another site from government data published at:- budget.gov.au

link to original article....www.michaelsmithnews.com/2013/02/the-federal-government-historical-income-and-payments-data-and-charts-the-real-reason-for-the-defici.html

 

[Willo]

Pretty damning.

 

[AngryAnt]

Unfortunately too many have their head in the sand.

$billions wasted and still going down the same path. Infrastructure= pink batts and school halls. Absolute farce.

Livers? Is that you?

 

[MB78]

Thanks Rob for the links. Not surprised at all about their content. But many around here will spin it all around to be a good thing.

 

[Rosy]

Thanks Rob for the links. Not surprised at all about their content. But many around here will spin it all around to be a good thing.

Instead of taking pot shots at others how about discussing why they aren't good? How do Rob's figures in relation to GDP compare with those here? What do they tell us?

 

[MB78]

Instead of taking pot shots at others how about discussing why they aren't good? How do Rob's figures in relation to GDP compare with those here? What do they tell us?

I have stated on this site many times that we have went further into debt than what was required due to stuff ups and waste. The graphs are not pretty reading and I'm worried how our future generations are going to pay back the debt.

And as for taking potshots I just stated I don't agree with many around this forum hardly a crime is it? If you are offended by my potshot surely you would be deeply offended by Antman's post above. BRW I'm not in the least at it wasn't directed at me.

 

[Rosy]

And as for taking potshots I just stated I don't agree with many around this forum hardly a crime is it? If you are offended by my potshot surely you would be deeply offended by Antman's post above. BRW I'm not in the least at it wasn't directed at me.

Not suggesting you committed a crime I wasn't offended by your potshot either. It's par for the course around here unfortunately. I am a self-confessed political and economics ignoramus. I'd like to understand better. You only gave thanks for one set of stats. I was interested to know if the ones I posted told the same story. Tis all.

 

[Liverpool]

Best example I've seen that IMO clearly explains what is really happening with government spending.

Excellent graph mate and hopefully the visual aide will help some people.

I think while the revenue curve matches the spending curve, then the debt is in some control. however, the minute the revenue curve dips and the current government keep spending at the same rate, then we'll be in trouble.

 

[AngryAnt]

I have stated on this site many times that we have went further into debt than what was required due to stuff ups and waste. The graphs are not pretty reading and I'm worried how our future generations are going to pay back the debt.

And as for taking potshots I just stated I don't agree with many around this forum hardly a crime is it? If you are offended by my potshot surely you would be deeply offended by Antman's post above. BRW I'm not in the least at it wasn't directed at me.

They don't call me Ant "Potshot" Man for nothing.

 

[MB78]

They don't call me Ant "Potshot" Man for nothing.

The best in the business. :hihi

 

[Tiger Rob]

I think while the revenue curve matches the spending curve, then the debt is in some control. however, the minute the revenue curve dips and the current government keep spending at the same rate, then we'll be in trouble.

Sorry, can't agree with that, atleast not at the current differential. At present they are outspending revenue by around 8 -12% depending on which year you look at. It does not take too long at all at that rate to suddenly have debt getting out of control. If it was just for 1, 2 or at most 3 years to get the country out of a crisis, yes I could havndle that. To continuously run a budget like that is irresponsible at best.

Think of it like this. If you continued to run your home budget in exactly the same manner, how long do you reckon it would be until the bank decided they wanted to reposses your home?

Another way to think about it is like this. You continue to run your home budget like the government and in your will you leave everything to your kids, including the debt. What do you reckon your kids or grandkids would think about getting a debt as in inheritance??

 

[Liverpool]

Another way to think about it is like this. You continue to run your home budget like the government and in your will you leave everything to your kids, including the debt. What do you reckon your kids or grandkids would think about getting a debt as in inheritance??

Probably the same as when Howard took over after Keating....and Abbott in September from Gillard