Swan’s mini budget ‘savings' mainly tax increases
… we still find the greedy hand of government thrusting itself into
every corner and crevice of industry, and grasping the spoil of the multitude.
Invention is continually exercised, to furnish new pretenses for revenues and
taxation. It watches prosperity as its prey and permits none to escape without
tribute.” – Thomas Paine
Cartoon: By Nicholson
‘World’s best Treasurer', Wayne Swan’s original budget for this year
was initially treated with skepticism over his contention that Chinese growth
would continue virtually unabated despite evidence to the contrary. Since then, revenue has declined
dramatically, resulting in a shortfall that has been obvious for nearly as long
as the budget has been out there.
As result WBT Swan has announced a ‘revision’ in which he has found
what he calls ‘savings’ of $16.4 billion.
The trouble with this is that apart from a reduction of the ‘baby bonus’
for second and subsequent children, all of the others are tax increases of
reductions in areas like the Medicare Rebate, which will probably take people
out of private insurance into the public sector.
Probably, the worst of these measures is forcing big companies to pay
their corporate tax monthly, which will raise the take by $8.3 Billion over
four years. In doing so the amount
of investment capital of these companies is reduced along with a substantial
increase in compliance costs.
Referring to increased taxes as savings is not just an Australian phenomenon,
but is used as a sugar coated poison pill worldwide. To the man in the street, it may, and is dishonest and
deliberately deceitful; however, when the attitude of the state is factored in
it may not be strictly the case.
In the main governments do not see any limit on their powers of
taxation, other than in some cases Constitutional requirements that can usually
be bypassed with clever wording and legal phraseology. Indeed, former French Finance Minister
Jean Baptiste Colbert described the art of taxation as, “So plucking the goose
as to get the most feathers with the least hissing.”
In the eyes of Wayne Swan, he is entitled to take whatever he wants
from whomever he wants, whenever he wants. Given this view, it is reasonable to assume that he sees
that portion of what the taxpayer gets to keep above what he feels he can take
is actually wasted. To him, a tax
increase is actually a preventative measure designed to reduce funds that the
taxpayer might otherwise splurge on himself. It therefore constitutes a saving in his eyes.
This is not the most innovative excuse for a tax rise. Those old enough to remember the
election of the Hawke Keating government will recall that one of their earliest
acts, was a tax hike which it was claimed was to ‘reduce the excessive
liquidity’ out there in the community.
Apparently, we had so much money sloshing about in our pockets it was
causing inflation.
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