11-05-2005 14:25									#1
	Tax cuts and Budget surplus - the Australian way Full PM-box? Change here!

Last nights budget included major tax cuts which comes on top of large tax cuts in last years budget, yet it still leaves the gov't with one of the largest projected surpluses on record. In the space of 3 years the highest rate of marginal tax, 47% will cut in at $125 000, up from the previous $60 000, and other tax rates have been cut, or had their thresholds lifted as well. The net debt of the Australia government is now close to zero after a series of budget surpluses, a situation far different from USA and most European countries.
The gov't claims this is the result of their superior economic management which has given the country about 15 years of continuous growth with no recession and the future looks just as promising.

	11-05-2005 14:45									#2
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And all because of China...

	11-05-2005 16:27									#3
	Re: Tax cuts and Budget surplus - the Australian way Browse Apolyton AD-FREE

quote: Originally posted by trev and the future looks just as promising.

Then you're not looking hard enough. The hangover from the housing bubble is really starting to bite, with retail sales being static and businesses expecting things to get worse. In addition, the commodities boom has probably peaked, with extra capacity now increasingly soaking up the demand from Asia.

All up, while a recession isn't on the cards, few economists believe Treasury's prediction of 3% growth.

Incidently, pumping money into the economy via tax cuts at the same time the Reserve Bank is trying to slow the economy through increasing interest rates strikes me as being less then good economic management...

	11-05-2005 17:29									#4
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That is why the tax cuts are spaced over two years, particularly those aimed at the more wealthy Australians.

Thankfully the poorer among us get something too. The first tax bracket after the $6000 tax-free threshhold has dropped from 17c / $ to 15c.

	11-05-2005 17:31									#5
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Now to convince the wife to move to Oz.

	11-05-2005 17:45									#6
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It sounds like Howard is actually a decent leader. To bad we have shrub.

	11-05-2005 17:52									#7
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I imagine this has more to do with external factors than Howard's leadership.

	11-05-2005 18:25									#8
	Avatar Enlargement: We've got the solution

The improvements in the ecomy,yes. There is the matter of the government being responsible enough to live with in its means and to not give money to every special interest under the sun in order for an unpopular President to get reelected.

	11-05-2005 19:58									#9
	Avatar Enlargement: We've got the solution

Australia is making it easier to immigrate there if you meet their skills criteria. Unfortunately for you, the partial list I saw did not include web designers. However, I'm sure you could probably qualify under another skill category.

	11-05-2005 20:00									#10
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I'm sure I could. I've been a sys admin and a net admin, and I want to go into database programming. The trouble isn't getting in to Oz so much as getting the wife out of North America. Her mother is terrified of flying, especially since 9/11 and she's very attatched to her family.

I am too, but I ain't stayin' to be put in some concentration camp for Christian apostates.

	11-05-2005 20:02									#11
	Got spare money?

She can always visit on a cargo ship. Many of them do have berths for passengers. It just takes a long time.

	11-05-2005 20:03									#12
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Yeah, that wouldn't work either. Her mother is pretty much terified of everything. She won't even go on an expressway after she had an accident (clipped by another motorest and sent her spining around the Dan Ryan).

	11-05-2005 20:04									#13
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If that's the case, how does she visit now? There have been plenty of train and bus accidents in the news over the years.

	11-05-2005 20:06									#14
	Got spare money?

She doesn't. We visit her, but it's much easier being on the same continent.

This is woman logic we're discussing, okay.

	11-05-2005 20:11									#15
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Flying is safer than driving, plus Australia boasts the only major airline to not have an accident.

I'll probably bring this thread back on-topic tomorrow after I've had some sleep.
Some of the taxation rulings seem interesting.

	12-05-2005 08:40									#16
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And here are the actual tax thresholds.

Current -> From July 1, 2005

code:

   

      
   Income Range $   
      
   %   
      
   Income Range $   
      
   %   
   
   

      
0 - 6000
      
0
      
0 - 6000
      
0
   
   

      
6000 - 21,600
      
17
      
6000 - 21,600
      
15
   
   

      
21,601 - 58,000
      
30
      
21,601 - 63,000
      
30
   
   

      
58,001 - 70,000
      
42
      
63,001 - 95,000
      
42
   
   

      
70,001+
      
47
      
95,001+
      
47
   

	12-05-2005 08:49									#17
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And immigration skills list expanded to 56 professions. Do not have the list though I do know that hairdressers have been added to it.

	12-05-2005 09:01									#18
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quote: Originally posted by chegitz guevara Now to convince the wife to move to Oz.

What, so y'all can live the good life riding the upside of the Laffer curve?

[singsong] Che loves Reaganomics! Che loves Reaganomics! Che and Reagan sitting in a tree. K-I-S-S-I-N-G. First comes love. Then comes marriage. Then comes Laffer in the baby carriage! [/singsong]

	12-05-2005 09:09									#19
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Don't forget the other side of the equation: spending. To be honest, I don't know how much of her economy that Australia's government spends. But those income tax rates are damn high, unless those are the only taxes that you have to pay.

	12-05-2005 09:11									#20
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Oh, I know. But still, the idea of a Communist wanting to move to a country that's lowering their marginal tax rates is just too rich.

No pun intended, of course.

	12-05-2005 09:14									#21
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Actually, I wasn't addressing the post to you, but rather to trev.

	12-05-2005 09:17									#22
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Ahhh.

You know, that "reply with quote" button comes in real handy sometimes.

	12-05-2005 09:22									#23
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Skanky: I'm curious about those tax rates. Do those incomes include deductions, such as mortgage interest? Additionally, are there tax credits for children?

JohnT:

	12-05-2005 10:13									#24
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Tax credits were recently introduced for children, at roughly $5000 for a first child. I'll have to look the numbers up though. The Howard government is pro-family and have been seeking to increase the birth rate for quite some time.

Those income ranges are taxable income ranges, so are total income minus total deductions. After 1 July 2007 the highest tax-rate will be payed by those earning over $125,001 taxable income which means the top marginal rate of tax will be payed by roughly 3% or Australians, rather than 10% as was (up until now) currently the case.

There are quite a number of other tax credits too, including my favourite "low income tax offset".

	12-05-2005 10:17									#25
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the economist has a whole section in their last weeks issue about australia, mostly showing that this growth might slow, but will still remain positive for a while to come.

	12-05-2005 10:59									#26
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Unfortunately, given our dependence on raw material exports, we're price takers. Treasury forecasted that commodity prices would probably fall as the market adjusts, which will affect Australia's revenue. A major contribution to the surplus was from extra company taxes due to high commodity prices.

There are still areas where the Government can improve. They've got to fix the infrastructure problems that are slowing down industry. And they could be doing more to help train Australians to fill the skills shortage. Plus these tax cuts give an additional 60+ dollars a week to high income earners, but only 6 dollars to an average income earner. That's not exactly a big deal.

	12-05-2005 11:17									#27
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quote: Originally posted by JohnT [singsong] Che loves Reaganomics! Che loves Reaganomics! Che and Reagan sitting in a tree. K-I-S-S-I-N-G. First comes love. Then comes marriage. Then comes Laffer in the baby carriage! [/singsong]

Nice rhyme, but, the problem is Howard balanced the Australian budget instead of running up massive deficits. That is the major accomplishment and it is highly unReagan of him.

	12-05-2005 12:04									#28
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REEEEEEEEEEJECTED

	12-05-2005 13:45									#29
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There are very substantial benefits paid every 2 weeks to families with children, which pay the majority of the cost of keeping children when one parent is not working, a bit less generous for 2 working parents, but still very useful. Many Australians do think the tax rates are far too high, but then America's tax rates would be much higher too if they ran a budget surplus of 1% of GDP, also we do not have state income taxes or other major sources of tax for the states, they are mostly funded by the 10% GST which is collected by the federal gov't and passed on to the states

	12-05-2005 13:53									#30
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There is also the final stage of tax cuts to come in on July 1, 2006, where the top thresholds are raised respectively to 80 000 and 125 000 I think. Unlike USA there are also no deductions from our wages such as a social security tax, all superannuation payments are made directly by employers at a rate of 9% of wages excluding overtime payments, so for a reasonable comparison your social security tax should be added to your tax rate.