Politicians make remarks without basis

THE thing about modern day politicians is their short-term focus.

You can bet every two weeks one side or the other will make an earth-shattering announcement designed to kick a goal in the coming round of popularity polling.

This is the stimulus for Tony Abbott's latest unachievable promise to up defence spending as a percentage of GDP to Howard government levels.

Just out of interest, spending fell during the Howard era relative to that of the Hawke-Keating years.

It is also what is behind Wayne Swan's ludicrous repeated promise to put the budget in the black next year.

The initial promise was made last May when economists in Treasury were tipping increased taxation revenues from mining, big-end corporate profits, increased employment and capital gains.

Reality bites.

Many of the big miners are saying that they won't be paying the vaunted new taxes on mining this year because of falls in commodity prices, delays in development and increasing costs.

Partly because Australians are keeping their spending under control, corporate profits are at best flat across the board.

There has been the expected reduction in unemployment but the fact is that much of the income is part-time casual that does not provide a fillip to government tax revenue but on the contrary, requires augmenting from social security payments.

The fact remains that 2.2 million people in this country are living under the poverty line and 600,000 kids live in households where nobody is employed.

Then there was the hope for capital gains tax revenues.

This won't happen: the new property market is recessed, the on-sale property market is flat and the sharemarket is pretty much a basket case.

I have said it before but I'll say it again, this Labor government seems intent on unravelling the advances made by the forward looking Hawke-Keating Labor government. No longer are aspirational Australians encouraged.

The Gillard government seems insistent on returning to the 1940s in promoting classism in Australia based on wealth.

The thin edge of the wedge was the attack on "high" income earners paying private health insurance premiums.

Next they doubled the tax to be paid by super fund trustees on contributions made on behalf of "high" income earners.

Swan is obsessed with keeping his promise of a budget surplus.

There is definitely more to come and the $1.4trillion in super savings will be the target. You watch!

Bob Lamont is senior partner in Corporate Accountants and Rid Tax at the Night Owl Centre, Gladstone. He welcomes your questions directed to boblamont1947@hotmail.com.



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