Another car tax

[Blue heaven]

Are you struggling with calculating 7%? Or have you based that on pre-tax. I’m sure they will double dip.

In NSW the stamp duty on the sale of cars is currently 3 per cent on vehicles priced less than $45,000 and 5 per cent on every dollar above that.


The opposition’s proposal would increase stamp duty to 7 per cent on every dollar above $100,000.

 

[Shock-On-T]

At some point governments have to realise that taxing more instead of cutting stupidity and waste is very bad for the economy.
I guess they are missing the stamp duty on overpriced sydney houses

The problem with that argument is that stupidity and waste are already as low as the stupid and wasteful politicians can possibly get them.

 

[Shock-On-T]

And how has that worked out over the past 20 years where it’s been done? Can anyone think of any examples where a private contractor delivers a formerly government provided service to a higher quality and lower or comparable cost than the situation prior? Do they outnumber the examples where the opposite is true?

Yes, many. They are just unknown to the general public because they are not of interest to the press.
There are good people in the civil service making smart decisions which save us money all the time. It's just that it's more interesting to report on instances of wastefulness and stupidity, of which, admittedly, there is no shortage...

 

[Tasdoc]

And how has that worked out over the past 20 years where it’s been done? Can anyone think of any examples where a private contractor delivers a formerly government provided service to a higher quality and lower or comparable cost than the situation prior? Do they outnumber the examples where the opposite is true?

Hint: Nationalisation vs privatisation

 

[Mark E]

Yes, many. They are just unknown to the general public because they are not of interest to the press.
There are good people in the civil service making smart decisions which save us money all the time. It's just that it's more interesting to report on instances of wastefulness and stupidity, of which, admittedly, there is no shortage...

In some instances it makes sense where the service being delivered is specialist and/or not capital intensive. Sadly most of the privatisations are not in that category. A classic example are tollways. If a private company can go to the market and raise capital, build a tollway, operate it for 20 years at an attractive rate of return for the investors and then return it to the government then the users of the said motorway are paying at least 20-30% more for the privilege of it being 'off of the government books'. There is no magic pudding of money and just because it's not your tax paying for it doesn't mean it doesn't cost you money.

Governments can raise money cheaper than the general market, and especially when the investors for the projects are overseas owned, the bulk of the profits go overseas, damaging our balance of payments and making us generally poorer.

Another classic example is our resources industry - especially gas. Compare and contrast the return to Australia for our gas exports compared with Qatar. We are about to eclipse Qatar as the largest CNG exporter globally and will earn around $600M in royalties. Meanwhile Qatar's mostly government operated facilities return around $26Bn. We also don't see any taxes returned and I read an article that estimated we effectively gave away $90Bn.

Then let's look at our electricity debacle - the privatisation and separation of the generation, distribution and retail components of our system has resulted in the gaming of the system by the generators who deliberately restrict generation and push spot prices astronomically to maximise profit, the over capitalisation and inappropriate development of the grid due to the guaranteed 10% ROI on any infrastructure deployment, and finally an additional layer of unnecessary margin to the retailers who have been consistently opaque and add little if any benefit to the consumer. We could remove 15% from our power costs by simply removing the retailers from the equation. Since there is only a single power line coming into my house, choosing a retailer is pointless, and us consumers are paying for the advertising as the retailers compete to send us a bill and clip a ticket. What value add can they possibly provide? They don't read the meter, distribute the power or generate it.

I'm also happy to discuss disability services, education, telecommunications and health services offline if you are interested. While I am a capitalist at heart, there are simply some things that privatisation should NOT be a part of since they do not add any value or real competition, add efficiency nor reduce consumer costs. They simply shift costs from the government's tax base to the taxpayer directly. Make no mistake, we still pay, and generally pay more.

There is an old saying that I heard over 30 years ago now that holds true here - "Privatise profit and socialise costs".

 

[Shock-On-T]

In some instances it makes sense where the service being delivered is specialist and/or not capital intensive. Sadly most of the privatisations are not in that category. A classic example are tollways. If a private company can go to the market and raise capital, build a tollway, operate it for 20 years at an attractive rate of return for the investors and then return it to the government then the users of the said motorway are paying at least 20-30% more for the privilege of it being 'off of the government books'. There is no magic pudding of money and just because it's not your tax paying for it doesn't mean it doesn't cost you money.

Governments can raise money cheaper than the general market, and especially when the investors for the projects are overseas owned, the bulk of the profits go overseas, damaging our balance of payments and making us generally poorer.

Another classic example is our resources industry - especially gas. Compare and contrast the return to Australia for our gas exports compared with Qatar. We are about to eclipse Qatar as the largest CNG exporter globally and will earn around $600M in royalties. Meanwhile Qatar's mostly government operated facilities return around $26Bn. We also don't see any taxes returned and I read an article that estimated we effectively gave away $90Bn.

Then let's look at our electricity debacle - the privatisation and separation of the generation, distribution and retail components of our system has resulted in the gaming of the system by the generators who deliberately restrict generation and push spot prices astronomically to maximise profit, the over capitalisation and inappropriate development of the grid due to the guaranteed 10% ROI on any infrastructure deployment, and finally an additional layer of unnecessary margin to the retailers who have been consistently opaque and add little if any benefit to the consumer. We could remove 15% from our power costs by simply removing the retailers from the equation. Since there is only a single power line coming into my house, choosing a retailer is pointless, and us consumers are paying for the advertising as the retailers compete to send us a bill and clip a ticket. What value add can they possibly provide? They don't read the meter, distribute the power or generate it.

I'm also happy to discuss disability services, education, telecommunications and health services offline if you are interested. While I am a capitalist at heart, there are simply some things that privatisation should NOT be a part of since they do not add any value or real competition, add efficiency nor reduce consumer costs. They simply shift costs from the government's tax base to the taxpayer directly. Make no mistake, we still pay, and generally pay more.

There is an old saying that I heard over 30 years ago now that holds true here - "Privatise profit and socialise costs".

Yes, I completely agree with you.
My point about smart civil servants was more small-scale, where it is sometimes smarter/cheaper to outsource certain services.

Privatisation of public assets (electricity, water, roads, hospitals, prisons) is absolutely horrendous. It is usually a short-term cash-grab, often with a kickback down the road for the influential politician, very rarely in the long-term public interest.

 

[paulp]

Just because something is legal doesn’t make it ethical or moral. The “what’s in it for me” attitude also infects the thinking on addressing climate change - everyone would be better off overall if everyone just did their bit without trickery. Same with taxation. People squeezing down the tax balloon in their corner of existence just forces it to pop out somewhere else and we get taxes like this one. As I said, reap what you sew.

Can’t agree with your first sentence. If there is a legitamate tax deduction available under Australian law, I’m absolutely taking every cent of it without any feeling of immorality or unethical dealings. Now tell me, do you claim all of your tax deduction opportunities?

With climate change I do my bit. My properties are officially recognised as the greenest in Adelaide, my house creates more power than it consumes, and I have electric cars charged by the sun. None of this comes cheap.....and yet to demonstrate or claim I have the most energy efficient office building in SA, I have to pay a levy to the government of NSW (no that isnt a typo). As does every other commercial building owner in Australia that leases or sells built assets under current legislation. So thats using the environment for NSW to extraxt tax outside its durisdiction. That is immoral. They don’t need more.

 

[Tasdoc]

In some instances it makes sense where the service being delivered is specialist and/or not capital intensive. Sadly most of the privatisations are not in that category. A classic example are tollways. If a private company can go to the market and raise capital, build a tollway, operate it for 20 years at an attractive rate of return for the investors and then return it to the government then the users of the said motorway are paying at least 20-30% more for the privilege of it being 'off of the government books'. There is no magic pudding of money and just because it's not your tax paying for it doesn't mean it doesn't cost you money.

Governments can raise money cheaper than the general market, and especially when the investors for the projects are overseas owned, the bulk of the profits go overseas, damaging our balance of payments and making us generally poorer.

Another classic example is our resources industry - especially gas. Compare and contrast the return to Australia for our gas exports compared with Qatar. We are about to eclipse Qatar as the largest CNG exporter globally and will earn around $600M in royalties. Meanwhile Qatar's mostly government operated facilities return around $26Bn. We also don't see any taxes returned and I read an article that estimated we effectively gave away $90Bn.

Then let's look at our electricity debacle - the privatisation and separation of the generation, distribution and retail components of our system has resulted in the gaming of the system by the generators who deliberately restrict generation and push spot prices astronomically to maximise profit, the over capitalisation and inappropriate development of the grid due to the guaranteed 10% ROI on any infrastructure deployment, and finally an additional layer of unnecessary margin to the retailers who have been consistently opaque and add little if any benefit to the consumer. We could remove 15% from our power costs by simply removing the retailers from the equation. Since there is only a single power line coming into my house, choosing a retailer is pointless, and us consumers are paying for the advertising as the retailers compete to send us a bill and clip a ticket. What value add can they possibly provide? They don't read the meter, distribute the power or generate it.

I'm also happy to discuss disability services, education, telecommunications and health services offline if you are interested. While I am a capitalist at heart, there are simply some things that privatisation should NOT be a part of since they do not add any value or real competition, add efficiency nor reduce consumer costs. They simply shift costs from the government's tax base to the taxpayer directly. Make no mistake, we still pay, and generally pay more.

There is an old saying that I heard over 30 years ago now that holds true here - "Privatise profit and socialise costs".

Perhaps, Qatar's gas industry is not the best example of a government-run business. It is more like a family-owned enterprise as everything of value in Qatar belongs to the Al Thani family. They have to distribute some dividends to regular Quataries, I suppose, but still, the whole Qatar Gas is as private as a business of this size can ever get.

I could go through other arguments in your post and discuss education, health services etc, but it is not the point I am trying to make. Unless we want to argue with Nobel prize laureates in economics, we have to accept the fact, that whatever service government provides, it provides it at x2 costs compared to a private enterprise driven by market forces. Hence it makes perfect sense for the government to only provide vital services, such as justice, defence etc.

Free economy driven by market forces has its own disadvantage - it tends to redistribute resources from less efficient to more efficient, so after a while you end up with few people owning everything and the rest left with nothing. Here comes another important function of the government - setting rules and regulation to prevent corruption.

 

[Vostok]

Can’t agree with your first sentence. If there is a legitamate tax deduction available under Australian law, I’m absolutely taking every cent of it without any feeling of immorality or unethical dealings. Now tell me, do you claim all of your tax deduction opportunities?

Interesting you ask me that. I could refuse to answer since it’s my business, but since I’ve put my philosophy out there, no, I do not claim all of my tax deduction opportunities. The only item I claim is for charitable donations that I make, because I think the government should invest more in social services and international aid and that is an indirect way of making them do so. That’s it. I do not claim any other type of deduction or the up to $300 that one can claim without receipts.

 

[Vostok]

In some instances it makes sense where the service being delivered is specialist and/or not capital intensive. Sadly most of the privatisations are not in that category...

There is an old saying that I heard over 30 years ago now that holds true here - "Privatise profit and socialise costs".

Amen... very well put. Governments have a phobia at borrowing (debt bad! unless Govt is urging households to spend! spend! spend! in which case debt good!) which makes little sense when they can leverage their sovereign credit rating. Another old saying... what’s the point of an AAA credit rating if you never use it?

I don’t have an issue where genuinely contestable services are “privatised” (which is the wrong word, but it’s so ingrained no point fighting it...). An example was the Government Printing Office. A genuinely contestable service that is not central to social function, so a good argument can be made that the government didn’t need its own printer.

But airports, roads, social services... land titles offices... not so much. Look at the profitability of Sydney Airport - can anyone say with a straight face that the consumer is now better off? What about the litany of dodgy commerical training and employment services providers that have done little except rip off the taxpayer before going bust?

And the real problem with governments “privatising” non-contestable services is that they have demonstrated time and time again they are truly appalling commercial negotiators. They have no clue, and get totally reamed by the experienced commercial negotiators in the huge listed companies they are dealing with.

Governments go to water when these companies bluff their risk profiles and so they agree to all sorts of terms and conditions that are close to immoral. Toll roads for example... 4% or CPI indexation, whichever is higher? Seriously? Where is the sharing of risk there? Free money straight from consumers to the owner. Constraints on permitting competing transport options during the term of the contract? Disgraceful... the ACCC should be all over that.

Part of this is due to the hollowing-out of public sector expertise because of... you guessed it, perceptions that public sector expertise is lazy, inefficient, and not worth the money. We all lose in the end.

If I was on the government side of the table, I would say “here are the costs, terms and conditions of this deal which would deliver this service or bit of infrastructure at the same or better quality and at the same or lower cost than we can. If you don’t like it or don’t think you can meet those Ts & Cs, then we’ll do it ourselves.”

 

[Shock-On-T]

Interesting you ask me that. I could refuse to answer since it’s my business, but since I’ve put my philosophy out there, no, I do not claim all of my tax deduction opportunities. The only item I claim is for charitable donations that I make, because I think the government should invest more in social services and international aid and that is an indirect way of making them do so. That’s it. I do not claim any other type of deduction or the up to $300 that one can claim without receipts.

I’m sure you have good intentions, but you are effectively making beneficiaries of all Australians, rather than your own kin.

As I young single man I would sometimes tip extravagant amounts, or give a homeless guy $50, or buy a friend a $300 bottle of wine (even if it was my last $300 before next pay!).
Now that I have a family and children I would rather put the money toward their future security.

 

[Vostok]

and yet to demonstrate or claim I have the most energy efficient office building in SA, I have to pay a levy to the government of NSW (no that isnt a typo). As does every other commercial building owner in Australia that leases or sells built assets under current legislation. So thats using the environment for NSW to extraxt tax outside its durisdiction. That is immoral. They don’t need more.

Is the levy compulsory, regardless of whether you want to make an energy efficiency claim or not? If not, presumably you’ve done your business case and you see value in the ability to “demonstrate or claim I have the most energy efficient office building in SA” and hence are willing to pay the levy, e.g. you think it enables you to attract more tenants or charge more rent because the tenant will have lower energy costs that more than offset it.

 

[Vostok]

I’m sure you have good intentions, but you are effectively making beneficiaries of all Australians, rather than your own kin. Now that I have a family and children I would rather put the money toward their future security.

Correct, that is my intention. My family and children already have a secure future, and that is an extremely privileged position to be in. So I have no issue with those less well off than myself getting more taxpayer funds being sent their way.

 

[Shock-On-T]

Correct, that is my intention. My family and children already have a secure future, and that is an extremely privileged position to be in. So I have no issue with those less well off than myself getting more taxpayer funds being sent their way.

Fair enough, good for you.

 

[Mark E]

Unless we want to argue with Nobel prize laureates in economics, we have to accept the fact, that whatever service government provides, it provides it at x2 costs compared to a private enterprise driven by market forces.
.

That I cannot, and will not accept. It is a blanket statement and frequently proven to be completely false. Has banking become cheaper now that CBA is no longer government owned? Has the price of electricity in Vic dropped since it was sold off? Did Telecom suddenly become more efficient and cost less after it became Telstra and was floated?

Why is dentistry so much more expensive than it needs to be? Look at the cost and quality of vocational training now that TAFE has been ruined.

The only motivation for government to use private enterprise is to keep the cost off of the government's books and therefore at arms length.

 

[paulp]

Is the levy compulsory, regardless of whether you want to make an energy efficiency claim or not? If not, presumably you’ve done your business case and you see value in the ability to “demonstrate or claim I have the most energy efficient office building in SA” and hence are willing to pay the levy, e.g. you think it enables you to attract more tenants or charge more rent because the tenant will have lower energy costs that more than offset it.

Yes the levy is compulsory (federal government requirment) if you want to lease or sell your building. If you want to leave it empty, no need to pay. The interesting thing is that small tenants don’t care about energy outcomes, they just want a great office at a good price (in my market). Larger corporate tenants like to be seen to be doing the right thing so they absolutely consider energy ratings.....but then leave all their lights and aircon on all night.

 

[Sluggabed]

The way Australia works, this thread should sadly become a sticky.....

Victoria introducing a luxury car tax of it's own


Passenger vehicles worth between $100,000 and $150,000 will be charged a duty of $14 per $200 of value, while cars valued above $150,000 will be charged a duty of $18 for each $200 of value.

 

[PJF000]

The way Australia works, this thread should sadly become a sticky.....

Victoria introducing a luxury car tax of it's own


Passenger vehicles worth between $100,000 and $150,000 will be charged a duty of $14 per $200 of value, while cars valued above $150,000 will be charged a duty of $18 for each $200 of value.

Not quite the whole story:

"Currently, for all cars worth more than $66,331, a duty of $10.40 is charged for each $200 of the car's market value.

From July 1, higher rates will be introduced to cars worth more than $100,000.

Passenger vehicles worth between $100,000 and $150,000 will be charged a duty of $14 per $200 of value, while cars valued above $150,000 will be charged a duty of $18 for each $200 of value.

Low-emissions cars, caravans, motorhomes and cars used by farmers in the business of primary production will be exempt."

 

[Sluggabed]

And yet will still put the industry and inturn, jobs at risk and business owners on the brink. New car sales already down 10% this year and these Muppets are completely out of touch thinking more tax is the answer.
Personally, I hope the EU and US go the government as all these extra taxes, as they go against the very treaties signed by the our government.

 

[Zoltrix77]

Any special tax for $3000 Prada handbags?