Greens plan to curb property investment
There are actually some good points in the plan. Reverting to inflation adjustment for assessing capital gains rather than giving a fixed 50% discount is much fairer though more complex to administer
The attack on negative gearing is very unrealistic, however. It would simply prevent a lot of property investment occurring so would constitute no gain to the treasury while reducing the supply of rental accommodation. But it is mostly the poor who rent so the plan would hit the poor while trying to hit the rich. But maybe that scenario appeals to the elitist Greens.
The Australian Greens are preparing to unveil the most ambitious plan yet to get young people into homes, costed at an extraordinary $51 billion. The $51 billion figure is a net saving to the budget rather than a cost, calculated over 10 by the Parliamentary Budget Office.
The three-point plan, Houses for Young People: Freeing up Investment Properties, would phase out the capital gains tax discount available to property investors over five years.
During the first year, the standard 50 per cent discount on capital gains tax would shrink to 40 per cent, to 10 per cent after four years and zero after five years.
Income from capital gains would be then be taxed at almost the same rate as income from other sources, except that the inflation component would be tax exempt, as it used to be before 1999 when the Howard government replaced the exemption with a 50 per cent discount.
Reverting to the original means of compensating investors for inflation would bring in an extra $2.75 billion over four years and $16.1 billion over 10 years.
It would make property investment and speculation less attractive, winding back the competition faced by owner-occupiers at auctions.
The plan would also end negative gearing for all new property purchases. Businesses would continue to be able to negatively gear non-property investments.
Landlords would continue to able to write off property investment costs against property investment income, but not against salaries and other income.
His part of the plan would bring in $2.4 billion over four years and $34.5 billion over 10 years.
The third leg of the plan would limit existing negative gearers to one property. Only 583,000 out of Australia's 1.5 million property investors invest in two or more investment properties.
The deductions available for second or more properties would shrink by one-fifth each year until reaching zero after the fifth year.
The limit would bring in an extra $100 million in tax revenue in the first four years and $1.3 billion over 10 years.
Launching the plan on Saturday, Greens leader Richard Di Natale will say it is "time to dismantle the rigged system that privileges investors and landlords over everybody else".
"Australia is facing a housing crisis. Everyone needs a home where they can feel secure, live comfortably and be part of the community," his speaking notes say. "But this is becoming increasingly difficult for millions of average Australians."
Greens Treasury spokesman, senator Peter Whish-Wilson will say the government has "rigged the tax system to favour wealthy people".
"Negative gearing and capital gains tax discounts have driven house prices sky high, making it easier for wealthy people to buy more homes and harder for first home buyers," he will say. "At the same time, stamp duty raises the price of homes and stops people from moving house, even when they're ready to downsize."
The Greens will also push the Commonwealth government to back state governments that replace stamp duty with land tax.
The plan goes further than the one Labor took to the election that retained negative gearing for all pre-existing investors, no matter how many properties they geared.
Labor proposed halving the capital gains tax discount from 50 per cent to 25 per cent rather than abolishing it and replacing it with indexation.
In the budget Treasurer Scott Morrison wound back some of the excesses of negative gearing by withdrawing deductions for things such as the cost of travel to inspect rented-out properties.
‘This is Pink Batts on steroids’: The national harm that lying Leftist historians created
Their "stolen generation" myth means that social workers are now reluctant to take abused children away from Aboriginal families -- and the kids sometimes die as a result
FAMILY: It’s supposed to be the core of society, the thing that protects our children and keeps them safe from harm.
But what happens when the family is the one causing the harm? And what happens when the government steps in and instead of taking the children away, sends them back to the same family that abused them?
This is the national shame that dare not speak its name, because it was born of another national shame. The shadow of the Stolen Generation looms so large over our governments that authorities are now placing children at risk of abuse because they are too scared to be seen as repeating the sins of the past.
And insiders believe the problem has been turbocharged by the mass outsourcing of child protection work to outside organisations.
Now a veteran foster carer is warning that child protection services are facing a looming disaster that will be “Pink Batts on steroids” and she has decided to blow the whistle to news.com.au in an effort to save children from abuse.
The outsourcing has also prompted the Labor Party to introduce new landmark legislation that would force the Auditor-General to investigate all child protection providers in Australia’s largest state.
Denise Crisp is a former president of the Foster Care Association NSW and finalist for NSW Woman of the Year but has warned that the effective “privatisation” of child protection services, combined with different rules for indigenous and non-indigenous kids, is creating a perfect storm that will put more children in harm’s way.
The first issue, she says, is authorities focusing on either keeping abused or at-risk indigenous children with their parents or, failing that, with other family members, which puts them at risk of similar environments or their parents still having access to them. Unlike for non-indigenous kids, there is a bias against putting them in permanent foster care.
“This is clearly discrimination regarding indigenous children and justified by promoting cultural or country reasons,” Denise says.
In one case, an indigenous baby we shall call “Hannah” was removed from her at-risk biological parents at birth and temporarily placed with very experienced carers who wanted to keep her in permanent care until she was 18.
Yet despite these carers being indigenous, the guidelines meant they couldn’t take her unless all family avenues had been exhausted. As a result she was instead placed with her aunt. Three months later Hannah was admitted to hospital with horrific injuries and her aunt’s partner has now been charged with her assault. She was 11 months old.
In another case, a baby we’ll call “April” was removed at birth from her biological parents, who had a long drug and criminal history, and placed with the mother’s mother. It was later discovered during a police raid that the grandmother had been simply leaving April with the very same mother she had been removed from for her safety. The baby girl was found unsupervised by her supposed legal guardian in a home surrounded by drugs, alcohol and domestic violence.
As a result authorities then removed her from her grandmother’s care and placed her with another family member: The grandmother’s sister.
In yet another case, a mother had three children (to different fathers) and Denise was contacted by a carer concerned for their safety. The youngest child was so skeletal that a doctor reportedly warned that if he wasn’t removed from the family within a week “he’ll be coming out in a body bag”. He was 18 months old.
Following a direct approach to the then-minister for community services, all three children were removed, as was another baby she gave birth to soon afterwards. The 18-month-old was returned to his father’s care and the other three were placed in kinship care with two highly respected Aboriginal women, one of whom was a cousin of the mother.
The children thrived, however after three years the Department of Family and Community Services as well as the NGO handling the case went to court to have the children sent back to their mother. And they were.
NSW is the worst state in Australia when it comes to the number of kids in out of home care, with around one in 100 kids in court-ordered statutory care. Only the Northern Territory has a higher rate, of 16 out of 1000 or 1.6 per cent.
Denise estimates that around 40 per cent of kids in out of home care are indigenous, and while the number of non-indigenous children is staying relatively stable, the number of Aboriginal kids entering care this year has “skyrocketed”.
She has welcomed reforms announced earlier this year by Premier Gladys Berejiklian and Minister Pru Goward to focus on getting abused kids into permanent “forever” homes, however the new guidelines do not apply to indigenous kids.
In NSW, there are different policies for indigenous and non indigenous kids in state care. Picture: Marianna Massey / AAP
In NSW, there are different policies for indigenous and non indigenous kids in state care. Picture: Marianna Massey / AAPSource:AAP
“These ‘steps’ are very positive steps and very welcomed but are not promoted for or supported in relation to Aboriginal/indigenous children in OOHC,” she told news.com.au.
“The main reason for that is based around ‘political correctness’ and the Stolen Generation.
“The sad fact is for many indigenous people, historically there is evidence of two and three generations entering the child protection system due to a long history of abuse/neglect and living in dysfunctional family units.”
However Aboriginal groups still oppose placing children under guardianships or adopting them out because of cultural reasons and because the scars of the Stolen Generation are so raw.
The peak body in the field, the Aboriginal Child, Family and Community Care State Secretariat says it is vital that Aboriginal groups deal with at risk kids because there is still so mistrust of government and non-indigenous organisations.
“We know what hasn’t worked in the past: the top-down approaches of government control, where Aboriginal people were given little say over issues affecting us,” AbSec CEO Tim Ireland told news.com.au.
“We know why Aboriginal people often distrust white organisations, because of a traumatic history which is still very present in the minds of our Stolen Generations.
“Of course, we wholeheartedly support every child’s fundamental right to safety. But no child should be made to choose between their safety and their culture — which is also a basic human right. We need to explore solutions like placing children in the care of Aboriginal relatives or community members, rather than completely removing them from the place and people they know, which are so integral to their identities.
“AbSec opposes guardianship orders and adoptions of Aboriginal children because as they currently stand, these approaches lack the necessary safeguards to keep kids in touch with their culture and community. So many previous generations of Aboriginal people have had to grow up without knowing their family or identity, and it’s had disastrous effects. The last thing we want is to perpetuate that cycle.”
The NSW Department of Family and Community services also stood by the policy for “cultural” reasons.
“Open adoption for Aboriginal children is not considered culturally appropriate although legislation does allow it under special circumstances, when it is in the best interests of the child and clearly preferable to any other care arrangement,” it said in a statement.
“The law seeks to protect future generations of Aboriginal and Torres Strait lslander children from the negative effects of separating children from their families, communities and culture, which were the results of past practices.”
The department also said the outsourcing of out of home care to NGOs followed a recommendation from the 2008 Wood Special Commission of inquiry into child protection.
“This recommendation was made on the basis that NGOs were best placed to deliver OOHC services as they had lower casework ratios than the government, and strong links to services and facilities in the communities in which they operate.”
However Denise believes many NGOs do not have the experience or capacity to handle these cases and may be susceptible to influence. She has likened it to the companies that sprang up to deliver the Rudd government’s home insulation program, which quickly spiralled into a fatal disaster.
“This is Pink Batts on steroids but at the expense and continued systemic abuse of society’s most vulnerable children,” she said.
Now the NSW Opposition is introducing a private member’s bill to force the Auditor-General to audit the performance and effectiveness of all NGO out-of-home care contracts prior to their renewal by the Department of Family and Community Services.
“Labor is urging the Berejiklian Government to offer bipartisan support for this legislation that will ensure non-government organisations are held strictly accountable for every single dollar of taxpayer funding provided to care for vulnerable children,” Opposition Family and Community Services spokeswoman Tania Mihailuk told news.com.au.
“Labor’s landmark bill will put the microscope of the Auditor-General through all OOHC contracts to support and prioritise better outcomes for the record number of children and young people now in care across NSW.
“NSW is fast approaching the highest rates of children in out-of-home care in Australia, second only to the Northern Territory, with many of these children staying longer in care and fewer being restored back to their families.
“Child protection has become more about dollars and business models as opposed to achieving the best possible outcomes for vulnerable children.”
It is hard not to wonder if in our desperation not to repeat the awful mistakes of the past we are destroying these children’s future. Indeed, one wonders what those children would say if only they could be heard.
Senior Australians say political correctness is ruining society
ATTENTION, Gen Y: Baby Boomers have had it with your political correctness.
New Australian research suggests over 50s are fed up with being told what they can and can’t say, and believe young people are the worst offenders.
The survey of 1000 Australians over 50 saw nine in 10 agree political correctness is ruining society, and thought younger generations were too worried about offending people.
According to the CoreData research commissioned by Australian Seniors Insurance Agency, 86 per cent of seniors believed “having to be politically correct all the time” was ruining society, and 86.6 per cent said it was “inauthentic”.
Bathurst teacher Vicki Evans is not afraid to admit she loathes political correctness.
The 55-year-old says she’s constantly being told off by her three children, all in their 20s, for opinions they say she shouldn’t be allowed to express.
“The number of times I saw something and my kids say ‘oh Mum, you can’t say that,’” she says.
“They say you can’t make assumptions about things, but I think you can make observations.
“You can’t say anything that’s offensive and that could be deemed to label anyone. You have to be always aware of perceptions, apparently.”
Ms Evans says that her children’s sensitivities are clearly not a product of her parenting, but blames universities and television for encouraging political correctness.
“I do get really cross with the whole idea that children aren’t allowed to talk about anything religious in relation to Christmas or Easter because it might offend someone,” she said. “I think if we can’t discuss any of these things we run the risk of losing our cultural identity.”
The data also indicated that Aussies grew less concerned about social norms and pleasing others as they grew older.
Almost a third (31 per cent) said they no longer cared about social norms or pleasing others.
Two in five (42.7 per cent) admitted to having shared politically incorrect jokes, and a quarter (24.3 per cent) said they used humour even it they knew it might make some people uncomfortable. One in five admitted they had used politically incorrect humour “among inappropriate company”.
Australian Seniors Computer Club Association president Nan Bosler said seniors were resisting societal pressure to be politically correct.
“Seniors are not letting this pressure deter them from staying true to themselves and their beliefs and they should be respected for that attitude,” she said.
“Australia’s older generation have been through a momentous amount of change and challenges, and this has made them a resilient bunch who value good humour and are not easily offended by lighthearted teasing.
“Therefore, it is easy to understand why this generation can be frustrated with certain political correct filters that are assumed in modern-day living.”
Family trusts run deep
The fact that Opposition Leader Bill Shorten’s crackdown on family trust income splitting was being described as “courageous” yesterday is a pretty good indicator of the special place that trusts have in the hearts of Australian business people.
It is, or at least should be, a no-brainer: income splitting is a device that should have been removed long ago, but ever since the failure of John Ralph’s effort to clean up trusts in his Review of Business Taxation in 1999, which was buried by the National Party, trusts have come to be the structure of choice for Australian small businesses, and splitting the income an annual accounting ritual.
These days the majority of business activity now goes through trusts; The Australia Institute reckons a fifth of national GDP sits in them.
And why not? Most small businesses are family affairs: everyone works in the business, or has to put up with mum or dad moaning about it over dinner every night, and one day the kids will be the owners (and moaners). So a family trust, with each family member as a named beneficiary, seems not only a natural way to run things, but a sort of dynastic battlement — our trust is our castle.
Oh, and you get to keep the assets from creditors and decide where the cash goes, and since it doesn’t get taxed until it gets somewhere else, spreading it around — or splitting it — can lower the average family tax rate.
Trouble is that the income tax system is designed around taxing individuals, not families. Maybe there’s a case for averaging taxation across family members, especially in family businesses, but that’s not the way it works and we’re not having that discussion.
John Howard, then Treasurer, made a half-hearted effort to fix the problem 40 years ago by introducing Division 6AA of the Tax Act (1936) which imposed the top marginal tax rate of 45 per cent on trust distributions to dependent children. But he left out spouses and other adult relatives, presumably on purpose.
In 1998 another Coalition Treasurer, Peter Costello, appointed John Ralph to review business taxation. However he failed to abide by the golden rule that you never have an inquiry if you don’t already know the answer, and Ralph proposed uniform taxation of business entities — taxing trusts as companies.
That recommendation went straight to the bin labelled “C” for courageous and from then on, trusts took off.
Perhaps the Rudd/Gillard/Swan Labor Party would have dusted off the Ralph Review after 2007 if they hadn’t been mugged by the GFC, but they were, and they didn’t.
And now, according to the latest Coalition Treasurer, the ALP’s attempt to revive Ralph 18 years later, almost to the day, by applying the company tax rate to trust distributions is a “dark economic vision”.
These words may well haunt Scott Morrison. If the Coalition makes allowing income splitting to avoid tax an explicit part of its election platform, and it somehow manages to win the election despite that, the policy will come back and bite it on the budget.
But this political battle over the use of trusts is not superficial. In some ways it is a new front in the eternal war between capital and labour, between business owners and employees, and it’s not entirely clear how it will turn out.
At one level, it is simply about improper tax avoidance: if distributing income to a dependent child is wrong, as decreed by John Howard and embedded in Division 6AA, then so is distributing it to a dependent spouse, or to a brother or sister who promptly gives the distributed cash back as a gift.
But at a deeper level it could be portrayed as an attack on family businesses generally and the organising structure that recognises that it’s a family rather than a company or a business partnership.
At least that’s presumably what the Turnbull Government will try on, unless the Prime Minister overrides the Treasurer again because he decides they need the money.
If he doesn’t, the argument could be an interesting test of both sides’ rhetorical skills, as well as an indication of where Australia sits on what might be called the Jeremy Corbyn spectrum — are we chanting or yawning?
Posted by John J. Ray (M.A.; Ph.D.). For a daily critique of Leftist activities, see DISSECTING LEFTISM. To keep up with attacks on free speech see Tongue Tied. Also, don't forget your daily roundup of pro-environment but anti-Greenie news and commentary at GREENIE WATCH . Email me here