The problem with Australia

As Clive James once said, the problem with Australia isn\’t that we sent a load of prisoners there, but that we sent a load of prison wardens there.

16 thoughts on “The problem with Australia”

  1. Have you heard about our new carbon tax that will leave 9 out of 10 Australians “better off” financially? And, no I’m not one of those nine.

  2. Yes. And if you’re not one of those nine, then luckily, you can afford the hit. And are likely, given Australia’s strong income growth, to be better off next year than you were this year anyway.

    Taxing things makes people do them less. In general, we know this. So taxing bad things (ie pollution) is a better way of raising revenue than taxing good things (ie income and sales), because we want less pollution, whereas we want people to generate more income and buy more things.

  3. The problem with Aus is it’s an Anglosphere nation and as such, as with the others, the “left” is not a descendant of continental style marxism but of puritan social reform groups. Thus the obsessive compulsion with temperance et al.

    Methodism, not marxism.

  4. “And if you’re not one of those nine, then luckily, you can afford the hit. And are likely, given Australia’s strong income growth, to be better off next year than you were this year anyway.”

    You believe that? Ho ho ho ho.

    I’ve got a mollusc that excretes toffee I can sell you.

  5. whereas we want people to generate more income and buy more things.

    You can’t “generate more income”. Where is the money going to come from? You can only generate as much income as there is currency.

    What “we” want is for prices to fall thus enabling people to buy more things with the same amount of income. And you can’t get that by raising taxes, can you?

    It doesn’t matter where in the economy you apply the tax. The simple arithmetic is that more taxes == less income, and thus less consumption.

  6. Ian B, I think, in this context, that it’s reasonably clear that John B is using “income” as a label for “more goods and services”. Looking up the definition of “income” at http://www.thefreedictionary.com/income, it states that income is: “The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments.” [Emphasis mine]

    So if an improvement in economic efficiency means that the amount of goods and services everyone gets in exchange for their labour goes up, even if the money supply is fixed, then it’s reasonable within the English language, to say that people are generating more income. Perhaps a bit confusing, but not straight-out wrong.

  7. I don’t think so Tracy. People on the Left, and indeed many on the Right, believe that economic improvements arise from raising earnings, with which they then buy more goods and services. That is, they don’t understand what growth is.

    If I’m wrong, I’ll apologise to John, but I don’t think I am.

  8. As I understand it then John the tax will only apply a restraint on consumption to one out of nine people. This 1/9th being the richest lot and thus most able to cope with more of their money being forcibly removed. The reason they are best able to cope is that they have enough resources to maintain a high level of consumption despite having a bit less.

    If the above is all true then it’s going to do bugger all to reduce emissions isn’t it?

  9. Listen all
    The modelling by the government bears no relationship to reality. There are plans to close a coal-fired plant that generates one quarter of my state’s electricity. There are no plans to replace it with nuclear or any other baseload source.

    The only potential solution would be to spend some billions of dollars building infrastructure to get gas from northern Australia to here. The costs will be horrendous. The brown coal is very dirty and it may well be a good idea to close it but our cost of living with go up very significantly.

    Secondly the arbitrary way in which various large taxes have been introduced is causing terrible consumer sentiment as are less obvious changes in Govt policy due to their difficulty getting out of deficit by next year (why they need to do that so urgently I don’t understand). I work in a totally separate area where we have been informed all government rebates will be decreasing year on year indefinitely (previously indexed for the wage-price index), and my end-consumer prices will be going up 10% per year as a result.

    As for being the 1 in 10 who can afford it, that’s right and I make no apology for it. It’s just that this year some $2000 goes to a “flood levy” they couldn’t afford to pay for out of general revenue and some – what – $2000 or more will go to carbon taxes next year and onwards, increasing as the carbon price goes from $23 to $70.

    That $4000 and more could be spent on things like hotels, restaurants, consumer items that would support the service economy here. But instead it will go to the worst government in recent (all?) history in this country and god knows what they will do with it.

    And Falco’s right, whatever else happens, I have no plans to reduce my emissions by going caveman. My main aim in life atm is to build an enormous climate-controlled wine cellar and age and drink my wine before I die. If you want my emissions to reduce, build a nuclear plant and I’ll buy an electric car. If you think I’m going to buy into some scheme to “reduce my emissions” by buying carbon credits from some offshore scammer, well I don’t work that way.

    johnb: “Strong income growth” ha, good one. Thanks to Saints Julia and Bob I’m trying to prevent this “Strong income growth” closing my business and leaving my employees to the mercies of the local unemployment office.

  10. don’t forget the brand new beaurocracies that are coming to control things.
    Meanwhile small business (and not so small) is wondering if there is a recession on.
    Still people can live on air ‘promise crammed’.

  11. Ian: there is *no difference* between prices falling and incomes rising. They are economically *the same thing*. So your point’s irrelevant.

    Falco: If the above is all true then it’s going to do bugger all to reduce emissions isn’t it?

    No. You’re forgetting the fact that spending on carbon-intensive things will become more expensive relative to spending on less carbon intensive things, and therefore people will alter their balance of spending.

    If I spend 5% of my income on bananas, then I get a 5% pay rise and the price of bananas doubles (with all other prices flat), then even though I’ll be able to afford to buy exactly the same goods as before, I won’t: I’ll buy fewer bananas and more things that aren’t bananas.

    changes in Govt policy due to their difficulty getting out of deficit by next year (why they need to do that so urgently I don’t understand).

    Because Labor said before the election that they would balance the budget, and therefore they’d be absolutely slated to death by the opposition and the right-wing media if they dropped the plans. Unlike the carbon tax, where they had no alternative due to the Greens holding the balance of power, Labor would have no excuse to drop this commitment. I agree it’s a silly commitment.

    whatever else happens, I have no plans to reduce my emissions by going caveman

    No, me either. But you don’t need to go caveman – as above, the point of the tax is that the relative price of carbon-heavy goods and services will rise more than the relative price of lower-carbon goods and services, so a rational consumer’s spending decisions will be tilted slightly more towards lower-carbon goods than they are today.

    Thanks to Saints Julia and Bob I’m trying to prevent this “Strong income growth” closing my business and leaving my employees to the mercies of the local unemployment office.

    Even in a boom, some businesses struggle; sorry to hear yours is one of them. But pretty much any other developed country in the world would envy Australia’s expected 4-4.5% real GDP growth for 2011; pretending that we’re not, on aggregate, both among the world’s very richest people /and/ getting richer at a decent pace is delusional.

  12. Oh, worst government in recent (all?) history – I think Captain Bligh’s just about ahead. Otherwise, I’d pretty much agree – the depressing thing is that the alternative manages to be slightly worse. See also: “how could anyone vote for a corrupt machine politician like Barry O’Farrell? *looks at NSW Labor*. Oh, I see how.” (I’d’ve held my nose and voted Liberal in this year’s NSW election).

  13. “Even in a boom, some businesses struggle; sorry to hear yours is one of them. But pretty much any other developed country in the world would envy Australia’s expected 4-4.5% real GDP growth for 2011; ”

    AND THE CARBON TAX HAS NOTHING TO DO WITH IT, WINGNUT!

    You’re funny, John. Do you do requests?

  14. Of course the carbon tax has nothing to do with causing 2011 growth – who the hell ever claimed that it did?

    (Also, ‘wingnut’ means ‘far-right lunatic’ – I think the phrase you were looking for is something more like ‘moonbat’?)

    The point is that with the economy growing at over 4% a year, the suggestion that we’re going to be busted by a revenue-neutral tax on pollution is obviously nonsense.

  15. Ian B, perhaps, I guess it depends on how you define “left”. I certainly know a lot of people who mistake visible appearances for the reality. However in my experience, it’s a bit dangerous to assume that, just from the use of an ambiguous word such as income, the last time that someone did that to me on the Internet, I was not amused (the actual case was about the word “money”, I was saying that if the government spent money on some things it didn’t have money to spend on others).
    And John B comes across to me as reasonably intelligent, so I doubt that he made that particular mistake.

  16. “I’ll buy fewer bananas and more things that aren’t bananas.”

    In this case, fewer bananas and more things that are possibly certificates sold by gangsters in Whereveristan aka “Carbon credits”. $40 billion a year going offshore that way as I understand it once the scheme is working.

    Good if you are a carbon credit salesman, too bad if you are an honest farmer selling bananas.

    I don’t know, is the carbon tax inherently unsellable or do you all just do a really bad job of it (our PM included)? There is NO WAY I will be convinced by anything I have heard so far, and I honestly feel I would be happy to have my mind changed.

Leave a Reply

Your email address will not be published. Required fields are marked *