Shorten vs Morrison

The political spectrum and where we line up, plus a look at what we know so far of Bill Shorten and Scott Morrison’s policies.

Everything is portrayed as a ‘cost’, which is ironic.

“Costs” from the Government’s perspective is simply NOT charging you tax. Not taking all income earned is a trillion-dollar cost to them.

 

Shorten’s Policies

Lowering 50% CGT discount to 25% (for assets purchased after 1 July 2017)

People will potentially hold onto assets longer because they will be taxed so much if they were to sell.

Negative Gearing – Removal of negative gearing (grandfathering existing)

(ABS Stats) 21% of households own a second home as an Investment property 35% of dwellings are investment properties (rental properties) Can’t offset more tax than is paid What if property is not rented for a while? People may not buy highly leveraged – high growth properties What if rates go up? A lot of properties in the past were negatively geared Depreciation already gone, property may become less attractive Less incentive for investors to hold an investment property, less available to renters, so therefore with the decreased supply the price of rent increases.

Family Trusts

Implement a 30% floor on the taxation that applies to distributions made by discretionary trusts Distributions cost $3.5bn to government in lost tax revenue

The removal of Franking Credits

Australian Market - unfranked 5.5% to 6.5% dividend yield on major bank stocks still smashes the 1.8% yield on US equities Change of company behaviour The American model – Reinvestment of funds is better for companies than double taxation of income for shareholder (reduced shareholder value) Remember, the Government might say that this is costing them money, but really, it’s just money that they aren’t able to collect in taxes!

Health Funding – additional $2.8 billion funding for hospitals

Additional money doesn’t equal additional efficiency, it depends on how the money is spent. Throwing extra money at a problem doesn’t necessarily solve it. For example, the hospital in Adelaide. Help reduce emergency department and elective surgery waiting times and provide more beds, doctors and nurses

 

Education

Scrap upfront fees for 100,000 TAFE students and to spend $100 million modernising TAFES around the country. Promised about 200,000 extra places at universities He did not give a costing for the extra university places

Increased funding for even further regulation and red tape

ASIC - lambasted the Government for cutting funds to AISC as a "disgrace" and "immoral" and pledged a $25 million taskforce for public prosecutors ASIC has gone industry funded - their revenue has gone up and just moved away from tax payer funding 

How all of this can be funded?

Can afford the extra spending because he would not “spend” $80 billion on big business tax cuts. Extra government spending enabled by this revenue-raising – think back to past public works programs, like the NBN or pink batts, or solar panels

Morrison  

Retirement age to 67, not increasing to 70. Whilst it’s not nice to have to increase the eligibility age for the pension, life expectancy has increased by 25 years since the age pension was introduced…and eligibility age has only gone up by 2 years. Cuts for small and medium businesses will cost up to $3.6 billion over four years $7.6bn on infrastructure spending Increasing rails and road networks etc Not sure about what the details or other polices are – nothing is clear at this stage.