Common Sense Dies Here #52
Welcome to Common Sense Dies Here #52, an act of love.
Despite small changes to the kind of deductions that property investors can claim, the government’s love affair with negative gearing continued in this year’s budget. “Mum and dad investors will continue to be able to use negative gearing, supporting the supply of rental housing and placing downward pressure on rents” Scotty Morrison claimed. But when you have investors, emboldened by tax breaks, buying up all the property, it forces everyone else into the rental market. That tends to put upwards pressure on rents. And while increasing the capital gains tax concession by 10% for investment in affordable housing will probably provide an increase in cheap rental properties, I doubt it’ll be “mum and dad investors” choosing to receive rent below market value. It’ll be wealthy people shouldering larger losses so they can pay even less tax.
On to some of Scotty’s other attempts at reducing housing prices now. Fining foreign investors $5000 for leaving their properties unoccupied for more than 6 months fits perfectly with the “Australia first” babble doing the rounds. But the vast majority of property investors are Australian, so it probably won’t do that much. Apparently the main things discouraging over 65s from downsizing are concerns they may lose the pension, and about paying stamp duty on a new property. So letting them put $300,000 from the sale of their home into super won’t have much effect either. And allowing first home buyers to redirect extra income towards super to help save for a deposit will surely just increase the amount of money some people are able to borrow, which will push up house prices further. As much as Scotty loves to talk about preferring “the scalpel to the chainsaw”, it seems more like a butter knife really.
The careful consideration for property investors was oddly lacking when it came to a new tax on the country’s 5 largest banks. The tax, which should raise $6.2 billion over 4 years, will only slightly impact the banks’ profits. But, as usual, they’re just going to pass the cost on to customers. This may mean a interest rate rise for all those “mum and dad investors”. Many of them, high on negative gearing concessions , have taken on more debt than was probably wise. So, this could leave them in an awkward position, and lead to decreased consumer spending.
Scotty and Mal Trumble have talked about fairness a lot in relation to this budget. And the fair thing for the banks in question to do would be shoulder the tiny hit to their profits. Particularly when, as Mal pointed out, they “benefit from an implicit government support”. But their disproportionate market power, which is partially a result of that support, allows them to behave as unfairly as they want. And maximising profit is their legal responsibility, even if doing so unfairly affects society as a whole. All of which gives the Coalition’s sudden desire to stick it to bankers, and their outraged response, a pantomime feel.
The claims of fairness fall flat in relation to other parts of the budget too. Overall, low earning households will only see their incomes increase by 0.09. And the pockets of middle income households will be hit harder than high income ones. More specifically, there’s the push to deliver the remaining company tax cuts, which it turns out will cost $16.7 billion more than initially thought. And increasing the Medicare levy by 0.5% for anyone earning over $21,655, while scrapping the 2% deficit levy for those making more than $180,000, isn’t really that fair either.
In response, Labor have proposed retaining the deficit levy, and only increasing the Medicare one for those with incomes of $87,000 and above. While the Greens have outlined an even better, if purely symbolic, plan that would involve progressively increasing the Medicare levy starting at $87,000. They also joined Wayne Swan in reiterating their support for a Buffet tax. But unfortunately Short William and Chris Bowen have decided it’s far better to very slowly close tax loopholes, so they can loudly congratulate themselves for each one.
The government loudly congratulated themselves for their plan to begin drug-testing welfare recipients. They will apparently decide which recipients to test based on things like government data, and the drug content of their area’s waste water. If they test positive, they’ll be placed on the cashless welfare card, and may be forced into treatment.
“You’re doing them a favour, you’re doing a huge favour. You know as well as I do that substance abuse, you’ve got a very high correlation with unemployment. The lesson is, don’t do drugs” Mal Trumble explained. Check out fucking Healthy Harold over here. I’d say both substance abuse and unemployment have pretty high correlations with things like alienation and depression. Is making someone take a drug test based on where they live, and the fact they’re unemployed, meant to make them feel like a valued member of society? What about forcing someone into treatment because they had a puff on a joint at party a few weeks ago? And what kind of people do you think they’re going to meet there? Probably a bunch that actually are in the depths of addiction, some of which will actively encourage them to try harder drugs.
Speaking of which, I think John Fitzgerald, a drug expert from Melbourne University, summed up the effect the policy will have on addicts perfectly: “It would be interesting to see whether anyone in Treasury had actually modelled this on the state criminal justice budgets, because that’s where it’s going to end up”. There’s also the fact that there isn’t enough funding to provide drug treatment for those that actually want it. And that people have already found ways around the cashless welfare card.
Yet Mal had the gall to describe it as a “policy based on love”. When asked whether it was based on any evidence, he said it was “plain common sense”. What a perfect illustration of the kind of flimflam this publication aims to combat. Anyway, Barnaby Joyce had his own load of that to add to the pile: “If I go to work and I can’t go to work drunk or under the influence of drugs, neither can you”. Was he pissed when he gave that interview? Though he was quite obviously at work, he seemed uncertain about whether he would be going there. He also suggested that the welfare people receive for being unemployed is a form of employment. I suppose the flushed mirth with which he greets some of his colleagues’ subpar jokes indicates he probably goes to work drunk quite often. As does the bullock dung that regularly dribbles through his lips. So, according to his logic, it’s fine for everyone else to.
While Barn explored metaphysical questions about work this week, Christian Porter offered a questionable semantic reading of the phrase “suitable work”. Welfare recipients will soon automatically have their payment cancelled for turning down “suitable work”. When asked what exactly that entails, he replied “any job is better than unemployment benefits”. Even one with shit pay, unreasonable conditions, and an abusive boss? Oh wait, that basically is unemployment benefits. Anyway, Christian’s definition rather contradicts the one in the relevant legislation, which lists a number of factors that render a job unsuitable. This suggests he either intends to change that legislation. Or that, much like Alan Tudge, he’s sourced some avant-garde legal advice to justify ignoring it. Either way, as a social services minister with a strong distaste for providing social services, Christian is the perfect example of what can go wrong when you make people do unsuitable work.
George Christensen expressed his distaste for the proposed visit of American white nationalist, Mike Enoch. He scrambled to disassociate himself from the group that invited him, despite previously appearing on their podcast. “It has since been pointed out to me that they are extremely anti-Semitic, regularly make racial-based slurs and, you know, they subscribe to white nationalism.If I had known that, there is no way I would have done that interview” he said. George experimented with anti-Semitism at uni, of course, but obviously he grew out of it. He’s also far too mature to openly express his support for white nationalism. Much like Tony Abbott, he prefers to heavily imply it instead. And while it’s hard to miss the group in question’s overt racism, George not properly researching something is entirely believable. If he’s up for a bit of research now though, he might want to look into whether he’s previously endorsed any of the far-right groups plastered all over the social media feed of the lady that assaulted 4 Muslim women in Sydney.
Donald Trump’s displeasure about the FBI’s continuing research into his links with Russia led him to fire James Comey. Initially, he and his surrogates asserted it had nothing to do with that investigation. Instead they pointed to a memo by deputy AG, Rod Rosenstein, that criticised Jim’s handling of the Clinton email investigation. But soon after, Don declared “ when I decided to just do it, I said to myself, I said: ‘You know, this Russia thing with Trump and Russia is a made up story, it’s an excuse by the Democrats for having lost an election that they should’ve won’”. He also basically confirmed that Rod’s memo was concocted as an excuse for Jim’s termination: “I was going to fire regardless of recommendation”.
Don tried to depict the self-defeating destruction of this modicum of plausible deniability, and the accompanying humiliation of his lackeys, as an example of his exciting dynamism. But really it’s just a further illustration of the fact he’s a moronic fucking crook that’s way out of his depth. To add to the farce, he then seemed to imply he’d secretly recorded his conversations with Jim. Or, who knows, maybe he was suggesting Obama did. To top it all off, Don apparently revealed sensitive classified information to Russian foreign minister, Sergei Lavrov, and ambassador to the US, Sergey Kislyak, while boasting “I get great intel. I have people brief me on great intel every day”. Sounds like a fucking 5 year old, doesn’t he?
Since he entered office, everyone’s been closely watching for any concessions he might grant Vlad Putin. But intelligence suggests Vlad’s main goal in supporting Don was discrediting the US presidency, and weakening America’s global influence. Don seems more than happy to oblige in that regard.