Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Wednesday 1 March 2017

Tony Abbott MP: the man who lied about a carbon tax is preparing to lie to voters once again


The week former chief of staff to Tony Abbott, Peta Credlin, confirmed that he had deliberately lied when characterising the Gillard Government’s price on carbon as a "carbon tax", The Sydney Morning Herald reported this:

Tony Abbott has laid out a five-point plan for the Coalition to have a chance at the "winnable" next election, including cutting back immigration and scrapping the Human Rights Commission.

In a major speech in Sydney at the launch of a new book, Making Australia Right, on Thursday evening, Mr Abbott gave the clearest signal yet he believed the Turnbull government is failing to cut through with voters, and that the contest of ideas - and for the soul of the modern Liberal Party - between the current and former prime minister has a long way to run.

Mr Abbott noted nearly 40 per cent of Australians didn't vote for the Coalition or Labor in the 2016 election: "It's easy to see why".

In a sign a return to the leadership was on his radar, Mr Abbott set out ideas on how to take the fight to Labor and win back Coalition voters thinking of defecting to Pauline Hanson's One Nation.

"In short, why not say to the people of Australia: we'll cut the RET [renewable energy target] to help with your power bills; we'll cut immigration to make housing more affordable; we'll scrap the Human Rights Commission to stop official bullying; we'll stop all new spending to end ripping off our grandkids; and we'll reform the Senate to have government, not gridlock?"
He said the next election was winnable for the Coalition, however, "our challenge is to be worth voting for. It's to win back the people who are giving up on us". [my highlighting]

So let’s look at this jumble of potential three-word slogans being readied for the next Coalition federal election campaign.

RET –renewable energy target

In 2014 the Abbott Government ordered a review of RET. This review found that RET tends to lower wholesale electricity prices and that the RET would have almost no impact on consumer prices over the period 2015–2030.

Despite Abbott's downgrading of RET targets when he was prime minister, in 2017 the Turnbull Coalition Government (of which Abbott is a member) continues its support of these targets.

According to the Dept of Industry, Innovation and Science network costs are the biggest factor driving up the cost of electricity and  a large part of these higher costs has been the need to replace or upgrade ageing power infrastructure, as most electricity networks were built throughout the 1960s and 1970s.

Housing affordability

In December 2016 the Australian Bureau of Statistics (ABS) recorded 11.3 million houses/units/flats purchased by investors for rent or resale by individuals and a further 1.3 million for rent or resale by others. [ABS 5609.0 Housing Finance]

The Reserve Bank of Australia (RBA) in June 2015 clearly indicated that purchase of housing stock by investors had increased to almost 23 per cent of all housing stock and, that increased investor activity and strong growth in housing prices were occurring along with an increase in negatively geared investment properties. [RBA, Submission to House of Representatives Standing Committee on Economics Inquiry into Home Ownership]

The Australian Council of Social Service (ACOSS) put the matter bluntly in Fuel on the fire: negative gearing, capital gains tax & housing affordability - The tax system at both the federal and state level inflates housing costs, undermines affordability, and distorts the operation of housing markets. Tax settings are not the main reason for excessive growth in home prices, but they are an important part of the problem. They inflate demand for existing properties when the supply of new housing is insufficient to meet demand. Ironically, many public policies that are claimed to improve affordability - such as negative gearing arrangements, Capital Gains Tax breaks for investors, and first home owner grants for purchasers – make the problem worse.

Competition between investor-developers recently saw $1.3 million added to the sale price of an older house at a Sydney metropolitan auction.

Although population growth is a factor in competition for housing stock, nowhere in reputable studies or reports can I find mention of immigration levels significantly contributing to this competition.  Which is not surprising, given that natural population increase and increase through migration do not occur uniformly within Australian states & territories and natural increase will outstrip migration in some states and territories in a given year.

Human Rights Commission

On 26 December 1976 the Fraser Coalition Government announced its intention to establish a Human Rights Commission which would provide orderly and systematic procedures for the promotion of human rights and for ensuring that Australian laws were maintained in conformity with the International Covenant on Civil and Political Rights and in order that citizens who felt they had been discriminated against under specific Commonwealth laws such as laws relating to discrimination on grounds of race or sex (but excluding laws in the employment area) would be able to have their complaints examined.

The Commission was created in 1981 by an act of the Australian Parliament and later rebirthed as the Human Rights and Equal Opportunity Commission in 1986 by another act of the Australian Parliament.

Whilst ever no Commonwealth statute exists which sets out the core rights of Australian citizenship the federal parliament continues to fail to guarantee protection against its own legislative or regulatory excesses.

The Human Rights Commission is one of the few points at which ordinary citizens without considerable financial means can seek redress of a wrong or harm done to them.

No new spending

I simply refer readers to Tony Abbott’s economic record in the slightly less than two years he spent as Australian prime minister, when on his watch economic growth was slowing and living standards were falling.

Senate reform

This is Section 57 of the Australian Constitution which would have to be amended and is required to be taken to a national referendum before reform can occur:

Disagreement between the Houses
                   If the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, and if after an interval of three months the House of Representatives, in the same or the next session, again passes the proposed law with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor-General may dissolve the Senate and the House of Representatives simultaneously. But such dissolution shall not take place within six months before the date of the expiry of the House of Representatives by effluxion of time.
                   If after such dissolution the House of Representatives again passes the proposed law, with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor-General may convene a joint sitting of the members of the Senate and of the House of Representatives.
                   The members present at the joint sitting may deliberate and shall vote together upon the proposed law as last proposed by the House of Representatives, and upon amendments, if any, which have been made therein by one House and not agreed to by the other, and any such amendments which are affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives shall be taken to have been carried, and if the proposed law, with the amendments, if any, so carried is affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives, it shall be taken to have been duly passed by both Houses of the Parliament, and shall be presented to the Governor-General for the Queen's assent.

The last national referendum held in Australia was in 1999 and cost $66,820,894 according to the Australian Electoral Commission for a vote on two questions.

Like 34 of the 44 referendum questions before them these two questions did not carry. In fact the last referendum questions to be carried were in 1977.

Prospect of successful right-wing reform of the Senate? 

Friday 24 February 2017

Company tax rate cuts in Australia and the banks that benefit


There has been some finger pointing in mainstream and social media of late over Labor’s use of $7.4 million as the amount banks would be able to retain under the Turnbull Government’s progressive cuts to the company tax rate included in the 2016-17 Budget.

According to the Australian Tax Office on 3 January 2016:

The government announced a reduction in the small business tax rate from 28.5 per cent to 27.5 per cent for the 2016–17 income year. The turnover threshold to qualify for the lower rate will start at $10 million and progressively rise until the 27.5 per cent rate applies to all corporate tax entities subject to the general company tax rate in the 2023–24 income year.

The corporate tax rate will then be cut to 27 per cent for the 2024–25 income year and by one percentage point in each subsequent year until it reaches 25 per cent for the 2026–27 income year.


ABC News reported in May 2016 that Treasury Secretary John Fraser told Senate Estimates: The cost of these measures to 2026-27 is $48.2 billion in cash terms.


So where did the $7.4 billion for banks come from?

Australia is thought to have four big banks – the National Australia Bank (NAB), Commonwealth Bank (CBA), Australia and New Zealand Banking Group (ANZ) and Westpac (WBA) and it appears that this amount is based on projections done with regards to these banks by think tank, The Australia Institute.

The Australia Institute, media release 2016:

Big 4 banks $7.4 billion budget gift

The Coalition Government’s business tax plan would deliver $7.4B to the big 4 banks.

“Cutting company tax rates delivers a massive windfall to an already highly profitable banking sector,” Executive Director Australia Institute, Ben Oquist said.

“It makes no economic or budget sense to deliver the big 4 banks a multi-billion dollar tax break when Australia already has a revenue problem.

“If your agenda is jobs and growth, targeted industry assistance would deliver a much greater return on investment,” Oquist said.

The value of company tax provisions was derived from 2015 full year annual reports for the big four banks. That figure summed to $11,123 million. That figure was projected forward to 2026-27 to give the no change scenario.

The projection assumed bank profit and hence tax payable would increase in line with nominal GDP. The nominal GDP projections used the figures in the 2016-17 budget papers which give nominal increases of:

2.5 per cent in 2015-16,
4.25 per cent in 2016-17, and
5 per cent in 2017-18 and subsequent years.

Company tax cuts do not affect the big banks until 2024-25 when the current 30 per cent rate will fall to 27 per cent for all companies with further reductions of one per cent per annum until they reach 25 per cent in 2026-27.

The results of this are presented in the following table:

Table 1. Benefit of company tax cuts for big four banks, $million
2024-25
2025-26
2026-27
Total
Savings on company tax
1,756
2,458
3,227
7,441

KPMG stated in Major Banks: Full Year Results 2015 that the Australian major banks reported another record earnings result in 2015 - a combined cash profit after tax of $30 billion.

By year’s end 2016 the major banks were reporting a combined cash profit after tax of $29.6 billion.

The Federal Government’s underlying cash balance for the 2016-17 financial year to 31 December 2016 was a deficit of $33,025 million and the fiscal balance was a deficit of $31,143 million. While net government debt for 2016-17 stood at an est. $326 billion.


There is an increasing global perception that banks put shareholders’ and executives’ interests ahead of their customers and the community. This perception is more real for banks than for other corporates as they are seen to rely not only on compliance with strict regulation, but increasingly on the goodwill of the community and government to continue to operate in their current form.

We are seeing heightened scrutiny of Australian banks, including through the recent Standing Committee on Economics (the Committee) inquiry, becoming a regular feature of media and political commentary, notwithstanding eight separate inquiries since 2009. There are many reasons for this increased level of oversight, with terms such as “trust deficit” and “trust gap” often cited as the root cause.

It has been argued that the financial services industry has lost touch with the core proposition customers are seeking by forgetting its real purpose in society and becoming too inwardly focussed. These themes were repeated in testimony to the Committee.

Readers can make their own minds up as to whether banks have lived up to the historic social licence granted them by community (see bank scandals since 2009 and alleged superannuation owing in 2017) and, if they actually need any further tax relief or if that $7.4 billion would be much better in the hands of the Commonwealth Treasury.


Monday 6 February 2017

Too many Liberal and Nationals MPs keep quiet while this sort of stress is happening to people in their electorates


Yet more examples of the Turnbull Government’s Centrelink automated ‘debt’ recovery debacle made it into the media………

Penrith City Gazette, 27 January 2017:

A Glenmore Park woman has described being sick with stress after Centrelink slapped her with a $35,000 debt bill, only to have it reduced to $173 a week later.

The woman, who is known to the Gazette but wishes to remain anonymous, was caught up in the controversial Centrelink crackdown on alleged overpayments earlier this month after being informed she owed the government agency $2,795.87, but was not told why.

After providing further financial information, she then received a Centrelink letter claiming she owed a whopping $35,147.16 just one week later.

The woman described being in tears and shaking as she repeatedly called both Centrelink and the Commonwealth Ombudsman about the debt.

On January 17 the woman was contacted by Centrelink and told she had in fact only been overpaid on three days six years ago, and the new debt was just $173.51.

Lindsay Labor MP Emma Husar said her office had been contacted several times after receiving similar notices from the automated system, which compares Centrelink and Tax Office records, many around Christmas time.

“This particular case highlights the incompetence of the system – a $35,000 debt notice reduced to $170 after two weeks on the phone, worrying and stressing,” she said.

My daughter has been fighting #centrelink incorrect debt since Nov. Since that time her debt has changed from 4k to 6k & today it dropped to
     RETWEETS11
      LIKES7
     
3 replies11 retweets7 likes
Reply

      leisa @thisleisa  
         2k on completion of appeal. Guy she spoke to said 'he' dropped it significantly as it was 'obvious'   she had genuinely tried to report
4 replies 3 retweets 3 likes
      leisa @thisleisa  
         correctly. So this amount is not based on any disparate figures. It's been at his discretion. I'm          trying to encourage her to keep fighting
1 reply 3 retweets 5 likes
      leisa @thisleisa  
 but as she was already advised to start paying back debt ($10pf) before completion of appeal, she  just feels like this is the easy option.
1 reply 3 retweets 2 likes
      leisa @thisleisa  
 She's been fighting it for months. Goes to work in tears everyday. The whole thing has been  designed to grind her down & I'm afraid its
1 reply 5 retweets 6 likes
      leisa @thisleisa  
 succeeded. And I can understand. An incorrect debt of 2k is better than 6k. But on the same hand  it's not her debt. It's a dismal cockup.
1 reply 4 retweets 11 likes
      leisa @thisleisa  
 And I've been gently encouraging her to keep fighting today. Got some good advice but it's not me  fighting. Hate seeing her in this position
1 reply 0 retweets 0 likes
      leisa @thisleisa  
 She's a good girl, good mother who works hard. She also votes. And so does every member of her  family & we wont forget her pain.
1 reply 2 retweets 3 likes
 @janecat60 it's been a horrible shit show Jane. This kid has been back at work since O was not  even 1yo. So unfair.

And yes, Nationals Kevin Hogan MP I’m looking straight at you because these so-called payment discrepancy notices are also turning up in letter boxes across the Northern Rivers region and specifically in your electorate.

Note

Centrelink direct freecall numbers:

Debt recovery - 1800 076 072
Payment Integrity - 1800 194 053
Customer Compliance - 1800 086 400


Wednesday 1 February 2017

Thousands of jobs have gone from Dept Human Services & Centrelink in last five years and the headcount was down to 30,210 by May 2016


It is no accident that the post-September 2013 drive to slash public service numbers and funding was significantly impacting on the Dept. Of Human Services at the same time it sought to fully automate as much of Centrelink’s service delivery as possible.

Between its 2012-13 annual report and 2015-16 annual report the department had lost 5,628 staff due to budget cuts and make do measures were not meeting service delivery needs.

It was also foreseeable that Turnbull & Co would choose Centrelink clients as guinea pigs in an attempt at fully automating data matching with a view to further departmental cost-cutting – after all welfare clients are apparently considered the lowest of the low by a majority of Liberal and Nationals parliamentarians.

Given the fact that this federal government had also decided to be digitally ‘agile and innovative’ - which appears to be code for fast and sloppy - the debacle which followed was almost inevitable.


BACKGROUND

Government News, 2 May 2016:

Charities, welfare groups and unions have pleaded with Treasurer Scott Morrison to release the pressure on the Department of Human Services (DHS) by funding more staff and better IT systems in the federal Budget.

In a joint statement, 14 organisations: Carers Australia, St Vincent de Paul, the Welfare Rights Centre the Community and Public Sector Union, Australian Council of Social Services, Children and Young People with Disability Australia, ACT Council of Social Services, National Union of Students, Fair Go For Pensioners, Combined Pensioners and Superannuants Association, People With Disability, the Consumer Action Law Centre and Financial Counselling Australia demanded the government “properly fund” the DHS to “provide the Australian public with the Medicare, Centrelink and Child Support services they need and deserve.”

DHS has fielded a range of allegations over the past year, including:
·         Centrelink bunging Youth Allowance and Austudy payments
·         Call waiting times of more than an hour to get through to Centrelink
·         One-quarter of all 57 million phone calls to Centrelink, Medicare and Child Support agencies last year going unanswered (Auditor General’s report 2015)Complaints up almost 19 per cent on last year, and customer satisfaction is down by per cent (DHS Annual Report)
·         An avalanche of customer complaints about online services, particularly myGov
·         A litany of complaints about mobile apps for child support, Medicare and Centrelink

In its statement, the coalition of not-for-profit groups said the federal Budget should:
·         Restore adequate funding to DHS
·         Invest in high quality, in-house IT systems so clients can access a reliable online service
·         Increase DHS permanent staff numbers so that claims and queries are processed quickly and clients who need over-the-phone or in-person services can get them
·         Ensure rural and regional Australia has fair access to government services.

The statement said:
“Millions of people in Australia rely on the Department of Human Services every day, for essential services including social security payments, Medicare, child support and aged care.
“Australia needs these essential services to be both accessible and of high quality, and employees of DHS resourced to do the best they can for everyone needing assistance.
“However, after years of budget cuts, DHS systems and staff are under extreme pressure.
“People who rely on Centrelink expect and deserve high quality public services. Employees in DHS must have the resources to deliver high quality public services. People are trying to do the right thing and reports changes as required, but the system is letting them down…….

The Canberra Times, 10 May 2016:

Department of Human Services officials have confirmed that 918 workers will be shed in 2016-17….

The federal government service-delivery workhorse, which runs Centrelink, Medicare and the Child Support Agency, will see also see its funding reduced by $100 million year-on-year, thanks in part to a "special" efficiency cut of $20 million a year….

Mr Jenkin also confirmed the budget papers got the department's headcount wrong, reporting 30,102 when it should have been 30,210.

The department's finance boss said the staff cuts were a direct result of the budget cuts.

In the Dept. of Human Services Annual Report 2015-16 overall staffing levels were shown as:

NOTE: It is likely that as many as est. 3,796 of these staff were non-ongoingat the start of the 2015-16 financial year.

The results of payment discrepancies released for action in the 2015-16 financial year were:

* 109,355,545 data matches undertaken by the department [DHS Annual Report 2015-16, p.241];

* cost of the data matching program (including departmental salaries) was $8,327,500 [ibid, 243];

* 4,904 payment discrepancy notices sent out to clients and 1,657 (or 33.78%) of these notices were later found to be false debts [op.cit., p.241]; and


* an unspecified number of debt notices were waived for reasons not stated.

Since Centrelink began sending out fully automated payment discrepancy/debt notices in mid-2016 there have been 169,000 initial letters sent.

Based on Dept. of Human Services 2015-16 admissions, this suggests that at least an est. 57,088 of these letters contained inaccurate payment discrepancies/false debts which can be verified as such by paperwork held by Centrelink clients and/or their previous employer (if the business holds such records indefinitely).

Centrelink clients telling their own stories can be found at www.not.mydebt.com.au.

Tuesday 10 January 2017

#NotMyDebt: the electorate's face remains turned against the Turnbull Government's debt recovery policy



According to Appendix E – Data matching of the 2015-16 Annual Report, the Department of Human Services spent $19.5 million in 2013-14, $25.5 million in 2014-15 and $8.3 million last financial year on its data matching program. That is, our government has allocated over $50 million in the last three years to produce the outcomes reported in the first week of 2017: outcomes so appalling that a government agency is making blanket referrals to the suicide prevention service Lifeline for hardships caused by its own actions.
Let that sink in: Centrelink is using social media platform Twitter to refer income support recipients to Lifeline, because some ‘customers’ are suicidal after receiving letters sent by the agency demanding repayment of debts that people have not, in fact, incurred. This is the return on a $50 million investment of public moneys.
Many were letters stamped with the Australian Federal Police logo demanding information under the code name Operation Integrity.
It will surprise no one who has observed the Turnbull government that the operation has no integrity. The link above does not provide a breakdown of Operation Integrity costs. But it offers this:
“From 1 July 2016, $45.1 million will be invested in the myGov digital service over 4 years, to ensure people can continue to interact with the Australian Government online, ensuring access by all tiers of government. … the next phase of improvements to myGov. $5.4 million will be invested over 2 years to modernise this service and ensure it continues to deliver on the government’s commitment to make services simpler, clearer and faster.”
From what I can tell, and I may not be reading it correctly (the reporting methods are oblique at best), this amounts to an additional $50 million for a total of $100 million for the years 2013-20. Again, to use the government-preferred econospeak, this ‘investment’ has a return. In the first week of 2017, the dividend included driving some low-income Australians to suicidal despair. And causing incalculable hardship to other welfare recipients across the country.

The New Daily, 8 January 2017:

With a flagged $4 billion to be recovered over four years, Centrelink’s demand letters over alleged debts could be just the start.

The Turnbull government’s mass invoices – constructed from data matching to claim discrepancies exist with Centrelink’s casual, disabled and vulnerable income earners – are expected to be used across the entire pensioner and social security sector. New discrepancies can be created over a recipient’s claimed asset values to substantiate invoices for ‘over-payments’.

Data matching and garnishee was originally implemented by Labor in government, but it was the Turnbull government that devised the more aggressive, presumptive and system-wide invoicing strategy.

While a responsible government has every right on behalf of taxpayers to eliminate fraud and ensure financial control in a country under deficit distress, the anecdotal hypocrisy of MPs who are extended travel allowance indulgences under lax rules adds fuel to what is becoming an explosive backlash across Australian postcodes.

A crowdfunded court challenge to the legality of the alleged debt invoices is now expected…….

In the current clawback, Centrelink has repeated its customer risk protocol by referring any distressed recipients to Lifeline for psychological support. More petrol on the fire.

Centrelink’s response to one of the widespread complaints from distressed welfare recipients. 
Photo: Twitter

One Centrelink senior staffer, who asked not to be named, told The New Daily the anger and rage generated by the data matching strategy had placed counter staff under confronting pressure.

“They just want to spit on us,” he said.

He asked why DHS had not quarantined vulnerable recipients, many of whom were intellectually disabled, from the more able casual income earners.

If DHS had a genuine “customer focus” the entire casual income reporting process would be “bulletproof” for recipients so they could neither calculatedly defraud nor inadvertently fall into error. A department wanting to engender trust with Australians striving to earn sustaining incomes in a now highly casualised economy would act protectively towards them.

“One intellectually disabled bloke screamed, ‘I’ve had a go mate … I did some work’.”

Our informant said the Centrelink data matching strategy would soon be exposed as counter-productive, with recipients now likely to desist in seeking any paid work for fear of losing any of their welfare payments.

With a Newstart allowance at $34 a day and city rents now at extortionate levels, many vulnerable people had little money left with which to clothe and feed themselves.

“We are dealing with the most impoverished and vulnerable sectors of the community. This is cruelty.”

No Place For Sheep, 6 January 2017:

Centrelink has now begun using its Twitter account to refer people to Life Line if they are experiencing distress. Life Line is a voluntary organisation given little or no support by the federal government. The government has also ripped millions from frontline services for domestic violence victims, community legal aid centres, and over a billion from aged services. You can bet that these outrageously underfunded services will be stretched to their limits by Turnbull’s latest attack on vulnerable citizens.

I cannot remember anytime in this country when a government department has referred citizens to an emergency service because they are experiencing suicidal levels of distress as a consequence of that government’s policies.

Does anyone?