Shorten will tax us into Venezuela

After the ‘rich people’ have deserted the country and can’t be taxed any longer by the ALP, Shorten will tax workers and small business into oblivion and the death duties he has mentioned will take us to new lows such as crippled Venezuela

-contributed

Australia Headed for a Perfect Storm…………

Thoughts from a concerned Australian including on the 2019 election

REASON : 3 current convergences

• China bubble potential burst and commodity price collapse upon which Australia is so dependent
  1. 22% of all apartments are empty due to massive government building programs sold to individuals and producing no income. This bubble will ultimately burst. Similarly with factories etc
  2. The Chinese, with little trust of their government had been laundering their money through buying houses into what they considered safer jurisdictions such as Australia particularly Sydney and Melbourne, and forcing prices to record, unrealistic levels. The Chinese government has now cracked down on funds leaving the country hence a huge decrease in demand in those centres causing the current drop in the market. Some analysts believe the market in Sydney and Melbourne could drop by 42% at best case to 75% worse case.
  3. Dramatic decrease in demand for commodities upon which our economy depends as our main export destination for these.

  

 

1. Housing market collapse as above-Add to the above factors the current Bank created credit squeeze during and since the banking enquiry where potential home buyers are having difficulty in obtaining finance. It appears the Banks are thumbing their nose at governments and showing them who the real bosses are by turning off the credit tap until the restrictions are put aside or lessened. Whatever their reason, this in turn has tightened housing and other markets resulting in the current slowing. Job losses due to the drop in the housing market will inevitably result.
2. Shorten election policies if he wins the election-Socialist take from the “rich” to give to the poor -to pay for the freebies- Shorten’s promises amount to an increase in asset taxes to cover his spending spree on social and climate change programs. Just a few examples:
   1. Taxation policies – Shorten has misrepresented these to the population
      1. Franking credits -are NOT A GIFT as Shorten constantly refers to them – a FC is the tax that the company paying a dividend to shareholders has to take out of that dividend to pay to ATO before the dividend is paid to the shareholder– so that the shareholder then includes the dividend in their personal tax returns and pays more tax if not enough has been deducted or gets a refund if excess has been taken out in relation to their overall personal tax position)- essentially similar to the principal of tax taken out of a wage(PAYG)-you get a refund if your individual circumstances give you unaccounted for deductions. This penalises people who have sought to be independent and cover their own retirement and not rely on the government pensions or handouts. Their doing so benefits the government bottom line. IT IS NOT USING OTHER TAXPAYERS TAXES to benefit the shareholder but uses their OWN PREPAID TAX. If he cannot be trusted on a simple thing like this what does it say about the other policies and hidden costs and smoke and mirrors.
      2. Negative gearing– the right to deduct expenses and losses from an investment property from other taxable income. Essentially it can be considered similar to an equipment dealer (for example let’s say a dealer in trucks or bull dozers which can be of similar value to an average house or more) selling items and claiming any expenses or shortfall if there is one against their tax. Selling a house that is not a private home is just similarly a trading business deal with income and expenses with input tax credits. Why is it being treated differently re negative gearing just because it is a fixed building?

 

This in effect will decrease investment in property to rent, thereby increasing demand competition through under supply, thereby increasing rents. Isn’t Australia already suffering from a short supply and especially will this be exacerbated by the Shorten immigration policies of bringing in huge numbers of refugees already requiring huge government aid. The greatest effect will be on those on the lower end of the market who can’t afford it -rents could have a very significant increase. Shorten  says his government will then build 250,000 new low priced houses to fill the supply need – guess who pays- the taxpayer again. And if other schemes are an example (e.g. buildings for schools, insulation debacle) the waste will be frightening. Why not let the taxpayer be incentivised to  build, own and deal with the houses rather than government? Far more efficient and economic.

In addition to government housing, currently the government runs a subsidised rental scheme where private investors provide the house to rent and it is rented out to vetted poorer families at a reduced rate by the government subsiding the balance. This reduces government outlays. Why would an investor take the risks and outlays if it is not tax deductable. This would decrease with fewer properties then available to those in greatest need. This currently supplies an additional affordable housing program over and above direct government built housing.

1. 1. 1. A string of others not elaborated on-halving capital gains concession in certain cases, death taxes etc. Venezuela was one of the richest countries but look at it now. Could we follow that path?
   2. Climate Policies-whether you agree with current global warming rhetoric or not, Shorten’s response to explanations that Australia cannot afford it and it will break the country is that Australia cannot afford not to act, yet all reports are that Australia’s contribution of 1.3% will not be measurable in overall “warming” of the planet or affect climate disasters. The policies have been costed out by an independent group as being approx. half a trillion dollars with the loss of 380,000 jobs and an 8% wage reduction for all.As an indicator which should raise questions : Look at the temp vs CO₂ graph in Al Gore’s first movie An Inconvenient Truth which pushed all this into the public arena and seemed quite convincing- with the graphs separated so a comparison of timing of the movements in temperature with CO₂ could not be seen. This was taken from an original research graph but in that graph temperature and CO₂ were superimposed and this showed clearly ( and not surprisingly)that whilst both graphs followed each other as accurately portrayed in the movie, the key was that the temperature graph on the research document moved first and the CO₂ graph followed. This could not have been anything other than a calculated misrepresentation in this presentation.CO₂ is not a pollutant but the essential plant food and hence the main building block for all life on earth. Without it plants die (95% of the dry weight of a plant comes from the air- note the essential photosynthesis equations you all learned in high school biology classes). What will that do to the food supply? Death of most plants occurs below 150ppm compared to current 400 ppm CO_2. An increase in CO₂ will be a good thing for the planet as it increases the growth and production of plants and decreases water use( both gases uptake and release from the plant occur by diffusion through the stomata/pores in the leaf and hence increased amounts of CO₂ results in faster diffusion of CO₂ into the leaf and therefore less water escapes in the process) . As confirmed by the up to 30% increase in crop yields over the last 30 years in the Mid-West due to the 100ppm rise in CO₂. This is worth billions of dollars to the global agricultural economy. Note also that nursery growers in various sectors release high amounts of CO₂ into their greenhouses in order to greatly increase their productivity. Research has been confirmed by increasing CO₂ to over 1000ppm (compared to the current 400ppm) and found great increases in productivity and also in drought resistance. Where did the huge growth come from in the era of the dinosaurs where plant growth was prolific with vast forests and the huge size of all living things during that era of high CO₂ levels? It is reported to have been up to 4000 to 8000 ppm in the atmosphere and life obviously flourished.
   3. This is concerning especially when considered in the light of Princeton University physics Professor William Happer’s explanation of the logarithmic effect of adding more CO₂ to the atmosphere (i.e. as CO₂rates rise it takes double the CO₂ to produce each degree of temperature rise ) and that we are in an historical Greenhouse drought. If you assume all of the temperature rise of 0.8 degrees Celsius over the last 100 years with an increase from 300 to 400ppm of CO₂ was due to CO₂ (which it is not anyway), to get the same 0.8 rise we would need a doubling of the CO₂ and a further doubling to add each 0.8 of a degree as the amount of CO₂ rises. Is destroying Australia economically worth “no result” environmentally. Add to this the fact that CO₂ is only 0.04% of the atmosphere compared to say water vapour which is a far more effective greenhouse gas due to the quantity( So to be genuine they should tell us to limit the water vapour ?– but at least they don’t think we are stupid enough to fall for that suggestion).
   4. And what if Climate change theories are wrong??? There is a plethora of research contradicting the current public theories

Example of policy effects :50% of all cars sold to be electric by 2030– in Shorten’s glib remark on at least one occasion if you have solar panels you just have to plug in when you get home and it is free. But the sun doesn’t shine at night so this requires adding batteries ( “free” looks  pretty expensive to me)  . Currently power costs the consumer 25c/kwhr or more.

1. 1. 1. The general mix of coal power , renewables , hydro, wind and other cannot keep up with Base load power at present under some circumstances. Yet they want to phase out coal fired power stations? Solar and wind are expensive and unreliable. They survive now only due to the subsidy from the government (i.e the taxpayer) from 40% to 60%. If they don’t increase the number of coal powered power stations (note new clean coal technologies) or put in nuclear, then with the increasing population there will be major issues. Add to this the demands of high electric car usage. This would mean serious hikes in power prices to the consumer generally. If coal fired power stations are phased out this will require back up diesel generators to make up for the usage spikes when everyone plugs in their cars at night. Remember the South Australia experience when power went down and the price spiked to $1300 per megawatt hour ( the difference subsidised by the government – not good for their bottom line or for the taxpayer under the power equalisation pricing plan)
      2. For the solar option :On an individual basis ( Shorten’s “charge up for free” )what are the costs and which income range will be penalised most? Aren’t the people Shorten says he’s helping (lower income or any that cannot afford to purchase a new car or put in solar and battery infrastructure) going to be disadvantaged substantially? The cost impost for all the policies would far exceed the small tax cuts to lower income earners.
         1. If electric car users come home and plug in after work (when there is no sun to produce power) the demand will spike and instead of peak prices for a short period in the evening the peak will extend to the hours it takes to recharge. Resulting in higher cost of power for consumers and be electricity retailers’ delight as pricing is paid on supply and demand formula.
         2. If consumer puts in panels –
            1. Cost of panels and batteries: The average household uses about 25 to 35Kw /day. To charge a 64KW battery of the car in addition you would need about 40kw of panels and battery bank to have stored it. At current costs panels could be upwards of $30K ( this requires a roof space of approx..288 square metres- bigger than most houses) and $40K for the batteries. There is huge variation depending on weather conditions and amount of sunlight in the day and a larger system could be needed to cope with this.
            2. Car costs: Figures vary greatly obviously but take an example of a small to mid- sized car–
            3. -Hyundai Kona $60,000 -claimed range 449kms, 64Kw battery-7.2kw/h charger takes 9 hours 35 mins to charge fully (CO₂ produced see details below*** 250kgs produced to go 450kms)

-Hyundai Kona 1.6 litre diesel not currently available in Australia but is overseas: 3.5 litres per 100kms, car cost estimated $28000. ie 15.75 litres/13kgs diesel per 450kms (current cost @$1.50/litre $23.62; total CO₂ production 40kgs approx allowing for exploration, drilling, refining and distribution *** see calculations below

If charged from coal power electric cars this result in 6.25 times the emissions of CO₂ than does the diesel car of similar capacity _.

ARE YOU SAVING THE PLANET using the electric cars???????

Batteries of an electric car need to be replaced every 5 to 10 years depending on the charging regime (battery life drops radically if you use multiple partial top-up charges rather than a full charge each time) Could be $15000-$20,000

1. 1. 1. 1. 1. Issues of timing of charging on the road over longer distance travel common in Australia (need to add meals and accommodation costs to your journey that would not otherwise be necessary)
            2. If you stay with diesel /petrol– what will be the levy/ charge per km for emissions? Cited level of the allowable limit is around 105 grams/km and a hefty fine for every gram over that. Virtually no combustion engine vehicles will currently meet those emissions. Electric only meet the standards because they don’t include the production of CO2 resulting from the generating of the energy stored in the battery. Pretty dishonest calculations
         2. Cost of thousands of charging stations and timing to get them all in? Including in your home- what about on long remote trips? Most homes are single rather than three phase and therefore don’t have the capacity for a fast charge system.
         3. How will the electric vehicles stand up to the rigors of outback driving? And risk of running out of charge in the middle of nowhere?
         4. Time to charge the vehicle? What about wait time when high demand at charging stations if usage of electric vehicles increases radically. Even quick chargers will take ½ hour- there will be an extreme growth in the coffee shop business to accommodate the wait period-   new growth industry???
         5. Cost of solar and wind farms plus battery storage at 40 to 60% subsidy -cost to taxpayer
   2. Agricultural policies effect due to climate change- prevention of clearing to open up additional vast area of unused lands and water resources in Northern Australia which have the potential to feed millions of people. All for zero affect on the climate. This is to get the agricultural sector to bear the brunt of covering Kyoto and international climate change agreement targets with no compensation. Additionally the $13 billion spent on water buy back from the Murray Darling system destroying towns and farms who depended on the water and which funds could have been spent on putting in dams and pipelines to capture flows from the North and could result in vast amounts of new agricultural land being available under irrigation. It would not take much vision if buy back costs are already budgeted for to divert this to constructive infrastructure instead of destruction of the existing capacity.
   3. And these are only some of the imposts on the Australian Economy. There are very many others. For example
      1. Asset taxes will have flow on effects to employment and increases on dependency on government pensions by individuals or of businesses leaving Australia ( as in the Keating era when many industrial businesses collapsed or went offshore – “the recession we had to have”)
      2. Increases in overtime payments will greatly affect small businesses many of which are struggling to survive now. Again a decrease in employment.
      3. Hidden/uncosted charges for the Shorten promises in their “Budget figures

All the best and pray that I am wrong.