Sunday 17th of January 2021

big bad beyond belief budget blues...


What the government has instead done is keep the LMITO for an extra year, meaning that middle-income earners get a $1,080 tax cut.

But they only get it for a year.

The government has extended the LMITO for two reasons – first politically, ignoring 80% of taxpayers during a recession would be suicide; and second during a recession not giving a tax cut to low and middle-income earners would be moronic.

But it is only for a year, because the government is judging the stimulus is needed now, and thus can take it away next year. And it certainly is not because of any change in attitude from the government about whom it wishes to favour.

In his budget speech, the treasurer, Josh Frydenberg, said: “Lower- and middle-income earners will this year receive tax relief of up to $2,745 for singles.” First that relief is not all “this year” – it is compared to 2018-19 – and those getting a $2,745 cut are earning $120,000.

That someone earning double the median income and is in the top 12% of all taxpayers is now included in “lower and middle-income earners” might suggest just who the government is really thinking about when it says it is helping “middle Australia”.


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meanwhile in donald's little kingdom...

Even as millions of people have lost their jobs during the pandemic, the soaring stock market since the spring has delivered outsize gains to the wealthiest Americans. And few among the superrich have done as well as corporate executives who received stock awards this year.

Edward W. Stack, the chief executive of Dick’s Sporting Goods, and William Lynch, president of Peloton, for example, are each sitting on paper gains of over $60 million on stock-based awards they mostly received in the first three months of the year, based on Wednesday’s closing stock prices, according to an analysis by Institutional Shareholder Services, which advises investors on how to vote on corporate matters.

And Stéphane Bancel, the chief executive of Moderna, a drug maker developing a coronavirus vaccine, received options in January that have appreciated by nearly $30 million.

The pay gains are a result of the sharp rise in the stock prices of these companies, which investors are betting are well positioned to grow during the pandemic. Another reason these stock awards have appreciated so much is that some of the grants were made when the stock market was close to its lowest point for the year. Of course, many executives are also sitting on gains on stock they got in earlier years.

But the surge in wealth also highlights how the compensation of senior executives is designed to give them enormous windfalls, which they have gotten even during one of the sharpest economic downturns in decades.

These gains are also a reminder that income and wealth in the U.S. economy are tilted heavily toward a tiny number of top earners who own significant amounts of stock. Most Americans own little or no stock, according to a recent Federal Reserve report, and many had less in savings in 2019 than they did before the last recession a decade ago.



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and labor half-muffed it...

Anthony Albanese’s budget reply last night ­– in which he proposed a universal childcare subsidy covering 90 per cent of costs and a $20 billion investment in the electricity grid – did enough to stave off fears that the Labor leader has zero appetite for policy risk. Describing this week’s historic budget as a missed opportunity and a “reform desert”, Albanese channelled his mentor, the left luminary and World War Two POW Tom Uren, who said that Australians survived the Burma Railway because they lived by a simple code: “The healthy looked after the sick, the strong looked after the weak, the young looked after the old.” Hear, hear. Call it economic nationalism, but the most stirring part of Albanese’s speech was his discussion of the Coalition’s failure to support Australian manufacturing, from killing off the car industry in 2013 to failed defence minister David Johnston’s memorable attack on local shipbuilders, whom he “wouldn’t trust” to build a canoe. “Last December,” Albanese said, “I visited the Downer EDI site in Maryborough, Queensland, where skilled Aussie workers are refitting rail carriages purchased from overseas by the former Newman LNP government. This work is being done in a factory that’s been building quality trains since the 19th century.” Inexcusable and gutting. Albanese proposed a national rail manufacturing plan, and if the Opposition can come up with an optimistic platform that restores economic sovereignty and creates blue-collar jobs by revitalising local manufacturing, powered by cheap renewable energy, it will be onto something.  

Albanese needed to come up with something because Scott Morrison has been sharpening his lines lately, accusing the Labor leader of taking an each-way bet on everything. On the floor of Parliament House, Morrison gives the appearance of being sublimely untroubled by his opponent. This week, Morrison gave Albanese a backhander during his tribute to the late Labor pioneer Susan Ryan, who Morrison said “was not a two-bob-each-way politician”. There is more than a grain of truth in the PM’s criticism, or at least there has been to date. In return, Albanese has flagged a more combative approach from here on in, and went the niggle this week, as David Crowe observed in the Nine newspapers, when he goaded Morrison for being disrespectful by naming his chooks at the Lodge after Hazel Hawke and Tamie Fraser.  

The stiff opposition in Albanese’s budget reply, however, is softened by the support Labor gave yesterday to waving through the Senate the omnibus legislation enabling the key tax-and-spend measures. Greens leader Adam Bandt slammed Labor’s capitulation: “Instead of fighting Tories, Labor is cuddling them … This budget is a trickle-down con job that spends big, but spends badly, and will prolong the recession. It favours millionaires over the millions, and puts corporate welfare ahead of helping people recover from the pandemic. This was a chance for our government to invest in delivering full employment and meaningful work in clean industries, as well as investing in the care economy, education, affordable housing, renewables and sustainable infrastructure. Instead, Liberals and Labor chose a gas-powered future that delivers billions in corporate welfare and tax cuts for millionaires.”

The Morrison government has squibbed the opportunity to build back better and greener, opting for a hugely expensive business tax giveaway, which journalist Ben Eltham describes as a move that “takes from the poor to give to the rich”. After this year from hell, Albanese asked: “Do we want to return to the same work insecurity, the same cuts to TAFE and unis, the same second-rate services for the bush, the same stale arguments over climate change?” The answer, surely, is no. It will be interesting to see whether Labor can make a policy fist of it. 


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women in pink...


aussie coal gets cold for the chinese...

The Australian coal industry is bracing for another hit to Australian exports to China after state-owned energy providers and steel mills reportedly received verbal notice to stop importing Australian coal.

The Australian government has not been notified of any formal Chinese direction to restrict coal imports and is preparing to respond to the report from S&P Platts, the global commodities information platform.


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pointed bone-head declares war on ASIC...

Josh Frydenberg has declared war on the corporate regulator, saying the Australian Securities and Investments Commission needs to be overhauled so it conforms to the will of parliament.

Asic was caught in a pincer movement on Wednesday, with a parliamentary committee chaired by a Liberal senator mulling ways to break up or reduce the powers of the regulator while Frydenberg used a speech to declare it must not “supplement, circumvent or frustrate” the law.

While regulators needed to make enforcement decisions independent of government, they “do not carry out their mandates in a vacuum”.

“They must pursue their mandates in a manner that is consistent with the will of the parliament,” he said. “There need to be mechanisms to hold them to account.”

Asic is under extreme pressure over $190,000 in payments benefiting its chairman and deputy chairman that the auditor-general says fell outside remuneration rules.





As an expert on rorts performed by his Morrison's government, Frydenberg can spot a rort a million miles away... Allow him to pontificate... see: morrison's military lobby culture... or  on his watch... and more on this site...