In the federal budget, Treasurer Scott Morrison promised tax cuts to all working Australians in the form of an offset and changes to tax income thresholds. But our analysis of Treasury data shows that while the government advertised these as payments to low and middle income Australians, most of the benefits would flow through to high income earners in future years.
If all of the stages of the tax plan passed parliament, there would be a sharp increase in benefits for people earning above A$180,000, due to the reduction of their marginal tax rate from 45% to 32.5%.
Taxes in most countries are progressive. This means that the more you earn, the higher your marginal rate (the additional amount you pay for each dollar earned).
There are good reasons for this – progressive tax systems mean those on a lower income pay a lower average tax rate, while those on higher incomes pay a higher average tax rate. This reduces income inequality – as you earn more, for each dollar you earn, you will pay more in tax than someone on a lower income.
With the 2018-19 budget, the proposal is for a “simpler” tax system from 2024-25. This means a reduced number of tax brackets, and a lower rate of 32.5% to those earning between A$87,001 and A$200,000.
Treasurer Scott Morrison said following the budget:
Well, you’ve still got a progressive tax system. That hasn’t changed. In fact, the percentage of people at the end of this plan, who are on the top marginal tax rate is actually slightly higher than what it is today.
However this new tax system from 2024-25 is less progressive than the current system. It means higher income inequality – the rich get more of the tax cuts than the poor.
As part of the new proposal, low and middle income earners get a tax offset in 2018-19, with high income earners getting very little. This part of the plan is progressive – more money goes to lower income earners.
However, by 2024-25, the tax cuts means high income earners gain A$7,225 per year, while those earning A$50,000 to A$90,000 gain A$540 per year, and those earning A$30,000 gain A$200 per year.
Of course, another factor of tax cuts is that they only benefit those who are employed. Tax cuts don’t benefit people like the unemployed, pensioners, students (usually young people) and those on disability support pensions.
The conversation Australians need to have is how we should be spending the revenue boost we are seeing over the next few years. We can either spend this windfall gain on benefits to high income earners, in the hope that this will flow through spending to everyone else; or maybe we should encourage young people into housing through an increase to the first home owners grant, or increased funding for our schools, universities and health system.
We’ve developed a budget calculator so you can see how your family is affected by the 2018 budget.
On April 6, the Electoral Commission announced draft boundaries for Victoria and the ACT, with both jurisdictions gaining a House seat. Victoria went from 37 to 38 seats, and the ACT from two to three.
As a result of these changes, Labor notionally gained two seats in Victoria and one in the ACT, and the Coalition lost two seats in Victoria.
On Friday, draft boundaries were announced for South Australia, with that state dropping from 11 seats to ten. According to The Poll Bludger, the safe Labor-held seat of Port Adelaide is to be abolished, but the new seat of Spence (formerly Wakefield), Adelaide and Hindmarsh become much safer for Labor.
Margins in Liberal-held seats were not greatly affected by the redistribution. Boothby has been reduced from a 3.5% to a 2.8% Liberal margin, and the SA-BEST-held seat of Mayo goes from a 5.4% to a 3.3% Liberal vs Labor margin. After SA-BEST performed poorly in the South Australian election, Mayo is an opportunity for either major party.
After the next election, there will be 151 seats in the House of Representatives, up from the current 150. The Coalition will notionally hold 74 seats (down two), Labor 71 (up two), and the five current cross-benchers notionally hold their seats. The new Victorian seat of Cox (formerly Corangamite) is too close to call on the new boundaries between the Liberals and Labor.
On the new boundaries, Labor requires just a five-seat gain to win a majority, while the Coalition needs to gain two seats to retain its majority.
The draft boundaries will go through a further consultation process before they are finalised. Final boundaries will be gazetted (become official) by July 20. If an election is called before all boundaries are gazetted, emergency redistributions are used. These emergency redistributions have never been used.
An election of the House and half the Senate could be called in early July, before the new boundaries are gazetted. However, according to the ABC’s Antony Green, the Coalition would lose from the emergency redistributions.
South Australian election final result: 25 Liberals, 19 Labor, 3 Independents
At the South Australian election held on March 17, the Liberals won 25 of the 47 lower house seats (up three since the 2014 election), Labor 19 (down four) and independents three (up one).
The Liberals won the two party vote by a 51.9-48.1 margin, but this represented a 1.1% swing to Labor from 2014, when Labor clung to power despite losing the popular vote 53.0-47.0.
Primary votes were 38.0% Liberal (down 6.8%), 32.8% Labor (down 3.0%), 14.2% SA-BEST, 6.7% Greens (down 2.1%) and 3.0% Conservatives (down 3.2% from Family First’s 2014 vote).
In South Australia, there is a fairness clause that requires boundaries to be drawn so a party with over 50% of the two party vote should win the election. The boundaries used at this election notionally gave the Liberals 26 seats, Labor 20 and one independent (Geoff Brock in Frome).
On the new boundaries, both major parties lost a seat to independents who had defected during the last parliamentary term. The Liberals gained King from Labor, but Labor gained Mawson from the Liberals. In Mawson, sitting Labor member Leon Bignell had a 4.5% swing in his favour, just overcoming a hostile redistribution.
Conservative commentators such as Graham Richardson have blamed Labor’s loss partly on its renewable energy policies. Between 2011 and 2014, Labor governments that had been in power for 14 to 16 years were smashed in New South Wales, Queensland and Tasmania. In South Australia, Labor had a two party swing in its favour. Renewable energy probably helped Labor, rather than damaged it.
The upper house results have not yet been finalised. In the race for the final seat, Labor has 3.46 quotas and the Conservatives 0.42. With preferences to come from Animal Justice, Dignity, SA-BEST and the Liberal Democrats, it is likely that Labor’s fourth candidate will defeat the Conservatives.
Final Tasmanian result: 13 Liberals, ten Labor, two Greens
At the Tasmanian election held on March 3, the Liberals won 13 of the 25 lower house seats (down two since the 2014 election), Labor won ten (up three) and the Greens two (down one). This is the first time a single party has had a one-seat majority at a Tasmanian election since 1978.
There were two seats contested between different parties that were undecided on election night. In Franklin, the Greens won the final seat by 226 votes or 0.02 quotas against the Liberals. Labor gained a seat from the Liberals.
Final primary votes gave the Liberals 2.90 quotas, Labor 2.06, the Greens 0.86 and the Shooters 0.17. As expected, the Liberals greatly benefited from Shooters’ preferences, but were damaged by within-ticket leakage. With only Labor votes left (they had 2.20 quotas at this point), the final Liberal led the final Green by just 81 votes. Labor’s votes then flowed strongly to the Greens.
In Bass, the Liberals had 3.53 quotas, Labor 1.58 and the Greens 0.56. At the three-way crunch point, the Liberals were just behind the Greens and Labor and were excluded. On Liberal preferences, Labor comfortably defeated the Greens by 801 votes or 0.07 quotas, thus gaining a seat from the Greens.
Final statewide vote shares were 50.3% Liberal (down 1.0% since 2014), 32.6% Labor (up 5.3%), 10.3% Greens (down 3.5%) and 3.2% Jacqui Lambie Network. This was the Greens’ lowest Tasmanian vote since 1998, when they received 10.2% – their vote has more than halved since they won 21.6% in 2010.
I believe the Greens’ poor result was mostly because Labor has a young left-wing leader in Rebecca White, and Labor’s anti-pokies policy attracted Greens’ voters.
The upper house was not up for election. The 15 members of the Tasmanian upper house are elected for rotating six-year terms in single-member electorates. Every May, two or three electorates are up. Labor has four upper house seats, and there are four left-wing independents, so the left currently controls the upper house.
New South Wales March ReachTEL: 52-48 to Coalition
A New South Wales ReachTEL poll for The Sydney Morning Herald, conducted March 15 from a sample of 1,521, gave the Coalition a 52-48 lead, unchanged since October 2017. Excluding 6.2% undecided, primary votes were 44.7% Coalition (up 3.8%), 34.6% Labor (up 0.9%), 10.0% Greens (up 0.1%) and 5.4% One Nation (down 3.5%).
Incumbent Gladys Berejiklian led Opposition Leader Luke Foley 52.3-47.7 as better Premier in ReachTEL’s forced choice question. By 59-26, voters opposed the government spending $2.5 billion on constructing new stadiums.
After a man barreled down a New York City bike path on Oct. 31, killing eight, President Donald Trump reacted by calling for an end to the “green card lottery” program that allowed the attacker to enter the country.
As someone who researches the impact of immigration on workers, I believe their plans to change who can enter the country legally is a big mistake. We would be giving up a program that benefits American workers with very little chance of a gain in safety.
While Trump’s tweets about the lottery program are based on security concerns, the usual argument supporting curbs on immigration is that new arrivals hurt native-born American workers and the economy at large.
As for the economic impact on U.S.-born workers, the key thing to bear in mind is that the more homogeneous and similar immigrants are to natives, the greater the odds they’ll in fact have a negative effect.
In contrast, immigrants who come from diverse backgrounds with a range of skills – such as the lottery winners and the so-called “Dreamers” – tend to produce greater economic benefits. That may be one reason at least some Republicans and most Americans are in favor of keeping the Deferred Action for Child Arrivals program that protects the Dreamers from deportation, which Trump recently ended.
A new approach
Currently, the U.S. receives a lot of immigrants without a college degree or with imperfect English. About half of immigrants fit either description.
It would also end the green card lottery, which awards 50,000 green cards a year to people from countries with low rates of immigration to the U.S.
Importantly, it would also change who gets a leg up when applying for a green card. Currently, family of U.S. citizens and legal permanent residents, including siblings and adult children, are able to apply. The new system would limit that to minor children and spouses.
Instead, the bill would create a point-based system like those used in countries such as the U.K. and Australia that use factors such as English ability, education and job offers to rank applicants. However, it would be stricter than point systems used in those countries, which admit immigrants through other programs as well.
Those who wish to restrict immigration often cite what they naïvely call “supply-and-demand economics” to essentially argue that the economy is a fixed pie that gets divided among a country’s residents. Fewer immigrants means “more pie” for the U.S.-born, as the story goes.
I am an economist, and this is not what my colleagues and I say. The commonplace argument that more immigrants, by themselves, lower wages and take jobs from Americans – an argument which Attorney General Jeff Sessions used to defend ending the “Dreamers” program – has neither empirical nor theoretical support in economics. It is just a myth.
Instead, both theory and empirical research show that immigration, including people with few skills and little English, grows the pie and strengthens the American workforce.
Value in diversity
While all the recently proposed changes to our immigration system will make U.S. workers worse off, the English requirement is likely to be particularly harmful to U.S. workers, especially low-skilled ones.
Indeed, I have found the relative fluency of U.S.-born workers is what keeps them from being harmed from labor market competition from immigrants.
The reason for this is the following. Essentially, immigrants with imperfect English skills tend to specialize in jobs that are less “communication-intensive,” such as manual labor. Americans fluent in the language, on the other hand, tend to take on higher-paying, communication-intensive jobs that are out of reach of those without a strong grasp of English. In other words, these groups aren’t likely to compete for the same jobs, making them more complementary than adversarial.
In contrast, when new immigrants are more fluent in English, something the Trump-backed proposal would encourage, the types of occupations they are qualified for are almost identical to those of American workers. Thus, insisting on strong English skills as a condition of coming to America is likely to increase labor market competition and suppress wages.
Immigration that helps
Immigration that emphasizes diversity, rather than merely merit, tends to attract more people who specialize in occupations uncommon among U.S.-born workers. And, in fact, this is the key source of the well-known economic benefits of immigration.
Studies by economists Giovanni Peri and Chad Sparber, for example, show this tendency toward job specialization is a key reason the large volume of low-skill immigration does not drive down incomes of Americans. Other research by Peri and Gianmarco Ottaviano shows that simply encouraging immigration from diverse origins lifts wages.
Put differently, there is direct evidence that the sort of diversity that the green card lottery encourages makes all Americans better off. It would be a shame to give all of that up because of a tiny risk of terrorism.
This is an updated version of an article originally published on Sept. 15, 2017.
Low wages growth has been a spectre hanging around the Australian economy for some time. In our series What We Earn we unpick the causes for this and why some workers might be feeling it more than others.
Workers aren’t being compensated as much as they should be for precarious work in casual positions.
One in four Australian employees today is a casual worker. Among younger workers (15-24 year olds) the numbers are higher still: more than half of them are casuals.
These jobs come without some of the benefits of permanent employment, such as paid annual holiday leave and sick leave. In exchange for giving up these entitlements, casual workers are supposed to receive a higher hourly rate of pay – known as a casual “loading”.
But the costs of casual work are now outweighing the benefits in wages.
Costs and benefits of casual work
Casual jobs offer flexibility, but also come with costs. For workers, apart from missing out on paid leave, there are other compromises: less predictable working hours and earnings, and the prospect of dismissal without notice. Uncertainty about their future employment can hinder casual workers in other ways, such as making family arrangements, getting a mortgage, and juggling education with work.
The employers of casual workers also face higher costs. High staff turnover adds to recruitment costs. But perhaps the main cost is the “loading” that casual workers are supposed to be paid on top of their ordinary hourly wage.
The practice of paying a casual loading developed for two reasons. One was to provide some compensation for workers missing out on paid leave. The other, quite different, motivation was to make casual employment more expensive and discourage excessive use of it. However this disincentive has not prevented the casual sector of the workforce from growing substantially.
Casual jobs aren’t much better paid
One approach in determining whether casual workers are paid more is simply to compare the hourly wages of casual and “non-casual” (permanent and fixed-term) employees in the same occupations. This can be done using data from the 2016 ABS Survey of Employee Earnings and Hours.
We compared median hourly wages for adult non-managerial employees, based on their ordinary earnings and hours of work (i.e. excluding overtime payments). If the median wage for casuals is higher than for non-casuals, there is a casual premium. If the median casual wage is lower, there is a penalty.
The 10 occupations below accounted for over half of all adult casual workers in 2016. In most of these occupations, there is a modest casual wage premium – in the order of 4-5%.
The size of the typical casual wage premium is much smaller, in most cases, than the loadings written into awards and agreements. Only one occupation (school teachers) has a premium (22%) in line with what might be expected.
Three of the 10 largest casual occupations actually penalise this sort of work. And overall for these 10 occupations there is a casual wage penalty of 5%. This method of analysis suggests that few casual workers enjoy substantially higher wages as a trade-off for paid leave.
Taking a closer look involves controlling for a wider range of differences between casual and non-casual workers. One major Australian study in 2005 compared wages after taking account of many factors other than occupation, including age, education, job location, and employer size.
All else equal, it found that part-time, casual workers do receive an hourly wage premium over full-time, permanent workers. The premium is worth around 10%, on average, for men and between 4 and 7% for women.
These results imply that most casual workers (who are in part-time positions) can expect to receive higher hourly wages than comparable employees in full-time, permanent positions. However, the value of the benefit is again found to be less than would be expected, given the larger casual loadings mentioned in awards and agreements.
It seems that while there is some short-term financial benefit to being a casual worker, this advantage is worth less in practice than on paper.
A recent study, using 14 years of data from the Household, Income and Labour Dynamics in Australia Survey (HILDA), finds no evidence of any long-term pay benefit for casual workers.
The study’s authors estimate that, among men, there is an average casual wage penalty of 10% – the opposite of what we should see if casual loadings fully offset the foregone leave and insecurity of casual jobs. Among female casual workers, there is also a wage penalty, but this is smaller, at around 4%.
This study also finds that the size of the negative casual wage effect tends to reduce over time for individual workers, bringing them closer to equality with permanent workers. But very few casual workers out-earn permanent workers in the long-term.
Inferior jobs, but fewer alternatives
The evidence on hourly wage differences leads us to conclude that casual workers are not being adequately compensated for the lack of paid leave, or for other forms of insecurity they face. This makes casual jobs a less appealing option for workers.
This does not mean that all casual workers dislike their jobs – indeed, many are satisfied. But a clear-eyed look at what these jobs pay suggests their benefits are skewed in favour of employers.
Despite this, the choice for many workers – especially young jobseekers – is increasingly between a casual job or no job at all. Half of employed 15-24 year olds are in casual jobs.
In a labour market characterised by high underemployment and intensifying job competition, young people with little or no work experience are understandably willing to make some sacrifices to get a start in the workforce. The option of “holding out” for a permanent job looks increasingly risky as these opportunities dwindle.
The article below reports on an unbelieveable situation in Greece – pedophilia being added to a list of disabilities! Does this mean pedophiles now qualify for disability benefits? You have to be kidding??? No, it seems they aren’t.
Court sentences him to three years on dubious charge of ‘attempt to promote civil unrest.’
NEW DELHI, October 18 (CDN) — A court in predominantly Buddhist Bhutan has sentenced a Christian to three years in prison for “attempting to promote civil unrest” by screening films on Christianity.
A local court in Gelephu convicted Prem Singh Gurung, a 40-year-old ethnic Nepalese citizen from Sarpang district in south Bhutan, on Oct. 6, according to the government-run daily Kuensel.
Gurung was arrested four months ago after local residents complained that he was showing Christian films in Gonggaon and Simkharkha villages in Jigmecholing block. Gurung invited villagers to watch Nepali movies, and between each feature he showed films on Christianity.
Government attorneys could not prove “beyond reasonable doubt” that Gurung promoted civil unrest, and therefore “he was charged with an attempt to promote civil unrest,” the daily reported.
Gurung was also charged with violation of the Bhutan Information, Communication and Media Act of 2006. Sections 105(1) and 110 of this law require that authorities examine all films before public screening.
A Christian from Bhutan’s capital, Thimphu, told Compass that the conviction of Gurung disturbed area villagers.
While Gurung has the right to appeal, it remained unclear if he had the resources to take that course.
Both Gonggaon and Simkharkha are virtually inaccessible. It can take up to 24 and 48 hours to reach the villages from the nearest road.
“Both villages do not have electricity,” the daily reported. “But Prem Singh Gurung, with the help of some people, is believed to have carried a projector and a generator to screen the movies in the village.”
Over 75 percent of the 683,407 people in Bhutan are Buddhist, mainly from western and eastern parts. Hindus, mostly ethnic Nepalese from southern Bhutan, are estimated to be around 22 percent of the population.
It is also estimated that around 6,000 Bhutanese, mostly from south, are Christian in this landlocked nation between India and China. However, their presence is not officially acknowledged in the country. As a result, they practice their faith from the confines of their homes, with no Christian institution officially registered.
Buddhism is the state religion in Bhutan, and the government is mandated to protect its culture and religion according to the 2008 constitution. As in other parts of South Asia, people in Bhutan mistakenly believe that Christianity is a Western faith and that missionaries give monetary benefits to convert people from other religions.
Yesterday’s Kuensel published an opinion piece by a Bhutanese woman from New York who described herself as “an aspiring Buddhist” condemning both the conviction of Gurung and Christian “tactics.”
“Although we may not like the tactics used by the Christians to proselytize or ‘sell’ their religion to impoverished and vulnerable groups, let’s not lose sight of the bigger picture, in terms of religious tolerance, and what constitutes ‘promoting civil unrest,’” wrote Sonam Ongmo. “If we truly want to establish ourselves as a well-functioning democracy, with equal rights for all, let’s start with one of the fundamental ones – the right to choose one’s faith. We have nothing to worry about Buddhism losing ground to Christianity, but we will if, as a predominantly Buddhist state, we start to deny people the right to their faith.”
While her view is representative of liberal Buddhists in Bhutan, a reader’s response in a forum on Kuensel’s website reflected the harder line.
“These Christians are a cancer to our society,” wrote a reader identifying himself as The Last Dragon. “They had crusades after crusades – we don’t need that. We are very happy with Buddhism. Once Christianity is perfect – as they always claim [it] to be, then let’s see.”
In July, the government of Bhutan proposed an amendment in the Penal Code of Bhutan which would punish “proselytizing” that “uses coercion or other forms of inducement.” (See, “Buddhist Bhutan Proposes ‘Anti-Conversion’ Law,” July 21.)
Christian persecution arose in Bhutan in the 1980s, when the king began a “one-nation, one-people” campaign to “protect the country’s sovereignty and cultural integrity.” Ethnic Nepalese, however, protested the move on grounds of discrimination. Authorities responded militarily, leading to the expulsion or voluntary migration of over 100,000 ethnic Nepalese, many of whom were secret Christians, to the Nepal side of the border in Jhapa in the early 1990s.
An absolute monarchy for over 100 years, Bhutan became a democratic, constitutional monarchy in March 2008, in accordance with the wish of former King Jigme Singye Wangchuck, who served from 1972 to 2006. Since the advent of democracy, the country has brought in many reforms. It is generally believed that the government is gradually giving more freedom to its citizens.
The present king, Jigme Khesar Namgyel Wangchuck, and Prime Minister Lyonchen Jigmey Thinley, are respected by almost all Bhutanese and are seen as benevolent rulers.