Matt Grudnoff is senior economist at the Australia Institute. He has published widely on a multitude of subjects, including taxation, the federal Budget, poverty & inequality, free trade agreements, housing affordability, energy economics and climate change.
If you want to understand the limitations of Gross Domestic Product (GDP) as a measure of wellbeing, then the latest figures for the March quarter are a great example. The overall picture saw the economy grow by 0.3% for the March quarter and by 2.5% for the last year. This shows slow growth but not as slow as some were predicting.
The backlash from vested interests was in full swing this week after the Federal Budget delivered real reforms that will make housing more affordable. They are trying to convince us that young people will be the biggest losers from these changes. The big problem with that is that it is entirely untrue. Young people get almost no benefit from the CGT discount.
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Angus Taylor just accidentally proved that the housing affordability crisis has nothing to do with immigration. In his budget reply speech he said “A Coalition government will cap immigration numbers based on the number of homes constructed each year.” But clearly, no one in his office ran the numbers.
It's true that some taxes grow and while others fade away. Here's a look at some of the 'smaller taxes' by how much they are expected to grow over the next 4 years. What's striking is that while Australia is in the middle of a gas price boom, the PRRT is still expected to fall by a third.
We know the amount raised from the beer excise is greater than the PRRT, but the bank levy is also bigger than the PRRT. It's little wonder the head of the Commonwealth Bank has twigged that gas companies are taking the piss.
The government's changes to negative gearing and the CGT discount will reduce the enormous tax concessions that are encouraging people to speculate on the property market. Finally, we have a housing affordability policy that will make a real, positive difference.
Rumour has it that the Labor Government might close a huge tax loophole that rich people have been using for years to avoid paying tax. Apparently, they will create a minimum tax rate of 30% for trusts. Don’t know what a trust is? Don’t worry, you’re not alone - read on.
The inflation figures released today confirm what we already know: inflation is being driven by higher fuel costs. This points to a supply shock rather than demand-driven inflation, meaning increasing interest rates will just heap more pointless pain on Australian households.
Changes to land taxes in Victoria pushed landlords out of the market — but didn’t reduce housing supply or drive up rents, showing that scrapping the CGT discount could improve affordability nationwide.
The Coalition’s solution to the energy crisis is to double down on fossil fuels. But is this a real solution, or are they merely adding more fodder to the culture wars? Well, you guessed it, "drill, baby, drill" doesn't work in reality.
