Yesterday, it was Cameron Clyne from the NAB promoting the GST to a receptive Neil Mitchell on 3AW. I usually don’t mind Cameron’s rather laid back style of analysis, but I was happy on this occasion to hear a listener pull them both up short with a question to the effect “How are dearer good and services going to help the economy?” They didn’t (couldn’t?) have a response.

Today it’s the more driven CBA boss Ian Narev, having delivered a record $7.8 billion profit, calling for the next federal government to lay out a “blueprint” for the economy. No doubt he’d look kindly on an extended GST, too. You see, apart from a little extra paperwork, it doesn’t affect their businesses.  However, Narev DID call for people not to take on too much debt at the moment. (You’ve not been on the turps, Ian?)

Hey, guys!  How about this? What about calling for Ken Henry’s all-in land tax? It’s in the nature of a rent and can’t add to prices. I mean, haven’t your super-profits been fuelled by bubble-inflated mortgages?  And wouldn’t a single rate Australia-wide land tax make housing more affordable for our youngsters?

You’re not interested in that idea at all? I wonder why not.

Young Australians who are prepared to put their heads into the mortgage noose before this bubble deflates are about to get into BIG trouble.

Don’t make yourselves wage slaves.  DON’T BUY NOW!

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  1. hmm, what is your opinion on state spending?? Is there alot of waste, as in do you think society would collapse is that the spending was cut 50%?? That what save alot of “taxes” would it not? Do you think there is a need for so many paper shufflers? I went to renew a licence, that can all be automated, along with many other “departments” i can think of.
    Also, most of the taxes are needed to pay off previous interest on borrowed money, how can you pay a debt off with a debt?? Can you find out what australias totel debt is foreign and deomestic? i hear it is a huge figure. Like in the trillions.And all the public pensions, are they factored into the debt? Is this money in some account somewhere? And doesnt pension money need 6-8% return to be able to pay out? Where can you get fixed income at 6-8%?? Not in bonds. Is the public pension money there or an illusion?

  2. I don’t believe the banks have reached that stage in Australia yet, Michael. As long as they can sell their mortgagee-in-possession homes into this bubble-inflated market, they’ll continue to make their super-profits. It’s when the bubble bursts that they’ll begin to hemorrhage (and start seeking taxpayer-funded bailouts!)

  3. I don’t believe the banks are making profits from mortgages based on the the ever increasing number of ‘For Lease’ signs that festoon suburban streets, commercial precincts and shopping malls.

    With such obvious financial stress for all to see in the property sector coupled with ATO data that the vast majority of property investors are losing money, the banks must surely be haemorrhaging money left, right and centre.

    I’m sticking with the Zero Hedge claims that our banks (which are the USA’s Foreign banks that are licensed to operate in America) are stuffing their balance sheets with freshly minted ZIRP money courtesy of Ben Bernanke and calling it profit under new accounting rules.

  4. Raise the GST? Right… anything to distract from rentier profits, including:

    – resource rents
    – private monopoly profits
    – geo-rent (land rent)
    – interest (a classic form of economic rent, as it has no cost of production, other than minor administrative costs).

    The answer is NOT to raise the GST, but to levy significant taxes upon all of the above, defraying the costs significantly of business and labour.

    I note with disappointment that even supposed reform-minded economists like Saul Eslake have even fallen into this trap.

    Somebody give me his job at the investment bank.

    Not happy Jan.

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