G'day -

-----Original Message-----

Now businesses like Kogan avoid GST legally by selling items that cost less than $1000 from a "subsidiary" in Hong Kong. When the Galaxy S3 was new I bought one for myself and one for a relative, both came from Hong Kong with separate receipts so that the bill was less than $1000 and exempt from GST. Kogan's price advantage over other companies relies on avoiding GST.

I think it would be better for the people of Australia if the GST threshold for imports was reduced to $300.

It would be also beneficial for the people of Australia to have sales and income taxes comparable to those in Hong Kong. Regards Slav This e-mail and any attachments to it (the "Communication") is, unless otherwise stated, confidential, may contain copyright material and is for the use only of the intended recipient. If you receive the Communication in error, please notify the sender immediately by return e-mail, delete the Communication and the return e-mail, and do not read, copy, retransmit or otherwise deal with it. Any views expressed in the Communication are those of the individual sender only, unless expressly stated to be those of Australia and New Zealand Banking Group Limited ABN 11 005 357 522, or any of its related entities including ANZ Bank New Zealand Limited (together "ANZ"). ANZ does not accept liability in connection with the integrity of or errors in the Communication, computer virus, data corruption, interference or delay arising from or in respect of the Communication.

G'day:

-----Original Message----- From: Russell Coker [mailto:russell@coker.com.au]

On Fri, 7 Nov 2014, "Pidgorny, Slav(GPM)" <slav.pidgorny@anz.com> wrote:

...

It would be also beneficial for the people of Australia to have sales and income taxes comparable to those in Hong Kong.

Hong Kong isn't an independent country, it's a "special administrative region". So it benefits from the protection of the Chinese army while being allowed to have policies that wouldn't necessarily work for the entire country.

Ok, make that "comparable to those in Saudi Arabia".

In the other thread it was suggested that the financial dealings in Luxembourg made a direct comparison with Australia inappropriate.

By whom? In the other thread someone also labelled use of tax breaks "money laundering", a blatant misuse of the term. So not everything that was suggested elsewhere withstands critical analysis.

When companies base their operations in Hong Kong to avoid Australian tax the solution is not to reduce corporate tax in Australia in a false effort at competing. The solution is to tax all companies in an appropriate manner to avoid having people like us left paying for their externalities.

Solution to what problem, sorry? If you consider the companies' use of offshore tax breaks a problem then reducing taxes in the locations where they operate will avoid the need to do that.

Don't think that you are one of the "better off" people that the Liberal party caters for. Your email address shows that you are one of the workers.

So what? If taxes are reduced then I either have cheaper goods or more money to spend. Good for the workers. Regards Slav This e-mail and any attachments to it (the "Communication") is, unless otherwise stated, confidential, may contain copyright material and is for the use only of the intended recipient. If you receive the Communication in error, please notify the sender immediately by return e-mail, delete the Communication and the return e-mail, and do not read, copy, retransmit or otherwise deal with it. Any views expressed in the Communication are those of the individual sender only, unless expressly stated to be those of Australia and New Zealand Banking Group Limited ABN 11 005 357 522, or any of its related entities including ANZ Bank New Zealand Limited (together "ANZ"). ANZ does not accept liability in connection with the integrity of or errors in the Communication, computer virus, data corruption, interference or delay arising from or in respect of the Communication.

On Fri, November 7, 2014 4:59 pm, Russell Coker wrote:

While Australia is over-reliant on mining income (and the Liberal policies make this worse), it's no-where near as bad as Saudi Arabia. If all mining in Australia ceased it wouldn't change things much.

It would make a bit of a difference I suspect to the 2.2% of the labour force employed in mining, the drop of 5.6% in GDP, and the 35% decline in the export market might be noticeable. -- Lev Lafayette, BA (Hons), GradCertTerAdEd (Murdoch), GradCertPM, MBA (Tech Mngmnt) (Chifley) mobile: 0432 255 208 RFC 1855 Netiquette Guidelines http://www.ietf.org/rfc/rfc1855.txt

Hi

On Fri, 7 Nov 2014, "Pidgorny, Slav(GPM)" <slav.pidgorny@anz.com> wrote:

...

I don't think that increasing taxes on the better off indefinitely is going to work in the long run.

There's always a balance, so "infinitely" is not a trail we need to explore. However, specifically lower taxes on the well off doesn't do anything for either the economy or society. It does not create more employment. This has been well tested in for instance the USA over many decades and although they still do it it just doesn't work. There is no "trickle down effect". In general terms, low tax countries do not have higher employment. In fact it's quite the opposite in many highly successful countries. Ref. Scandinavia and Germany, to name a few. And in interestingly, the lifestyle aspects there are also better than in other countries that have lower taxes. More comfort in general, more opportunity, better and cheaper (or free) healthcare and education. In all the abovememtioned countries the policies are to not prioritise a military industrial complex. Interesting. Did you know that in Finland, education had been taken away from political control. That is, it's regarded as too important (!) to be subject to political haggling. In Finland, anything up to university is free. While that may seem expensive, It's proven to be a worthwhile investment in the people of the country. So spending more money on the right thing can be good. On 7 November 2014 2:27:53 PM AEST, Russell Coker <russell@coker.com.au> wrote:

Right wing politicians talk about running a country like a company. But their political ideas are just bad business. No responsible CEO would plan for short term profits by cutting off the potential for long term profits. But that's how Abbott et al want to run a country.

Speaking as a company owner/CEO, I fully agree with this. A country is neither a household (Thatcher) nor a company. Different scales require different strategies. Macro economics is distinct from micro economics - for real sensible reasons. I can also confirm that I see many companies do the most whacko short-term things. There are many drivers for this, including incompetence and some very bad government-created structures (on every level of government) that effectively encourage short-term weirdness. But govt policies aside, it is of course still a matter of choice for company execs what strategy they pursue. Many choose badly. And, for instance, tossing money at companies, specifically big corps, does neither drive nor support innovation. As a general guide, it's not big corps that innovate. Recognising this could save billions in expenditure and raise many times that in yield over time. But the key in terms of bad governance by the Abbott government is not the odd or even many bad policies. It's inconsistency, uncertainty and resulting instability. For companies, bad policies are not that much trouble if you just know what you're dealing with. With Abbott however, most things are up in the air most of the time, for extended periods, and that's really bad for business and employment. Uncertain companies won't invest (and that includes personnel as well). Unsurprising. Regards, Arjen.

Arjen Lentz wrote:

On 7 November 2014 2:27:53 PM AEST, Russell Coker <russell@coker.com.au> wrote:

...

Right wing politicians talk about running a country like a company.But their political ideas are just bad business. No responsible CEO would plan for short term profits by cutting off the potential for long term profits. But that's how Abbott et al want to run a country. Speaking as a company owner/CEO, I fully agree with this. A country is neither a household (Thatcher) nor a company. Different scales require different strategies. Macro economics is distinct from micro economics - for real sensible reasons.

There was an interesting interview on RadioNational; where the point was made (sorry can't recall date); that it is not only a question of scale. In some ways running a national economy is more like running a bank, than an ordinary company. Consider the question of paying off or increasing 'debt;' in the form of say buying back and selling bonds. Buying back bonds has the consequence of increasing the amount of money in circulation; the US because of it's role as world banker, is able to just print money and buy back bonds; (which in any other economy would produce double digit inflation !) Selling bonds has the reverse effect; perhaps the real question with this form of goverment debt is; does (or will ) the percentage yearly long term return to the national economy; (from infrasructure development; education etc); exceed the long term borrowing cost; ie bond yield less inflation rate ? regards Rohan McLeod

On Mon, November 10, 2014 8:46 am, Arjen Lentz wrote:

On 7 November 2014 1:06:15 PM AEST, Russell Coker <russell@coker.com.au> wrote:

...

Tony Abbott wants to increase GST and apply it to more items. The Liberal goal of increasing taxes on poor people is going well.

I reckon that's a bit simplistic. Most affluent countries have a much higher GST rate than we do. Our 10% rate is very low.

I think Russell is right; the tax burden will be shifted, any shortfall from corporate (et al) tax cuts will raised from the GST instead.

Indeed, applying it to more items is not good. Unprocessed foods and other primary living needs should have a 0% rate. Did you know that in the Netherlands, books are taxed at a lower 6% rate? (about a third of the normal Dutch GST) Interesting.

Which will lead to the problems of the old Australian sales tax system where different items had different rates, adding to the complexity of the system and requiring government definitions of what constitutes "unprocessed food" (remember the cooked chicken incident?) and whether game rule books are books, but exactly the same books in a box are games. Variable rates means the GST loses the one advantage it used to have; relative efficiency.

GST is a tax on consumption rather than earnings, and that is generally regarded a mechanism suited as a broad revenue measure as well as guiding for instance more environmentally aware purchasing. It means people pay tax in line with their consumption choices rather than on their earnings. That can be a very good thing for everybody including those on lower incomes. Abbott may be exploring this for the wrong reasons (political haggling with the states as that's currently where GST revenue goes), but it's not intrinsically a bad policy.

I think it is intrinsically bad. Any tax on transactions - apart from the usual administrative costs - also carries a deadweight loss, caused by loss of trades. If you want more environmentally aware purchasing, internalise externalities through a Pigouvian tax. Overall, *all* taxes on earnings or consumption carry deadweight losses, it's just a matter of degree. Taxes which concentrate on rent-seeking activity (which often are based around high-profit companies), or which pass their costs externally (e.g., pollution taxes) actually provide net economic benefits.

As a simple example, a higher GST would make McDonalds relatively much more expensive than fresh (unprocessed) foods. That tweaks consumer behaviour which has positive impact on health, healthcare, local food production, as well as the environment.

It also means that your tofu and quinoa salad with kale juice purchased at Hipster Cafe is more expensive too.

I mention the local food production because in a longer supply chain the cost component of the transport and intermediaries increases, and because GST taxes that, a shorter supply chain gains a relative advantage.

Not really. The costs is passed along each point of the transaction so only the final consumer pays the tax ultimately. Which means a short supply chain has the same relative advantage as prior to a GST. -- Lev Lafayette, BA (Hons), GradCertTerAdEd (Murdoch), GradCertPM, MBA (Tech Mngmnt) (Chifley) mobile: 0432 255 208 RFC 1855 Netiquette Guidelines http://www.ietf.org/rfc/rfc1855.txt

On 12/11/2014 2:50 PM, Russell Coker wrote:

You seem to think that McDonalds has market share due to being cheap. McDonalds isn't that cheap, a large double-quarter-pounder meal with Coke costs $10, a can of Coke costs $0.50 at the supermarket, a packet of frozen chips costs maybe $5 for a Kg or two, buns are $0.50 or less, and meat patties aren't that expensive. You could probably make up meals comparable to McDonalds at home for much less than half the price.

McDonalds is very expensive these days. Heck, I wanted a large strawberry shake the other night, it cost me $4.35 ... that is ludicrous for some flavoured ice-cream drink. I quickly understood why the price boards didn't even tell you the price. I stopped buying McDonalds quite some time ago for lots of reasons, price was just one of them. Coke.... that isn't cheap either, even at the supermarket, unless you get a super special, it is generally much more expensive than petrol. Of course you can buy a lesser coke, but people usually don't prefer ordinary supermarket cola brands that are cheap. Coca Cola is a very popular brand and it is an expensive soft drink that is also best avoided (or consumed in moderation, that is rarely consumed).

McDonalds is popular because it's easy.

I would rather they all closed down. Being able to buy McDonalds food 24/7 whilst not being able to shop anywhere near as widely at supermarkets is a disgrace. My preference is for far better food than McDonalds supplies and I can never understand people considering it a cheap option; it is in fact a very expensive option. You could go to Food Star and seriously overeat (on better foods) for less that you could try to do the same as a McDonalds for horrid food. A.