Australia’s fiscal problems

I have just seen Australian political opposition leader, Tony Abbott announce the Liberal Party’s new “Real Solutions” Plan.

While such publications cover various issues ranging across healthcare, foreign policy and labour markets, this post is not about addressing any of those topics and nor do I know enough in order to offer intelligent advice, BUT from a financial perspective, this is what I think needs to change in Australia.

Housing is unaffordable and the increasing cost of residential rent is ridiculous.
Personal taxes are too high
Corporate tax rates are globally uncompetitive
The re-unionisation of industrial workers is dangerous
High wages are prohibitive
A strong Australian Dollar is nothing to cheer about
Attitudes about innovation & entrepreneurism need to improve

There is a whole generation who have never seen a recession (which was at least 20 years ago) or been fired from a job.

With the decline of the manufacturing sector, it seems like Australia will end up selling tourism experiences along with financial services and insurance.

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4 Responses to Australia’s fiscal problems

  1. Mark McManus says:

    All fair comments – what would be a competative tax rate ?

    • I think the corporate tax rate should fall be 15% and the highest marginal personal tax rate should be capped at 30%. Maybe even explore a “flat tax” across for individuals.

      I believe lower taxes induces investment and economic activity and stops the flight of capital away to lower tax regimes.

  2. Katina Law says:

    I agree with you on all these points Rob. We are making ourselves uncompetitive in a very competitive world.

  3. Lyndon says:

    Good points Rob.
    Speaking as a small manufacturer in Vic,I concur entirely that tax rates,wage rates and high $A is slowly killing off industry.Outsourcing overseas of services may also kill off a large proportion of our services sector.
    It is now common for drafting,architectural and design work to be done offshore also.
    Negative gearing on existing property is also a massive problem I believe only resulting in inflating prices at the expense of the taxpayer.
    NG should be limited to newly constructed dwellings only.This helps the building sector and creates jobs.
    “Create” being the operative word here.
    NG on existing property creates Ponzi’s and creates absolutely nothing.

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