Thursday 28th of November 2024
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Taxing at double time to pay for Abbott's baby bonus

Glenn Dyer writes:

BABY BONUS, TONY ABBOTT

Millions of Australians will lose from Tony Abbott's idea of taxing profitable companies to pay for his exaggerated version of the baby bonus.

People with superannuation, either in managed funds, run by retail or industry groups, or self- managed, will be the hardest hit, along with investors holding shares directly.

Big companies such as Telstra will be impacted at a time when its share price is already under pressure. With the Future Fund (Australian taxpayers), still owning a swag of shares in the company, we all will suffer.

In all the commentary about the absurdity of Abbott's 1.7% levy on the profits of Australia's 3000 most profitable companies such as in the Fairfax broadsheets this morning, one very, very important point has been lost.

There's has a lot of talk about the impact on costs and prices and employment. But that's marginal issues. The $2.7 billion a year, $11 billion-plus four-year cost of his idea will predominantly come from shareholders, which include nearly every one of the more than 10-plus million working people in this country.

According to Australian Stock Exchange figures "retail investors directly own slightly less than 20% of all listed equities, with domestic institutions owning slightly less than 40% and foreign investors slightly more than 40%."

So about 60% of all shares on the ASX are owned by Australians, one way or another, and these are concentrated in the four big banks, BHP and Rio Tinto, Woolworths, Wesfarmers, the AMP, AXA, Telstra and others with a market capitalisation of $1 billion or more, which in turn account for 90% of the market's valuation.

According to the ASX at the "end of 2009, a total of 175 companies had a market capitalisation greater than $1 billion, with 385 companies between $100 million-$1 billion, 534 companies between $20 million-$100 million and 855 companies below $20 million.

The companies valued below $20 million are unprofitable or barely profitable miners and small industrials. The bulk of the companies that will pay the tax are in the next groups, right to the 175 worth $1 billion or more, which is where investors concentrate.

This has been ignored by political commentators in the big papers and electronic media. (They are as removed from the real world of business as Abbott).

What they don't understand is that the easiest way for profitable companies to pay the tax will be to either cut dividends, or not increase them, even if profits are rising.

While some groups (accountants mainly) are saying companies can restructure to save tax, the stamp duty costs of doing this these days is prohibitive. The easiest way is simply to either cut dividends, or not increase them. Much easier than pushing up prices.

This will apply to all listed companies, as well as private groups. All make distributions one way or another. The listed companies make them to shareholders, which in most cases include super funds, both retail, industry and self-managed funds.

Other investors own shares in their own right and will lose directly. Self-funded retirees will be hurt more than anyone because they depend more on dividends for their income than do wage earners.

Because he will be taking earnings from companies, their share prices will be impacted, their prices will fall or no rise by as much because their dividend yields and price earnings ratios will be adversely impact. They are crucial measurements for investors in assessing the worth of listed companies as an investment.

Companies will underperform the market, which will underperform as a whole each year because $1 billion to $2 billion a year in earnings are being stripped out by this odd new tax.

Investors will take their money from the market (or not commit as much), to invest in other riskier or lower taxed investments.

Read the full story on our website


The resolution is there but, where is the media?

I quote from the Australian Constitution on Double Dissolutions.

 

Clearly, the possibility for disagreement between the two houses of parliament is possible in Australia. This disagreement reached its height in 1975 when the Senate refused to vote on the Whitlam Government's budget bills.

One means of resolving conflict between the two houses of parliament is by means of a "double dissolution" of the Parliament.

A Double Dissolution of the Australian Parliament is allowed under Section 57 of the Australian Constitution:

If the House of Representatives passes any proposed law, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, and if after an interval of three months the House of Representatives, in the same or the next session, again passes the proposed law with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor-General may dissolve the Senate and the House of Representatives simultaneously. But such dissolution shall not take place within six months before the date of the expiry of the House of Representatives by effluxion of time.

If after such dissolution the House of Representatives again passes the proposed law, with or without any amendments which have been made, suggested, or agreed to by the Senate, and the Senate rejects or fails to pass it, or passes it with amendments to which the House of Representatives will not agree, the Governor-General may convene a joint sitting of the members of the Senate and of the House of Representatives.

The members present at the joint sitting may deliberate and shall vote together upon the proposed law as last proposed by the House of Representatives, and upon amendments, if any, which have been made therein by one House and not agreed to by the other, and any such amendments which are affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives shall be taken to have been carried, and if the proposed law, with the amendments, if any, so carried is affirmed by an absolute majority of the total number of the members of the Senate and House of Representatives, it shall be taken to have been duly passed by both Houses of Parliament, and shall be presented to the Governor-General for the Queen's assent.

God Bless our House of Representatives.  Ne Oublie.

 

 

 

Freedom; Democracy and other cons.

The variety of subjects that you John and Gus indulge in is amazing.

I believe that I can get a better picture of what is happening in Australia and the world by reading your posts.  As I have said, you go to great pains to tell both sides. Fair dinkum.

So my bitch is this.  If you can invite comment as proposed - if you can give your opinion for or against - and you let people like me have their say - what better example of a "democratic" and truthful society is that.  And we would pay for that before we would even consider the Murdoch plan to charge the internet.

I sincerely believe in everything I write, with some emotion at times.  I would dearly like to see more people of independent thought contribute to this rare window of free opportunity.

God Bless Australia and our areas of free expression.  NE OUBLIE.

The Biggest Criminal in the world is the "free media"

Let me make my opinion very clear at the outset - we Australians are not in a democracy.

I believe that over the years and the wars, democracy has become a Capitalist method of excusing the very war crimes that "democracy" has promoted as a universal peace objective where every person will be equal no matter what happens. Disneyland.

If, and it does, the "free media' of the US and Australia has successfully argued and established that the "greatest boon" to democracy is the "free" press. Disneyland.

The Zionists have realised as far back as the turn of the 20th century, that to control the information fed to the citizens of a nation IS the way to capture their hearts and minds.

Every day we hear our friends make a point accompanied by a statement like, I read it in The Australian; or it was on TV; or Alan Jones said so on the radio.  Unregulated abuse of freedom of speech.  Entertainment it is NOT. It is pure and unadulterated propaganda and is controlled by the owners of that avenue of tripe.

Assume for a moment, like Obama, that Kevin Rudd tries to implement some restrictions on the total misinformation of the Murdochracy - he would be treated as Gough Whitlam and his Wife were in 1975.

Conversely like you Gus and John, are prepared to give a factual account of some important person's view but, follow it with an alternative? Or a confessed opinion?

Over the years in Australia, cartels have developed and the efforts of Paul Keating to stop it were negated by the Howard "New Order". Hence the "Murdochracy".

I would like to see Australia make a decision regarding information to the public that is not, in any way, attached to profit or political advantage.  Of course that sort of courage would eventuate in Barnaby Joyce becoming Murdoch's P.M. Struth.

After the American "powers that be" pulled off the false election of G.W. Bush - the American press can not be believed.  Their claims of being the pinnacle of democracy only means that their policies must be obeyed- because they said so.

God Bless Austalia and make us immune to propaganda.  NE OUBLIE.

 

 

Truth v Media - David v Goliath.

We live in a world where, by constant conflict, has felt the need to be absolutely dishonest for the sake of security?  Or that is what we are told.

IF, just one nation decided that only the established and verified truth would be printed in the media - why would that be wrong? Is their objective to influence our hearts and minds? No, not surely.

Then who tells them what to give us as "information". The government has no input but if they do, they will not be elected the next time.

"Kevin Rudd didn't look at the NSW Premier" but, for how long did that orchestrated anti-Rudd situation exist?  To her credit, the NSW Premier said it was blown out of proportion.

The Prime Minister's issue with the State and Territory leaders is a clear indication that this P.M. believes in consultation. IMHO, everything he and his Ministers have done is only after consultation with all stakeholders - an unheard of P.M. who wants to have all those directly involved in his plans to have an input.  A government by majority.

And if there is a hiccup in any of his plans for the working classes of Australia - he will take the blame.

Don't let the Capitalists remove your best P.M. in my living memory.

This man leads a government which acknowledges the problems of both employers and employees.

If we want true democracy, only this man and his very competent ministers can provide it.

God Bless Australia and all individual passport holders of which they are proud.  NE OUBLIE.