A win for Nate. A win for reality.

@jsmooth995

And boy has there been an assault on reality.

In his Andrew Olle lecture Friday night ABC broadcaster Mark Colvin described what's been happening this way:


"I'm talking about the way people can create their own reality stream.

It's particularly far advanced in America, because a quarter of a century ago they abandoned the fairness doctrine, a federal regulation which mandated a degree of balance on the airwaves.

So now you can run a creationist channel that rigorously excludes Darwinists from the airwaves - you can say again and again that Barack Obama was born in Kenya, and refuse even to look at the documentary evidence, and so on.

In 2004, the writer Ron Suskind wrote a famous piece in which he quoted a Bush aide - reliably believed to be Karl Rove - as follows:

"The aide said", wrote Suskind, "that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality judiciously, as you will we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors;and you, all of you, will be left to just study what we do."

I imagine most of us here tonight would categorise ourselves as the reality based community, but we too are beleaguered."


New York Times data geek Nate Silver was feeling beleaguered.

A few days back Paul Krugman took up his story:


"For those new to this, Nate is a sports statistician turned political statistician, who has been maintaining a model that takes lots and lots of polling data — most of it at the state level, which is where the presidency gets decided — and converts it into election odds. Like others doing similar exercises Nate’s model continued to show an Obama edge even after Denver, and has shown that edge widening over the past couple of weeks.

This could be wrong, obviously. And we’ll find out on Election Day. But the methodology has been very clear, and all the election modelers have been faithful to their models, letting the numbers fall where they may.

Yet the right — and we’re not talking about the fringe here, we’re talking about mainstream commentators and publications — has been screaming “bias”! They know, just know, that Nate must be cooking the books. How do they know this? Well, his results look good for Obama, so it must be a cheat. Never mind the fact that Nate tells us all exactly how he does it, and that he hasn’t changed the formula at all.

This is, of course, reminiscent of the attack on the Bureau of Labor Statistics — not to mention the attacks on climate science and much more. On the right, apparently, there is no such thing as an objective calculation. Everything must have a political motive.

This is really scary. It means that if these people triumph, science — or any kind of scholarship — will become impossible. Everything must pass a political test; if it isn’t what the right wants to hear, the messenger is subjected to a smear campaign."

Nate - for the most part - failed to strike back, or back away from his assessment (one arrived at by calculations rather than judgments by the way, like in Moneyball).

The end result? Darn near exactly what he predicted:

Reality (specifically, data) triumphed over people who preferred to choose their reality.

As Jon Stewart said last night: "This was the historic election between arithmetic, and belief. And belief wasn’t going down without a fight."

Watch the full eight minutes. It's worth it.

Essential reading:

. The war on Nate Silver, the after-action report - Brad DeLong


Related Posts

. Obama. He knows how to write.

. See. This. Movie. Moneyball

. Why most forecasts are crap

Read more >>

Unemployment is 5.4%. Without Queensland it would be 5.2%

Evocative graph from Greg Jerico:

Related Posts

. Why are job vacancies still high? Because we're leaving jobs very quickly

. Switching jobs. The turbulence beneath the smooth job market surface

. All of employment growth is accounted for by Australians over 55

6202.0

Read more >>

Census 2016. Why the questions will be answers in themselves

They'll show how we're changing

You can tell a lot about a nation from its census - not only from the answers but also from the questions asked. Next census for the first time the Bureau of Statistics wants to ask about our second houses, and even our third ones.

“In the old days we all probably had a single house we lived in,” says census data director Jenny Telford. “But now many people have many places they call home. Children live in two houses in shared custody, workers fly in and fly out, many or us have holiday homes.”

The ABS isn’t sure how to word the new question - whether to ask whether there is another place we regard as home, or whether to ask whether there is another address we rest our heads so many nights a month. It’s begun a period of consultation that will last until May.

In 2016 it also wants to ask how we earn our money. Ever since 1911 the census has merely wanted to know how much we earned, on the safe assumption we made it from work. But these days Australians are increasingly earning money from investments and many live on government benefits. The ABS hopes a new question asking how we get our income will give it a handle on what type of people are beneficiaries and what type are investors. Ms Telford says eventually the form might ask us to tick a box to allow the Tax Office to hand over data that will detail dollar for dollar where our income comes from.

The Bureau also wants to ask the sort of questions a society asks when it gets old - who suffers from long-term health problems and where they live.

It also wants to change questions that are being rendered meaningless. "Asking whether your dwelling was connected to the internet made perfect sense when we first did it in 2001,” says Ms Telford... “But now people has iPads, multiple means of connecting to the internet. Our current question doesn’t capture the full picture. We need to work out what it is we want to know. Do we want to know about fixed connections, or about how much people are connecting and what they are doing whiel connected?”

Even the means of asking the questions will offer a window into changing times. The ABS will dispense with the army of 43,000 census collectors, posting letters with login details instead. “We are finding Australians increasingly want to interact with us online, Ms Telford says. “They would prefer not to have us knock at their door. At some homes we can’t get to the front door.”

In today's Canberra Times and Age


Related Posts

. Remember the census? It's about to change, big-time

. Educated, professional, staying put. The census second wave

. Play with the census. It's fun and interactive

Read more >>

Behind the RBA "surprise". Why December is a good bet

The Reserve Bank is fully prepared to cut interest rates at its next meeting on December 4, but the statement released after its Tuesday board meeting reveals it’ll be no pushover.

The Bank went out of its way to describe interest rates for borrowers as “clearly” below their medium-term averages. It subscribes to a notion made popular by its previous governor Ian Macfarlane that the further rates move from neutral the stronger the case that needs to be made to move them further away still.

It sees signs the five cuts it has delivered since Melbourne Cup day 2011 are “starting” to have the desired effects. Business demand for funding is up, housing is stronger and share prices have climbed in line with markets overseas. It is looking for “further effects” over time. If it gets them, and if they are strong enough, it might feel the economy doesn’t need another interest rate boost. It would like to see a clear case for a cut before cutting again - clearer than it needed in order to begin to cut.

It is somewhat concerned about inflation (which has been “slightly higher” than expected) but not concerned enough to rule out another rate cut and, importantly, not concerned enough to make it delay any rate cut under after the release of the next consumer price index in late January.

The board believes that by its next meeting in December - its last for the year - it’ll get a good enough steer on inflation from the wage price index, due for release next Wednesday. It will also have the latest figures on investment intentions, something to which it is now paying very close attention as it worries about the transition from mining investment to other forms of investment after the boom peaks some time next year.

Late Tuesday the market was assigning a 58 per cent probability to a rate cut in December, which is probably about right. The Bank is worried about unemployment edging higher (although it recognises this will help control inflation) and it believes some of the jump in consumer spending in the first half of the year was only temporary, created by early carbon tax compensation payments.

The Australian dollar jumped to its highest point in six weeks after the Reserve left rates steady, climbing more than half a cent to 104.27 US cents, in a move that can’t have made the Bank happy. It would like to crimp the dollar which it thinks is “higher than might have been expected”. It is now ‘leaning against the wind’ by selling Australian dollars where foreign customers want to buy them, but it doesn’t want to cut rates in order to restrain the dollar because it fears it mightn't work. It’ll cut rates only the case stacks up on its own terms, which isn’t yet.

In today's Sydney Morning Herald and Age


Related Posts

. Melbourne Cup? No cut.

. October: Why the RBA cut. The resources boom is about to peak

. September: Situation no longer normal. The Reserve prepares to ease

Read more >>

Melbourne Cup? No cut. It's today's favourite

The Reserve Bank is expected to leave rates on hold today, making this the first Melbourne Cup day in six years it will have left rates steady.

The Melbourne Cup day board meeting is traditionally favoured for rate moves because it comes just days after the release of the September quarter consumer price index which provides the first official reading on inflation each financial year.

This year the Bank was so confident the inflation rate would not trouble it that it moved rates ahead of the release, in early October. Inflation has been at or below 2 per cent all year, even after the carbon tax - well down on the rates of 3 per cent or more consistently recorded all last year.

The Bank believes its three rate cuts this year - in May, June and October - are yet to have their full effect. It believes it is too early to tell whether the economy needs another set of back-to-back cuts. It is also conscious that international economic conditions have improved since its October meeting rather than worsened as they had in the leadup to it.

Complicating the board’s deliberations are retail figures released Monday showing no real growth in spending since the carbon tax compensation payments delivered in June.

September quarter retail spending was up just 0.6 per cent on the June quarter, but all of the increase was accounted for by an 0.7 per cent lift in prices, meaning the volume of goods bought actually fell. Spending on food climbed 1.3 per cent, but food prices had climbed 1.6 per cent - led up by much higher prices for fruit and vegetables - allowing the Bureau of Statistics to conclude the volume of food bought slipped 0.3 per cent...

“Consumer demand and retail spending remain soft but are ticking over with no signs of further weakening,” said Westpac economist Matthew Hassan.

“Consumers are worried about losing their jobs in a softening labour market, income growth is slowing and people are keen to pay down debt. The response to recent rate cuts has been tepid.”

Purchases of food climbed just 3 per cent in the year to September, purchases of takeaway and restaurant food 3.5 per cent, and purchases of household goods 3.2 per cent. Department store sales climbed only 1.4 per cent - failing to keep pace with population growth. “Clothing, footwear and personal accessory retailing” was the only category identified by the Bureau in which spending grew strongly, climbing 7.7 per cent over the year after adjusting for inflation.

Stark differences have emerged between the states, with inflation-adjusted spending growing at annual rates of 8.9 and 4.6 per cent in the mining states of Western Australia and Queensland and at healthy rates of 5.8 and 5.2 per cent in NSW and the Australian Capital Territory. But spending in Victoria grew by only 1.1 per cent, suggesting spending per person fell. Spending in Tasmania went backwards 2.7 per cent.

The ANZ’s count of job advertisements slid a further 4.6 pc in October, its seventh consecutive monthly decline. Around 145,000 jobs per week were advertised in October, well down on the 170,000 per week a year before.

“We expect employment to fall when the official figures are released on Thursday and the unemployment rate to pause at 5.4 per cent on its upward trend,” said ANZ head of economic research Ivan Colhoun.

“Weaker job advertising and continuing job losses suggests continuing upward pressure on the unemployment rate. It will see the Reserve Bank cut rates further. We had been expecting a cut in December, but a move on Melbourne Cup day would not surprise.”

Westpac chief Gail Kelly called for further cuts to boost consumer and business confidence. She said a Melbourne Cup day cut was a “lineball call,” but otherwise there wopuld be one in “December or the latest February”.

Westpac's reported a 5 per cent jump in its cash profit to $6.6 billion for the year to September. It passed on just 0.18 points of the Reserve Bank’s most recent 0.25 percentage point cut and has the highest standard mortgage rate of the big four banks.

In today's Canberra Times, Sydney Morning Herald and Age


Related Posts

. October Why the RBA cut. The resources boom is about to peak

. September Situation no longer normal. The Reserve prepares to ease

. May Private banks are infuriating the RBA. Why it went big.

8501.0

Read more >>

Not all business friendly. Treasury keeps tabs on Coalition policies

TREASURY TALLY

What the Coalition will cost business

Paid parental leave levy: $3.2 billion per year

Scrapping of instant write off and associated provisions: $1.07 billion per year

Scrapping loss carry back provision: $300 million per year

Annual total: $4.57 billion

Treasury analysis

The Commonwealth Treasury believes the Coalition’s tax policies will cost Australian businesses an extraordinary $4.57 billion in their first full year of operation.

Prepared as Treasury attempts to come to grips with a suite of Coalition policies yet to be announced, the analysis includes only those to which it has publicly committed. Excluded are policies with a negative but uncertain impact on business such as winding back the increase in the employee tax free threshold from $6,000 to $18,200.

The three policies identified by Treasury are the Coalition’s commitment to impose a 1.5 per cent tax levy on big firms to fund paid parental leave, its decision to axe instant asset write off and other tax breaks for small business funded from the carbon tax, and its decision to axe the ability for businesses to “carry back” losses and obtain refunds for tax already paid funded from the mining tax.

The analysis excludes the benefit to some businesses from axing the carbon and mining taxes.

Treasury finds businesses would lose $4.5 billion in the first full year the Coalition’s three commitments were operational, accumulating to $17.2 billion over four years. Its calculations suggest manufacturers would pay an extra $1.34 billion per year, retailers an extra $930 million, and the construction sector an extra $860 million per year.

Although business as a whole would benefit from the Coalition’s policies because of the removal of the $6.6 billion per year carbon tax and the $2 billion per year mining tax, the analysis suggests that outside of the few big companies paying those taxes the rest of Australian businesses would suffer.

Treasury’s responsibility for costing Opposition policies in the leadup to elections has been transferred to the new Parliamentary Budget Office, but it still maintains a watching brief on behalf of the government. During the 2010 campaign it found errors and differences of opinion over Coalition costings amounting to $11 billion...

Finance Minister Penny Wong told the ABC on Sunday the Coalition was being irresponsible by attacking government moves to keep the budget in surplus while not detailing how it would fund its own promises to axe the carbon tax and the mining tax.

“I'm not sure it's very responsible to talk about the importance of bringing a budget to surplus and the importance of fiscal discipline but not telling people what your cuts are,” she said. “And I'm not sure it's responsible to talk about the ending of the age of entitlement but then oppose the tightening of benefits such as the Baby Bonus, and Family Tax Benefits.”

Coalition finance spokesman Andrew Robb attacked Senator Wong for refusing to guarantee the budget would be in surplus.

“Wayne Swan alone has declared on at least one hundred and fifty occasions the government will deliver a surplus in 2012-13 come hell or high water,” he said. “If Labor walks away from this commitment it would sit alongside Julia Gillard’s infamous promise there would be no carbon tax.”

In budget analysis to be released Monday Deloitte Access Economics says sliding mining revenues make the forecast surplus unlikely. It expects a deficit of $4.2 billion this financial year, followed by a deficit of $5.1 billion in 2013-14.

“China has slowed and that hurts the budget,” Access says. “While we cheer the genuinely tough decisions in the budget update - notably the cut to the baby bonus and to indexation of subsidies to private health insurance - the budget is still in search of a surplus.”

In today's Sydney Morning Herald and Age

JOE HOCKEY MONDAY: TREASURY GOT IT WRONG, SOMEHOW

Do you dispute the figures?

JOE HOCKEY:

Yes. Absolutely. They are fundamentally flawed on a number of basis, including the fact that some of the assumptions are wrong, fundamentally wrong. Treasury never rang us about it and certainly the journalist, Peter Martin, never rang us about it. You would think it was 101 in journalism that when you are making allegations about someone or something that someone has done that you give them a courtesy phone call. Quite frankly, it is becoming a bit tiresome when these sorts of documents are published by newspapers or others as if they are fact when in fact when they are not – they are factually incorrectly, they are grossly inaccurate and the journo never bothered giving us a phone call.

JOURNALIST:

What assumptions are wrong?

JOE HOCKEY:

A range of assumptions. You will see why they are so wrong when you look at our policies before the next election.

JOURNALIST:

Can you tell us specifically where it is wrong? You said a range of errors.

JOE HOCKEY:

There are a range of errors. You will see. They could have rung us and asked us.

JOURNALIST:

But you can’t tell us which areas?

JOE HOCKEY:

No. I am not going to waste people’s time. For a start, some of the policy assumptions; that we are not going to pass on the benefits of abolition of the carbon and mining tax, weren’t included in the numbers. Of course that is a benefit to business! We have said repeatedly, the carbon tax and the mining tax are going to go. Now the mining tax is hardly raising a dollar but we have also said there are a number of spending initiatives associated with those packages that are going as well. So that wasn’t taken into account. It goes on and on and on. Pretty typical really.

Related Posts

. March 2012 Hockey has done it, so he says - savings found

. December 2011 Lib costings debacle - "auditors" fined

. September 2010 Coalition costings: The inexcusable, the inexplicable...

Read more >>

Garnaut to miners. You've conned yourselves over China

Read his full speech below. It is very good.

Climate change advisor Ross Garnaut has lambasted mining executives for destroying shareholders funds in the blind belief China's demand for Australia’s big three exports would continue to climb.

While they had splurged on “wasteful overinvestment” China had been making good on its promise to cut its emissions intensity and had been sourcing iron ore from elsewhere.

“It happens that the Chinese structural change has had its most severe effect precisely on the three commodities which have been at the centre of the Australian resources boom - iron ore, metallurgical coal and thermal coal,” he told a Melbourne Institute conference.

“The awful reality is that parts of corporate Australia have dissipated shareholders’ funds by underestimating the seriousness of Chinese commitments to reduce the emissions intensity of economic growth.”

Speaking at the same conference Treasurer Wayne Swan warned of a “savage blow” to the global recovery unless Republicans and Democrats in the United States could agree on a way to prevent a crisis in December when large numbers of tax cuts would automatically expire.

Professor Garnaut said China had exceeded its ambitious emissions targets, cutting coal-fired generation by more than 7 per cent in the past year. A rapid expansion in hydroelectricity, and wind, biomass, solar and nuclear power had pushed down coal’s share of energy production from 85 to 73 per cent.

Australia’s iron ore exporters would soon have to compete with massive new Chinese-funded mines in West Africa created in part by Australia’s decision to block Chinese investment at home.

The forecasts for iron ore and coal exports in the government’s Asian Century white paper were barely believable, their credibility protected only by the presence of “low” projections along with so-called medium and high projections.

Gas and uranium would be far more important to Australia’s prosperity than the “diminished prospects for the staples of the early twenty first century”...

Mr Swan built on his September attack on the “cranks and crazies” he said had taken over parts of the Republican Party saying the “looming fiscal cliff” in the United States could plunge it back into recession.

The legislated unwinding of a decade’s worth of tax cuts and spending programs on December 31 would “left unattended, see the the US economy suffer a crushing annualised contraction of 2.9 per cent in the first half of next year”.

“Whoever wins the presidential election in less than a week’s time and whoever controls the Congress will have choices to urgently make,“ Mr Swan said.

“A few weeks ago I described in colourful terms the risk posed by those who were
pushing the most extreme points of view.”

“I got a lot of support for that speech, but some of my dependable critics misunderstood it as a political statement, when any economist or policy-maker following the fiscal cliff crisis knows all too well this is about risks.”

Mr Swan will fly to Mexico for the G-20 finance ministers meeting on the weekend and then to Washington for meetings with the head of the International Monetary Fund Christine Lagarde and the head of the US Federal Reserve Ben Bernake.

Professor Garnaut told the conference Australia had been blessed to have a mining boom immediately following the largest consumption and housing boom on record.

The immediate challenge was to “come down from our hump in incomes and expenditure without precipitating recession”.

In today's Canberra Times, Sydney Morning Herald and Age


Here's my favourite bit, about Japan:

"Some observers see Japan’s economic stagnation as a failure of the Japanese economy and polity. Many Japanese do not feel that their country is in crisis. Unemployment is low. Income is more equitably distributed than in the United States, although some Japanese are disturbed by increasing disparities. Health services are excellent by global standards and longevity incomparably high. Japanese enjoy high and subtle literacy and good education, and a rich cultural life. There is private financial and personal security and incomparable public security—natural disasters aside. To be sure, the ageing of the population slows national economic growth and reduces national strategic weight, and a more dynamic polity would remove some longstanding imperfections. But if Japan is the end point of modern economic growth, then modern economic growth is no bad thing."


Ross Garnaut 2012 Economic and Social Outlook Conference



Related Posts

. Earth to Australia - the party's over, you've had time to prepare

. Worst case - after the boom we look like Europe

. What next, after the boom ends?

Read more >>

When the government's own advisor tells it to tax wine properly...

Here's what the Australian National Preventive Health Agency told the minister today:

"Based on public health considerations, the Agency finds that the current operation of the Wine Equalisation Tax is of concern and requires reappraisal."

Pretty strong, for bureaucrats.

Here's junior health minister Mark Butler's early response:

JOURNALIST: Minister on a different issue, you’ve seen two reports in the last week discussing minimum prices on alcohol and also volumetric taxes on alcohol. Has the government come to any feeling, or perhaps you have a personal feeling, about the best way to deal with alcohol-related problems.

BUTLER: Well we’ve seen advocacy from some in the public health sector around floor pricing for some time so the report released earlier this week is not a new perspective, though there’s some added detail in there. As to the report this morning that appeared in News Limited papers around a forthcoming piece of work by the preventative health agency, that is just a draft report that has not yet been received by government so I’ve not seen, it’s not come to me and I obviously can’t comment on its contents. But can I say two things about it, to stress first that when we do receive it it will be a draft report that will go out for further consultation with the community before final recommendations are provided to the government around pricing issues, particularly the idea of a minimum or a floor price on alcohol. The second thing I would stress is that a report from an agency like the preventative health agency will be one of a number of considerations the government would weigh when considering pricing issues, if we do come to considering pricing issues around alcohol. In response to the Henry Review, in last year’s tax forum, members of the government, including the Treasurer, have said that some of those issues would include the supply of grapes in the wine industry, industry restructuring and a range of other issues. So it is very early days, we have not received a report that is a draft report that will go out to the community for further consultation, so for that reasons we don’t really have anything further to add to this issue. I think it is important that that draft report be the subject of further discussion in the community around this issue.

JOURNALIST: Do you think it’s right that you can bottled water for more than you can buy a bottle of wine?

BUTLER: Well when we receive the Preventative Health Taskforce Report in 2009/2010 and made our response in 2010, we did accept the recommendation of that taskforce that a public interest case be developed around the issues of minimum floor pricing, which is essentially at the heart of your question, Sue, and when the preventative health agency was established, that task was giving to this agency. Now, we take that process seriously, we think the community takes it seriously, stakeholders in the public health sector or in the alcohol manufacturing sector would expect that process to be respected by us and we will. A draft report will be received by us soon, it will then be released by the agency, not by the government, for further community consultation over a period of some weeks and then a final report will be developed. We think that’s the proper way to develop thinking around this issue, providing evidence and having some proper process in the community. For that reason we don’t intend to express a view about these issues.

JOURNALIST: This could solve your budget problem, though, couldn’t it? You could raise $900 million by taxing wine at the same rate as you tax beer.

BUTLER: Whether the question is put from the perspective of budget or from a perspective of public health or comparing the price of water, my answer will be the same. We’ve set a very clear process in place that we think needs to be expected by the government and by other stakeholders in this argument.

Related Posts

. But the wine glut is almost over!

. A conservative estimate. Properly taxing wine will save $230 million

. Even mass market wine makers are on board

Read more >>

You're not squeezed. The truth about your cost of living

Far from being squeezed, working Australians are better off than ever the latest figures show, with lower costs from interest rates counteracting the higher costs imposed by the carbon tax.

Average wages have climbed 3.7 per cent in the past year (3.9 per cent in the private sector, 3.3 per cent in the public sector). But the living costs faced by working households climbed only 1 per cent in the year to September, an increase that takes account of all of the price rises that have so far flowed from the carbon tax.

The stunningly low cost of living increase - half the official inflation rate - is because the Bureau of Statistics cost of living measure incorporates household mortgage interest costs which have slid 6.7 per cent over the year to September and 2.5 per cent in the past three months. It also gives a high weight to motoring costs which have slid 0.8 per cent in the past three months as a result of lower petrol prices.

The 1 per cent annual increase in living costs is one of the lowest on record and has only been bettered on other occasions when interest rates have been falling.

In parliament climate change minister Greg Combet ridiculed a series of “notorious” warnings about the carbon tax from opposition leader Tony Abbott.

“He went to Sanitarium and claimed Weet-Bix prices would be much higher, but breakfast cereal prices fell 0.9 per cent. He went to a dairy farm saying milk would go through the roof. But milk prices are down 0.5 per cent. Senator Barnaby Joyce said a lamb roast would be $100 after the carbon price. But lamb prices are down 2.3 per cent. Tony Abbott said motorists wouldn't be able to get in their car. But there is no carbon price on fuel.”

Other households for whom mortgage charges and petrol prices are less important were harder hit.

The ABS says the living costs faced by pensioners and households relying on Newstart climbed 2 per cent. The costs faced by self-funded retirees climbed 1.5 per cent...

Separately-released figures show private sector house building approvals up 1.2 per cent in September. Approvals for renovations surged 11.5 per cent. BT Financial Group chief economist Chris Caton said the news was “not so much a sign of strength as a sign of hope”. Building approvals were volatile and they didn’t respond predictably to cuts in interest rates.

The Reserve Bank has cut interest rates 1.50 percentage points over the past year Banks have passed on to customers 0.95 points slicing $184 from the monthly cost of servicing a $300,000 mortgage.

In today's Sydney Morning Herald and Age


Related Posts

. Price Shock: The carbon tax is doing even less than expected

. Does Tony Abbott know the price of cheese? Or bread? Or...

. The softly-spoken good news. Our power bills are no worse

6467.0, 6345.0

Read more >>

A conservative estimate. Properly taxing wine will save $230 million

More heavily taxing cheap wine along the lines recommended by the Henry Review would benefit Australia to the tune of $230 million per year, the first rigorous benefit cost study has found.

The ground-breaking benefit cost analysis by Melbourne economic consultant John Marsden is intended to form the basis of a Productivity Commission study into alcohol tax should one be commissioned. It was unveiled at a Canberra seminar Monday by productivity commission deputy chairman Mike Woods who praised its rigour.

The 2010 Henry Tax review described Australia’s Australia’s system of differently taxing beer, spirits and wine as “incoherent” nothing that while beer was taxed on the basis of alcohol content wine was either not subject to alcohol tax (if it was produced in small wineries) or taxed on the basis of price meaning bottles of Penfolds Grange pay around $100 in tax while a $10.99 two litre wine cask is taxed at just $1.59.

The Marsden report attempts to quantify the benefits and costs of adopting Henry’s recommendation which would tax all alcohol at the rate applying to draft beer.

It is deliberately conservative, choosing not to count as a benefit reductions in the costs of harm to drinkers themselves and reductions in the costs of alcohol related absenteeism. Among the benefits it does include are reduced incidence of motor accidents, alcohol related violence, burglaries and use of the criminal and justice and child protection systems. It values carers time at one tenth of average weekly earnings rather than at market rates.

The study identifies as the costs of adopting the Henry recommendation reduced consumer enjoyment, amounting to $100 million per annum. The benefits in reduced harm to others amount to $300 million per annum, producing a net benefit of $230 million per annum.

It's a truly major piece of work. Enjoy.


MJA Report Bingeing Collateral Damage and Taxation 2012



Related Posts

. Out of excuses. But Swan still won't fix the wine tax

. Really good news on alcohol tax. Winemakers are leading the charge

. Column. Please put a floor under cigarette and alcohol prices

Read more >>

Educated, professional, staying put. The census second wave

Me on ABC Adelaide 891 today

15 minutes, play or CLICK THEN CLICK AGAIN to download mp3







Far from making Australia more dynamic, the mining boom appears to have pushed us back into our shells. The second wave of results from the 2011 census released Tuesday show that in the five years in which the boom was its strongest Australians became less likely to move home and less likely to to work long hours, although keener to study.

An extraordinary quarter of a million of the West Australians questioned on census night had arrived from outside the boom state in the preceding five years. But the census finds the overwhelming majority came from overseas. Only 22,000 came from NSW, 19,500 from Victoria and 19,500 from Queensland.

Nationwide, 84.1 per cent of those surveyed slept in the same house on census night as they had one year earlier, up from 81.3 per cent in 2001 and the highest proportion in decades. A long-term high of 58.3 per cent slept in the same house they had five years earlier.

The proportion of workers who put in forty or more hours a week fell from 47.2 per cent in 2006 to to 45.3 per cent. Women became more important as managers, accounting for a record 35.4 per cent of all management positions in 2011, up from just 28 per cent in 2001. Women also increasingly dominated professional positions, accounting for 53.8 per cent of all professionals, up from 51 per cent a decade earlier.

Some 21 per cent of Australian workers now call themselves professionals, around one in every five. When taken together with managers the proportion is one in every three.

But management is slowly shrinking as an occupation, counterbalanced a rise in the description “professional”. Managers have slipped from 13.3 to 12.9 per cent of the Australian workforce in the past ten years. Professionals have climbed from 18.7 to 21.3 per cent.

The proportion of unskilled workers employed in jobs including cleaning, labouring, process work and food preparation has fallen below one in ten - the lowest on record...

Retailing is no longer Australia’s biggest employer. In the latest census it cedes the crown to “health care and social assistance” which employs health and welfare support workers, carers and aides, hospitality workers, protective service workers and sports and personal services workers. The sector now accounts for 1.17 million workers (79 per cent of them women) after putting on an extra 211,500 in the past five years. By contrast mining remains tiny - directly employing only 176,500 workers in 2011, up from 107,000.

Australians are more educated than ever before. More than 2.3 million now hold at least a bachelors degree, up from 1.4 million in 2001. The number with postgraduate qualifications has doubled from 473,000 in 2001 to 900,100.

Women increased their dominance in higher education, climbing from 53.8 per cent of all degree holders in 2001 to 55.9 per cent in 2011.

Engineering is by far the most popular field of study for men, with 1.4 million enrolled in 2011. Management and commerce was the next most popular (700,806 enrolments), followed by architecture and building (505,352).

Women are most likely to study management and commerce with 1.04 million enrolments, followed by health (677,693), society and culture (671,036) and education (537,607).

In today's Sydney Morning Herald and Age



Related Posts

. Why is Gina importing workers direct? Because we won't go there

. Play with the census. It's fun and interactive.

. Remember the census? It's about to change, big-time

Read more >>

Devil's Dust. Shameless plug for my friend's book and mini-series

I have been extraordinarily privileged to have worked with Matt Peacock since...well, for a long time.

And well before that, as a high school student I bought his first book about asbestos. It was either the first or the second book I bought with my own money - both were from the ABC concert ticket office in Gawler Place. I had played with fluffy asbestos at the Royal Adelaide Show. An Bradford Insulation display invited passers by to feel it. Matt was doing magnificent work in the ABC's investigations unit alerting people to a truth about which Australia in the 1970s didn't care.

Many many deaths later (and the deaths are continuing - the stuff found its way into carpet underlay only now being removed by unsuspecting renovators) Australia is on board. Matt - the geeky radio science journalist - was right, early.

James Hardie knew about it at the time. Its hiring policy was to take on older workers so they would be seen to have died of other causes. The union backed Hardy and turned its back on science. Asbestos meant jobs and members.

Matt's very recent book - Killer Company - tells the whole story. Matt is near the centre of the book, because that's the way to tell the story - as an investigation.

Killer Company is being rereleased in November (cheaper and with an index) to coincide with the screening of the two-part miniseries Devils Dust, on ABC Sunday November 11 and Monday November 12.

Matt reckons that although some of the conversations didn't happen exactly as recreated, the writers have got the essence of the story right. As with the book, Matt is at its centre.

I'll be watching, Sunday November 11, 8.30 pm.

Taker a look at the actors:

Devil's Dust Media Kit3 - Sun 11 and Mon 12 Nov 8 30pm Abc1



Related Posts

. Australia's James Hardie - close to evil

. James Hardie - the 7.30 Report video

Read more >>

Wow. Would Australia's ABS tick off our prime minister like this?

My guess is, it would.

(Click to enlarge)

HT: FT Alphaville


Related Posts

. Meet Brian Pink, Australia's statistician

. Other nations fudge things. The ABS won't, on carbon permits

. Jobs growth not as we said - ABS

Read more >>

Older mums - everything old is new again

Behind the misleading headline

A record 12,800 babies were born to women over forty last year, up from 7100 a decade earlier. But - while recent - the trend to late births isn’t new.

Australian National University demographer Peter McDonald says late births were far more common in the nineteenth century. “Back then a lot of women had more than ten births. They were continually giving birth every two years until well into their forties” he told the Herald.

“Towards the end of the nineteenth century they started to control their births, stopping after a certain number of children.”

“Older births began to grow again about a decade ago, primarily because women had postponing having their first child, which delayed subsequent births. In vitro fertilization has also boosted late births.”

Professor McDonald thinks the drift to later births will soon slow, and the Bureau of Statistics report bears this out. Although the proportion of late births continued to climb last year, the typical age of mothers giving birth fell.

He thinks the paradox is explained by a change in women’s behaviour in the mid-2000s. Instead of delaying births some brought them forward in response to publicity about about the dangers waiting, and perhaps the introduction of baby bonus. Women now typically start at 28 years and 11 months instead of 29 years and four months. In time those decisions will result in fewer women having their later children after forty...

The figures show the government’s decision to cut the baby bonus for second and later children will hit most women giving birth. Around 56 per cent of babies born last year were second or subsequent births. “Most Australian children grow up in families with three or more children,” Professor McDonald said.

In today's  Sydney Morning Herald







The Crunch Data Blog

Peter Martin takes a look into birth statistics and what they tell us about the baby bonus.

They're fair questions. How many babies born last year were first children? And how many were second or later children? We went after the answer with Thursday's release of the ABS births numbers because it would have given us a handle on the number of births who would get the lower $3000 baby bonus announced in the mini-budget for later children instead of the previous $5000.

The ABS hides a "sort of" answer in the "Explanatory Notes" page of its web release. It's Note 51. The proportion of last year's babies who were first children was 43.8%, meaning most of the babies were second or subsequent children. (By the way 1.3 per cent of the babies joined five or more sisters or brothers)

Its a "sort-of answer" because it "excludes births registered in Victoria, Queensland and Tasmania". That's because those states don't collect information on how many previous babies the mother has had, only how many the father has had (including those in earlier relationships).

Given that it is the mother who has the children, the Victorian, Queensland and Tasmanian idea of what constitutes a second or a third seems strange (and certainly won't be used by the government in deciding what size baby bonus to grant).

Will they change it? Probably not? Is the ABS stuck with what it gets from the births deaths and marriages registries? Probably.

But wait. ANU demographer Peter McDonald says the Australian Institute of Health and Welfare has a much better data set it complies at the hospitals from nurses and midwives who actually ask each new mother how many children she has previously had. But it's late. The most recent publication is for 2009. It's also a magnificent source of data, far better than the ABS publication. It details the length of stay in hospital, everything - even the most popular month for births, which is October.

In The Crunch Data Blog


Related Posts

. 2008. We had a baby boom

. A boosted baby bonus means...bigger babies. No kidding.

. Births, conceptions and deaths - Money changes everything

3301.0

Read more >>

Price Shock: The carbon tax is doing even less than expected

Me on ABC NightLife,Wednesday October 24 2012

8 minutes, play or RIGHT CLICK to download mp3










The carbon tax has boosted the cost of living scarcely at all. Despite dire talk of an “almost unimaginable” increase (Tony Abbott) and $100 for a Sunday roast (Barnaby Joyce) the first official consumer price figures show a far lower impact than predicted by the Treasury.

Last July Treasury said the tax would push up the consumer price index 0.70 percentage points, adding $9.90 per week to average household costs. In return households were given compensation averaging $10.10 per week.

But 0.70 percentage points looks like being an overestimate. Inflation figures for the September quarter (the one that encompasses almost all of the electricity and gas price rises) show them adding 0.44 points to the CPI. It’s a big figure - but not that much bigger than the usual September quarter slug.

Sydney households were whacked with with a horrific 17.9 per cent increase in the price of electricity in the latest September quarter. As bad as it is, it’s not that much worse than the 15.1 per cent served up the previous September quarter, and its much less than the 21.7 per cent served up the September quarter before that.

Melbourne households have endured a 13.6 per cent increase electricity prices - unwelcome, but well short of previous September quarter jumps of 19 and 21 per cent. Canberra families have had to cop 19 per cent this year - bad, but not too different from a previous 18.1 per cent.

Nationwide, electricity and gas price rises added 0.25 and 0.33 points to the consumer price index in the previous two September quarters. The latest increase of 0.44 points isn’t that much bigger. It is 0.11 points bigger than last year’s increase and 0.19 points bigger than the one before that. Those differences are a long way short of the 0.70 impact forecast in the lead up to the introduction of the tax...

We won’t know the full impact for some time. Treasury expected the gas and electricity price hikes to account for only half of the 0.70 boost, the rest being accounted for by businesses that passed them on.

But Commonwealth Bank senior economist Michael Blythe makes the point that if the electricity and gas impact is around half what was expected it is likely the total impact will be too.

“It is looking as if the Treasury’s figure will be an overestimate rather than an underestimate,” he told the Herald.

The total consumer price index increased 2 per cent in the year to September, a figure right at the bottom of the Reserve Bank’s two to three per cent target band, giving its board room to cut interest rates again at its next meeting on Melbourne Cup Tuesday.

The quarterly price increase of 1.4 per cent is high, on a par with earlier outsized increases sparked by unusual movements in fruit and vegetable prices. The latest increase also reflects an outsized jump in food prices which contributed 0.32 points to the total, not too far behind the 0.33 points contributed by electricity and the 0.11 points contributed by gas.

The so-called underlying rates of inflation calculated by the Bureau of Statistics come in at 2.4 and 2.6 per cent, almost exactly in the middle of the Reserve Bank’s target band.

Futures markets were last night pricing in a 60 per cent chance of a rate cut at the Melbourne Cup day meeting, down from 85 per cent on Tuesday.

In today's Canberra Times, Sydney Morning Herald and Age


Related Posts

. Abbott could have chanced his arm, bet against the market on inflation

. How important are household power bills really?

. When Treasury modelled a minor tax change...

6401.0

Read more >>

MYEFO. What the wash-up tells us (it ain't pretty)

Me on ABC 891 this morning

12 minutes, play or RIGHT CLICK to download mp3

Me on ABC The Drum, Monday October 22

Tim Palmer. presenter
Jacqueline Maley, Sydney Morning Herald
Judith Sloan, The Australian
Peter Lewis, Essential Media

14 minutes, play or RIGHT CLICK to download mp3





Related Posts

. MYEFO. It's Swan's last throw

. Billions of cuts with "Labor values"

. $21 billion has been wiped from projected revenue

Read more >>

Joe Hockey defends the culture of entitlement, which he opposes

On Radio National today:

"We don’t support blanket cuts because the Government has determined that’s the way they are going to do it... There are a million Australians earning $24,000 or less that have private health insurance. I don’t see that as middle class and they’re overwhelmingly people who are trying to pay their way in their older years. The changes to the Baby Bonus are not means tested changes, they’re just blanket changes. So, frankly, I think the suggestion that it is about middle class welfare is actually inaccurate, because they are widespread cuts, but there’s no sense in it"


At the Institute of Economic Affairs, London, 17 April:

"The entitlements bestowed on tens of millions of people by successive governments, fuelled by short-term electoral cycles and the politics of outbidding your opponents are, in essence, undermining our ability to ensure democracy, fair representation and economic sustainability for future generations... The age of unlimited and unfunded entitlement to government services and income support is over. It’s as over in Greece as it is in Italy, in Spain, and in the USA."

Read more >>

MYEFO. It's Swan's last throw

The government needs export prices to fall no further in order to have any hope of painlessly delivering its promised budget surplus.

A statement of risks published with the budget update shows that if Australia’s terms of trade fall a further 4 per cent (on top of 8 per cent now forecast) the government will lose an extra $2.8 billion in tax revenue, enough to obliterate what is now a wafer-thin $1.1 billion forecast surplus. It would lose the $2.2 billion surplus expected for the following year as well, suffering a revenue hit that year of $6.7 billion.

The update shows the Australian economy performing well, with economic growth of 3 per cent expected this year, down only slightly from the 3.25 per cent expected at budget time. Employment is expected to grow and unemployment is expected to stay almost exactly where it is at 5.5 per cent right through to mid 2014.

But the international economy has turned against Australia sharply. Between the May budget and the first week of September the spot price of iron ore slid 38 per cent, before clawing back two thirds of the fall in October. The world has suddenly become less generous to Australia than it was in May, pushing company and mining tax collections $4 billion lower than expected this financial year and $20 billion lower over the next four years.

The biggest trick used to make up the shortfall this year is to grab half a billion dollars worth of superannuation money that would otherwise be sitting around unclaimed in unidentifiable accounts. Until now those funds had to lay unclaimed for five years before the Tax Office grabbed them and parked them in consolidated revenue. That period has been cut to one year, effectively channelling five years of unclaimed monies into one year’s budget. Another trick is to “reprofile” government grants, paying in future years what would have been paid this year.

Over the four year forecast period by far the biggest trick is to make companies hand over their tax payments monthly instead of quarterly. It’ll first be big companies with turnovers of $1 billion (from January 2014) then mid size companies with turnovers of $100 million from January 2015 and companies turning over $20 million from January 2016. Over four years this will rake in an extra $8.3 million - accounting for half of the $16.4 billion the Treasurer is saving over four years. Wayne Swan said yesterday no companies would pay a single extra dollar in tax as a result of the change, and he is right - but as each group of companies moves to quarterly payments it will hand over 14 months of tax in the first 12-months, paying in May and June two thirds of the payment that wouldn’t have been due until July 21. Mr Swan isn’t the first Treasurer to pull forward company tax payments - his predecessor Peter Costello did something similar.

Not all of the measures are fiddles... Some have set up future Treasurers for the long term. Mr Swan has freed the budget from the jaws of the private health funds who until now have had the government rebate a portion of whatever fees they chose to set. From 2014 government rebates will increase only in line with the more slowly moving consumer price index. At the moment the CPI is climbing 1.2 per cent per year. Health insurance premiums have been climbing 5 per cent per year. It’ll save $700 million over three years and that’s just the start.

Lifting visa charges for people wanting to move to or work in Australia will raise $500 million over four years, and more as they are benchmarked to charges overseas.

Mr Swan has used just about every trick available to him to to keep the budget in the thinnest of surpluses without pain. Should export prices turn down further, there will be little more he can do.

In today's  Sydney Morning Herald 


Related Posts

. MYEFO. $21 billion has been wiped from projected revenue

. Straight talk from the IMF about that surplus: we might have to postpone it

. Treasury. Are big budget surpluses gone forever?

Read more >>

Billions of cuts with "Labor values": MYEFO at 11.00 am

And check out the good news in the last paragraph

Workers who get a tax advantage sacrificing their salaries for tickets to events such as V8 supercar races and the Department of Defence are among those who will bear the brunt of billions of dollars of budget cutbacks to be unveiled this morning in a bid to wipe government debt by 2021 and pressure the Reserve Bank to cut interest rates again next week.

The mid-year budget update is being brought forward from November in order to get eight full months of revenue this financial year from the measures that will apply from November 1 and to present the Reserve Bank board with a picture of fiscal discipline when it meets to consider a second successive rate cut on Melbourne Cup Day November 2.

The cost of family reunion visas will soar next month as a result of a rule change that will require a visa for each member of a family being reunited rather than a single visa per family. The cost of each visa will jump by roughly 30 per cent in order to lift Australia’s charges to the average of other countries.

The Government will also close a loophole that allows a very small group of workers to use salary sacrificing to get taxpayer funded discounts for things such as theatre tickets and V8 supercar tickets. Until now there has been no tax on the first $1333 of so-called “in house fringe benefits” such as cricket bats for sports store employees, even when the worker buys them by sacrificing salary.

The change will hit South Australian public servants who are able to salary sacrifice to buy tickets to V8 races and University of Western Australia academics who can salary sacrifice to buy tickets to the Perth International Arts Festival. It will not hurt workers who receive goods for free and it will hit workers who use staff discount cards.

Treasurer Wayne Swan says the cutbacks will “reflect Labor values in doing the utmost to protect low and middle income earners and the community’s most vulnerable”.

Budget revenues are down $4 billion on what was expected this financial year and $21 billion over the next four years, enough to obliterate this year’s forecast surplus of $1.5 billion and the forecast surpluses for each of the following two years. The cutbacks to be announced this morning will restore the forecast surpluses and put the government back on track to be debt-free by 2021.

It will be the fourth consecutive mid-year update to cut spending and will bring to around $150 billion the ongoing savings made by Labor over five years... Treasury analysis included in the update will show those savings have improved the budget position by 0.9 per cent of GDP this financial year and will have improved it 2 per cent by 2022. They will be used to argue the savings are long-term rather than quick fixes intended to secure a temporary surplus.

The Department of Defense will be biggest victim in the bureaucracy of budget cuts, other departments having already suffered “efficiency dividend” haircuts of four per cent.

A survey by the Community and Public Sector Union has found members waiting times up 75 per cent for Centrelink, Medicare, Tax and Immigration and Customs services.

A rare spending measure today will gift $10 million to a new superannuation consumer centre to lobby on behalf of superannuation customers. Former Macquarie Bank chief Allan Moss has been draw up the proposal and told The Age it would ensure industry voices were not the only ones heard on superannuation. Where the consumer body agreed with industry it would give the industry’s views more credibility.

In today's Sydney Morning Herald and Age


Related Posts

. MYEFO. $21 billion has been wiped from projected revenue

. MYEFO Madness. Research is shutting down

. About those cuts, Ms Wong. Money is fungible

Read more >>

Bugger tax reform. The ACT is like the rest of Australia after all:

If the most educated state in the nation falls for a scare campaign against sensible tax reform, what hope is there for the rest of us?

One in every four citizens of the Australian Capital Territory has a university degree. In the rest of Australia it’s one in seven.

The Labor-Green alliance that runs the ACT took the 2010 Henry Review at its word. It found there was no role for stamp duties in a modern tax system.

“As a tax on transferring land, they discourage land from changing hands to its most valuable use,” the review said. Stamp duties taxed most heavily Australians “who need to move”.

As stamp duties were phased down it suggested land tax be ramped up, in part because this would dampen the effect of lower stamp duties on house prices.

Textbook stuff. Just like the review’s suggestion that mining royalties be replaced by a super profits tax (something which would be assisting the industry right now if it had been fully adopted).

Kevin Rudd and Wayne Swan ran with the super profits tax and were rewarded with a (successful) scare campaign.

Surely it couldn’t happen in the Australian Capital Territory, where voters were likely to actually understand what was going on?

It did. The ACT Liberal Party campaign on one three word warning: ''triple your rates''. On Saturday night it was rewarded with a 6.4 per cent swing and is now set to have more seats in the House of Assembly than Labor (although Labor will retain government with the support of the Greens).

The lesson is being absorbed throughout the nation. Don’t bother with sensible tax reform - no matter who recommends it and no matter who compelling their arguments - if the campaign against it can be reduced to three simple words.

The Labor stronghold of the Australian Capital Territory has swung sharply to the Liberal Party with key Labor ministers including the attorney general at risk of losing their seats.

The 6.4 per cent swing to the Liberal Party will give it eight of the 17 seats in ACT assembly, just one short of the nine it would need to form government. Labor will continue in minority government with the support of the Greens whose numbers have been halved from four to two.

At issue was a decision by Labor and the Greens to phase out real estate stamp duty and replace it with higher rates in accordance with a recommendation of the Henry Tax Review. It allowed the Liberals to campaign on the three word warning: “triple your rates.”

Greens leader Christine Milne said the campaign showed “a simple negative message can cut through”...

Tony Abbott called on the Greens to accept the will of the people and go into coalition with the Liberals. He said the issue was that the ACT rate increase hadn’t been put to an election, just as the carbon tax had not been put to an Australian election.

The narrow result puts the Coalition in a strong position nationally. The ACT had been expected to rally behind Labor fearing public service cutbacks should the Coalition take office federally. It leaves Labor governing in its own right in just one state; South Australia, and leaves it governing with the support of the Greens in only two - the ACT and Tasmania.

With counting not yet finalised, neither the Labor leader, Katy Gallagher, nor the Liberal leader, Zed Seselja, have claimed victory. Mr Seselja, said he was open to negotiating a coalition government with the Greens but said there would be no Greens in his ministry.

In today's Age


Related Posts

. Canberra is not the problem

. Not leaving Canberra

. Henry's great tax forum speech

Read more >>

MYEFO. $21 billion has been wiped from projected revenue

In a matter of months

Next week’s budget update will unveil spending cuts and revenue measures worth an extraordinary $4 billion this financial year - a task made all the more difficult by the fact the year has just eight months left to run.

Shocking revenue downgrades to be included in the update reveal that since May deteriorating international conditions and collapsing export prices have knocked $21 billion from projected tax revenues over the forward estimates and $4 billion from forecast tax revenue this financial year.

Without action the downgrades would wipe out this year’s planned $1.5 billion surplus and wipe out the next two years’ planned surpluses as well.

Writing in today’s Herald Treasurer Wayne Swan reaffirms his commitment to balance the budget next week but says he will cut with care, doing “everything possible to protect jobs and help pave the way for classic Labor reforms”.

“In balancing the budget, the Gillard government has made sensible spending cuts while winding back inefficient and outdated tax concessions. We have balanced fiscal discipline with continuing investments in people – our most valuable natural resource – through vital reforms in skills and education, a national broadband network and the national disability insurance scheme,” he writes.

The Herald understands the revenue downgrades overwhelmingly result from weaker international conditions. The Australian forecasts remain strong with economic growth of 3 to 3.5 per cent over the next two years, continuing low unemployment and contained inflation...

The publication of the virtually unchanged domestic economic forecasts will further pressure Opposition Leader Tony Abbott who has already been asked to explain why his predictions of “almost unimaginable” inflation and job losses resulting from the carbon tax have not materialised.

A Bloomberg survey of 25 market economists ahead of next Wednesday’s release of the first inflation data since the July 1 introduction of tax finds most expect a low annual inflation rate of close to 1.6 per cent.

The tax collection data suggests that if anything the domestic economy is somewhat stronger than expected at budget time. Both taxes collected from wages and goods and services tax collections are running ahead of projections.

Dramatically lower company tax collections account for most of the $21 billion writedown.

Treasury official David Gruen told a Senate hearing Thursday the spot prices of iron ore, thermal coal and coking coal have fallen 15 to 35 per cent since the May budget. These were the three big commodities that drove Australia’s terms of trade.

The budget had forecast a slide in the terms of trade of 5.75 per cent.

The update will say that although some of slides have been partially reversed they are no longer expected to return to the levels forecast in May.

It will revise down revenue forecasts for the new minerals resource rent tax and the petroleum resource rent tax in addition to cutting forecast company tax collections.

It will also revise down forecast income from non resource companies acknowledging generally weaker corporate profits across the economy. Profits from unincorporated businesses will also be revised down.

In today's Canberra Times, Sydney Morning Herald and Age


Related Posts

. MYEFO Monday. Cigs up November 1?

. MYEFO Madness. Research is shutting down

. About those cuts, Ms Wong. Money is fungible

Read more >>