yep, bang on. more from you please terry!

Metal, your historical sweep and perspective never fails to awe and compell. I picture you as a 140 year old Solomonic crank genius with the memory of an elephant, muttering on a soap box in Hyde park to an audience of three Crikey subscribers, a couple of homeless old Communists and an angry socialist nun, who rattles her rosaries and her collection box at the occasional middle-class power-walkers as they avert their eyes and pick up the pace.

Ach, Doc, I agree 100%, ‘spiteful’ in scare quotes was a wry nod to the politics of an inheritance tax.

No Bill was a good Treasurer and didn’t have time to warm into the job after the mishandling by Whitlam Ministers in their portfolios and personal lives. I talking Lionel Murphy, Jim Cairns and Rex Connor. Treasurers rarely make the successful switch to full to Politician. Keating couldn’t though he did get a good 5 years. Bill McMahon got less than 2 when he knifed John Gorton in 1971 to get the PM job. Cairns failed as did Hayden. Costello guttoed out. Freudenberg was booted out by the wisdom of his electorate so that was another no-show. Treasurers simply don’t make good politicians. Howard was the only one and that was the very long wy round by way of getting Labor to do all the hard yards and the dirty work while gradually but surely burying your lamentable legacy of serving as Treasurer in perhaps the worst post-war Government in Australia’s history which the dumb Australians bought – 3 times. I am referring of course to Malcolm Fraser from 1975-1983 of which 5 of those 7+ years, Howard was Treasurer. And what a stinker of a job he did too. Now his career is a mystery for the ages after his revolting term in office during those years. But the record unfortunately speaks for itself. 5 years as Treasurer and 11 years as PM.

**** no.

It’s a tossup between him and Howard as to who is responsible for more of contemporary Australia’s problems.

And similarly the acolytes of both in their respective parties today prevent any meaningful attempts to fix those problems.

Finally! Someone who knows their history!

I don’t think anyone has a problem with a bit of unspent super being left behind when someone passes.

But many wealthy people are very clearly using it as an estate planning tool with millions of dollars.

This is why there needs to be a total cap on super balance (I would suggest somewhere between $1-2 million). Over that, no more tax benefits.

The point of inheritance tax, like most taxes, is not to be spiteful but to incentivise behaviour and reduce inequality (in this example by moderating generational wealth accumulation).

Well some people say that as a public servant I didn’t earn my money either working all those years. Much of what is valued and taxed can be assessed and classed as similarly unearned. It is property rights that come into play as well. Why talk about irrelevancies? I am getting sick of this, “People who earn more than me should be taxed more” whine. We had inheritance taxes years ago. They were a State based imposition and as State and Territory governments don’t have the power to levy taxes under the Federation and the Constitution, any money imposed has to be called something else. They were called Death Duties basically. States can levy duties and charges. I’m sure each State had a fancy name for them but that is what they were and they were taxed on all inheritances – furniture, art, gold, real estate, everything. Until one Jo Bjelke-Petersen came up with the bright idea in 1977 of abolishing them. This had the effect of every State and Territory following suit otherwise all the property investment would have flowed to QLD. It would have been a supercharged Florida and a touch of California. We had them. They won’t come back Federally on everything so it is best to come up with reasonable policies here that will fly. I think a large ball park figure is best.

That is all premised on the neoliberal paradigm Keating (and the western world) were seduced by and which he introduced into Australia. It’s a paradigm which can’t get through its thick (or self-interested) head that the federal govt does not rely on tax revenue to be able to spend because it is the issuer of a currency not dependent on anything other than its own authority.

Australia uses a sovereign fiat currency, the sole authority is the Federal govt. It decides how much money goes into circulation via its spending bills and legislation that decides what the RBA and the private banks can do.

The fundamental role of taxes due as determined by the taxing authority, the fiat currency-issuing govt, is to ensure demand for that currency. You can’t pay any tax in that nation by any means other than in that currency. Not gold, or your firstborn, or bitcoin or the $US, only $A.

Fiat currency enables a govt to fund anything it wants (including pensions) as long as the capacity and resources exist. Govt overspending into a sector that lacks capacity leads to inflation. But the ability to spend itself is not to blame, its how and where it is spent.

E.G.#1 shortage of building materials + unrestrained govt spending in a market with no price caps = construction materials inflation (factors into CPI)
E.G.#2 Insufficient govt spending to skill up teachers and trainers to train people for future labour needs will be dealt with by increasing skilled immigration. But due to high construction costs as per E.G. #1. a housing shortage ensues, leading to rent inflation, feeding into the CPI

Under Keating’s blue pill neoliberalism, the govt, which can easily fund a comfortable universal age pension and free public education from early childhood to mature age, instead decides that a balance sheet that shows a govt deficit and a private sector surplus is the cause of all economic ills… because anti-Pope Friedman said so>

(NB all govt spending goes into the private sector E.G. public servants wage once paid is now in the private sector.)

Compulsory super has certain advantages if you are of the faith but as many others have shown, it leads to other problems which arise from policies also based on that faith.

To the current discussion re superannuation & changing tax concessions forsuper accounts over $3m:

The secondary roles of tax in a fiat currency nation include
a) adjusting the amount of money in crculation
b) affecting behaviours, economic and personal through tax, tax discounts, sububsidies etc) and
c) in this case tax & transfer to create a more equitable and level playing field based on morality.

Even if we accept the neoliberal assertion that tax is an evil ncessary to fund another evil, govt spending, (repeat: its not) the fact is that those sitting on really big nest eggs got there thanks to tax concessions.

Once the goal of the tax concession – to encourage sufficient private retirement funding – was achieved, the concession is not needed.

Whether sufficiency is $1m, 2m, 3m or $10m is a moot discussion until the principle is accepted. Reducing or removing the tax concession is not practically affecting the government’s ability to spend elsewhere, it can spend where it likes.

Given the govt can create money at will, unlike the rest of us, who’d be convicted of counterfeiting, tax and transfer is a hypothecated concept which can be used to shift where the money flows in the economy without increasing the amount of money in circulation.

E.G.#3 straightforward removal of tax concessions on super balances above $x and increase tax concessions for lower super balances; or less straightforward, remove tax concessions on middle to high super balances and make the age pension universal and non-means tested, as it is in New Zealand