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ACT Budget – ho hum!

By John Hargreaves - 12 June 2017 6

ACT Budget 2017/18

In the old days when knights were bold and ladies fair, and a gay time meant partying, Budgets were always all about increases in petrol, booze and smokes. Every time, the same old bunch of wowsers thought it was good stuff whilst the rest of us just got on with it, resigned to the inevitable.

It is the same today but booze, petrol and smokes are not highlighted so much. And definitely not in the ACT Budget. Perhaps it is because increases to these staples was always a federal issue cos they were tax increases.

These days at the federal level, it’s all about spending more on killing machines and sticking it to the low economic group; all about letting the big corporates off with a $50 billion tax cut but increasing the Medicare levy for everyone. Well, Mr Prime Hamster, the richies can afford top cover in the private sector or just pay for the big hospital bills out of petty cash. But the families on $50,000 or less depend on Medicare and the increase will mean something has to go. And I don’t mean they have to give up Foxtel or eating out. I mean school excursions; replacement clothes for the kids, putting $20 of petrol in the car because they can’t fill it up; I mean hanging on to the gas guzzling old monster instead of a new environmentally friendly car because they can’t afford the repayments. I mean renting longer because they can’t save for a house.

Sleep well, Mr Prime Hamster. You live in two Government owned houses rent free and have squillions. You are just the richest public housing tenant in the country. Don’t you worry your pretty little head about the serfs and slaves. They will look after themselves.

The same can be said about the ACT Budget in a way. The predicable items are more spending on roads, shops, schools and heaps on the hospital. The money comes from slugging rates and services whilst pretending to offset them all by reducing stamp duties. The flaw in this is that there are many in the community who don’t pay stamp duty cos they bought their homes ages ago and the other stamp duties are still there. In other words, the home buyers are getting a one-off benefit only to pay it back exponentially over the ensuing years though increases in rates and services.

I noted that in the past week the same old reprobates complained about everything in the Budget including the disruption that road expenditure delivered. But most of the people I know and talk to haven’t raised any issue with me.

Well, my suburb has been a construction zone for months lately and surrounded by massive improvements in the arterial road system and more to come. I remember it being quicker to go by bike from Woden to Tuggers but not anymore. The road stuff is great. And the footpaths are gradually getting fixed. I know cos I notice these things and I am not fixated on the 100 metres on either side of my house.

But I make this observation. Most people look at the Budget and say: well, I can’t do anything about that so I’ll just suck it up and get on with life. They don’t moan and groan; they don’t gnash their teeth, they don’t chew their fingernails down to the elbow worrying about how they’re going to get by. They just do.

I will though, make another observation. Have you noticed that most everyday expenses have gone up in price for the past couple of years? And not just marginally either. Heaps in some cases.

I was once told that the major expense business has is salaries and wages. In some cases, it was as high as 85%. Well, salaries and wages haven’t gone up nearly as high as the prices have. So what’s the go Anna? Is it time for a new Prices and Wages Accord? We seem to have no blanket on price increase but there are pressures to keep salaries and wages down.

Heck… the public service hasn’t had a decent rise in years and the CSS superannuants get about 1% or less a year increase. I pity those self-funded pensioners on fixed pensions. The value of their savings and pensions deteriorates as the spending power of the dollar decreases.

Anyway, I though both Budgets were just ho hum and not unpredictable enough for me to lose sleep. I thought the federal Budget was a safety first one for the Prime Hamster and environmentally unfriendly with a (L)iberal dose of war mongering and scare tactics about those horrible asylum seeking terrorists. And I thought the ACT one was as good as one could expect. We were all told what was in the ACT Budget through leaks to the media and apart from the usual commentariat belly aching, no one seemed to notice it was done.

People seemed more interested in the horror stories from England and Europe and I don’t mean the British Elections (although for some I guess it was a horror story, especially that knight-errant, Sir Lynton). They were more interested in the unfolding of the comedic events dogging Pres Trump. Someone really should take the shovel off that guy.

Even though Tuggeranong is the ACT Cinderella, we have had a better time dealt out in this Budget from Andrew Barr than in previous years so hey, life’s not that bad.

So come on, you guys, let’s be having you…

What’s Your opinion?


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6 Responses to
ACT Budget – ho hum!
chewy14 3:20 pm 15 Jun 17

CanberraStreets said :

The indexed component of the CSS pension is tied to CPI; I am unaware of the source of the Author’s claim that that indexation rate is not meeting the increased costs of living. I am know of varying views on the topic, but am not sure which of them is being used by the Author.

If the major issue taken from my post is that single example, I think we can agree to disagree on extent this opinion piece informed anyone on the ACT Budget or provided credible, evidence based commentary. I will continue to regard the original article as a somewhat incoherent ramble on a grabbag of things the Author does not like, uncontaminated by evidence to support the opinions expressed.

The author is suggesting that CPI does not accurately reflect the increases in cost of living because pensioner households will have different spending habits to the “basket” that is included for CPI. Which is fairly accurate.

Although it’s a bit rich for a CSS pensioner to happily accept the extremely generous provisions in the way their pension is determined but then complain that the indexing provisions aren’t generous enough.

I’m sure most people on accumulation superannuation schemes would swap their super for a CSS defined benefit one in a heartbeat.

CanberraStreets 12:11 pm 15 Jun 17

The indexed component of the CSS pension is tied to CPI; I am unaware of the source of the Author’s claim that that indexation rate is not meeting the increased costs of living. I am know of varying views on the topic, but am not sure which of them is being used by the Author.

If the major issue taken from my post is that single example, I think we can agree to disagree on extent this opinion piece informed anyone on the ACT Budget or provided credible, evidence based commentary. I will continue to regard the original article as a somewhat incoherent ramble on a grabbag of things the Author does not like, uncontaminated by evidence to support the opinions expressed.

dungfungus 11:44 am 15 Jun 17

John Hargreaves said :

dungfungus said :

“I pity those self-funded pensioners on fixed pensions. The value of their savings and pensions deteriorates as the spending power of the dollar decreases.”

You got that right John.

But I can’t shed a tear for retired public servants who may see their CSS pension lose 1% because that money belongs to the taxpayer, the CSS being a defined benefit non-contributory pension that the benficiary has got totally for free.

The problem here is that public servants contribute a minimum of 5 % of their salaries from the get go towards a super pension. It is not “free” . Sure, the employer contribution is pretty good but it is still not “free”. I started paying super when I was a 19 year old in Treasury and worked it out that if I retired at 60 (I did at 63) I would be using my own money up until I was 75 years old or thereabouts. I would be having a pension based on my contributions plus interest. After 75 or so, I would be receiving a pension based on the employer’s contribution plus interest. As it turns out folks under that scheme can take a lump sum and a pension based on the interest earned over the time of contribution.

In relation to the other post, the increase in pensions for Commonwealth superannuants is less than the cost of living increases so my position still stands. Pedantry over percentages ignores the fact that the value of the dollar is eroded, the increase doesn’t cover the cost of cost of living increases generally and specific costs increase far in excess of the CPI.

According to the website there are two types of CSS schemes. The one I was referring to is the “defined benefit” one which worked like this:

“In a defined benefit fund, member benefits are ‘defined’ by a set formula. In CSS, your defined benefit part is generally your CPI-indexed pension which is defined by a formula based on your final super salary, your length of contributory service and your age when you leave CSS.”

John Hargreaves 9:46 am 15 Jun 17

dungfungus said :

“I pity those self-funded pensioners on fixed pensions. The value of their savings and pensions deteriorates as the spending power of the dollar decreases.”

You got that right John.

But I can’t shed a tear for retired public servants who may see their CSS pension lose 1% because that money belongs to the taxpayer, the CSS being a defined benefit non-contributory pension that the benficiary has got totally for free.

The problem here is that public servants contribute a minimum of 5 % of their salaries from the get go towards a super pension. It is not “free” . Sure, the employer contribution is pretty good but it is still not “free”. I started paying super when I was a 19 year old in Treasury and worked it out that if I retired at 60 (I did at 63) I would be using my own money up until I was 75 years old or thereabouts. I would be having a pension based on my contributions plus interest. After 75 or so, I would be receiving a pension based on the employer’s contribution plus interest. As it turns out folks under that scheme can take a lump sum and a pension based on the interest earned over the time of contribution.

In relation to the other post, the increase in pensions for Commonwealth superannuants is less than the cost of living increases so my position still stands. Pedantry over percentages ignores the fact that the value of the dollar is eroded, the increase doesn’t cover the cost of cost of living increases generally and specific costs increase far in excess of the CPI.

dungfungus 11:18 pm 14 Jun 17

“I pity those self-funded pensioners on fixed pensions. The value of their savings and pensions deteriorates as the spending power of the dollar decreases.”

You got that right John.

But I can’t shed a tear for retired public servants who may see their CSS pension lose 1% because that money belongs to the taxpayer, the CSS being a defined benefit non-contributory pension that the benficiary has got totally for free.

CanberraStreets 12:18 am 14 Jun 17

After reading this article through a couple of times, what I think the message was intended to be is that both the Federal and ACT budgets were pretty adequate, but the Author feels the need to express generic dissatisfaction about everything, but not provide any facts. The rationale for the content on the UK or the USA escapes me as it does not appear relevant in any way to either budget.

Some of the statements in the article are either misleading or just plain wrong; for example CSS Pension amounts increased by 1.1% on the first payday in January 2017 for pensioners who had received their pension for the entire six months prior to the increase. CSS pensions are increased every 6 months in line with CPI, and the CPI rose 1.5% over the twelve months to the December quarter 2016. These figures are drawn from the CSS and ABS sites respectively. Of course, pensioners results may vary as there are a number of ways the pension can be constructed, including indexed and non-indexed components.

The author was “once told that the major expense business has is salaries and wages. In some cases, it was as high as 85%”. The reader can only imagine that the costs of doing business would very much depend on the nature of the business.

I am saddened to have spent time trying to understand the article only to find I am no better informed on the ACT Buget, merely better informed on the Author’s peeves of the day.

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