21 Ways to Improve Australia by Jamie McIntyre:
1. Establish a sovereign wealth fund
This is one thing I and others have lobbied to have implemented for years. It is critical to preserve Australia’s wealth after the mining boom and to ensure our government doesn’t waste the boom years generating large mining revenues. In fact, all proceeds from the mining tax should go to such a fund with the goal of building a sovereign wealth fund comparable to those of Norway and Dubai.
Such a fund also could be used to help stabilise and ‘lower out’ currency by shifting some of our wealth into overseas markets to diversify and expand Australia’s sovereign wealth and better balance global inflows.
So what does our current Government say about a sovereign wealth fund?
They reject it. Mainly because they want the mining tax revenue and other boom revenues from the once-in-a-lifetime mining boom to fund their budget deficits.
That’s what’s expected of governments with a long-term history of spending.
2. Banish carbon tax
This controversial tax introduced by the current Government, against the wishes of the majority of Australians, will cause significant economic losses for little gain.
Firstly, a carbon tax that does little to help the environment is an unjustified waste of time and money.
If its purpose was truly to benefit the environment and less about profit and bribing certain sections of the population, a possible solution is to simply create an incentive for renewable energies industry. All major commercial polluters such as coal companies would be taxed a certain amount per tonne to contribute towards an approved renewable energy fund or project.
This means 100% of any monies raised go direct to the creation and support of renewable energies. Significant polluters could even be given the opportunity to create their own renewable energy divisions as long as it meets the predetermined criteria.
This means many larger carbon emitting companies would be incentivised to invest into renewable energy projects directly and in many cases they would turn it into a division within their companies to potentially profit from eventually. Thus it becomes an investment for companies, not so much a tax.
This is a much more co-operative approach resulting in a direct, positive, long-term contribution to helping the environment whilst minimizing the negative financial impacts. It also will avoid the tens of billions of Australian revenue that will simply go offshore over the years as a result of the current carbon tax which will drain our economy and fail to invest in Australian Renewable Energy Projects.
3. Banish mining tax
Australians would be more inclined to support a mining tax if it was going to directly benefit the future of our nation, unlike the proposed tax which will simply prop up budget deficits of a Government that can’t spell the words ‘fiscal responsibility’.
This would be a much easier sell and as long as it wasn’t excessive.
4. Build a High Speed Rail system
I’ve raised this issue before and I really think this type of infrastructure project needs to happen. It’s received some positive press recently and the idea may actually get off the ground. But it could take 15 to 20 years before it’s a reality.
Initially the rail project should start with Newcastle to Sydney, and then extend to Canberra and Melbourne. In Queensland it should start with Sunshine Coast to the Gold Coast via Brisbane, eventually connecting in Newcastle – thus connecting Brisbane with Melbourne, covering the large majority of Australia’s population.
Admittedly, to complete such a large project will require anywhere from $60 to $100 Billion dollars. However redirecting fossil fuel subsidies, and other cost savings could fund this.
The $16 Billion the Government wasted on the BER school program could have been put into infrastructure like this, or least into completing the Brisbane to Melbourne Freeways. Unfortunately the Government squandered that opportunity.
A rail network is also more environmentally friendly than air travel and takes congestion off the roads, which are expensive to build and maintain. The fast rail network could eventually pay for itself and help Australia move into the 21st Century.
5. Provide Australia with a value for money National Broadband Network – NBN
The current $42 Billion NBN is overpriced and a poor return on taxpayer’s money – who will be asked to pay twice for it (with our taxes first, then again every month to use it).
A household being able to download movies at home isn’t what I call “Nation Building”. And consumers won’t pay for the highest speeds because it will be too expensive and they simply don’t need or want it.
The Government has already projected in its NBN plans that most households will only take up the packages offering 25% of its full speed. Most people won’t pay the extra because that speed is more than enough.
That’s a lot (billions) wasted on a system that, for the most part, won’t be fully utilized and isn’t necessary for non-business activities.
Sure an NBN would be great and everyone agrees that faster broadband is critical. But an effective one focused on at least the capital cities having fast broadband initially would be a good idea. One that covers a large majority of the population for a fraction of the cost would save a good $20 to $30 Billion and still enable faster broadband for regional Australia.
Just imagine what else could be done with $30 Billion in savings – and still achieve a similar broadband outcome.
6. Eliminate State Governments
Why do we need them? They’re costly and ineffective. Why should we carry the massive costs of 3 layers of Government? Not to mention the extra administrative burdens on business as well as additional taxes and inefficiencies. I mean why isn’t education, transport, health and infrastructure all Federal and a singular nationwide system, rather then State based. Are we not one country?
Think about how much would this save in time and money. We’re talking Billions per month. We can have State appointed ministers to represent the interests of each state instead. And I’m sure no one will be upset about fewer politicians and less elections to vote in.
7. Build a new large Dubai type city in North Western Australia
Such a city could attract massive international investment. It could provide desperately needed lower cost housing in Australia. And better service the booming mining industry in the Pilbara region by reducing the number of “fly in fly out” workers.
To meet the demands of the mining boom infrastructure projects in the pipeline there’s a need for hundreds of thousands more workers in Western Australia. The region has water and would have ample jobs and new immigrants would be encouraged to move to this new city. It also would provide WA with a second large city (which it desperately needs) and would reduce infrastructure costs of the other major cities.
Overcrowded cities such as Sydney are already paying Australians incentives to relocate out of Sydney. Because it’s cheaper for Governments to do so than to invest in further infrastructure in already overcrowded cities. Plus being located in North Western Australia would mean the new city becomes a gateway to Asia.
8. Ban compulsory Voting. Instead, only those that qualify get to Vote
I mean how communistic is it to force people to vote? A true democracy is freedom of choice. Every Australian deserves the right not to vote – especially when many don’t find either choice competent or worthy of a vote. Voting should be for those who want to vote, are educated about the state of affairs in the country and actually care who is elected.
We should create an application process with a few basic hurdles. That way, only those truly committed will qualify. Let’s say 30% of the population is committed enough and interested enough to want to qualify to vote – that would eliminate political bribery we see now. Because the political parties would know that these 30% of the population that want to vote are better educated about the affairs of the country and can’t easily be misled or bribed to vote for them. It would lead to a better and more accurate political debate and less pork barrelling.
We need a true democracy where everyone has the choice to vote – which includes the choice not to vote for either option. Then politicians would be held more accountable.
9. Financial Planning Commissions banned
I can’t take all the credit for this happening; however I have been an outspoken critic of this industry for over 12 years. I’ve been attacked and harassed by regulators for being a major critic of this industry, but I’m willing to stand up and educate Australians. They need to know that the majority of the financial planning industry are not financial experts, but rather commission driven sales people largely employed by the banks to flog their managed funds. These funds, by the way, lost a lot of money in the Credit Crisis – and yet they still charge the poor investor fees for achieving that!
Finally in recent times ASIC has cottoned on that, yes, the industry has been commission driven and bias, and that things need to change. Well done ASIC.
I mean would you go see a doctor who has no real life practical experience at surgery? So why do people take the advice of licensed financial planners, who in many cases have never invested in their life? That’s like the blind leading the blind.
10. Remove stamp duty
One of the biggest challenges Australia faces is labour immobility, as many Australians won’t move or relocate to find work. One reason for this is the cost of selling the family home and buying a new one, which incurs a restrictive amount of stamp duty.
Stamp duty – at least in the short term – should be abolished for people relocating to regional, rural and mining areas. In the long term, stamp duty should be abolished altogether.
One of my previous ideas is to build a new large Dubai-type city in North Western Australia.
Such a city is needed to house many of the 750,000 workers needed by 2050 and to lower the cost of housing. A city of this type would provide a gateway to Asia.
Let’s say we build a city the equivalent size of Brisbane or even Newcastle (which could be built in two years if constructed in China). If we are talking about a city of only 400,000 people the size of Newcastle, proper strategic planning could see this city built within 10 years.
Many large mining companies would help underwrite the development for housing in collaboration with governments at State and federal levels.
The Government could provide incentives such as home buyers’ grants, no stamp duty and lower tax rates for Australian families to relocate to help solve employee shortages in mines. Many more would migrate if a modern attractive city with low cost housing was built.
11. Negative Gearing Reduced Or Banned
Why? Because negative gearing is the best legal tax scheme going around.
Why try some dodgy offshore tax scheme and wind up going straight to jail (thanks to Wickenby), when you can negatively gear property legally; have the government help fund your retirement and save a small fortune in tax?
However the problem is that Negative gearing distorts our property markets. It causes excess monies to be invested into Australian houses. And less into more productive uses such as funding for companies to grow and employ more Australians. Or vital infrastructure projects to improve our productivity and wealth. It creates a sense of false wealth through high property prices.
So even though it would be in my (and many others) best interest to keep negative gearing… instead of being selfish, shouldn’t we be focused on the greater good of our country?
12. Turn Australia Post into a bank to compete with the top 4 banks
I’ve lobbied for this for sometime. It’s a no brainer and would help with much needed competition in the banking industry, which is heavily consolidated. This consolidation occurred largely because the Government panicked unnecessarily during the credit crisis and allowed CBA to buy Bank West, and Westpac to buy St George. These 2nd tier banks should only have been allowed to merge or be bought by banks outside the top 4, to create a 5th major bank and therefore, further competition.
In New Zealand NZ Post has successfully transitioned to become a successful bank. And if the kiwis can do it – surely we can too! As a bank Australia Post would greatly improve regional Australia’s banking services as well. I’m so appalled at the lack of banking competition I’m funding the launch of a consumer website called www.swapbanks.com.au (it’s launching soon).
This site will help consumers access better interest rate deals off lenders as well as cheaper electricity and insurance etc. By forming large online consumer groups collectively Australians can use their consumer power through group buying to negotiate better deals. Especially on home mortgages, insurance, credit card rates and electricity.
13. Eliminate Payroll tax
This tax is absurd. To tax employers for creating jobs – only a bureaucrat could be dumb enough to create such a thing. I believe it will lead to further outsourcing of jobs overseas. In fact I already do it in my companies to reduce payroll tax bills, and I’ll continue to do so. That means Australians are losing jobs due to the tax disincentives.
At least in the short term pay roll tax should be removed from companies with less then 100 staff. That way small to medium businesses can grow and employ more people, before being bled to death by incompetent state governments who mismanage our money.
Did you know the state governments were supposed to remove payroll tax in return for GST revenue when GST was introduced? It’s true, but they failed to.
Few employees realise that companies pay 4 to 5 % payroll tax on top of each employee’s salary (on top of superannuation). That’s approx. $2,500 for someone on $50,000. And $5,000 for someone on $100,000 – plus 9% for super.
14. Form a taxpayers’ union
I’m not a unionist. I believe Unions often over abuse their power and that’s why they are in decline. However, the one Union I would back is a taxpayers union, funded by taxpayers.
I believe taxpayers should be able to influence and even dictate where their money is spent; they should have the power to delay payments of taxes to enforce the wishes of a majority of taxpayers.
Taxpayers need more direct control over government spending and perceived waste.
15. Create a New Political system
I agree this one is radical but…why even have political parties at all? Do they really serve the citizens interest in the most effective way? Why not have elections or referendums based on policies, not parties. I mean, do we agree with all the policies of our preferred party? Of course not. But we’re forced to vote for a party even though we might only agree with some of their policies. And when elected they claim a mandate to implement all their policies, even though we didn’t give them such a mandate.
Or, for example, they say their policy is “no to carbon tax”. Yet after being elected they implement a carbon tax, and use taxpayer’s money to run ads asking us to say yes to carbon tax…
Didn’t the majority already say “no”? And why even run ads asking us to say yes, when we don’t actually get a choice again to say yes or no?
It’s a classic case of why we don’t need political parties! Not just because they can’t be trusted to do what you voted for, but because they do what they need for political survival, often ahead of the nation’s best interest or the majority.
My point is this: let’s vote on major policies – not parties. We’d still have politicians (albeit less of them) but we vote based on policies and for politicians based on the quality of policies.
With technology today we can easily vote on major policies. And the ones that aren’t considered major enough, the elected politicians vote on. No more need for politicians to tow the party line.
Imagine the more honest, congruent, passionate debates when politicians can debate policy and not party politics. Imagine how fast, simple, easy and accurate it will be when we as voters get to vote on major policy online.
16. Solve the problems of manufacturing high labour costs and shortfall of mining workers in one go
To do this we need to create a two tier structure for award wages. This means new immigrant’s move into the manufacturing, mining and rural sectors on a lower award base to reduce labour costs. This helps struggling industries, such as manufacturing, which desperately need to lower labour costs or suffer more closures and job losses.
I know this is controversial and the Unions won’t agree, however the Unions can’t have it both ways: their constant demands to raise their members’ wages cost jobs.
Have they ever considered pay cuts to preserve jobs? Never.
I believe this is an obvious solution to compete with overseas manufacturing; otherwise it’s time to move to higher value manufacturing like Germany did.
Sure the Unions have their agendas to push and protect workers’ rights (which is important), but they must see the bigger picture. Many immigrants arriving to Australia would be happy to work in rural areas for say 50% of the award wages currently on offer. It could be a way for people to earn their way into Australia when they arrive: every year they work during their first five years in Australia, their award wage level rises until it then equals the national awards wages. It would work as an apprenticeship for the sector and the worker.
A move such as this will dramatically boost Australia’s productivity and efficiency. It will also assist a mass migration of workers to who can help take advantage of a once in a lifetime boom.
A recent ANZ report highlighted as many as 750,000 workers will be needed over the next 30 to 40 years.
I’m not suggesting a move like this won’t deliver any short-term structural pain, especially taking into account the volatility of the manufacturing and tourism sectors. And this prediction is reliant on China’s continuing growth.
However, the radical idea of lower level wages for new immigrants for the first five years working in the manufacturing industry may be the only way this sector will survive.
17. Superannuation contributions increased to 18%…but not by the employer
For Australians to have a secure retirement they need about 18% put aside over a lifetime. Currently it’s at 9%. I agree it needs to be higher, but the employer shouldn’t pay the extra. Why? Because they’re already carrying the burden, and to increase that burden will cost jobs.
Instead employees should be incentivized to match it. What I mean is, employers contribute 9% on the basis employees contribute 9%. And there should be incentives of zero tax for the employees 9% contribution.
Don’t you think that would be a massive tax incentive? It would ensure all Australians are in a strong financial position come retirement and as a result our country would be in a strong financial position with less demands for pensions.
I’ve offered for my life’s work – the 21st Century Educational system I’ve invested millions in to create – to be provided to schools and Governments royalty free.
18. Immediate change to immigration laws
This country desperately needs hundreds of thousands of more workers. The mining industry and rural sectors can’t find enough employees to fill positions and it is slowing their growth.
It’s not good enough to say Australians should get all the jobs. The fact is Australians in many cases don’t want the jobs and in some cases won’t work as hard as those who desperately seek work. Another reason is that many Australians won’t move to mining regions or rural areas to get the work. For instance BHP ran full page advertisements in Wollongong to hire the 1,000 BlueScope workers who were laid off. However, hardly any will relocate to mining regions for a new job.
Australia’s development is therefore being delayed due to the government’s restrictions on immigration and its immobile labour force.
Another question is, why does Australia restrict migration from countries such as the United Kingdom, United States or Canada, when I have no doubt these people could easily assimilate? Try gaining a Visa to live in Australia; it’s almost impossible.
We should take refugees to help the less fortunate and many of these will contribute greatly to this country. However, Australia’s priority should be to encourage immigration especially from the West and other skilled nations who are headed for decade-long recessions.
Can we not as a country afford to be fussy and select the cream of the crop to be able to live and work Australia?
19. Financial Education to be taught at schools by those with a Ph D in Results
With such world leading technology, this much-needed modern education system could be provided to all Australians for minimal cost.
Think about it…why send our children to 20th Century schools designed in the 19th Century industrialization era (that sets them up for financial failure in life)? Let’s get into the 21st Century! The current schooling system needs to embrace Financial Education and better equip the youth of today to excel financially.
20. $5000 Government Grant For Financial Education
Combined with Financial Education being taught at schools, I’d suggest a Government grant of $5,000 be made available to Australians who have finished school, but didn’t get a proper financial education. That grant would be used to invest in financial education courses to improve their financial intelligence.
But listen, it’s not money that’s needed to better educate this country; it’s simply better, proactive leadership.
21. Introduce Immigration Visa Fees
It is estimated that each year four million people are trafficked or smuggled, with the value of this criminal trade being approximately $10 billion per year. Apparently illegal immigrants are paying people smugglers as much as $60,000 each to be smuggled through Australian borders.
The fee often represents the asylum seekers life savings or those of their entire family, or even consists of contributions from their community. There are reports of false promises in terms of treatment, visas and even destination. Not only are they being misled but financially exploited with a faint hope of safely making it to Australia or ever becoming a legal resident.
Here is a simple solution.
The Australian Government should sell visas to raise necessary revenue while eliminating any need for people smugglers. Increased Australian immigrants would fulfill Australia’s labour demand due to the mining boom, and many mining and similar industries would happily contribute towards the visa fees for skilled workers.
Imagine the current approximate 200,000 immigrants per year being granted visas that on average cost say $75,000. That’s a massive $15 billion per year in revenue.
It may not completely solve the illegal immigration problem but would eliminate a lot of the commercial viability of people smugglers who are profiting from selling just the hope of getting to Australia.
Charging for immigration visas is something that needs to be urgently considered to not only meet labour demand but also to raise billions in new revenue for the country, while diminishing fraudulent and dangerous people smuggling.