My issue with Local Government

Brent Fleeton

Until Saturday, for the past five or so weeks, I spent most late afternoons and early evenings after work walking my local streets letterboxing a small summary of my basic policies along with instructions on how to vote in the 2013 local government election. 

I ran for a Council seat in West Ward in the City of Bayswater. I ran on three simple issues – lower rates, tangible policies to address the crime wave impacting on my local area (I am a recent victim of a home burglary) and streamlining local council planning approvals processes.  

Polling Day was Saturday and there is no denying this fact – I got flogged. I polled a whopping 380 votes out of 5,455 valid votes. 

However, I take three positive outcomes from this campaign: It gave me a better understanding of my local area; it taught me a lot more about the people who helped me and also about those involved in grassroots politics; and more people voted for me than they did for Darren Brown.  

Today, after hearing and reading about how it’s very distressing to some journalists in WA that the voter turnout was historically low and that the answer must be to force people to vote, I got to thinking about this issue of local council voter disengagement.

It didn’t take long for me to conclude that this really isn’t an issue at all, and to force people to vote is a stupid idea.

The more important issue we ought to be discussing at great length (and at much higher levels of government), and even though this never seems to be on the agenda, is how to address the drastic overreach by local governments. 

Don’t get me wrong, this average punter firmly believes state and federal governments in Australia have all drastically overstepped their boundaries. Let’s just focus on Local Government for now.

Did any journalist who contributed to the various columns conveying the collective dismay at the 20-30% turnout stop to consider that the reason that a vast majority of eligible people don’t vote in these elections may be because most common-sense people probably expect that the only matters their local council should be in charge of are lawns, roads and rubbish? 

Most people in my neighbourhood wouldn’t know that the 2013/2014 City of Bayswater Budget totalled spending of around $70million, and consisted of a taxation of local ratepayers of some $34million. This was through a rate increase of almost double that of inflation. During the Budget process, the City issued a press release stating this increase as ‘prudent’. It certainly was interesting rhetoric.

What’s my point? A good question!

When did local governments get the power to turn a small operation charged with the responsibility of fixing our roads, taking care of our local parks and gardens and collecting our garbage into a multi-million dollar ‘tax and spend’ machine, splurging ratepayers funds on hiring sustainability consultants and ‘buzz-word’ doctors, creating make-work programmes in the form of diversity and cultural projects and awarding often ridiculously generous grants for ‘art’ projects? Oh, and please don’t forget the annual contributions local governments pay to groups like WALGA and ALGA. These two lobby groups spent millions of dollars of ratepayers’ funds on a political advertising campaign for something which never occurred, but still won’t give the funds back to ratepayers. Hashtag integrity.

If we must spend money on hiring ‘sustainability’ consultants, I’d like to hire a sustainability consultant in the form of an accountant to first examine the ‘sustainability’ of the alarming rate at which local governments are taxing and spending ratepayer money. 

Unfortunately for those libertarians among us, our governing structure agreed upon at Federation created a monster. There is a solution, one which could possibly appease almost all who are concerned. However, it will be unappealing to those with less-than-solid intestinal fortitude. Local Government (in theory) answers to the State Government and only it can do something about this growing problem. I would like to see a genuine push by the WA Liberal-National Government, by the end of this term, to legislatively cap any future Local Government rate increases to that of CPI. If we can stop the ability for over-taxation, we can slowly stop the ever-expanding purview of local governments. 

This is what I call a ‘sustainable’ approach to local government.

In summary, I know fixing roads, mowing lawns and disposing of garbage costs my local council money, but its purview should end there. Local governments must be made to recognise, by way of state legislation if necessary, the unsustainable practice of ridiculous rate rises and over-the-top spending. If we were to force people to vote in local government elections, just to be able to say people are now ‘engaged’ with grassroots politics, we would fail to address these alarming issues with local government entirely. Compulsory voting on local government elections would give councils a mandate which could only lead to further over-government and over-taxation in our country. This would be a disastrous outcome for what little freedom is left in Australia.

Brent Fleeton

Committee Chair of Perth Young Professionals Inc.

Member of the WA Liberal Party Policy Committee

Reform


B Fleeton

Brent explains the many failures of our compulsory superannuation system and why it needs reform.

As our great country was founded on regulation and
government interference, to appease those scared of true free markets, I’m sure
we’ll have plenty of ‘policy wonks’ out there able to work up a list of rules
associated with this to perpetuate the need for Canberra to exist.

It surprises many, if not all those who have watched their compulsory retirement funds shrink, that the government is not held responsible for such loss. GC.Ed.

This word is as overused in politics as ‘champion’ is in sports. It’s one of those words that seemingly applies to any little change government enacts. I don’t mind the Prime Minister announcing an eight-month election campaign; it means the date-of-death for a disastrous government can be etched into its proverbial tombstone. It also, and more importantly to this punter, allows us to take a broad look across the country to prioritise areas in desperate need of genuine and worthwhile reform. One particular issue I believe needs attention is the way Australians are forced to ‘plan’ and ‘invest’ for their own retirement. While few choose to believe it, superannuation is a tax. The current ‘three pillars’ approach to retirement income is as follows:

  • A safety net consisting of a means-tested Government age pension system (this requires a separate article);
  • Private savings generated through compulsory contributions to superannuation; and
  • Voluntary savings through superannuation and other investments.

Unfortunately for Australians, too much emphasis is placed by government on the ability for the second method to generate sufficient returns for one’s retirement, and too little attention is placed on providing more power, freedom and opportunity to voluntary save through non-superannuation investments. 

Every pay-day, like millions of my fellow tax-payers, I have 9% taxed from my salary and sent to a super fund of my choice. This is as good as it gets, because from here it is reduced by entry fees and tax (and then ongoing fees), then what’s left is invested into an ‘expertly chosen’ range of poor performing managed funds. These are the funds which exist to assist in growing a nest egg that can be converted into a pension stream to fund my retirement; however a majority of these funds are struggling to meet or beat the relevant benchmark, regardless of the excess performance fees charged.

Let me begin by stating ‘choice’ is not the word I associate with this scenario.

Sure we have Self-Managed-Super-Funds but if, for some divine reason, I was entrusted by my government to prepare and invest for my own financial future outside of the superannuation environment, I’d keep the 9% tax (soon enough this will be 12% – apparently this is a good thing) and use the extra income to put in place a financial plan to purchase my first property. Please, don’t even ask about the First Home Saver Account-more government intervention in the market. Looking at my current balance in my super fund, I have enough for a sizeable deposit. Real estate is historically the vehicle of choice for Australians to accumulate wealth. Next time you’re speaking with someone who is currently funding their own retirement, inquire about the way they were able to do this. Property and direct shares, outside of super and first bought many years ago will be the answer, not industry super. Giving the power and freedom back to the individual leads to true choice: when to buy and sell; the opportunity to use profits from trades to further accumulate more wealth. By locking away (for decades) the loss of the ability to access equity now means the loss of overall growth is unquantifiable. This opportunity cost is not worth any benefit of the current arrangement. 

The current system accomplishes very few notable positive outcomes for Australians. The millions of dollars in compulsory contributions goes towards feathering the bed-lining of super fund managers, cushions the share price of listed super funds, it forces government to legislatively guarantee a minimum income for an industry that was established to build wealth for clients (but is currently failing to meet set performance targets) and the consistent legislative changes result in a very happy accounting/financial planning fraternity. 

Should the Coalition be successful in wiping away the stains of Labor on 14 September, I have faith it will stick with the promise of not touching superannuation. While markets like stability, what I hope for (probably in vain) is to see the prioritising of this issue and for the Coalition to take the tough political hit in its first term of government in order to achieve true and long-lasting reform in this area. 

Should an individual choose this path, let them use this 9% to accumulate wealth now. Should they wish to remain in the current system, fine, but the pressure on government to provide that safety-net will be markedly reduced with this plan as Australians will have considerably more wealth by the time they reach their chosen retirement age. As our great country was founded on regulation and government interference, to appease those scared of true free markets, I’m sure we’ll have plenty of ‘policy wonks’ out there able to work up a list of rules associated with this to perpetuate the need for Canberra to exist.

Brent Fleeton is a member of the WA Liberal Party Policy Committee, is studying a Diploma in Financial Planning and is the Committee Chair of Perth Young Professionals Inc.

Shopping online is good?

Brent Fleeton

Brent Fleeton has strong views about online shopping. Gerry Harvey might not agree!

Overnight the Australian Retailers
Association (ARA) announced their response to the Low Value Parcel Processing
Taskforce final report. Now, it is to be expected that protectionism is the
ruling economic policy of the ARA, but their call for Australian consumers to
be taxed for purchasing goods online that will see a parcel arrive from
overseas shows how out of touch this lobby group is with everyday Australians.
I must admit I am unlike many of the good burghers at the ARA, as I am biased
towards consumer freedom in a global economy.

Like many friends and colleagues, I
shop online for many goods for one reason – the power of my dollar gets a
better quality product for a lower price online than if I was to shop in
Australia. As an example I unashamedly have expertise in, buying a suit from an
Australian retailer doesn’t make economic sense because the prices are lower
and the quality is better if you visit the online shopping sites of a host of
British or American tailors. To tax my purchase and use the reason that “… the additional state revenue will translate to
community benefit – police, teachers and nurses.” is simply laughable.

The
ARA goes on to say that “it also means putting Australian retailers and
Australian online retailers on an equal GST footing with the rest of the global
retail market to create jobs, pay taxes and contribute to local wealth
creation.” Why is the predisposition of the ARA to bring equality of
competition by raising taxes? Why isn’t the aim to lower taxes across the
board? Every Australian should be terrified of the most concerning trend today
– Governments have no choice but to tax and spend. If the ARA had any ingenuity
or economic foresight, they’d be looking at ways of lobbying government to
achieve their aims of equal competition but by lowering tax – not raising it,
by providing greater economic freedom for consumers – not trying to force
Australians to buy inferior goods and services just because it’s from Australia
and allowing Australians to shop in a global market unfettered by government
which in turn forces Australian retailers to be competitive in the 21st
century economy.

It’s time the ARA caught up with
modern consumer trends and advocated for policies which ensured their members
aren’t relying on legislation to stay alive, but by staying alive because they
provide quality goods and services at competitive prices. This is the only way
to keep up with their international competition.

We are but a small national economy
playing in a global marketplace, it’s time we stopped pretending protectionism
works. 

The Australian Retailers Association, advocating
that you pay more since 1903.

Brent Fleeton is the President of the Murdoch University Liberal Club.

The difference

Brent-FleetonLabor's policy focus is on short-term gain, not long-term reform, writes Brent Fleeton.

*Reader Message* I have not conducted any polling or commissioned any focus groups to provide me with an opinion, these thoughts are my own.

Last week, university liberal clubs around Australia have set up tents, tables, stands and signs in preparation for their respective O-Day. In the process of attracting new students to sign up to our clubs, I often get the question “what is the difference between Labor and Liberal?” The most often used explanation involves the differences of ideology.  If the poor student is willing to listen to my preaching, I ask them to read Simon Benson’s book ‘Betrayal’.

The book is a recommended read for any new member of my home club at Murdoch University. The book is a succinct reminder of the differences between the Coalition and the ALP. Although the book was written about the internal war that destroyed the credibility of the NSW Labor Party, it can be seen as a microcosm for the way the entire ALP is structured.

It starts off in 2007 with Kevin Rudd asking Morris Iemma to hold back on delivering one of the most important policies NSW would have seen in a generation for his own short term political gain until after the 2007 federal election. Although Iemma would have had union trouble with the sale regardless, he had just won an election no one thought was possible. This gave him capital over the unions and the time was ripe for the sale. In the deal, Rudd promised he would get the policy approved by the national executive in return for holding off. Rudd didn’t deliver.  Rudd was foregoing the needs of a state that was on its knees because he knew the Parliamentary Labor Party, both state and federal, was always at the mercy of their union base. The political gain of having the most important state in the federation financially able to deliver on his own infrastructure promises by having billions of dollars from the sale of state electricity assets was unable to be realised because the unions wouldn’t allow it and Rudd didn’t have the gusto to do what was right. This is how Labor traditionally operated in a nutshell: unless the unions approve it, it is not policy.

How times change. Now, fast forward to February 24 2011 with Julia Gillard’s announcement that Australia will have a tax on carbon. The backflip from a pre-election commitment that this wouldn’t happen can only be seen in one way. Bob Brown has completed his coup d'état of the unions as the pre-eminent power base of the current government. Karl Bitar would be vomiting in his Sussex Street office at the thought of voter backlash at the next election. Actually he should be planning a long vacation, or his resume, because he should be out of the game completely by then (let us pray). The words stated by the Prime Minister during the 2010 election campaign “there will be no carbon tax under the government I lead” were said because Bitar’s focus group reports would have told him that is what the people wanted to hear. It didn’t matter if Gillard genuinely believed in either position, the point was to win, whatever the cost. Throw out your reports, Karl, Bob is in charge now. The game has changed, and I really hope Australia wakes up to this during the next election. 

The difference between the Coalition and Labor is Tony Abbott wouldn’t prostitute the beliefs and values of the Liberal Party once in Government. Julia Gillard has followed her predecessor in abating her party’s beliefs in order to remain in power. I wonder how long her backbenchers will put up with this? A Coalition Government will implement change for the good of Australia, not for the sake of being in power.

Labor = short term win > long term reform

Coalition = short term win < long term reform

Brent Fleeton is the Australian Liberal Students' Federation representative from Western Australia.

Community Cabinet

Brent-Fleeton Brent Fleeton explains why he feels that Community Cabinet meetings are a waste of time.

On Wednesday 9 June 2010 I attended the latest Community Cabinet Meeting at Como Secondary College.

I got what I expected.

Kevin Rudd stated that he was bringing government to the people and that the government would use these CC meetings to listen to citizens. The questions were pathetic. The answers were worse!

I congratulate Tony Burke for the only genuine, straight forward, logical answer to a question on live sheep exports. The other answers spat out by the PM and his Ministry were spinning so fast Shane Warne would have been proud.

Kevin Rudd was asked by an astute citizen that if re-elected, would his government follow standard policy cycle and do more consulting before announcing policy. This was a very relevant and simple question that deserved a simple answer. Instead the crowd was subjected to a barrage of irrelevant rhetoric that would have given Christopher Pyne a heart attack if it happened during QT. I was very tempted to stand up on a point of order and raise the issue of relevance! Rudd’s answer detailed how ‘very excellent’ Naplan testing proved to be, how ‘working families would be better off’ and how he was ‘building for the future’. Umm that’s very good Kevin, and your answer please?

We all know the Labor machine is one of unrelenting rhetoric, but this man deserved an answer that he could understand. The answer he got indirectly from the PM was a resounding No!

The Labor Government if (IF!) re-elected would NOT be more consulting with stakeholders in their approach to policy.

The Labor machine is damaging their own chances of re-election; people are tired of hearing his lines.

This is why Tony Abbott would make a better PM. He maintains the party line while giving a straight forward answer to credible and fair questions. The astute citizen asked a credible and fair question to Rudd, he got spin. Abbott would give substance. Jump up and down about it, but you’ll get an answer.

Rhetoric is in every word a politician speaks, it is a way of communication. Liberal rhetoric was used effectively to show how another policy failure would now be a benchmark in which all policy from the Labor Government will be measured. The great example I use is Greg Hunt’s relentless attack on houses catching fire because of Peter Garrett and Kevin Rudd. No one listened or took notice for months, but he didn’t give up and it caught on. If they cannot put insulation into a roof without burning it down, how can the Australian people trust the same inept government to pay off our debt or control our borders?

I have a suggestion for another policy to add to the Liberal list, ditch Community Cabinet meetings.

Brent Fleeton is the President of the Murdoch University Liberal Club.

SuperProfit Tax – err sorry, correction – NormalProfit Tax

Brent-Fleeton Brent Fleeton writes on the ill-effects of Rudd’s Resource Tax.

Any company that takes Australian resources out of the ground and sells it can expect to pay their state a royalty for doing so. This is a fair system that compensates the people of that state for the use of their resources. If anything, royalties in WA should be higher.

This is an interesting time in Australian political history. Here we have the current Labor Federal Government showing absolute contempt for the Australian people, even more so than the disgraceful Whitlam Government in 1975.
It also shows the lack of political clout of Wayne Swan and Kevin Rudd. They really did not think this one through, and if they didn’t know the tide has turned, they do now. The people of Australia will remind them come polling day.

Kevin Rudd, the self declared ‘economic conservative’ has teamed up with Wayne Swan, Lindsay Tanner and Julia Gillard to retard Western Australia’s economic prosperity.

In the words of the greatest treasurer this country has ever seen, “I know it’s a big call”.

We now know why the Federal government did not want Colin Barnett to see the Swan Tax Review before making a decision on Rudd’s Health Plan. Rudd expected Barnett to go all in without seeing one of his hole cards.

The people of Western Australia were expected to sit by and wait for Swan to release the Henry Tax Review, then to have only one concrete proposal come about and this wasn’t even what Henry recommended!

If any economist, Labor government spokesperson or unionist can say this is a SuperProfit tax they should find a new job. Except for the Labor hack, they should stay. This is a super tax on normal profits.

The tax kicks in at a super low level, just 6%. Other issues with this crazy proposal is the company tax rate has not been lowered to recommended level from Ken (from 30% to 28% instead of 25%) as to offset the full recommended rate for the RRT (40%). For this reason alone, if the Labor Government is going to persist with this line, they must acknowledge the tax kicks in at a too low level and change it. Better yet, just drop the idea.

As we have seen in the past week, Rio have cancelled $11 billion worth of plans in WA, Clive Palmer has followed suit in Queensland, Cape Lambert in WA has ceased new projects for exploration, and we can expect smaller operations to become less viable in the wake of this change.

Why are companies reacting so harshly? Because it is stupid to suggest that an investor should outlay a large amount of capital when profits are deemed to be Super and taxed at a huge level when they exceed 6%? Can I lock in my gas and electricity prices now? Get ready for a rise!

This ill-thought policy proposal has already retarded further investment in the one industry that had the potential to be the cornerstone of our national economy for the next 20 years.

I am calling on the Liberal Party machine to fully explain this current proposal to the Australian people, so that they realised in the long term, this is detrimental to all. I don’t just mean a few ‘Ministerial Media Statements’, I’m talking a full assault!

Brent Fleeton is the President of the Murdoch University Liberal Club.