So I guess that would be the companies that had just a part of their organisation drop 30% in turnover for a short period, and then claimed for the whole company for a long time- the people mentioned in Michael West’s article yesterday. Here is the article below from the SMH today. And yes, it is the IMF, hardly a Leftie organisation suggesting this, though the Greens did also.

Tax those who prospered during pandemic to repair budget: IMF

Shane Wright, 4 April 2021

Sydney Morning Herald, Senior economics correspondent

The International Monetary Fund has urged nations to consider using the Abbott government’s temporary budget repair levy to overcome the huge deficits left by the coronavirus recession, warning deep cuts to spending could lead to political instability.

Amid predictions Australia’s budget deficit could be $50 billion less than feared, the IMF has also suggested taxes on “excess” profits such as the abandoned mining resource rent tax.

Governments around the world have all been forced to run huge deficits to deal with the COVID-19 outbreak, with collective deficits approaching 13 per cent of global GDP. Australia’s deficit, forecast to reach $197.9 billion this financial year, is close to 10 per cent of GDP.

The IMF, in its fiscal monitor report ahead of this week’s world economic outlook, said that while governments had been forced to run large deficits there had also been an increase in income and wealth inequality because of the pandemic.

It said governments faced difficult decisions on how to cover their large deficits while also not exacerbating inequality.

Among budget repair options, the IMF said those nations with “robust tax systems” could look to increase top personal income tax rates, similar to the budget repair levy put in place by the Abbott government in 2014.

“Temporary increases in personal income tax rates (often restricted to the highest income brackets) were previously introduced during exceptional circumstances in Germany, Australia and Japan,” it said.

The budget repair levy, which was a 2 per cent impost on people earning more than $180,000 a year, ran between 2014 and 2017, raising more than $3 billion to help reduce the budget deficit.

The IMF said another option was to tax so-called “economic rents” or super-profits, targeting those sectors that had done well during the pandemic.

“Taxes on ‘excess’ profits, either in addition to or instead of the regular corporate income tax, can assure a contribution from businesses that prosper during the crisis (such as some pharmaceutical and highly digitalised businesses) and not affect companies (and their workers) otherwise earning minimal profits or incurring losses,” it said.

The fund warned trying to repair budgets by cutting expenditure on services or support to those left behind by growing inequality could lead to substantial political problems.

The Morrison government has pledged not to increase taxes, as the Abbott government pledged ahead of the 2013 election.

Very high iron ore prices, strong GST returns and a better-thanexpected economy are already reducing the budget deficit.

Deutsche Bank economist Phil Odonaghoe said it was not inconceivable the deficit could be half of what had been predicted in the mid-year update.

He cautioned everything would have to go right for that to occur, which would result in a deficit of about $100 billion. Even that would still be a record budget shortfall.

Mr Odonaghoe said a deficit of about $150 billion was more likely, which would set up the budget for future years. “The better starting point in 2020-21 also means smaller deficits across the forward projection period. On our revised profile, the federal budget could conceivably return to balance by 2025-26,” he said.

ANZ economists Hayden Dimes and David Plank said the deficit would be as low as $155 billion because of the better expected economic conditions.

But they cautioned some of this improvement was due to GST receipts.

Due to the way the GST is refunded to the states and territories, the better revenue this financial year could end up a shortfall in 2021-22.

Recession Alert!  A Law is Coming to Get Ready for Negative Interest Rates, but it being sold as just another move against the ‘black economy.  The bill is the ‘Currency (Restriction Use of Cash) Bill 2019’.

Cash is used in the black economy to avoid tax. But when the GST came in, the obvious time to restrict cash transactions, this was not done. Now it is coming in the above bill, banning cash transactions over $10,000 apart from a few exemptions which can be turned off by regulation, (i.e. without going back to Parliament). This bill was announced last Friday afternoon 26 July, and not picked up by the mainstream media.  The consultation period is very short- 26/7/19 to 12/8/19.

It begs the question; ‘Why restrictions on cash now?’

It seems that the answer is that when the economy will not grow, interest rates are lowered. They are at 1% now, so cannot go much lower till they get to zero. How do you stimulate the economy when the interest rates are zero?

One way is to tax people who are not using their money and give it to the banks, who presumably will give people money to take the stored cash and use it.

Some countries already have restrictions on cash. The 500 Euro note was withdrawn by the European Central Bank. France has banned transactions over 500 Euros, Italy 3000, Spain 2,500. Some long-term interest rates are already negative.

From the public’s point of view,  if you are going to lose money by putting it in the bank, it would be better to keep it in cash and put it under the mattress or in a home safe.  Even bullion has a storage cost.  How retirees will manage is hard to say.  They will be losing cash just by holding it and they simply have to spend their capital to survive. Naturally it means that all the cash in the world will be available to stimulate industry as the owners of cash will have immense financial pressure to put it into investments.

There is an IMF paper ‘‘Enabling Deep Negative (Interest) Rates to Fight Recession- A Guide’ IMF Working Paper April 2019 by Ruchir Agrawal and Miles Kimball’ which is a ‘how to’ guide for governments to use negative interest rates. At a political level the advantage pointed out is that people will blame the private banks rather than the government. The paper also suggests that a short sharp shock with ‘deeply negative’ rates might get a better response than a longer period of mildly negative rates. This gives an idea of the thinking- it is all about countering recessions. The IMF paper even canvasses the possibility of the abolition of paper money transactions!

The convenience of cards has been lessening cash use, but this new bill looks as though it is following the IMF guide and getting ready for the possibility of negative interest rates. It is not really about stopping the black economy.

The government put out a call for a discussion of this bill on the Treasury website last Friday afternoon, the crowded news day, presumably in the hope that it would not be noticed. They seem to have succeeded- There has been nothing in the mainstream media, apart from old articles referring to controlling the black economy. The Treasury seems to want people to believe that this is all part of counteracting the ‘black economy’ the email address for submissions is blackeconomy@treasury.gov.au. But it would seem that this is simply dishonest. The IMF is worried about a long-term global recession. Presumably our government is also, so they are getting their legislation in place on the IMF recipe. They just thought that you had better not know. It says a lot about how we are governed.

This information was given to me by a ‘freedom group’ called, ‘In the Interests of the People’. At youtube.com paste ‘/watch?v=770M2s6ZD8Y’ to see the video. I do not want to be the vector for conspiracy theories, but the implications of this really need to be understood and discussed. It really is not just about stopping the black economy.

The Treasury website that gives the bill has no discussion- merely explanations of the Bill, and even this is quite incomplete as the Part 2 which has the penalties is missing.

The IMF paper that seems to be the origin of the bill is fairly dry reading also but is at:
www.imf.org/en/Publications/WP/Issues/2019/04/29/Enabling-Deep-Negative-Rates-A-Guide-46598