Is Australia becoming a bureaucratic, state-dependent puddle of its former self?
I recently read the musings on Substack of a British citizen who is watching “the country I was born in dissolve into a managed, bureaucratic, state-dependent puddle of its former self.” They say, “Britain is not failing. Britain has failed,” and they’ve assembled a comprehensive solution. I wonder to what extent their economic reforms should be applied to Australia. Do you think any of it makes sense for us? Are we failing as a nation? Do these ideas represent solutions? Some ideas would have labels attached to them, such as ‘regressive’ and ‘protectionist’, but forget the labels. You have to look at the whole, not the individual measures, which, of course, is how we got to the mess we are in. Perhaps we need a telescope not a microscope. Would it be better than what we have?
Here are the economic proposals for the UK, word-for-word.
“I will say what our political class has been institutionally incapable of saying for thirty years. Capital is not the enemy. Capital is the engine. Destroy capital formation and you destroy jobs, you destroy productivity, you destroy the tax base that funds every school and every hospital ward. The British establishment’s psychotic relationship with wealth creation is not a moral position. It is a suicide note.”
“The personal income tax rate becomes a flat 20%. Every adult, same rate, no exceptions, no reliefs, no accountant required. The tax code is simplified to the point where a moderately intelligent sixteen-year-old can complete a return in an afternoon. The compliance industry, which exists entirely to navigate complexity we invented and could abolish tomorrow, shrinks accordingly. Good.”
“Corporation tax goes to zero. Not 19%. Not 15%. Zero. Britain becomes the most attractive corporate domicile on earth, overnight. The revenue lost on the headline rate is recovered many times over through income tax on the workers employed, the VAT on what they spend, and the asset taxes on what they accumulate. This is not theory. Ireland ran a version of this experiment for twenty years and built one of the wealthiest societies in European history from a standing start.”
“But here is where we depart from the libertarian catechism, because I am not an ideologue, I am an algorithm engineer. The Buy, Borrow, Die loophole, the mechanism by which billionaires legally pay zero income tax by borrowing against appreciating assets rather than realising income, is abolished. Any loan secured against an asset is taxed at 20% at the point of drawdown. One exemption only: a primary residence. Your home is your castle. Everything else is fair game.”
“A flat 20% import tariff applies to all goods entering the country from outside a negotiated free trade zone. This is not protectionism as religion. It is leverage. Every global manufacturer now has a financial incentive to build their factory here, employ our people here, pay taxes here. And because the personal tax cuts land simultaneously, the purchasing power of ordinary citizens is mathematically protected against any price increase the tariff generates. The maths works. The political will is the only missing ingredient.”
“All of this feeds a Sovereign Wealth Fund. A fixed percentage of every pound of national tax revenue, locked away, compounding, invested globally. Only 50% of annual returns can ever be drawn down to fund public services. The principal is constitutionally untouchable. In fifty years this fund becomes the financial backbone of the nation. In one hundred years it makes taxation itself largely optional. We stop eating the seed corn and start planting an orchard.”
“…And this document must include an un-repealable clause: the GDP Tax Cap. Total government taxation, at every level, capped at a fixed percentage of national output. When the state wants more money it must earn it through growth, not extraction.”
So what do you think? You can read the entire post here: The rot stops now.
Australia’s One Nation party will be particularly interested in the proposed solution for the UK’s BBC.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
