Bits and Pieces.

I think we can give up hope this third consecutive La Niña will be any better than her two previous sisters.

On Thursday 6th Sydney broke the record for the rainiest year since data collection began in 1858: that day rainfall over Observatory Hill meteorological station totalled 2,206.8 mm. The previous record (2,194.0 mm in 1950) had stood for 72 years.

(source])

To give readers – particularly European ones – an idea how much rain that is: in the 278 days of the year from January 1st to October 6th 2,606.8 litres of water fell over every square metre around Observatory Hill (1,000 litres of distilled water weigh 1,000 kg: one tonne).

From October 6th to the end of the year there are 87 days.

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(source)

Not surprisingly, rains these last few days have left New South Wales, Victoria and Tasmania flooded. In VIC, more severely affected, these are the current (Sunday 16th 1823 AEDT) warnings:

(source)

Legend: red triangle means emergency warning and normally recommend immediate evacuation.

The peak in the water level is expected on Monday 17th.

Elsewhere also Venezuela, Nigeria, and Bangladesh are currently being affected by floods. Over there the loss of life has been much higher.

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Once again the Morrison Stage 3 tax cuts is making the headlines. The question of the week was: will PM Albanese go ahead with them?

We all could use a reminder. In 2019 the then Morrison regime decided to change how personal income tax is calculated. Up to the 2019/20 financial year, these were the income thresholds and marginal rates:

Okay, first question: How do you use that table?

Try this. Imagine your income is water and each income bracket is a bucket. You proceed from top to bottom: pour enough water to fill the first bucket, then move to the next, until you have no water left. Now, you apply the marginal rate to the contents of each bucket. Finally, you add those partial amounts to have your combined tax bill.

An example. Suppose that year your combined income (salaries/wages, interests, dividends) was $60,000. This means that you have enough “water” to fill completely the first ($18,200) and second ($18,800) buckets and still have enough left ($23,000) to pour on the third one ($18,200+$18,800+$23,000=$60,000); the fourth and fifth buckets, however, get nothing. Apply now the corresponding tax rates, to get $0 (0% of $18,200), $3,572 and $7,475, respectively. That adds up to $11,047: your total income tax bill for that year.

So, what’s the tax rate corresponding to that hypothetical $60 k tax unit?

• 0%?
• 19%?
• 32.5%?

None of the above. The effective income tax rate is 18.4% (= $11,047/$60,000): a little over 18 cents per dollar of income.

(It’s important to highlight that those are only estimates. Personal circumstances – number of dependants, rebates, offsets and other factors, including whether you are a citizen/permanent resident or not – affect those figures.)

The mechanics of the calculation covered, you may be curious about the changes. So, what are they?

The reform needed legislation (which Labor supported in Parliament). The changes were introduced by stages. The following table reflects the first two stages:

That table is – and will remain until July 2024 – in use; then – if the Government goes ahead with that – it should be replaced by:

That is the Stage 3 tax cuts table.

Now, compare the three tables.

Readers may find a little exercise interesting: calculate the effective tax for three hypothetical income levels: $25 k, $60 k and $200 k (you already have one value). A calculator, pen and paper is all you need, but if you feel a little more adventurous, you may enjoy setting a spreadsheet. You can use this as an example:

(h/t anonymous)

To the right, the functions underlying the $60 k calculation example above; to the best of my knowledge, the most popular spreadsheets use the same syntax.

(To be continued)

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WWF Australia released its 2022 Living Planet Report.

Some key findings:

• “Global wildlife populations fell by 69%, on average, between 1970 and 2018.”
• “Australia continues to have the most mammal extinctions in the world. The report tells a disturbing story of continual decline of more than 1,100 wildlife populations in Australia due to pressures from climate change, habitat destruction and introduced predators.”
• “Populations of sharks and rays have dropped by 71% worldwide over the last 50 years due to fishing practices.”
• “Globally, land use change is still the biggest current threat to nature, destroying or fragmenting the natural habitats of many plant and animal species on land, in freshwater and in our oceans.”
• “If we cannot limit global warming to 1.5°C, climate change will likely become the dominant cause of biodiversity loss in the coming decades.”

Among other things, WWF Australia is promoting a letter writing campaign asking federal Minister for the Environment Tanya Plibersek for action on the extinction crisis in Australia.