GST and User Pays
Grandpa Aerotart
Thread Starter
GST and User Pays
I am fascinated as to why we as an industry and AOPA, among the various alphabet groups, are not raging against the Govt mandated 'user pays' system when we have always paid, via fuel tax, and continue to pay, via GST, a huge % of 'our way'.
I put some broad figures down on another thread and it garnered about as much interest as a turd in a punch bowl.
On a per quarter basis industry pays about $15 million into consolidate revenue in GST on fuel alone. On top there is GST on every $ spent on tickets, parts, labour, aircraft sales, charts, data base revisions, landing fees, air nav charges and on ad nauseum.
All this adds up to well over $100 million/annum....fuel alone contributing over $60 million....god knows what airline ticket GST contributes to consolidated revenue...maybe the total figure is $200 million/annum.
If taxes collected from fuel, labour, parts, air tickets, GPS database subscriptions, aircraft fitment upgrade, aircraft paint jobs, landing fees, the list just goes on and on, doesn't constitute 'User Pays' what does?
Why are not ALL industry participants uniting and saying "ENOUGH!!"
I put some broad figures down on another thread and it garnered about as much interest as a turd in a punch bowl.
On a per quarter basis industry pays about $15 million into consolidate revenue in GST on fuel alone. On top there is GST on every $ spent on tickets, parts, labour, aircraft sales, charts, data base revisions, landing fees, air nav charges and on ad nauseum.
All this adds up to well over $100 million/annum....fuel alone contributing over $60 million....god knows what airline ticket GST contributes to consolidated revenue...maybe the total figure is $200 million/annum.
If taxes collected from fuel, labour, parts, air tickets, GPS database subscriptions, aircraft fitment upgrade, aircraft paint jobs, landing fees, the list just goes on and on, doesn't constitute 'User Pays' what does?
Why are not ALL industry participants uniting and saying "ENOUGH!!"
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".....airline ticket GST contributes to consolidated revenue...maybe the total figure is $200 million/annum."
And CASA wants to increase it's user pays charges in order to increase it's external income from $5 mill per annum to $20 mill per annum..........
As another PPRuNer of note often comments: Don't lie, cheat or steal. The Government doesn't like competition.
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chuckles
I stand to be corrected here but wasn't GST meant to be a replacement for State/Territory charges such as stamp duty etc. so it doesn't go to the Federal Govt coffers.
However, I understand exactly where you are coming from because the current rundown of infrastructure by present and past Federal governments is a total scandal which will have serious repercussions.
The current trend towards "user pays" is totally distorted where infrastructure is concerned. Why should it be the poor schmuck who actually uses an aerodrome have to pay landing fees when the whole community benefits from having air mail, freight and a pax service through the same aerodrome.
I stand to be corrected here but wasn't GST meant to be a replacement for State/Territory charges such as stamp duty etc. so it doesn't go to the Federal Govt coffers.
However, I understand exactly where you are coming from because the current rundown of infrastructure by present and past Federal governments is a total scandal which will have serious repercussions.
The current trend towards "user pays" is totally distorted where infrastructure is concerned. Why should it be the poor schmuck who actually uses an aerodrome have to pay landing fees when the whole community benefits from having air mail, freight and a pax service through the same aerodrome.
Grandpa Aerotart
Thread Starter
One of the 'benefits' of GST was a supposed removal of various state taxes. It is notable that most, if not all state Govts have yet to remove many of the taxes they were supposed to remove...I would imagine because the state govts are mostly (all?) labour ones and it's a great way to put pressure in the Liberal National Govt and make them look like the thieving C*&T$ they are.
That is not pertinent to my point.
We are being hit with multitudinous user pays fees when the 'user', be they passengers or participants (private or professional) are paying taxes on every phase of aviation from fuel to landing fees and an exhaustive list of things between.
It is double taxation.
As air ace alluded to above the GST on domestic tickets, which would be about 95% non refundable within the tax rules, alone pays for ALL the infrastructure many times over...surely passengers are the ultmate user?
When pilots fly for fun they are paying 10% GST, approximately 16 cents/liter, on the fuel they use. In my Bonanza that equates to about $9/hr and my aeroplane does about 100 hrs/annum. When a Chieftain/Baron flies it's more like $20/hr.
My last maintenance bill on the Bonanza which was for the 10 yr wing bolt AD included $206 in GST.
Labour runs about $80/hr and 10% of that goes to the Govt.
Every time I look at a bill I see something else which attracts GST. The frieght costs involved in shipping my wing bolts away to be xrayed...$30 of which 10% went to the Govt.
I don't mind paying my fair share but I object violently to paying 2 or 3 times!!!
There can be no doubt as to why the Govt is awash with money when NONE of these things attracted tax before GST. Little wonder in the first months and years after GST was introduced they were stunned at the increased revenue stream they had harnessed...to the point of embarrassment apparently...or more likely hysterical giggling
This is OBSCENE!
That is not pertinent to my point.
We are being hit with multitudinous user pays fees when the 'user', be they passengers or participants (private or professional) are paying taxes on every phase of aviation from fuel to landing fees and an exhaustive list of things between.
It is double taxation.
As air ace alluded to above the GST on domestic tickets, which would be about 95% non refundable within the tax rules, alone pays for ALL the infrastructure many times over...surely passengers are the ultmate user?
When pilots fly for fun they are paying 10% GST, approximately 16 cents/liter, on the fuel they use. In my Bonanza that equates to about $9/hr and my aeroplane does about 100 hrs/annum. When a Chieftain/Baron flies it's more like $20/hr.
My last maintenance bill on the Bonanza which was for the 10 yr wing bolt AD included $206 in GST.
Labour runs about $80/hr and 10% of that goes to the Govt.
Every time I look at a bill I see something else which attracts GST. The frieght costs involved in shipping my wing bolts away to be xrayed...$30 of which 10% went to the Govt.
I don't mind paying my fair share but I object violently to paying 2 or 3 times!!!
There can be no doubt as to why the Govt is awash with money when NONE of these things attracted tax before GST. Little wonder in the first months and years after GST was introduced they were stunned at the increased revenue stream they had harnessed...to the point of embarrassment apparently...or more likely hysterical giggling
This is OBSCENE!
Last edited by Chimbu chuckles; 15th Jun 2006 at 12:25.
I'm in one of those moods
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chuck as usual you are dead right 
... I am sure (judging by the lack of any counter arguments) that people agree .... what the heck can we do whilst this mob is in office?? 
...... 18 months (or so) to go .... the 'gene pool' had better 'wake up' between now and then 
... I am sure (judging by the lack of any counter arguments) that people agree .... what the heck can we do whilst this mob is in office?? ...... 18 months (or so) to go .... the 'gene pool' had better 'wake up' between now and then
Grandpa Aerotart
Thread Starter
A best guess from our resident Pprune TA EWL suggests total domestic ticket sales falls around 7-10 Billion dollars.
That'd be a minimum of $700 million/annum in domestic ticket GST.
Yet something else which was, I think, tax free before GST.
I would suggest we are comfortably over a BILLION dollars out of the 12-13 BILLION dollar current surplus that is directly attributable to aviation if you include the GST on fuel and the multitudinous other things on the aviation list.
But the Govt has the gall to suggest we are not paying our way and can no longer be carried by the tax payer.
It's a bit like suggesting smokers are a burden on the health system...see how well that runs without the $5/pk excise and 10% GST.
If you do a quick search on the internet you can find a paper discussing this stuff which takes an in depth look at the FAA funding arrangements. Basically all taxes collected from aviation, mostly but not exclusively, ticket taxes and fuel taxes, were put in a trust fund and used to fund the FAA and aviation infrastructure. They stopped putting the money in it long ago but haven't come close to emptying it yet, despite the most wasteful best efforts of the FAA. Now they (FAA/US GOVT/ US airlines[surprisingly]) are starting to spout the old User Pays mantra as well....but US AOPA and similar groups are fighting it hard. The airlines can see a benefit by not having the ticket tax which our airlines will never see because here it is called GST....it is still a tax on tickets.
That'd be a minimum of $700 million/annum in domestic ticket GST.
Yet something else which was, I think, tax free before GST.
I would suggest we are comfortably over a BILLION dollars out of the 12-13 BILLION dollar current surplus that is directly attributable to aviation if you include the GST on fuel and the multitudinous other things on the aviation list.
But the Govt has the gall to suggest we are not paying our way and can no longer be carried by the tax payer.
It's a bit like suggesting smokers are a burden on the health system...see how well that runs without the $5/pk excise and 10% GST.
If you do a quick search on the internet you can find a paper discussing this stuff which takes an in depth look at the FAA funding arrangements. Basically all taxes collected from aviation, mostly but not exclusively, ticket taxes and fuel taxes, were put in a trust fund and used to fund the FAA and aviation infrastructure. They stopped putting the money in it long ago but haven't come close to emptying it yet, despite the most wasteful best efforts of the FAA. Now they (FAA/US GOVT/ US airlines[surprisingly]) are starting to spout the old User Pays mantra as well....but US AOPA and similar groups are fighting it hard. The airlines can see a benefit by not having the ticket tax which our airlines will never see because here it is called GST....it is still a tax on tickets.
Grandpa Aerotart
Thread Starter
An interesting link...US but the underlying facts are identical to Australia.
http://web.nbaa.org/public/govt/issues/funding.php
What is also interesting is the amount of fuel tax they pay in the US. 19 cents/gallon. That's a little more than the 3 cents a liter we pay in Avgas excise but not a lot...and that is all the yanks pay...not an additional 70 cents a gallon in GST!!!
Another thing I find galling, to put it mildy, is after we paid for all the airports the Govt sold them in a one off money grab...and then introduced GST.
Chuck
http://web.nbaa.org/public/govt/issues/funding.php
What is also interesting is the amount of fuel tax they pay in the US. 19 cents/gallon. That's a little more than the 3 cents a liter we pay in Avgas excise but not a lot...and that is all the yanks pay...not an additional 70 cents a gallon in GST!!!
Another thing I find galling, to put it mildy, is after we paid for all the airports the Govt sold them in a one off money grab...and then introduced GST.
Chuck
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Originally Posted by Chimbu
There can be no doubt as to why the Govt is awash with money
So
I would suggest we are comfortably over a BILLION dollars out of the 12-13 BILLION dollar current surplus that is directly attributable to aviation if you include the GST on fuel and the multitudinous other things on the aviation list.
A consumption based tax has been needed in Australia for decades to encourage an increase in Savings. Australia is one of the few nations who spend more than we earn. It also requires no "indexing".
So. How much Wholesale Sales Tax was levied on aircraft parts, aircraft etc, pre-GST?
You know business travellers can claim GST back?
Another thing I find galling, to put it mildy, is after we paid for all the airports the Govt sold them in a one off money grab...and then introduced GST.
Why is the government trying to "horde" money as you say. It's because the (let's call them) "Older" generation approaching retirement, overall have spent all their cash and not saved for retirement.
Grandpa Aerotart
Thread Starter
If none of the GST goes to the Federal Govt why are they 12 billion in the black...and why is Costello constantly argueing with state finance ministers over how much of the GST pie they get?
As far as I am aware aircraft parts did not attract any significant taxation before GST...I stand to be corrected on that. Even if we did it was nothing like 10%.
I have owned my aeroplane since before GST...it is a LOT more expensive since GST.
Yes businesses can claim back GST...I used to operate my aeroplane in that manner...but you get back a crap load less than you pay...and you wait 3 mths to get it...an interest free loan to the govt.
And what % of domestic travel is business related and can be claimed back...fecking small I would suggest.
It doesn't matter what descriptor you put in front of the word tax the fact is aviation contributes something over a billion dollars (lets be generous and suggest $700 million net) towards consolidated revenue but we are still lumbered with a raft of user pays fees.
Years ago we paid 24 odd cents fuel tax and got everything else we needed pretty much gratis...now we pay 10% GST on everything under the sun and have to cough up more money for everything under the sun. Tell me that is a fair system and contributes positively towards fostering aviation.
I pay handsomely when I use the system, either as a passenger or when flying, maintaining, insuring (there's another thing which attracts GST) my Bonanza.
I think we contribute enough....another 20-30 million is unreasonable.
What mechanisms have ever been in place to allow people to save much money for retirement?
Would it be the disgracefull taxes on super that are about to be abolished?
Simple fact is no Govt in history has ever modified the tax system to their detriment and the current Liberal Govt is no different.
I remember Hewson was going to introduce a GST but have personal tax reduced to some low flat rate. It cost him his job from memory. That would be a good fair system...but we got GST and a 2% reduction in the prime tax rate instead.
As far as I am aware aircraft parts did not attract any significant taxation before GST...I stand to be corrected on that. Even if we did it was nothing like 10%.
I have owned my aeroplane since before GST...it is a LOT more expensive since GST.
Yes businesses can claim back GST...I used to operate my aeroplane in that manner...but you get back a crap load less than you pay...and you wait 3 mths to get it...an interest free loan to the govt.
And what % of domestic travel is business related and can be claimed back...fecking small I would suggest.
It doesn't matter what descriptor you put in front of the word tax the fact is aviation contributes something over a billion dollars (lets be generous and suggest $700 million net) towards consolidated revenue but we are still lumbered with a raft of user pays fees.
Years ago we paid 24 odd cents fuel tax and got everything else we needed pretty much gratis...now we pay 10% GST on everything under the sun and have to cough up more money for everything under the sun. Tell me that is a fair system and contributes positively towards fostering aviation.
I pay handsomely when I use the system, either as a passenger or when flying, maintaining, insuring (there's another thing which attracts GST) my Bonanza.
I think we contribute enough....another 20-30 million is unreasonable.
What mechanisms have ever been in place to allow people to save much money for retirement?
Would it be the disgracefull taxes on super that are about to be abolished?
Simple fact is no Govt in history has ever modified the tax system to their detriment and the current Liberal Govt is no different.
I remember Hewson was going to introduce a GST but have personal tax reduced to some low flat rate. It cost him his job from memory. That would be a good fair system...but we got GST and a 2% reduction in the prime tax rate instead.
Last edited by Chimbu chuckles; 15th Jun 2006 at 13:58.
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Sales Tax
please correct me if I am wrong but I seem to recall that prior to GST, aviation goods and services were actually exempt from sales tax. Aviation was, as of the magic date, one of the few products that could simply raise its prices 10% to cover the tax.
PAF - The concept that the GST was "for the states" is simply smoke and mirrors. The federal agency, the ATO, collects it and it goes into govt revenue to be handed out according to who is being a good Premier this week.
That said- hey Chimbu I bet your insurance attracts Stamp Duty payable to the Qld Govt, as well as GST?
PAF - The concept that the GST was "for the states" is simply smoke and mirrors. The federal agency, the ATO, collects it and it goes into govt revenue to be handed out according to who is being a good Premier this week.
That said- hey Chimbu I bet your insurance attracts Stamp Duty payable to the Qld Govt, as well as GST?
Grandpa Aerotart
Thread Starter
Yep that was my memory too...sales tax exempt...a hang over from when aviation was considered an essential service to the community.
Aviation simply got 10% more expensive the day GST started...and we get NOTHING for it...but still they want more.
And yes I pay stamp duty on my insurance too.
Just thought of something else which attracts a tax which didn't before..hangarage!!!
Aviation simply got 10% more expensive the day GST started...and we get NOTHING for it...but still they want more.
And yes I pay stamp duty on my insurance too.
Just thought of something else which attracts a tax which didn't before..hangarage!!!
Last edited by Chimbu chuckles; 15th Jun 2006 at 14:36.
The problem for aviation is that it fits squarely within the definition as used by the productivity commision for cost recovery purposes. Service to aviation can have a public good. That public good is used by a narrowly defined user group. As a group we can then be charged for cost recovery. Presently, CASA recoups about 71%($59.8mil/71.4%=$17.1mil shortfall) of what it costs to operate. ASA recovers 108%($585.4mil/108.6%=$50.34mil surplus) of what it costs to operate. These are 2001 figures from the productivity commision. Cross-subsidisation is forbidden so we can have a system where one section of the industry is reaping in dollars and another is falling behind and must increase costs. The government sets the level of cost recovery, the departments must then comply.
It is a cruel hoax when governments of the day strip an asset base from an industry and then demand the users to pay for a service. I am glad the community saw what was happening to save the snowy but too late for QANTAS, COMBANK, TELECOM, DOT and its spawn of CASA/ASA, FAC, AUSAR and on and on. Asset sales where necessary to recover a budget black hole for this government. The previous government used asset sales for current expenditure. Selling the farm to pi$$ against the wall. I prefer the current governments ideas. However, I do not understand why we have to suffer a disconnect between what the government recovers from one section of aviation and yet bleats that another section is going broke and MUST be recovered from its users.
As an aside, ASIC recovers 249% of what it costs to run ($361m/$144.8expense=$216.2m. Even after "cross-subsidising" other governments and departments, ASIC still returns over $56.2m every year)
It is a cruel hoax when governments of the day strip an asset base from an industry and then demand the users to pay for a service. I am glad the community saw what was happening to save the snowy but too late for QANTAS, COMBANK, TELECOM, DOT and its spawn of CASA/ASA, FAC, AUSAR and on and on. Asset sales where necessary to recover a budget black hole for this government. The previous government used asset sales for current expenditure. Selling the farm to pi$$ against the wall. I prefer the current governments ideas. However, I do not understand why we have to suffer a disconnect between what the government recovers from one section of aviation and yet bleats that another section is going broke and MUST be recovered from its users.
As an aside, ASIC recovers 249% of what it costs to run ($361m/$144.8expense=$216.2m. Even after "cross-subsidising" other governments and departments, ASIC still returns over $56.2m every year)
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Originally Posted by Chimbu chuckles
If none of the GST goes to the Federal Govt why are they 12 billion in the black...and why is Costello constantly argueing with state finance ministers over how much of the GST pie they get?
The argument that "we pay GST on aviation related things, therefore we shouldnt have to pay fees to fly" is honestly the most ridiculous thing I have ever heard. Every industry in the country could argue that stupid point if they wanted to!
Grandpa Aerotart
Thread Starter
Why is it stupid to suggest that we already have user pays?
Our tax system on aviation related activity is remarkably similar to the US one...except more comprehensive.
In the US system they pay tax and expect something for their money...why are you suggesting we should not?
What is the fundamental purpose of tax?
Our tax system on aviation related activity is remarkably similar to the US one...except more comprehensive.
In the US system they pay tax and expect something for their money...why are you suggesting we should not?
What is the fundamental purpose of tax?
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GST isnt an industry specific tax, it is a broad base goods and services tax. Paying industry specific fees makes something user pays. ie. pilots paying casa processing fees to make casa self-sufficient.
The GST is essentially a state tax, how can you expect that the states will all come together and say "hey, the aviation industry paid $300million in GST this year, perhaps we should give them some back"? keep dreaming.
The GST is essentially a state tax, how can you expect that the states will all come together and say "hey, the aviation industry paid $300million in GST this year, perhaps we should give them some back"? keep dreaming.
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* to distribute the tax burden between individuals or classes of the population involved in taxable activities, such as business,
* to redistribute resources between individuals or classes in the population. Historically, the nobility were supported by taxes on the poor; modern social security systems are intended to support the poor, the disabled or the retired by taxes on those who are still working,
* to influence the macroeconomic performance of the economy (the government's strategy for doing this is called its fiscal policy)
* to modify patterns of consumption or employment within an economy, by making some classes of transaction more or less attractive.
(Wikipedia)
* to redistribute resources between individuals or classes in the population. Historically, the nobility were supported by taxes on the poor; modern social security systems are intended to support the poor, the disabled or the retired by taxes on those who are still working,
* to influence the macroeconomic performance of the economy (the government's strategy for doing this is called its fiscal policy)
* to modify patterns of consumption or employment within an economy, by making some classes of transaction more or less attractive.
(Wikipedia)
Grandpa Aerotart
Thread Starter
Fundamentally I would suggest we pay tax in a society so the Govt of the day can pay for 'stuff'.
Infrastructure comes to mind....the military etc.
My point is that we are being fed a line of ****e about being a burden on society and must pay our way when we always have paid our way with money left over to subsidise the Govt of the days other social adgenda.
The basic aviation infrastructure was paid for with fuel taxes, air nav fees and registration fees, and yes perhaps a % of funds from general taxation, back in the 50s, 60s, 70s and 80s.
Govts of the day then sold off those public assetts to private monopolies who then charge for the upkeep and modernisation of said infrastructure and a profit to shareholders.
The Govt of the day then introduces another tax called GST and everything in aviation gets 10% more expensive...no taxes, of note, come off....with that revenue stream being a low cost gold mine for the Govt.
You can spout all the rhetoric you like about it being a state tax the fact remains that it has been a HUGE windfall for the National Govt...which is why they are awash with money...it may have been touted as a replacement for some state taxes but it has also been a great little earner for the Federal Govt.
Aviation in all its forms contributes huge revenue to Govt from taxes on;
Fuel, oil, hangarage, insurance, labour, parts, landing fees, airways charges, tickets, aircraft hire or purchase, aircraft refurbishing and painting, GPS database renewals, Jepps/ Dapps purchase and annual subsciptions and on ad infinitum.
The Federal Govt is awash with OUR tax revenues to the tune of 11 or 12 BILLION dollars and a significant % has come from aviation taxation...why the **** should we be expected to pay more?
We are then expected to pay an extra $20-30 million per annum to run the Govt corporatised entity who's sole corporate aim seems to be cover it's arse and get industry to do it's job for them...and at it's own expense...while said Govt corporatised entity pays a profit dividend to the Govt.
Govts of both persausions have sold off the golden goose but still want the gold it produced.
I will ask again....how many times should a user have to pay?
The same applies to non aviation infrastructure...road transport fuel GST is 10% of almost 5000 megaliters/QTR...not to mention the % of each liter which is excise. The Govt then sells off road infrastructure to it's mates and they charge exhorbitant user fees while the Govt pockets the taxes.
And you wonder why people struggle to get ahead?
We are about the most heavily taxed population in the western world...our Govt long ago replaced any feeling of responsibility towards the population with an attitude of 'what can we rip out of them next'.
It's a disgrace and should have society up in arms.
Infrastructure comes to mind....the military etc.
My point is that we are being fed a line of ****e about being a burden on society and must pay our way when we always have paid our way with money left over to subsidise the Govt of the days other social adgenda.
The basic aviation infrastructure was paid for with fuel taxes, air nav fees and registration fees, and yes perhaps a % of funds from general taxation, back in the 50s, 60s, 70s and 80s.
Govts of the day then sold off those public assetts to private monopolies who then charge for the upkeep and modernisation of said infrastructure and a profit to shareholders.
The Govt of the day then introduces another tax called GST and everything in aviation gets 10% more expensive...no taxes, of note, come off....with that revenue stream being a low cost gold mine for the Govt.
You can spout all the rhetoric you like about it being a state tax the fact remains that it has been a HUGE windfall for the National Govt...which is why they are awash with money...it may have been touted as a replacement for some state taxes but it has also been a great little earner for the Federal Govt.
Aviation in all its forms contributes huge revenue to Govt from taxes on;
Fuel, oil, hangarage, insurance, labour, parts, landing fees, airways charges, tickets, aircraft hire or purchase, aircraft refurbishing and painting, GPS database renewals, Jepps/ Dapps purchase and annual subsciptions and on ad infinitum.
The Federal Govt is awash with OUR tax revenues to the tune of 11 or 12 BILLION dollars and a significant % has come from aviation taxation...why the **** should we be expected to pay more?
We are then expected to pay an extra $20-30 million per annum to run the Govt corporatised entity who's sole corporate aim seems to be cover it's arse and get industry to do it's job for them...and at it's own expense...while said Govt corporatised entity pays a profit dividend to the Govt.
Govts of both persausions have sold off the golden goose but still want the gold it produced.
I will ask again....how many times should a user have to pay?
The same applies to non aviation infrastructure...road transport fuel GST is 10% of almost 5000 megaliters/QTR...not to mention the % of each liter which is excise. The Govt then sells off road infrastructure to it's mates and they charge exhorbitant user fees while the Govt pockets the taxes.
And you wonder why people struggle to get ahead?
We are about the most heavily taxed population in the western world...our Govt long ago replaced any feeling of responsibility towards the population with an attitude of 'what can we rip out of them next'.
It's a disgrace and should have society up in arms.
Last edited by Chimbu chuckles; 16th Jun 2006 at 08:42.