Continued from Part 2.
Why an Albanese Government Should be Elected
My Morrison Must Go article set out a number of reasons why an Albanese Government should be elected, but let us drill down a little further regarding the policies which the ALP have announced or have recorded on their website.
This is not change for the sake of change. I repeat what I said in my AIMN article of 28 April 2022 about the reasons why change is now necessary, in the interests of our democracy, and even in the compromised interests of our Fourth Estate. Indeed, when it comes to media bias in favour of the Liberal Party, I have previously raised these facts of concern. This week we saw that bias on full display as an impertinent reporter from Channel 9 tried to make a hero of himself with a gotcha question asked of Albanese, when all he did was interrupt the flow of policy discussion at an energy forum.
Notwithstanding the ongoing imbecilic reporting by Channels 7, 9, and the Murdochracy (and even some reporters at the ABC), there are very important policy objectives which the ALP will introduce to make Australia a better nation again, brought together and not the divided horde which Morrison has deliberately planned for it to be (take the intrusion by Morrison into the NSW Branch of the Liberal Party to insert as a candidate for Warringah, Katherine Deves).
In Part 1 of these articles I provided a link to the ALP’s 2022 policy agenda, and I ask that you take time to read those items of policy (if you haven’t done so as yet), before reading the matters I raise here-on-in.
So, as I said earlier in reference to the theatrical work of art, “away we go.”
Cost of Living
Nowhere have young families felt the cost of living more than in the failure of the Morrison Government to implement a policy regarding the costs of childcare. Indeed, for many families this cost makes it uneconomic for both parents to work when the child care fees almost consume one of the incomes being brought in by a parent. An ALP government led by Anthony Albanese will:
- Lift the maximum child care subsidy rate to 90 per cent for families for the first child in care;
- Increase child care subsidy rates for every family with one child in care earning less than $530,000 in household income;
- Keep higher child care subsidy rates for the second and additional children in care;
- Extend the increased subsidy to outside school hours care.
96 per cent of Australian families will be better off under the ALP’s child care reforms. Which in real terms amounts to 1.26 million families. The ALP will also get the ACCC to design a price regulation mechanism to drive out of pocket costs down for good, and the Productivity Commission will conduct a comprehensive review of the sector with the aim of implementing a universal 90 per cent subsidy for all families.
The ALP will also develop and implement a whole of government Early Years Strategy to create a new integrated approach to the early years and develop of program of action. The ALP will invest approximately $5.4 billion to make child care cheaper, starting from July 2023.
Economic Plan and Budget Strategy
I have already in the matters discussed above regarding the Morrison Government’s mismanagement of the economy highlighted how unnecessary it has been for Australians to be subjected to the inflationary pressure (remember we did not go into recession under the helm of the Rudd and Gillard Governments).
Undoubtedly this is the worst nightmare of poor economic performance being displayed by the Morrison Government as it is an out of control truck of pork barrelling lacking criteria for billions of dollars of our money being handed over to undeserving recipients which would not meet the proper criteria for such large amounts of money being distributed to them. Indeed, it is almost like watching pigs in mud as the Morrison Government displays its focus on channelling funds into seats it needs to retain to be returned to government, and with that intention the beneficial outcome for the public has been negligible, such as building a carpark where there is no train station.
An ALP government’s Budget Strategy is tailored to Australia’s economic conditions and is designed to:
- Make room for smart, targeted investments that expand the capacity of the economy, so that it can grow stronger, broader and more sustainably.
- Improve the quality of spending to generate a budget position that will allow us to reduce debt as a share of the economy over time, while delivering real outcomes for Australians in essential areas like Medicare, aged care and child care.
The ALP will do this by:
- Prioritising smart, responsible and targeted investments that deliver economic value.
- Dealing with the Liberals’ wasteful spending including by trimming spending on contractors, consultants and labour hire in the public service.
- Conducting a waste and rorts audit.
- Closing down loopholes which allow multinationals to avoid their tax obligations to Australians.
An Albanese Government will not impose new taxes on Australians, but it will go after the multinational companies trading here in Australia who have not paid tax under the Morrison Government. The ALP will tackle multinational tax avoidance in four ways:
- Supporting the OECD’s Two-Pillar Solution for a global 15 per cent minimum tax, and ensuring some of the profits of the largest multinationals – particularly digital firms – are taxed where the products or services are sold.
- Limiting debt-related deductions by multinationals at 30 per cent of profits, consistent with the OECD’s recommended approach, while maintaining the arm’s length test and the worldwide gearing ratio.
- Limiting the ability for multinationals to abuse Australia’s tax treaties when holding intellectual property in tax havens.
- Introducing transparency measures including reporting requirements on tax information, beneficial ownership, tax haven exposure and in relation to government tenders.
An Albanese Government will support a global 15 per cent minimum tax and ensuring some of the profits of the largest multinationals are taxed where the products or services are sold as it will implement the OECD’s global Two Pillar Solution, which was designed to address challenges created by the digitisation of our economies. The Two-Pillar solution includes:
- a Global Minimum Tax proposal to ensure multinationals pay an effective tax rate of at least 15 per cent on the profits they make around the world; and
- a fairer distribution of profits by multinationals, in particular digital firms.
Countries around the world are committing to implementing these measures, which will only affect the largest companies in the world. Australia should also take action domestically to ensure we do not lose out when other jurisdictions are implementing these arrangements. The ALP would join other OECD members in implementing the arrangements in line with global action. The OECD is expecting these arrangements to begin in 2023. The ALP will adopt the OECD’s recommended approach for limiting the deductions multinational firms can claim for interest payments.
Creating artificial debts and repayment arrangements within related entities is one of the main strategies multinational groups use to minimise their profits in higher tax countries while maximising income in low tax countries. An Albanese Government will adapt Australia’s rules on deducting interest to fit with the OECD’s recommended approach to limit net interest expenses to 30 per cent of profits (EBITDA – earnings before interest, taxes, depreciation, and amortisation) from 1 July 2023.
An Albanese Government will ensure we are targeting tax minimisation and firms may be able to make further deductions if they can substantiate those under the arm’s length test or worldwide gearing ratio test.
Many countries around the world have adopted similar approaches including the US, UK, Germany, Japan, Sweden, Norway, Spain and many other European countries.
A major cost of living issue in Australia is the price of housing.
Under the Morrison Government we have witnessed market politics at its worst in relation to the cost of housing. To put it in simple terms, the Morrison Government have been economically negligent in allowing the cost of housing to skyrocket.
An Albanese Labor Government will help more people get into the housing market sooner by:
- Cutting the cost of buying a home by up to 40 per cent. This will mean a smaller deposit, a smaller mortgage and smaller mortgage repayments. Help to Buy will be open to 10,000 Australians each financial year.
- Implementing a system whereby eligible home buyers will need a minimum deposit of 2 per cent, with an equity contribution from the Federal Government of up to a maximum of 40 per cent of the purchase price of a new home and up to a maximum of 30 per cent of the purchase price for an existing home. This would mean that for a homebuyer in Sydney, buying at the maximum price cap of $950,000 with 40 per cent equity, monthly mortgage repayments would be over $1,600 cheaper.
- Implementing a system for a homebuyer in regional Queensland, buying at the maximum price cap of $500,000 with 40 per cent equity, monthly mortgage repayments would be over $850 cheaper.
Similar schemes are already successfully operating in several states including Western Australia and Victoria. Homebuyers will not be required to pay rent on the stake of the home held by the Federal Government. Help to Buy will cost around $329 million over the forward estimates. Real Estate groups support the scheme.
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