Actions speak louder than words
Joe Hockey has been making noise about tax avoidance.
“They’re stealing from us and our community,” he told the Nine Network on Friday, labelling tax cheats as “thieves.”
Tony Abbott told us we should judge the Coalition on their actions rather than their words – sound advice considering their words bear no resemblance to what they actually do – so it would be timely to consider what they have done to address this growing problem.
While other countries are closing their tax minimisation loopholes, the Abbott government has spent the past year opening them up.
One of Treasurer Joe Hockey’s first acts in office was to roll back Labor’s measures to tackle profit shifting and improving tax transparency – effectively handing back $1.1 billion to big global firms.
As it pushes for a G20 summit agreement this weekend to crack down on corporate tax evasion, the Abbott government has set a timetable for action that is about one year behind the biggest European economies including Britain, France and Germany.
The “early adopters” in the global program will begin exchanging information in September 2017, however, the exchange of information with Australian authorities will not take place until September 2018.
In March this year, the ATO announced an amnesty for offshore tax cheats. For those who come forward before the end of the calendar year, there is a guarantee of no prosecution and only four years of offshore income is assessed with a maximum shortfall penalty of 10 per cent.
“For lots of people, their forebearers came from war-torn Europe”, tax lawyer Mark Leibler told the ABC’s AM program. “They wanted to keep nest eggs overseas, not primarily in order to avoid or evade tax, but just as a measure of security.”
So these people and their families have been avoiding tax since they arrived here after the war but let’s not worry about that.
Around $150 million worth of assets is the most declared by one person so far. The money has come from 40 countries including Switzerland, the UK, Hong Kong, Israel and Singapore.
Australian Tax Office deputy commissioner, Greg Williams, said new migrants with limited knowledge of Australia’s tax system and people that have deliberately sent money offshore are also among those coming forward.
“You’ve got that whole gamut from old money, new money, recent migrants and people sending the money offshore,” he said.
These ‘people’ include our own government.
Australia’s Future Fund has revealed it has invested more than $20 billion through offshore tax shelters, including the Cayman Islands, warning of lower returns if it does not minimise its tax bill.
The $77bn fund for federal public-servant pensions has revealed that 14.4 per cent of its assets, worth about $11bn, are invested in subsidiaries based in the Cayman Islands (a tax haven in the Caribbean) and a further 1.3 per cent is in its subsidiaries in the British Virgin Islands and Jersey.
On top of this, the fund has tipped 12.6 per cent of assets, about $9.6bn, into private market vehicles based in these tax shelters and a small fraction is invested in a vehicle based in Luxembourg.
Answers to a Senate inquiry revealed that, at June 30, the fund held stakes in 15 tobacco manufacturers including a $55.4 million stake in British American Tobacco in Britain, $44.5m in Lorillard and a $44.9m investment in Philip Morris in the US.
Individuals within the government also embrace the benefits of tax “minimisation”.
In July, it was disclosed that Malcolm Turnbull, Australia’s second-richest parliamentarian, has invested in a ”vulture fund” based in the tax haven Cayman Islands.
Mr Turnbull, who has divested himself of shares and switched his investments to managed funds and hedge funds since being elected, updated the register of members’ interests on June 18.
The IPA, not surprisingly, is against any moves to tighten up the laws.
“Inspired by the sensationalist headlines, the emerging policy agenda for a clamp down on tax avoidance should be seen for what it truly is: a ploy by indebted countries, with overgrown public sectors, to hoover up more cash from productive people and enterprises, stifling tax competition in the process.”
You have to give them credit for never letting morality or ethics interfere. They were no doubt impressed when their much-loved patron, Rupert Murdoch, single-handedly blew an almost billion dollar hole in our budget when the ATO chose not to appeal a court ruling condoning Murdoch’s tax avoidance practices.
In a 1989 meeting, four News Corp Australia executives exchanged cheques and share transfers between local and overseas subsidiaries that moved through several currencies.
They were paper transactions; no funds actually moved. In 2000 and 2001 the loans were unwound. With the Australian dollar riding high, News Corp’s Australian subsidiaries recorded a $2 billion loss, while other subsidiaries in tax havens recorded a $2 billion gain.
By last July that paper “loss”, booked against News Corp’s Australian newspaper operations, had become an $882 million cash payout.
Under a legal arrangement when the company was spun off last June, News was forced to pass all of the tax payout to Mr Murdoch’s 21st Century Fox.
News Corp said it had retained $A81 million because it faced income tax charges on the interest payments by the Tax Office. However it seems unlikely to actually pay these funds: News Corp Australia carried another $1.5 billion in tax deductions from a separate paper shuffle that it made when News reincorporated in the US.
The Australian Taxation Office says its $882 million loss to Rupert Murdoch’s News Corporation may just be the tip of the iceberg.
Tax Commissioner Chris Jordan and deputy Neil Olesen told a parliamentary inquiry the Tax Office has recently lost even more valuable cases against individual taxpayers.
“There are others bigger than this one,” Mr Olesen told a parliamentary hearing in March. “There were significant amounts at stake that we were also unsuccessful with through the courts.”
In a current case, Australian tax authorities allege multinational oil giant Chevron used a series of loans and related party payments worth billions of dollars to slash its tax bill by up to $258 million. The claim is now being heard before the Federal Court of NSW.
Despite growing pressure to crack down on multinationals reaping massive profits in Australia each year and paying little tax, the ATO has been scaling back its technical ability to force the “transnationals” to pay up.
After cuts of $189 million in the May budget, the ATO announced that they had to cut staff by 2,100 people by the end of October.
Community and Public Sector Union (CPSU) deputy national president Alistair Waters said “The tax office has provided evidence to the Senate that for every $1 spent on resources by the tax office, that collects $6 in tax revenue. Obviously if you are pulling resources out of the tax office that makes it easier for people who might want to avoid paying their tax.”
Public servants with hundreds of years of combined technical know-how have left the ATO’s “Internationals’ Group” in recent years, with the process accelerated by the present massive cuts to the agency.
Private advisors hired by “transnationals” to minimise their tax payments know too much about internal workings of the ATO and are using their insider knowledge to profit their clients.
Case deadlines of 90 days imposed on audit teams by ATO bosses eager to increase the number of cases covered have allowed transnationals to simply “wait out” the Taxation Office or to have low-ball settlements accepted.
Swedish furniture giant IKEA paid just $7.7 million in tax in Australia in 2013-2014, despite banking an operating profit of $92 million for its Australian activities that year.
Even the government’s domestic decisions belie their stated willingness to crack down on tax rorting.
Repealing the legislation regarding novated car leases and FBT cost us $1.8 billion in revenue and the only people to benefit are those who fraudulently claim business usage of their car, and the salary-packaging industry that has sprung up to service this perk.
But what can you expect from a Prime Minister who keeps caucus waiting for an hour – his excuse being “he had to schedule an early morning visit to a cancer research centre in Melbourne on Tuesday so that he could justify billing taxpayers to be in the city for a “private function” the night before”.
Or a Treasurer who defended “his practice of claiming a $270-a-night taxpayer-funded travelling allowance to stay in a Canberra house majority-owned by his wife” as did the Communications Minister who “rented a house from his wife Lucy when in Canberra.”
In Canberra, MPs are not required to show a receipt to prove they stayed in a hotel because the blanket $270 rate applies whether you stay in a hotel or a house owned by yourself or another person.
Because of the rules, many MPs purchase property in Canberra to provide a base during parliamentary sittings and use their travel allowance to pay off their mortgage.
We also have our Prime Minister, Attorney-General, Foreign Minister and Agriculture Minister defending their practice to claim travel and accommodation costs to attend weddings whilst grudgingly refunding the money only after it was exposed in the press. Attendance at sporting events apparently still constitutes official business.
Tony Abbott had promised to lead an honest government that would respect taxpayers’ money and end the age of entitlement.
Joe Hockey has “vowed to give the Tax Office whatever laws it needs” and is “determined to use all available resources to close tax loopholes.”
Sorry boys – your actions make me doubt your sincerity.
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How does Hockey propose tightening tax loop holes with cutting red tape – cognitive dissonance, much?
Why do our leaders appear to be the progeny of the Red Queen from “Alice in Wonderland”? Given their flexibility on holding two contradictory ideas simultaneously, yet completely rigid on anything the least bit logical and sciencey?
“Business groups are said to be anxious over the scope of the G20 tax agenda while banks have concerns about the cost of compliance with the new common reporting standard, because it could require them to install new computer systems.”
Perhaps we will have DFA – which could mean Direct Financial Action where we pay banks to comply with regulations – or it could mean Do F*ck All which is, I suspect, far more likely.
It is sick making. Not even lip service, just more lies.
The LNP mates are big business who don’t pay taxes, anything that they put into place will be the weakest possible response to the crisis of government revenue, basically because they believe in small government and let the private sector ripp!!!
Hey… here’s a brilliant idea! Let’s get all the rich and powerful business leaders together and get them to formulate tax policy for the government!!! What could possibly go wrong?
A London-based billionaire appointed by Joe Hockey to advise on Australia’s financial regulations runs companies that have been forced to repay tens of millions of dollars after exploiting tax loopholes.
His financial empire, elements of which have also utilised tax havens such as the Channel Islands and the Cayman Islands, reportedly generated $154 million in 2011, but paid an apparently modest $55,000 in corporation tax.
In May, Britain’s Guardian reported that Sir Michael had just donated $2.7 million to the British Conservative Party, making it the biggest single donation in six years and the largest single donor to any political party in that country currently.
He is also a supporter of the provocatively named Global Warming Policy Foundation whose mission is to challenge claims of anthropogenic climate change. Its website refers to the UN’s Intergovernmental Panel on Climate Change as ”the climatocracy”.
Read more: http://www.smh.com.au/federal-politics/political-news/lib-adviser-repays-43m-tax-20140523-38ufq.html#ixzz3J6mqVwt9
he is not game, will upset his rich mates, he will continue getting it from the aged, sick and unemployed.
“…the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world…”
Aided by a lazy, clueless and/or corrupt MSM, this advice still works wonders…
From today in the MSM…I sometimes wonder if my computer is bugged 😉
“More than 2200 people have now left the agency under budget cuts required by the government by 2017, including more than 500 members of its audit team. A further 2500 will be required to leave over the next three years to meet a target of 4700.
The cuts come at a time when tax authorities around the world, including at the ATO, are poring over one of the biggest tax leaks in history.
The so-called “Lux leaks”, published by the International Consortium of Investigative Journalists last week, exposed how hundreds of Australian and multinational companies used Luxembourg to shift profits and avoid tax.
The 28,000 pages of documents outlined secret tax deals, many struck by accounting firm PricewaterhouseCoopers on behalf of companies such as AMP, Macquarie Group, Lend Lease and the government’s Future Fund.”
Read more: http://www.smh.com.au/business/tax-office-reels-after-staff-losses-20141114-11mh50.html#ixzz3J7Suz0cG
The stories are there…they just don’t get airplay. For some reason, Tony’s lies are proving stubborn to dislodge. Do your best Textor, Credlin and Murdoch…a growing number of people are making it harder to sell a lemon, not to mention the lemon himself.
It seems everyone is reacting the same way to Hockey’s crap…..
“Few government agencies have been hit as hard by budget cuts as those tasked with keeping corporate Australia in line.
The government is pressing ahead with cuts that experts warn will severely impact the regulators’ ability to do their jobs, despite recent scandals involving financial advice – such as at the Commonwealth Bank – and allegations of large-scale tax dodging by multinationals.
Thousands of jobs will go from ASIC and the Australian Tax Office over the next four years as the government slashes more than $260 million from the two agencies.”
Could it be that they have finally tipped the bs metre irrevocably to “pants on fire”?
Character misrepresentation amounts to identity theft, and together with profiteering of the misfortunate, is prohibited by law, in Australia!
Thought I’d do something I haven’t bothered to do for a while; checked out the Murdochcracy. What ARE they saying about G20?
Well on Sky News Tones isn’t getting everything his own way, if you can get past Paul Kelly’s analysis, you will be rewarded by the sight and sound of Bill getting all ‘zingy’ with his, er zingers at the Abbott position on pretty much everything.
I’m a little confused tony. Whose character is being misrepresented?
What does (anyone from) Labor have to say regarding big-corpa tax dodge and slashing of ATO staff?
We know we cannot trust the MSM, but surely the Opposition would have much to point out to the government?
I suppose Labor is still just giving the LNP enough rope…. right?
diannaart …… Listened to Bill Shorten speaking ( the link provided by you ) ……. and thought he was right on the button. He spoke so very well – and did not resort to smart-ass comments, to get a very strong message across.
HE spoke like a statesman – he didn’t falter and he spoke with authority, class and a determination to see a better Australia.
There was absolutely no spin ……. pity we don’t have a leader that can articulate in such a way.
While Abbott is at the helm – it will never happen.
And it’s a pity more people will not see this interview.
I thought it interesting that such an interview took place on Sky News – there is hope, Annie. Although I am still disappointed with Bill and Labor’s failure to act upon so many of Abbott’s transgressions – hence my comment on Shorten’s ‘zingers’.
Compared to the reprehensible assault on Julia Gillard’s supposed lie on ‘carbon tax’ with the plethora of lies by Abbott – the cutting of funding to the ABC and SBS by no means least, but surely the most blatant.
Where is the fully justifiable outrage?
Many different views about Bill Shorten. …….. ‘ the quiet one ‘. Old saying ” be wary of the quiet one’s ” !! ( or words to the effect ), and with many good reasons.
Shorten ‘ doesn’t do outrage ‘ ……. and neither did Julia Gillard. …. She raised her voice a few times, but never spat, yelled and blathered her responses, unlike her enraged Opposition – and they were enraged and outraged at absolutely everything back then. …. God help any mosquito that entered the Parliament precinct – – – – they’d have attacked it with an MK 17.
As leopards don’t usually change their spots – what we saw when the Liar-barils were in Opposition, was surely a good guide as to what we could expect to see if ( when ) they became Government. And it has turned out that way, with undiplomatic ( and unprecedented ) shots at other national leaders in the world …. aggression, and vicious policy making – not to mention what else they propose for Australia.
Bill Shorten was just ONE of quite a few members of the Labor Party who approached Julia Gillard with concerns about projected State election outcomes and they ( about 6 of them ) urged her to challenge Rudd – in the first instance. At the end of the day, it was Bill Shorten ( and others ) who again switched sides and while he applauded Julia Gillard for her outstanding term ( video ) – and the achievements she accomplished ….. also thought that a change back to Rudd would ensure Labor would lead the country for further terms. Bill Shorten – the powerbroker ( and he is, always was, always will be ) …. was wrong.
The people didn’t agree – and went to the opposite – away from Rudd and into the Mudd.
Bill Shorten also has not changed his spots. He is a very hard game player in the filthy world of politics. ….. I don’t know if that makes him acceptable or not – but whoever leads Labor, also has to play the dirty game that it is.
We have recently seen the dirtiest game of all in politics – played out by the incumbent Government – with their vile policies based on lies, their inhumanity, their fascist resolves, and their undying loyalty to the wealthy ……. we all know what they have done / are doing.
Just 4 days ago – Alan Jones took another swipe at the Abbott Government …… http://thenewdaily.com.au/news/2014/11/18/alan-jones-tony-abbott-attack/ —- I am fairly sure this is a new attack – he had a go at him about 10 days ago as well.
The British Tories ( Margaret Thatcher – Abbott’s ‘idol’ – was a Tory ) …. have also had a real go at him in the British Press :
http://thenewdaily.com.au/news/2014/11/21/uk-politicians-slam-abbotts-eccentric-climate-stance/ ……….. yesterday.
So – why should Bill Shorten start thumping desks, yelling invective and insult – and showing outrage – when the press ( increasingly ) are doing it for him.
He will sit ‘quietly’ and think, and plan with his Party …… and will act ( I believe ) when the time is right. It’s getting the timing right that will be the tricky bit – even for Shorten the powerbroker.
I would think Abbott is becoming more and more uncomfortable as the days go by ….. and must be sweating on the outcome of the Victorian election. He is not too popular with his ‘friend’ Napthine either.
Sure will be interesting.
p.s. – sorry this ended up such a long post.
Annie, Julia got cheered as she entered Gough Whitlams goodbye service and got a standing ovation as she entered. This was in stark contrast Tony was booed, and looked very uncomfortable throughout whole proceedings, he has been told in no uncertain terms by Napthine that he is not good for business and the Liarbils campaign here in Vic,
Julia is still more popular than the Rabbid Rabbit, this must be chewing at his ego so bad, he cannot get that same adoration as her and never will, because he is a fool always has been and always will be, Tony has always been a nobody pretending to be a somebody his whole life and will continue to be for the rest of it’s life..
So agree with you DanDark. …… It may have been my imagination ( I giggled ) …. but I think Napthine shouldered or pushed Abbott out of the range of the TV camera last night ( ? ) night before …… when he leered into the camera to Napthine’s left. …. He disappeared VERY quickly. A fleeting glimpse of that infamous ‘leering’ grin – – bad enough at any time.
I seriously wonder if Julia will come back into politics ? ……. Or if she would be permitted to ( not sure about the rules and regs. on that ).
As I said in another post – the Abbott would be squirming …. a great deal these days – over many many issues.
I take heart from your thoughtful reply, Annie.
My wish is for Labor and the Greens to work together – their ideals, as well as most of their policies dovetail and would be a force which really would have the LNP sleepless.
Why do you suppose Labor is so determined to copy the LNP on refugees and still so supportive of continuing to open new mines?
It is not enough to try to appease old technology while claiming to support sustainable technology.
Labor is going to have to draw a line in the sand and declare what and for whom it stands, or continue to be buried by the reprehensible LNP.
Bill Shorten is Labor leader pro tem. Even with the new leadership ballot system he will not lead Labor to the next election, imnsho. 12 months out he will resign. There will be no coup. Who will replace him is an open question, though Burke is looking the goods for me at present. Plibersek is also a candidate, despite the question mark over another female leader, given what happened to the last one. However Plibersek and Gillard are rather different people with different histories. Plibersek is a far more “conventional” candidate, and whilst I personally don’t think it ought matter it clearly does for a lot of people. She also has a very solid political CV. Whether she has what it takes to be a parliamentary leader – with all that goes with that task – remains a little uncertain for me.
But I’m very confident that Shorten is just a seat warmer and I think he knows it and his performance reflects that knowledge.
Erotic Moustache ….. ….
I take your point. Shorten would know his position, if it is indeed seat warmer …. and would be playing that role exactly as he should ( I would think ).
There is in fact the possibility of a double dissolution at some stage. If legislation does not get passed through the Senate ( and they are in a bit of uproar at present !! – perhaps deliberately so ) ……. and it ‘sits on the table’ for 3 months, with nothing agreed to – then Parliament is in fact ineffective and a DD must be called.
I posted this link elsewhere from the Australian Electoral Commission …… and it surprised me somewhat :
Now ……… THAT … would be interesting !!! – – – for both major parties 😉
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