It is wrong to blame Tony Abbott for the state of the nation.
After all, he is hardly a charismatic leader who inspires allegiance. He is far from an accomplished orator who convinces us to follow him. He doesn’t even know where he is going let alone showing us the direction. So how did we end up with someone like him ‘running’ our country?
Like an uncomfortable rash or a festering sore, Tony Abbott is a symptom of the malaise afflicting our nation. Greed is one of the main causes of this disease. Tony was installed by people who expect him to protect their financial interests.
Those that have the most, work very hard at contributing the least. Fifty-five of Australia’s highest earners paid no income tax at all during 2012-13, not even the Medicare levy. Between them they reported earning $129.5 million, an average of $2.3 million. By the time their accountants had finished with them they reported losing a combined $12.8 million. 40 of them claimed an extraordinary $42.5 million for the “cost of managing tax affairs” which is, itself, a deduction.
Nine global drug companies booked $8 billion in Australian revenue last year but paid just $85 million in tax – just over 1%. For the third year on the trot, Shell service stations generated billions of dollars in revenue but not a cent in company tax. In 2002 Chevron Australia set up a subsidiary in the US which borrowed $2.5 billion at 1.2 per cent interest but on-loaned the funds to its parent in Australia at 9 per cent. The profit from this arrangement was not taxed in either country. They are currently facing several audits focusing on redirection of funds to Singapore and Bermuda. Google, Apple, the examples are endless.
It is interesting to note that, four years ago, 13 of the country’s biggest companies were in Q1, the ATO’s highest-risk category for tax avoidance, but now only News Corp Australia remains, reflecting what is described as a secretive, aggressive approach to the ATO.
News Corp has had a string of tax challenges before the courts. In the most recent case, News Corp’s accounts reveal that its 2013-14 tax refund was even larger than reported, at $923 million.
The Tax Office had challenged $2 billion in tax deductions which News Australia claimed, based on paying out a foreign currency loan to another News subsidiary in the last days of the 2001 and 2002 tax years.
In July 2013 the Court of Appeal ordered repayment of base tax of $623.8 million plus $299.5 million of interest payments.
Income tax of $85 million was payable on the interest earnings, if there were no tax losses to claim against, taking the net gain to $838.8 million.
News also won a 2010 appeal when the Tax Office disallowed $1.5 billion in capital losses it created in a round-robin series of exchanges when it re-incorporated in the US in 2005.
News Corp has also been on the losing side in tax cases. In 2010 it settled a tax avoidance case for $77 million after the Murdoch’s listed the family company Kayarem on the Bermuda stock exchange days before it was sold to News in 2005, to sidestep $52 million in Australian stamp duty.
In 1995 the Murdoch company Cruden Investments was held to be liable for South Australian stamp duty in a 1987 deal when the Murdochs sold $670 million of News shares to Queensland Press, which claimed the shares were registered in a computer in the Northern Territory.
After investigation at a Senate inquiry in April this year, a spokesman for Newscorp responded to media inquiries saying “News Corp Australia paid $417 million in corporate taxes over the last five years and $900 million in goods and services, fringe benefits and payroll taxes over this same period. We have answered extensive questions on our tax matters at the Senate Inquiry [into corporate tax avoidance] in an open and transparent way and have nothing further to add.”
The obvious flaw in that statement is that the GST they forward on to the government was paid by their customers – they were purely the collection agent. Claiming that as tax paid by the company is deliberately disingenuous.
As Joe wrings his hands making noises about bracket creep and income tax cuts, he is also walking away from making big business pay a fair contribution.
Why reduce company tax when it is obvious that most companies do not pay anywhere near the 30% they should? Why unwind thin capitalisation laws? Why refuse to disclose the tax being paid by big companies? Why slash staff at the ATO?
He has abolished the mining tax for the miners, the carbon tax for the polluters, the bank deposit tax for the bankers, the requirement to justify business usage on cars for the salary packaging and car lease companies, doing away with tens of billions in revenue.
He refuses, against all advice, to examine tax concessions offered to the wealthy, but wants us to have a “mature, sensible conversation about increasing the GST.”
As far as bracket creep goes, it would be easily fixed by adjusting the second top bracket to kick in at $100,000 instead of $80,000. Possibly increase the bracket below also to $40,000 from the current $37,000. Problem solved. Though I think if you asked working Australians would they pay a couple of extra dollars a week in tax if the big companies paid the billions they owe, they would be prepared to put up with a bit of bracket creep.
Greed also rears its ugly head in our dealings as a global citizen.
Many Australians, including politicians, resent money spent on foreign aid. Charity begins at home they say. Yet these are often the same people who want the boats stopped, the same people who want us to bomb Iraq and Syria, the same people who wanted the carbon tax gone.
The benefits of lifting people out of poverty, empowering women, and stopping human rights abuses around the world are manifold. We open up new export markets. We curb population growth. We stop the human tide of refugees fleeing war and oppression. We save money on health.
Refusing to take meaningful action on climate change because of the immediate cost is unbelievably selfish. This is truly the debt we will leave to our children.
With every action, this government reaffirms its lack of conscience. The language of ‘lifters and leaners’ shows their disregard for all but the wealthy. Just go and get a high paying job, preferably with entitlements that mean you never have to pay for anything yourself, and you’ll be able to afford lots of houses.
I hear the job of Treasurer is up for grabs – no expertise required.
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