By Terence Mills
Alan Joyce, CEO of Qantas and not the partner of Barnaby Joyce, gave us a 101 lesson in taxation and basic economics this morning.
I’m still trying to get my head around it but the gist of it is that if in your daily endeavours you can ensure that your expenditure exceeds your income, you will pay no tax: everybody understands that, Mr Joyce helpfully pointed out, and who needs schools and hospitals anyway? Even better, you can carry forward any losses into future years to minimise tax obligations for those years.
My partner – my real partner, that is, not the odd arrangements that the other Mr Joyce has – was listening closely to this and instantly pointed out the error of my ways. You do realize, she admonished, that we have been paying tax from our first dollar earned under the Pay as You Go tax system and, despite our family enterprise not making a surplus of income over expenditure, we are still pay tax, something that would alarm Mr Joyce (both of them probably).
So, as my life partner pointed out, we were paying 37 cents in the dollar tax on a losing family enterprise whereas, if we were to transition into a company our tax rate would go down and, even better than that, if we could deliver a loss on our family budget, we could avoid paying any tax at all and we could probably also claim depreciation on the ancient dog that shares our woes. But, I asked innocently, how do we achieve this nirvana that the Joyce’s and that nice Mr Morrison point to? You just keep spending until you are in deficit, silly she pointed out.
Mr Joyce – the one who is not bonking present or past staff members – as far as we know because it’s all personal innit? – did confuse both of us, despite the fact that we are now directors of this dodgy family venture, when he explained why his salary had increased massively while his employees were rewarded either with redundancy or zilch and they still had to lift their productivity. As Mr Joyce patiently explained to Fran Kelly, his remuneration rocketed to $25 million because the Qantas share price increased under his stewardship and the profitability of the company improved significantly but he emphasised not sufficiently to deliver a taxable income or any corporate income tax obligations: and that folks is why companies need a cut in corporate tax rates, he told us.
I don’t think I trust any of the Mr Joyce’s – but henceforth I will be known as managing director of Terry2 Inc.
