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It’s a Taxing Time for ”All But the Rich”

Never in the history of this nation have corporations, rich individuals, and the Government that supports them, been so openly brazen. The Australian Tax system is absolutely riddled with rorts for corporations and the privileged.

The Abbott Government has shown an insensitivity to the common good that goes beyond any thoughtful examination. Ideology and governance for their supporters has determined every decision they have made since coming to power.

But ordinary Australians, those who believe in a fair go, recently have, by virtue of a factual avalanche of evidence, come to realise the extent of the unfair pampering that this government is giving the top end of town and wealthy individuals.

Yet it’s the pensioners, the unemployed and welfare recipients who are being asked to tighten their belts in the public interest.

The recent Senate enquiry into the amount of tax that giant corporations like Apple, Google Transfield, Ikea and others pay in this country has opened the eyes of the average Australian who during an extended period of affluence have had them closed. Now with clear vision they can see the unfairness of it all. In fact there is more than just a perception of anger. There is palpable wrath.

Unfair was the word that so characterized Hockey’s first budget. A budget framed on the pretext that Labor had stuffed the economy and that a crisis of monumental proportion was about to hit. Repair had to take place, he would do it, and the poor pensioners and others would bare the brunt.

It’s a pity this compassion starved Government didn’t have the same fervor for cutting tax avoidance by the rich and privileged as it does for cutting welfare for the poor.

And all from a man who takes advantage of Negative Gearing for the privileged by paying off homes with his living away from home parliamentary expenses.

And while he and Abbott blamed Labor for the countries woes Joe was busy adding $45 billion to the country’s debt.

Now he is faced with presenting a second budget while at the same time major cost savings from his first still have not passed the senate. It would not surprise if he has the gall to carry over the savings.

The problem for Hockey is that ideology forbids the raising of new taxes. It is anathema to them. And of course further cuts to health, education and welfare would be unpalatable by the electorate.

This quote by Scott Morrison is indicative of the Governments disdain for the concept of fairness and governance for the common good.

‘’I know the business community wants to see the budget come back into balance ; well if that’s the case I would like to see them out there supporting the changes to family tax benefits, the changes to retirement savings that we put in place in the last budget’’

The word unfairness has struck a chord with the electorate. They are now asking questions. Why does the Treasurer and the Prime Minister lie so much about the economy?

Why are they so out of step with other ministers, ands indeed each other, when talking about the framework of the next budget?

Why are fabulously wealthy international corporations able to manipulate the tax system to the extent where they virtually pay no tax at all. And when they are asked to explain, mock, laugh and act deplorably toward their Senate inquisitors.

Their collective belligerence would have sickened the average PAYE Taxpayer and the many Australian based companies who do the right thing.

Why is it, according to the Australian Tax Office, that 75 Australians who made more than $1 million in 2011-12 paid zero tax?

Why is it that 900 companies so effectively claim deductions that they only pay a tax rate of 19.3%

Why is it that high income earners are given a tax discount on their superannuation which means they effectively pay 15% less tax. The unfairness of it is staggering, but understandable if you look at this government’s ideological approach to its decision-making processes since being elected.

It is now faced with explaining to taxpayers, in its budget, just why the less well-off should subsidise these unjustifiable and immoral tax breaks. In the next few years they will be costing as much as the pension.

There is a consensus that the current concessions to wealthier retirees are unsustainable and unfair. Unfair because the poor are being asked to pay for them.

Official government data shows that 24,000 of the richest superannuation holders each with more than $2 million in their accounts receive about $5.2 billion in tax-free income annually. And that’s not all, a further 51,700 retirees with $1 million to $2 million in their accounts receive $4.9 billion tax-free. It’s a legacy of the decision of the Howard–Costello government in 2006 to scrap taxes on retirement income from superannuation.

Why is it that the taxpayer is subsidising enormously profitable mining companies who send their profits overseas and pay little tax themselves?

Richard Dennis director of leftist think tank The Australia Institute states that over the past 6 years, state mining subsidies could have delivered:

Queensland: $9.5 billion, or 9 major hospitals

  • Western Australia: $6.2 billion or 52 new airport terminals
  • New South Wales: $872 million or 116 new schools
  • Northern Territory: $407 million or 799 doctors
  • South Australia: $316 million or 620 nurses
  • Victoria: $206 million or 377 police
  • Tasmania: $54 million or 116 teachers

The Federal Government throws in an additional $4 billion which includes:

$1,900 million in fuel subsidies

$550 million in reduced tax payments for the gas industry’s production of condensate

$368 million on tax write-offs for capital works

$330 million on deductions for exploration and prospecting

$312 million in accelerated depreciation write-offs.

Significantly, this is likely to be an underestimate as it does not include State subsidies (the Queensland Government alone is spending $1.4 billion each year in subsidies to the mining industry) or sweeteners like fringe benefits tax exemptions, benefits from publically-funded infrastructure projects.

Why is it that our taxation laws are so open to exploitation that you could drive the proverbial truck through them?

Why is it that Negative Gearing and Capital Gains Tax which so disenfranchises first home buyers isn’t subject to some review. Perhaps it’s because many politicians, including the Treasurer use it as an investment contrivance to minimise tax.

A recent ACOSS report said that over half of the benefit of “negative gearing” deductions goes to the top 10 per cent of personal taxpayers, earning more than $100,000 a year. Eliminating negative gearing would save 1billion and make it easier for new home buyers to enter the market.

There are any number of methods available to the privileged of society to avoid paying tax. John Howard was cynically nicknames ‘’honest John’’ during his tenure as treasurer for not dealing with the Bottom of the Harbour schemes of the 1980s.

Of course they are not confined to just a couple of schemes. They have a five-star menu. There’s sure to be something on the capitalistic menu from which to choose. Tax havens, Family Trusts. Profit shifting, Asset shifting.

Alas we live in a failed system. Capitalism does not allow for an equitable flow of economic resources. With this system a small privileged few are rich beyond conscience and almost all others are doomed to be poor at some level.

So why does all this tax dodging arise. Well on the one hand you might say that people or corporations are simply taking advantage of laws that enable them to do so. On the other hand you might also say that it is pure greed. Greed of the most lamentable kind

 

 

 

 

 

 


29 comments

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  1. David

    As a post script…I turned on TV this morning to get the latest live News and Current Affairs and the very first item is the physco Abbott introducing in his words ‘my very good friend’ the head of some pharmaceutical company the Oxford Scholar mumbled so as the name to be unrecognizable to me anyway. My point…there he is brazenly, to use Johns description pushing and pampering a huge Corporation that this government is giving to the top end of town and wealthy individuals with the unending support of majority of MSM.
    These cowering gutless wonders offer him as much airtime as he desires, I suspect because most are run by typical big money individuals.
    Where the blazes we are going to be when election 2016 comes round is horrifying to contemplate.

  2. jimhaz

    It looks to me that what they have decided to do is to use tax bracket creep to get around the “no new tax” rubbish.

    Again this hurts those on lower and middle incomes far, far more than those on higher incomes.

    Longer term they are gearing up for GST rate increases, another regressive tax, as bracket creep can only be pushed so far.

  3. Kaye Lee

    Introduce a new tax bracket for those with annual income over $300,000. 60c for every dollar over $300,000.

    Abbott has already said he won’t tackle superannuation tax concessions. Not only do the wealthy save 34% tax on their super contributions, since they eliminated the low income supplement, those between 18,200 and 37,000 only save 4% tax and those with income below $18,200 pay 15% more tax to put money in super – these are mostly women who are already disadvantaged with regards to superannuation. Freezing the increase in the superannuation guarantee is costing all workers, particularly the young. Their policies favour the wealthy at the expense of women and kids. They are favouring people who were never going to qualify for an aged pension at the expense of those who will need assistance. It makes no sense, as I keep saying about everything this lot do.

    And John, Hockey has already said he is including the savings measures that haven’t passed the senate in this budget. His fiscal documents aren’t worth reading other than as an exercise in how to recognise manipulation. It will be very interesting to see next year’s PEFO.

  4. Annie B

    An excellent article John … a summary of what ails this Government as far as tax is concerned. it is all correct – and something has to be done about it …

    What ? is the question. …

    @ David .. let’s hope some uproar occurs in the Liberal party, that ensures an election before next year. …. So that we might be able to repair some of the damage we managed – in Sept. 2013, before too much more time passes.

  5. tet02

    Excellent article as usual, sort of writing that makes you want to pull a ‘Guy Fawkes gunpowder plot’ on their collective arses. However just wanted to let you know the links wont open, ‘this page cant be displayed’.
    Maybe Abbutt and Honkey are onto you. Better check if there’s a couple of vans out front, heavily tinted windows, lotsa aerials sticking out everywhere, etc.
    Good luck.

  6. stephentardrew

    Great article John.

    As usual the mind boggles a the lies and deceptions of the rich and greedy. It’s funny how they act like I am just a normal bloke or woman yet underneath they are far from normal. They expect, and get, recognition as the members opposite in a harmonious bantering between left and right which is no more than a hypocritical reflection of feigned mate-ship and democratic tolerance.

    Well it so happens they will not tolerate the poor and marginalised so what have they done to deserve the tolerance of those who should be reminding them daily of their immoral and amoral behaviour.

    Democracy and tolerance become the worst enemy of those who are desperately in need of help while the parliamentary hail fellow well met is a fools game of concocted tolerance and blatant hypocrisy.

    These bastards suck you in and spit you out with a smile on their faces and a facade of concern and friendship. Those people are not my friends and never will be unless they change radically.

    The sort of mind games we have been conditioned to accept need to be challenged if we are to hold those who will harm others, without guilt or remorse, to account.

    There is something quite dystopian about this sort of dishonest unwarranted social tolerance.

    I am not saying to be intolerant what I am saying be vitally aware of the games and motives that condition us to act in ways detrimental to our moral standards.

  7. revolutionarycitizen

    Anyone here ever read the various tax laws and associated regulations and tax office rulings?

    Of-course you haven’t, and no-one else has either, and that being much a part of the problem.

    Google can spend far more looking to exploit the rules to its advantage than the tax office can spend trying to stop them.

    Here is a tip, re-write the laws, from the beginning.

    As for the rich not paying tax, complete bollocks, the rich pay more than anyone else, the problem we have is getting similar to what is crippling the US of A, far too many people dwelling in the lower tax brackets and being unable to move upward.

  8. John Lord

    Kaye I wasn’t aware that they intended carrying over the “non existent” savings into the next budget. It should be, in an accountancy sense, illegal.

  9. stephentardrew

    I was wondering about that Kaye and John. I thought it must be some sort of Hockyism meant to confuse so it will be interesting to see if he actually does it. You would imagine he is handing a giant bullet to the left if it were to occur. He can’t be that dumb. I think his actions of the last two years answers that for itself.

  10. David

    @revolutionarycitizen …” As for the rich not paying tax, complete bollocks, the rich pay more than anyone else, the problem we have is getting similar to what is crippling the US of A, far too many people dwelling in the lower tax brackets and being unable to move upward..” and why would that be pray tell? Its a no brainer ‘some’ of the rich pay more, but is it comparable to what we peasants pay?

  11. Annie B

    @ rev – citizen …

    Re : “Anyone here ever read the various tax laws and associated regulations and tax office rulings?

    Of-course you haven’t, and no-one else has either, and that being much a part of the problem.”

    ” No one else has either ” ???? ….. that is absolutely, not correct. .

    The lowliest of accountants, tax agents et al, would be appraised of what is what – and what is not – in tax laws. They HAVE to be.

    If an accredited tax consultant or a public / chartered accountant is not up to speed, they risk severe penalties if they make errors when submitting a tax return – small or large – for their clients. …. They therefore protect themselves. … and rightly so.

    Your argument partly falls in a heap, especially re the rich paying tax. …. They may well, ( with the help of the current Australian Tax laws ) … give a nominal amount towards what could be loosely called ‘tax’, but overall, there are many many loopholes they can wriggle their way through, by paying a goodly salary / stipend, to their top-notch advisers on financial matters. !!!

    It is indeed the fault of the tax laws that so many escapes can be made, from paying tax. … Your suggestion that a complete re-write of the tax laws, has merit. …. However, do you think that would happen in the foreseeable future ? … especially with this Government at the helm ???

  12. Annie B

    @ stephen t … ( ref. at 5:27 pm )

    As a collective profile on this rabid mob currently ‘leading’ Australia ( to potential ruin ) …. your comments are absolutely spot on …….

    ” ,,,, concocted tolerance and blatant hypocrisy.” – Absolutely. …

    They are indeed ‘immoral and amoral’ …

    Well said …

  13. Annie B

    @ David … Nooo – it is not comparable. ( ref. your comment at 7:37 pm ).

    And it never will be, while this monster mob is in residence.

  14. David

    Cheers Annie, my point precisely

  15. revolutionarycitizen

    Annie, if one compiled just the regulations in the tax laws at only the federal level it runs over 8,000 pages at last count, and that’s over 8,000 pages and growing, then there is state and local taxes, fees and charges and so on.

    So, no, no-one has ever read it all, and if your tax consultant tells you they have, they’re being dishonest, and not to mention, by the time you had actually finished reading all of the corporate and personal tax law and attached regulations and rulings they’d be out of date.

    Which is why there are so many loop-holes and escape clauses, because no-one has ever considered just re-writing it, they just keep adding to it.

    Then there are tax treaties, free trade agreements that may or may not alter taxation regimes, rulings on what constitutes business in Australia for the purposes of taxation tied to those agreements.

    We do need tax reform, and nothing to do with the rates as they’re charged, the whole system needs to be reconstructed in a way that costs everyone less to actually administer and genuinely raises revenue across the whole economy.

  16. Jexpat

    If “revolutionarycitizen” needs a lawyer for any particular reason, then let’s hope he finds one who’s read the entirety of the state and federal statutes, along with all of the case law and interpretations on point- going back to Blackstone.

    Otherwise, he’d not be getting the astute and learned representation that he’s paying for.

  17. Annie B

    @ revolutionary citizen …

    I don’t have a tax consultant. …. but I was married to an accountant / tax consultant for years.

    Pages would come in on a regular basis and be filed appropriately in the tomes that constitute the laws of tax. … I presume the same thing continues today. … and there’s now the Internet to search. There are always references – a form of complicated index from which correct applications can be found.

    For someone who is familiar on a daily / weekly basis of finding the correct tax application / formula for a specific reason, this referencing is relatively simple.

    It’s like the Bible. …. People claim to have read the Bible from cover to cover …. I doubt there is anyone ever lived or living who could recite the bible in its entirety, word for word – but many can quote passages – chapters and verse from it. …. Along with the Bible comes an Index, a Concordance, 90 pages of ‘ready references’, maps of biblical times, and a bible dictionary. … At least that’s what the bible I have, contains.

    ,,,,

    If you had read my reply correctly, you would see I did not claim that the entire taxation laws would be read and remembered. … tax consultants / accountants must be ‘appraised’ of what is or is not applicable ( by referencing or by knowledge ) … and they have to be ‘up to speed’ with their understanding of new regulations etc. …They must stay ahead of the game to do their job properly.

    So my comment stands …. people have indeed read and continue to read and study taxation laws. Just not all at once in one hit, committing the entire thing to memory – – – for gosh sakes !!

  18. John Passant

    Howard did in fact deal quickly with bottom of the harbour schemes. He made them illegal and retrospectivley taxed them. It earned him the undying hatred of many in the WA liberals.

  19. John Lord

    I wonder Kaye and Stephen if the new Family Welfare package might be conditional on the savings measures previously rejected by the Senate, being passed.

  20. Kaye Lee

    Abbott has already stressed that new spending must be funded by savings elsewhere and they have shown that blackmail is their preferred method of negotiation – Dutton’s co-payment linked to medical research fund, Morrison’s shameful episode of having children ring Ricky Muir begging for visas that offer them no future other than getting out of the hellhole they currently endure, Pyne’s threat to defund university research if deregulation doesn’t go ahead.

    Who will we have to sacrifice to pay for childcare? It isn’t going to be the wealthy superannuees. It isn’t going to be corporate tax dodgers. It isn’t going to be fossil fuel producers. It isn’t going to be investors taking advantage of negative gearing and capital gains concessions. Look out pensioners and the unemployed.

  21. Kaye Lee

    I think it was Morrison who justified the inclusion of unpassed legislation in the budget by saying “all things remain on the table until they are replaced by another saving measure”.

  22. stephentardrew

    I am sure that is the case John however it will still come to a grizzly end. Trying to bully the senate is no strategy. He just does not seem to understand mediation and negotiation. Ideological blindness is his modus operandi and you can see that every bone in his body screams out against compromise thus the continual urge to vilify. The answer to those who do not yield is to search for every devious underhanded lying strategy to get what he wants.

    Continual negative reinforcement is self-defeating. You only have to look at the polls (Morgan that is) to see it is a failed strategy.

    His body language and demeanor represent someone who thinks he has the right to rule and that those who disagree with him are worthless socialist scum. Intelligence requires us to be in control of our compulsive subconscious drives however Abbott is like an open book. Very emotionally immature.

    Julia on the other hand genuinely went into negotiations with a tough attitude yet the flexibility to compromise.

    I think it is called emotional intelligence.

    Hockey, Pine, Morrison’s body language, along with the rest of the front bench, is similarly arrogant and uncompromising. Turnbul, on the other hand, is a little more devious holding his true feelings in check.

    Day by day they demonstrate clearly they are emotionally and ethically challenged.

  23. Kaye Lee

    Oh FFS. Thanks for making me angry to start my day Stephen. How dare they waste our money like that. I am expecting Christopher Monckton to make a comeback next as an adviser. Even this guy’s own government wouldn’t fund him.

  24. Glenn

    I’ve spent (far too much) time wondering if our ‘leaders’ really believe the agenda they are pushing. Mr Pyne’s comment to Sarah Ferguson on 7:30 some time ago, when asked how the poor will be able to afford University fees, suggesting that teaching and nursing courses will remain cheap (I still can’t understand how the media let him get away with this so relatively unscathed) and Mr Hockey’s statement to the effect that poor people don’t drive very far, to me indicate that perhaps they do. Both these comments were made during un-scripted interviews.

    Can being born into privilege, raised in privilege, attending the most privileged universities etc. result in someone growing up never actually understanding what it means to not be wealthy? Perhaps they have never actually rubbed shoulders with a ‘poor’ person. I’ve never experienced being wealthy and can only sort of imagine what it might be like….

  25. stephentardrew

    I sympathies Kaye.

    I was absolutely dumbfounded when I read it. Thought it must be a joke. Some kind of joke.

  26. jimhaz

    [Introduce a new tax bracket for those with annual income over $300,000. 60c for every dollar over $300,000]

    Yep. And bring back death taxes, so the born to rule types have to first earn the plums they stick in their mouths.
    Also tax any moneys transferred to tax haven countries at the same rate – these havens have to be broken.

  27. David

    Good thinking Jim but alas Abbott and his economic imposters Hockey and Cormann don’t have the guts to do it. The protection of the hand that feeds them is stronger than the needs of the nation as a whole. The precious few will remain the only benefactors of this Govt.

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