Joe Hockey said “We are going to give economic reform a red hot go in 2015.”
He went on to say “The taxation discussion with the Australian people next year will not be about increasing the revenue take for the Commonwealth, it needs to be how we can have a taxation system that makes us a more efficient and productive nation, and is fairer for all Australians.”
If we want to make revenue collection fairer, and we want to cut wasteful spending, then I have a few suggestions of where to start.
Tackling corporate tax avoidance is an urgent priority; Australia does not have a spending problem, it has a revenue problem and it must be fixed.
Up to $80 billion was foregone by the taxman between 2004 and 2013.
Superannuation tax concessions
Superannuation tax concessions will cost the budget around $35 billion in 2013-14 projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.
Capital Gains Tax and Negative gearing
Generous government tax breaks for property investors see them benefit from a 50% discount on capital gains tax (at a cost to the government’s budget of $4.4 billion per year) and negative gearing (costing $2.4 billion a year).
Fossil fuel subsidies
The Government will spend almost $14 billion in the next four years on fossil fuel subsidies to the big mining corporations.
Fighter jets
Tony Abbott said Australia will acquire another 58 Joint Strike Fighters at a cost of around $90 million per plane; $24 billion has been budgeted to purchase and operate the aircraft until 2024.
Submarines
A decision to spend more than $20 billion on up to 10 Japanese submarines will be announced before the end of the year (maybe?)
The Commission of Audit’s report shows that in the past four years, the Australian government has increased spending on the detention and processing of asylum seekers who arrive by boat by 129 per cent each year. Costs have skyrocketed from $118.4 million in 2009–10 to $3.3 billion in 2013–14.
This is the fastest growing government program and projected costs over the forward estimates amount to more than $10 billion.
(It costs $400,000 a year to hold an asylum seeker in offshore detention, $239,000 to hold them in detention in Australia, and less than $100,000 for an asylum seeker to live in community detention. In contrast, it is around $40,000 for an asylum seeker to live in the community on a bridging visa while their claim is processed.)
The Abbott government has given Transfield Services a $1.22 billion government contract to run immigration detention centres on Nauru and Manus Island.
(Tony Shepherd, who was the chairman of Transfield until he resigned in October to Head the Commission of Audit, left with more than 200,000 Transfield shares, allocated to his family superannuation fund, on top of his final salary of $380,000. Shares in Transfield soared 20.8 per cent on the news, lifting the company’s market capitalisation by about $80 million. He now heads the WestConnex Delivery Authority where money from the East-West link may be redirected)
Employment Service Providers
The Coalition Government has released its exposure draft of the purchasing arrangements for a new employment services model – a $5.1 billion investment over three years from July 1, 2015 – which includes the new Work for the Dole scheme.
Under the ERF the government will spend $2.55 billion to purchase emissions reductions through auctions.
The federal government is on track to fork out $1 billion in redundancy payouts to public servants even before entitlements such as leave are paid.
School chaplaincy will be continued for another five years at a cost of $245.3 million. Under the program, 3700 schools are eligible for up to $72,000 funding to employ chaplains.
Marriage guidance vouchers
NEWLYWEDS across Australia will be given a $200 voucher for marriage counselling from July 1, as part of a $20 million trial to strengthen relationships and avoid family breakdowns.
Tim Wilson
TONY Abbott’s hand-picked human rights adviser has been given a $56,000 expenses package to top up his six-figure salary. Human Rights Commissioner Tim Wilson now has a total salary of $389,000 plus vehicle and telephone expenses following a recent decision by the Remuneration Tribunal.
Hope that gets you started Joe, or whoever is now doing the budget. (Cormann? Frydenberg? Thawley? Credlin? Rinehart?)
PS: In light of the above potential savings, you may want to read my plan to get half a million people employed at a cost of $8.8 billion
PPS: In South Africa, Boxing Day was renamed Day of Goodwill in 1994. May you use it to contemplate wisely.
