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Tag Archives: company tax cuts

Seldom has a government looked more ridiculous. More compromised. Incompetent. Less trustworthy.

If you want a vision of the future, imagine a boot stamping on a human face – forever, wrote George Orwell, foreseeing, our Border Protection policy, in the news this week as Australian War Memorial Director, Brendan Nelson proposes the creation of a type of shrine or monument to paramilitary thugs; the weaponising of compassion to enable us to deny our own innate humanity.

Similarly highlighted this week is the tender loving care our government lavishes on loan sharks, insurance touts, embezzlers and other predators in “the financial advice industry” at the expense of “ordinary hardworking Australians”. Yet nothing shows our open, transparent, democratic, government so clearly as its suppression of criticism; dissent.

Group hugs must surely break out all round at Sunday’s news, that the Coalition has pressured the UN to excise from its expert report on irrigation, a critique of the government’s $13 billion failure to restore our Murray-Darling river system.

The “Australia chapter” is now cut from the UN report “Does Improved Irrigation Technology Save Water?” published online by the Food and Agriculture Organisation (FAO). Down the memory hole it goes; extinguished.

Water allocations to irrigators will in fact increase an extra 605 GL under innovative “on-farm efficiency: schemes but nothing may distract us from the government’s carefully orchestrated inquisition into usury and other money-lending malfeasance this week in Melbourne, an antipodean Malleus Maleficarum, which can turn grown men to water.

Banks Behaving Badly-or Business as Usual, a spell-binding, live-streaming, morality play, stars Royal Commissioner, The Honourable Kenneth Madison Hayne, QC, AO, as Grand Inquisitor, brilliantly assisted by Ms Rowena (shock and) Orr, QC.

The show, so much better than anything Labor had planned, government ministers keep telling us, continues its blockbuster run, as a hand-picked cast of spivs, charlatans and rogues and other financial advisers show open contempt for corporate cop, ASIC, and expose Coalition nobbling. Yet mystery shrouds this week’s show. Where are the big guns?

Conspicuous by their absence, possibly in witness protection, as secure as if in Monash fox-holes, are any CEOs.

Schadenfreude seizes the nation. Outrage. The drama has our full attention. True. Bonkers Brendan Nelson does his best to distract with his proposal to honour Border Force; to extend The Australian War Memorial to commemorate those brave souls who served in the war on compassion; our nation’s glorious battle with innocents; those compelled by cruel fate to seek asylum by any means. Some troops, he says, even jumped into the water to save people from drowning.

By Monday, the plot of Banks Behaving Badly includes dead people, knowingly being charged for financial advice; The CBA pockets $118 million for advice it doesn’t provide; NAB bribes people – its innovative “Introducer Program” -pays commissions to unqualified “spotters” – no financial expertise necessary- for home loan referrals, a subplot which includes forged payslips to settle loans, and envelopes stuffed with cash. The Introducer nets NAB $24 billion in loans.

(Former banking lobbyist, Scott Morrison’s tough new fines are capped at less than 1 per cent of that. Offenders will be brought to account, thunders former Goldman Sachs banker Turnbull. NAB is laughing all the way to the bank.)

Fee for no service turns out to be a nice little earner also. AMP’s head of financial advice, Anthony Regan, says he’s lost count of how many rip-offs; how many thousands of customers are charged fees for services they don’t receive. Lives are destroyed by bad advice; or when advisers’ financial ineptitude is compounded by avarice and duplicity.

It’s bad timing, however, for government by and for the banks, a Coalition which has to sell the electorate the last $35 billion of its $80 billion tax cut package, a gift of $13.2 billion in savings to our big four banks over the next ten years.

Even worse, its big business pals are no help. In the parallel universe where senate enquiries are held, Business Council of Australia’s CEO, Jennifer Westacott is asked, this week, by The Greens’ Lee Rhiannon.

“Can you give us an example of another country where tax cuts have resulted in wage rises?”

Westacott wimps out. She’ll “take that question on notice”, despite the claim’s being a central plank of the BCA and the government’s campaign for the past two years. But let’s be fair. There’s too much business bashing around these days, as Westacott often wails. Above all, even the BCA can’t provide evidence that doesn’t exist.

Examples abound, however, from Canada or from The UK where, despite ten years’ company tax cuts, real wages continue to decline. The National Bank conducts one of Australia’s largest business surveys only to report that a mere 8 per cent of businesses would give workers a significant wage rise if they received a company tax cut.

One-in-five say they don’t need a tax cut to secure their company’s future. But who needs research in an age of neoliberal faith? The Coalition takes heart in the recent dismissal of The White House Chaplain, Jesuit Patrick Conroy who has held the job for seven years. No reason has been given for Father Conroy’s sacking. Nor is it needed. In a Trumpian universe, it’s heresy to frown upon trickle-down or laugh at the Laffer Curve or even just express dissent.

Best explanation, reports The New York Times, is that the priest is being punished for his prayer last November, at the opening of a debate on the Republican tax bill. Conroy asked God to make sure that the members’ efforts “guarantee that there are not winners and losers under new tax laws, but benefits balanced and shared by all Americans.”

Amen. Fairness is the last thing our government needs in its agile, innovative business-friendly zeitgeist but former Xenophon team member, now the more prosaic Centre Alliance, Sterling Griff, (a name that conjures confidence) is quick to remind listeners of government trumpet ABC Radio National that some top BCA companies pay no tax.

Australia’s effective company tax rate is 12% already. He warns his audience, moreover, where cuts will come from.

“It’s hard to see how a reduction in corporate tax is not going to lead to a reduction in public services like health and education.”

“The economic case for these company tax cuts never stacked up. The benefits were largely to foreign shareholders, with a huge long-term revenue cost to the budget,” says The Australia Institute’s executive director, Ben Oquist when the Coalition withdraws the tax cut legislation it fails to get through the senate last month.

“It’s a tactical retreat” explains former HealthGuard and HBF Insurance companies’ general manager, Mathias Cormann.

Desperate to stop the rot, Malcolm Turnbull mounts a type of apology for his government’s howling down the very idea of a Royal Commission into banks, an opposition it kept up for two whole years. His government would have been “better off politically” to have called the Royal Commission, “several years ago”, he calls in from Berlin, Monday.

Not that he’s accepting any responsibility (Westminster or otherwise) for any malfeasance that his government has effectively enabled by its two years of spirited opposition, evasion and delay,

“The responsibility for wrongdoing lies with the people who did the wrongs. Let’s be clear about that,” he says, hopefully.

It is too little, too late and will do nothing to appease his critics who rue his dreadful political judgement; nor those who ask why his government protects wealthy banks and big businesses, while hounding and gouging the poor.

ASIC’s official boast is that it’s “Australia’s integrated corporate, markets, financial services and consumer credit regulator”. The Coalition hypes the regulator’s powers. Two years ago, Treasurer Scott Morrison claimed that,

“ASIC has the powers of a royal commission and, in fact, it has greater powers than a royal commission.”

But just in case, penalties will now be increased; jail time provided for some offences, a hollow response that overlooks the core problem. ASIC has neither the will nor the resources to act. It’s launched but one criminal case in ten years.

As this week’s testimony shows, ASIC’s the financial sector’s family pet, lying doggo or sitting up and begging to play fetch or rolling over to have its tummy tickled. Of course there’s a weasel-word for it. In ASIC- speak it “negotiated” rather than prosecuted misconduct cases which is why it’s brought only criminal prosecution in ten years.

Does Hayne’s royal command performance have more power? While a royal commission can refer suspected offences to the Director of Public Prosecutions who can then prosecute, in practice, criminal prosecutions rarely result from recommendations of either a royal commission or a parliamentary inquiry.

Key to the commission’s power are its terms of reference. Here is a huge weakness. Its terms of reference dictate that it is not required to look at anything the commissioner believes “has been, is being, or will be, sufficiently and appropriately dealt with by another inquiry or investigation or a criminal or civil proceeding”.

In other words, it will ignore the findings of at least 38 other inquiries held into banking and financial services since 2010. Sensational, shocking as it may be, the misconduct Hayne has revealed, so far, is but the latest scandalous chapter in a long series of instalments, all of which have also exposed ASIC as a Clayton’s corporate regulator; a paper tiger.

When The CBA ruined many clients with bad financial advice a 2014 Senate inquiry criticised ASIC for being “too slow to act, lack[ing] transparency and … too trusting of the big end of town”. The verdict still applies today.

In the meantime, by popular demand, – and the instigation of The Nationals helped by The Greens and with the late support of Labor, the show must go on. And on. Talk abounds of an extended season. Yet can it fix anything?

Crusty Justice Hayne’s superbly orchestrated production is in danger of being upstaged by its own lurid revelations of the graft, fraud, usury, collusion, extortion, embezzlement, cheating, lying and bare-faced robbery integral to our banking system; as a series of wretched pin-striped small fry from the big four take turns to spill their guts.

Equally distracting are the sideshows. A stampede to steal the glory includes the two-bob populist Pauline Hanson, even though it was her hapless former colleague, Rod Culleton, a bankrupted WA farmer who campaigned for a royal commission. Perhaps she’s getting confused with her repeated calls for a Royal Commission into Islam.

Also confused is Hanson’s new pal, Tony Abbott who channels the Queen of Hearts. “Off with their heads”.

Tin-pot general of the monkey pod rebels, Abbott is pumped. He’s led his peacock peloton and mobile media squad coal revival cycle tour through the Latrobe Valley of death-by-coal-fire, his latest sortie in his “no sniping or undermining” war of revenge by attrition on Turnbull. He’s just back from the $100 million Monash Centre he had built in France.

He goes off like a frog in a sock. “Sack ASIC”, he shrieks, despite his own role as ASIC’s chief nobbler.

Abbott’s government snatched $120 million, a cut of 200 workers, from the Australian Securities and Investments Commission, a pillaging which left the watchdog unable to do very much at all effectively, let alone chase up the banks. Instead, the corporate regulator would get banks to self-report. What could possibly go wrong?

At the same time, in July 2014, Mattias Cormann attempted to weaken Labor’s Future of Financial Advice legislation (FOFA) which sought to ensure that advisers acted in their customers’ best interests, amendments put up by the banks but lost only when two cross-benchers voted them down.

ASIC hit the panic button. It complained that all advisers would be caught on the hop. It would do nothing, it said until July 1 2015 – two whole years after the new law was supposed to apply.

This, the corporate regulator supported Cormann, giving advisers two extra years in which to charge commissions and evade their duty to put the clients first. This week has seen how AMP flouted the FOFA law with impunity.

“Through AMP’s dealings with ASIC regarding the extent and nature of its fee-for-no-service conduct, AMP adopted an attitude toward the regulator that was not forthright or honest, and demonstrated a deliberate attempt to mislead,” Ms Orr sums up Friday.

AMP and its advice businesses misled the regulator 20 times from 2015 to 2017 about the nature and extent of its fees-for-no-service practice.”

The Coalition is responsible. It can’t pretend now that it merely got the timing wrong. Surely. But that’s just what it does.

Time to chuck a U-turn. Not far from Hitler’s bunker in Berlin, in the Reichstag’s shadow, Monday, Turnbull grabs the Coalition handbrake; burns rubber in a tyre-shredding U-turn. The government’s been driving the wrong way up a one-way street for two years but a quick U turn will fix it. Memo: Get updated talking points to Kelly O’Dwyer.

Facing overwhelming evidence that its concerted opposition to a Royal Commission into the banks was palpably not in the public interest, a willful misreading, if not contemptuous defiance, of public opinion in defence of the top end of town, the PM and his minions hastily abandon their epic, sandbagged, campaign to defend their banking mates.

Seldom has a government looked more ridiculous. Or more compromised. More incompetent. Less trustworthy.

Tragically, Terry McMaster, of Dover Financial, a pillar of the financial advice industry, oxymoron of the week, is taken ill, mid-sentence – but quickly recovers sufficient self-possession to sit bolt upright in his ambulance stretcher like some grandee being ferried up above the masses upon a palanquin. He’s excused from further participation in Hayne’s show.

But not before he’s been able to defend hiring advisers who were under investigation and later sanctioned for serious breaches. At least, he makes some incoherent response. Perhaps he’s just choking.

McMaster’s also questioned on Dover contracts which purport to give client protection yet which, in fact, attempt to indemnify Dover advisers from accusations of bad conduct. Doubtless ASIC plans to catch up with him on that, too.

Dover is the only big financial advisory group to decline to assist the Royal Commission. It has not supplied adequate documentation. Yet McMaster has dramatically collapsed in the attempt. His clients will wish him a speedy recovery.

You can’t fault the performances. The Royal Commission into crony capitalism is an orchestrated confession of wrongdoing; a lavish smorgasbord of malfeasance even if the grubby money-grubbers of the “wealth industry” themselves, are cynical, untrustworthy, grossly overpaid, self-interested spivs who’d sell their own grandmothers.

The formidable Rowena Orr, QC, continues to impress as she leads a brilliant supporting cast in homage to the English theatrical tradition of personifying justice as a Judge, a trend since Respublica, the mid-15th Century, morality play which has the body politic under insidious, deceptive attack from Avarice, Indolence, Oppression and Adulation.

By Monday, however, our political masters are back on song, a Hallelujah chorus of shock, surprise and outrage, the necessary ritual disclaimer and distancing which will enable them to snatch the whip hand back from Hayne.

“I have to say I have been surprised. I have to admit some of the revelations in recent times, I have been surprised.”

Mathias Cormann tells Sky News, Australia’s Fox News of government spin, while Matt Canavan, Minister for Coal, is “shocked“. Kelly O’Dwyer is “appalled” in a in a duet with Barrie Cassidy on Insiders. At the Self-Managed Super Fund expo in Melbourne on Friday, (no irony in the venue?) the assistant treasurer is back on stage and on song.

“The royal commission has highlighted in the most profound way, some of the devastating personal consequences that have resulted from corporate misconduct in the financial services sector,” she says.

“The government did get the timing wrong.”

That’s it, then. Just dud timing. Could happen to any government bank protection racket. As Helen Razer notes in Crikey, not one MP is surprised, or shocked, or appalled, or devastated enough to call out a scandal when they see one.

As Bob Katter fears, Karen Middleton reports, the real problem remains. Banks will continue to transfer loans between them, unilaterally dictate and then change the terms, downgrade property values and then foreclose without negotiation, seize and offload the properties at fire-sale prices, leaving borrowers still owing them the difference.

And it’s all perfectly legal.

Routed by the sheer force of numbers, rubbery figures, lies, impersonation and other evidence of illegality elicited from bankers so far, by beak of the week, Justice Hayne and his crack team of silks so far, Monday, Malcolm Bligh Turnbull beats a retreat on his quixotic Coalition forces’ foolhardy ideological charge against Labor and The Greens’ impregnable position; that there be a Royal Commission into Banking. It’s also a retreat from credibility and legitimacy.

News of the PM’s surrender from Berlin where he commends John Howard’s Pacific Solution (2001); lecture Germany on how to deal with refugees as he fills in time before opening yet another monument to John Monash and to honour his government’s militarisation of history and fetishising of war.

Some may admire his chutzpah. Germany took in a million Syrian refugees. The nonsense that border control helps build a multicultural society is insulting; demeaning to any audience. But it’s all designed for domestic consumption.

Turnbull makes no apology for his government’s enabling of what clearly amounts to a banking oligarchy; helping our new robber barons hold the country to ransom, destroying careers, wrecking families and ruining the lives of thousands.

“It was a poor political decision“, is the best the former merchant banker can manage.

 

 

 

 

 

 

Small government, like communism, might sound like a good idea but they are lambs for slaughter on the altar of greed

Deregulation, self-regulation, red tape, green tape, nanny state, small government, privatisation, asset recycling, compliance costs, free market, one-stop shop – these are some of the phrases religiously chanted by big business, and echoed by conservative think tanks and governments, with a certainty that smacks of zealotry.

We are told that the private sector is more efficient so we outsource service provision to them. We sell off valuable assets and profitable government-owned enterprises. We remove regulatory oversight and streamline approval processes.

We sack public servants, urge wage restraint, remove penalty rates, freeze the superannuation guarantee and hobble collective bargaining.

We provide so many concessions for the owners of capital and assets that they end up paying little to no tax. We encourage exports whilst enduring shortages at home. We provide a guarantee for the banks to protect them from the financial turmoil afflicting the rest of the world. We have a whole government department dedicated to making sure the private sector does not face unfair competition from the public sector.

And still, even as companies continue to announce record profits, it’s not enough – they want more.

Now that may all be very well if all players are acting ethically, if profits are shared not only with CEOs and shareholders but with employees through job creation and wage rises and with the government through taxation, if sustainable practice and environmental protection was a non-negotiable aspect of doing business, if businesses could be trusted to tell the truth and to fulfil their part of the social contract.

But that is not the case.

The cases of malfeasance, corruption, fraud, exploitation and environmental damage just keep coming. Cases are fought by armies of legal and financial teams, dragging them out until plaintiffs give in. Penalties are seen as just part of doing business.

By their own actions, businesses have destroyed our trust and forfeited the right to dictate the rules. Self-regulation does not work. There is no loyalty or morality as the greedy scramble for an ever-increasing share of the pie, doling out crumbs that barely sustain the rest of society.

The government has abrogated their responsibility to defend us against unscrupulous merchants and employers, and the extreme class structure that results from their exploitation. They have sold off our common wealth for short-term sugar hits for the budget. They have privatised essential utilities and services which are now run for profit rather than the common good.

And now they are even outsourcing the drafting of legislation to the very legal and accounting firms that advise big business on how to get around the rules.

Small government, like communism, might sound like a good idea but they are lambs for slaughter on the altar of greed.

Matt Canavan tells the press club that our current tax system is “very competitive”

Resources Minister Senator Matt Canavan addressed the National Press Club today.

When asked by David Denham from Preview Magazine if declining trends in exploration and production in the petroleum industry should make us more inclined to encourage things like electric cars and renewable energy more broadly to fill the gap, Senator Canavan gave this amazing response:

“We have attracted more than 200 billion dollars worth of investment in the last decade in oil and gas generally so we obviously are doing something right in this country. I think we do have very competitive tax systems and tax settings and that’s been proven.”

OOPS!

For those who want to hear it from the horse’s mouth (or is that arse), start at 56:20.

 

Will Pauline be bullied into changing her mind?


The government is going to try to push through its company tax cuts in the next two weeks and requires the support of One Nation to do it.

To date, Pauline had said no, but she has been subjected to a concentrated campaign by the business community.

A few days ago, Simon Benson reported that five-minute video petitions from the Business Council of Australia and the Council of Small Business Organisations of Australia, shot in Townsville, and clearly aimed at One Nation, have been sent to all Senate crossbenchers.

The business lobby also held three days of talks with local businesses in Cairns and Townsville to localise the impact on jobs.

So will Pauline cave-in?

Who can ever tell.

On her facebook page, Pauline has gone into overdrive about Labor’s planned changes to excess franking credits refunds.

“LABORS CUTS TO PENSIONERS – OVER MY DEAD BODY!”

Yet in 2016, she sang a different tune.

Hansen said successive governments, in a bid to win votes, had allowed welfare to become a way of life rather than a helping hand and “tough decisions” were needed.

“If we are going to be able to, in the future, support those who are truly in need, like the sick or the aged, we’ve got to do something about it now,” she said.

“I want the money to be put into hospital waiting lists and schools. Infrastructure in this country is ridiculous.”

This was in explanation to the budget cuts proposed by the government and supported by One Nation.

They included: $2.9 billion in Family Tax Benefit end-of-year supplements; $1.3 billion carbon tax compensation for future welfare recipients; $1.2 billion by stopping the “double dipping” of paid parental leave; and $600 million in assorted measures including freezing eligibility thresholds, ending a pensioners education supplement and making dole recipients wait a period before receiving payments.

Senator Hansen said the government should go even harder, suggesting the wait period for the dole should be 3 months, and there should be a tougher approach to the disability support pension, including biennial reviews of all recipients by government-certified doctors to ensure the pension was warranted.

For Pauline, it was all about budget repair.

“Right across the board, not only in welfare, I see a big waste of money and we actually have to rein it back in.”

Perhaps Pauline doesn’t quite understand the proposed changes to franking credit refunds or perhaps she has changed her mind about welfare going to those that needed it.

But if she still cares about budget repair, will she accept Matthias Cormann’s sales pitch, or will she see a cost of $65 billion for no assured gain?

Cormann is really pushing hard.

“Families around Australia wanting to get ahead need their Senate to pass our business tax cuts for all businesses in full,” Senator Cormann said. “Their future job opportunities, job security and wage increases depend on more businesses being more successful and more profitable into the future.

“We can’t put our businesses at a competitive disadvantage compared to the businesses from other parts of the world. This is commonsense, plain and simple. Bill Shorten has been blinded by his adoption of socialist ideology and is putting his extreme and reckless views ahead of what is in the best interests of our economy.”

Why does no-one ever stop him to say our average rate is 17% and our effective rate is 10.7%, making us already very competitive. Our overly generous allowable deductions and ‘legal’ tax loopholes result in many companies paying no tax.

It isn’t the tax rate that attracts investment here, as foreign companies keep explaining, with much of our foreign investment coming from countries who already have lower company tax rates than ours.

Unless companies raise dividends, it will only be foreign shareholders who benefit from a cut in our company tax as Australian shareholders will have to make up the difference in income tax. And if companies raise dividends, then how can they afford to raise wages as well?

So how much of this can Pauline absorb? Will she be strong enough to resist the very concentrated pressure? Will they win her support by promising to only let white Christians migrate here?

My guess? White South African farmers should book their tickets.