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Tag Archives: corporate tax avoidance

Merry Christmas Gina and Rupert

If you go to Tony Abbott’s facebook page, at time of writing, you will find six threads about the Martin Place siege and one about the slaughter of innocent children in Pakistan. Four days after its release, you will not find any comment about Hockey’s MYEFO. That in itself should be cause for concern.

Tony Abbott has admitted he has little interest in the “dismal science” of economics and it appears he is hoping that applies to the rest of us. He is sticking to his forte – death cults and shirt-fronting.

Despite telling us all to carry on our lives as normal, he seems determined to class the acts of one deranged individual as a terrorist attack on home soil.

When Australians responded by showing solidarity with the Muslim community through the “I’ll ride with you” campaign, the odious Miranda Devine found a new target.

“Thus it was that on Monday, while real people were suffering at the hands of an Islamic State-inspired terrorist in Martin Place, hashtag activists sprang to the defence of theoretical victims of an Islamophobia that wasn’t occurring.

The meaningless, narcissistic, one-sided nature of this “near silent encounter” perfectly symbolises the leftist ­approach to Islamist terrorism.

Denial, deflection, projection. They see themselves as morally superior to the rest of Australia, which they imagine as a sea of ignorant rednecks. In their eyes the threat is not terrorism but Islamophobia.”

This view was endorsed by LNP member for Dawson, George Christensen who tweeted

“#illridewithyou is a typical pathetic left wing black arm band brigade campaign, casting Aussies as racists who will endanger Muslims”

The colourful characters who frequent Andrew Bolt‘s blog joined in with a barrage of hate.

Whilst Abbott, Devine, Bolt and Christensen continue to pander to the minority of xenophobic racist rednecks, others have been commenting on the policy direction of this government and none of it is good.

Firstly, Joe Hockey has cost us $28.6 billion in foregone revenue over the forward estimates through his own decisions.

Carbon Tax $12.8 billion

MRRT $3.4 billion

FBT on cars $1.8 billion

Tax on super earnings $313 million

Work-related self-education $266.7 million

Closing corporate tax avoidance $775 million

RBA $8.8 billion (classed as foregone dividends)

Add to that his spending on Direct Action, the “war on terror” at home and abroad, and the extra spending on Operation Sovereign Borders and PPL and we would go close to wiping out his deficit of over $40 billion.

So when you hear the girlinator Cormann talking about Layboor’s debt and deficit disaster, understand you are being sold snake oil by a con man.

Speaking of con men, the G20 leaders must be wondering about our commitment to join the war on corporate tax avoidance which has been shown to be yet another example of Joe “over my dead body” Hockey’s ‘tell em what they wanna hear’.

The head of the Australian Tax Office, Chris Jordan, has described a tax lurk for multinational companies that is being retained by the Abbott government as having been “abused” by foreign corporations at a cost of “hundreds of millions of dollars” a year to the Commonwealth but Hockey, following consultation with the big four accountancy firms and the Corporate Tax Association, which represents the biggest listed companies, decided not to tinker with section 25-90 of the act. And they had the hide to criticise Gillard and Swan for caving in on the mining tax though that was one time I found myself in agreement.

And they will have more pressure coming as the world insists that we take action on climate change.

During an appearance before a British parliamentary committee meeting held early Wednesday morning Australian time, British Prime Minister David Cameron was asked by an MP whether there was hope Australia would do more because “the new Australian government is in denial” on the issue.

Mr Cameron did not disagree and told the hearing there was hope Australia would step up its efforts.

“Australia will respond to international pressure and do more on climate change because it will not want to be seen as the “back marker”.”

The new revised GP co-payment has also been blasted.

The Australian Medical Association (AMA) has expressed its formal opposition to the Federal Government’s new co-payment model, labelling it a “wrecking ball”.

“That this should be instituted and ready to go by January 19 is, I think, absurd,” Associate Professor Owler said. “Particularly when there has been absolutely no consultation on this issue.”

The OECD was also not impressed with Hockeynomics slamming his budget measures and stating that ‘close monitoring’ was required mentioning everything from changes to Newstart and pensions through to Direct Action, deregulation of uni fees, and choice of infrastructure spending. They were particularly critical of superannuation tax concessions. The overall implication was “you haven’t thought these measures through”.

And as Abbott has his photo taken in front of lots of Christmas trees, presents are being delivered around the country.

Up to 100 ABC journalists have been told they will become redundant and ADF personnel will face rent increases as well as other charges for live in accommodation and meals.

Australia has transformed into the global Scrooge just in time for Christmas, with spending on foreign aid set to plunge compared to other wealthy industrial countries.

An analysis of Treasurer Joe Hockey’s $3.7 billion cut to the aid budget announced on Monday – on top of the $7.6 billion cut in May – reveals that Australia’s generosity towards the world’s poor will fall to an all-time low.

Australia will soon devote a paltry 22¢ cents in every $100 of national income to foreign aid – less than half the amount spent by the Coalition government more than 40 years ago.

This is the news Tony Abbott and his band of elves don’t want you to discuss as they take from the poorest in the world to give generously to wealthy corporations and mining companies. Gina and Rupert should be well pleased.

Cherchez des revenus

When my husband lost his job not long after the birth of our first child, my immediate reaction was to ring my old boss and go back to work. I didn’t sit there thinking what spending I could cut – I actively pursued employment. We were already pretty frugal, living on one income, so cuts would have meant a lowering of our living standard – doable but not my first choice.

Which is why everything this government is doing in the budget seems so wrong to me.

They screamed blue murder about the burden on cost of living imposed by the carbon tax but the cuts they are making take far more away from those least able to afford it than removing the carbon tax will replace. The poor, the sick, the elderly, the unemployed, our students – all will face a substantial reduction in future disposable income.

While we increasingly hear about the lack of affordable housing, and a possible housing price bubble due to low interest rates and a burgeoning investment market sending prices soaring, both parties hasten to say they have no intention of changing the negative gearing tax concessions. Why not?

Negative gearing allows investors to deduct losses made on rental properties from their other income, thereby reducing their overall annual tax liability. The Grattan Institute says it costs the federal government $2.4 billion a year, and there is “little justification for it”.

The Reserve Bank said strong demand by investors meant investor housing loans now accounted for about 40 per cent of all home loans. It said it had become so concerned about Australia’s overheating property markets that it was openly questioning whether bank lending practices were “conservative enough”.

Once again, I find this an odd statement. If the banks’ lending becomes more conservative, the people who will miss out on loans are the first home buyers, not the investors. Why not make it less attractive to investors by removing negative gearing? They are the ones driving up the prices.

Then there is their approach to superannuation.

As Treasury revealed in the budget, the annual cost of superannuation tax concessions is set to surge in coming years, making the current cost — nearly $32 billion — look paltry as it rises to a remarkable $50 billion in 2017-18. At that point the cost of superannuation will exceed the cost of the age pension

Australia’s richest taxpayers will collect over $35.5 billion in tax concessions via the superannuation system over the next five years, and by 2017-18 they will be taking over $8 billion a year.

And far from contributing to the burden of helping repair the deficit, the top 5% of taxpayers will enjoy an increase in tax concessions above current levels of over $2.9 billion dollars by 2017. That increase by itself is almost enough to wipe out the revenue generated by the government’s temporary deficit levy on incomes over $180,000, which is forecast to yield just over $3 billion in that period.

Just curbing the growth between now and 2017-18 could deliver nearly $15 billion to the government, several times more revenue than the temporary tax levy, twice as much as the cuts to foreign aid, and many multiples of savings through punitive cuts to Newstart.

Hockey also removed the legislation to tax retirement incomes at 15% on the excess over $100,000 pa, foregoing over $3 billion in revenue.

At the other end of the scale, the people most likely to qualify for an old age pension are having their superannuation savings slashed by the delay of the superannuation guarantee increase by 7 years and the removal of the low income co-contribution.

And then we have capital gains tax concessions.

The other big costs are the capital gains tax exemption on the family home (estimated to grow to $57 billion over the three years to 2017-18) the 50 per cent discount on capital gains (which could hit $70.5 billion over the same period) and the cost of CGT discounts for individuals and trusts (estimated at $28.3 billion).

Whilst removing the CGT exemption from the family home could have deleterious impacts, a broad-based land tax (preferably in place of stamp duties) would encourage a more efficient use of the housing stock and improve labour mobility, penalise land banking and vagrancy (increasing effective land supply in the process), and help to make infrastructure investments self-funding for governments (since any land value uplift brought about through increased infrastructure investment would be partly captured by the government via increased land tax receipts).

A report released earlier this year by the International Monetary Fund (IMF) estimated that Australia has the highest tax expenditures in the OECD when measured against GDP. These include government revenues foregone as a result of differential, or preferential, treatment of specific sectors, activities, regions, or agents. They can take many forms, including allowances (deductions from the base), exemptions (exclusions from the base), rate relief (lower rates), credits (reductions in liability) and tax deferrals (postponing payments).

There is a strong case to limit superannuation concessions, which have increasingly become a mechanism for richer older people to avoid paying tax, rather than a genuine means for Australians to pay for their own retirement and avoid drawing on the Aged Pension. There are very good reasons to quarantine negative gearing losses, so that they can only be applied against income from the same asset, as well as removing the capital gains tax concession on investments (why should they be taxed at a lower rate than income?). These concessions are skewed towards the wealthy and high income earners, undermining the progressiveness of the tax system.

Mathias Cormann assures us that we have very strict tax avoidance laws.

These “strict” laws allow 75 individuals who made an average of $2.6 million each in 2011-12 to pay no tax at all – no income tax, no Medicare levy and no Medicare surcharge.

These “strict” laws allow almost a third of Australia’s largest companies to pay less than 10¢ in the dollar in corporate tax.

Ernst & Young is the auditor of Westfield Group, James Hardie and 21st Century Fox, all of which pay less than 1 per cent tax, according to the report, Who Pays for Our Common Wealth, produced by the Tax Justice Network and the union United Voice.

It is also the auditor of some of the US multinational tech companies accused of paying minimal tax in Australia, including Google, Apple, Amazon and Facebook.

Accounts show 21st Century Fox spent $US19 million on tax advice from E&Y in 2013.

The G20 assure us that they are talking about how to cut down on tax avoidance. A deal struck at the G20 summit in Cairns will see authorities in more than 40 countries sharing information — including bank balances and income — to identify companies that avoid tax.

But Australia will not begin swapping the financial details until September 2018, one year after countries including Britain, Germany, India, Ireland, The Netherlands and a handful of tax havens.

Why wait? We make our own laws, we could close the loopholes right now if we wanted to. Instead, we are slashing staff at the Australian Tax Office by so much (4,700 over the next few years) that they will not have the personnel to pursue tax cheats.

“Morale is down and 3000 of our most senior staff have recently taken redundancy package,” said one former officer. “There was also an absurd clear out of senior transfer pricing staff about two years ago, so there is very little likelihood of the ATO ‘manning-up’ on multinationals any time soon. The general impression among senior ATO officers is that we are supposed to give the big firms what they want and to usher the revenue out the door. The News decision (not to appeal the $882 rebate to Rupert) is symptomatic of that and a lot of staff were pissed we caved on that case.”

With reports that one in three elderly Australians are living in poverty, despite being among the most highly educated senior citizens in the world, that 17% of our children live in poverty, that making unemployed people under 30 wait six months for income support and raising the eligibility age for the dole to 25 could breach human rights to social services and an adequate standard of living, I would suggest that if Tony Abbott wants to spend hundreds of billions on defence and border security he starts taxing his party donors, beginning with Rupert.

Perhaps you may want to see how the French are approaching their deficit.

Il est evident. Cherchez des revenus, stupide.