The world is about to end! (Part 2)
By Anthony Andrews
(Continued from Part 1)
A government cannot protect or serve the needs of their citizens without revenue.
The present attacks on the ATO by the media and the almost unparalleled speed of the present federal government to publicly discuss initiating change, are not for the benefit of ordinary taxpayers, even if they are the faces we are seeing in the media. The real beneficiaries of this “overhaul” are the multinationals, and the present campaign is designed to reign in our nation’s ability to investigate and prosecute corporate tax avoidance and ensure financial responsibility to the country’s citizens. Pensioners and their families, the society they’ve … in fact, all of us, have helped to create, have a right to demand those that do business here be a part of that social contract and not avoid their responsibilities.
Taxation though, is an issue that brings our emotions to the surface and is an easy target for those that wish to use our collective animosity to initiate change that, in reality, will not lead to a better deal for any of us.
For a long time, I’ve thought about income tax. Actually, I’ve thought about the pros and cons of removing income tax.
Why do we even need it?
Is a universal basic income really going to be of any benefit to working people?
I’m still not sure, and have some reservations after reading more about it than the “sound bites” fed to us by the media. When I get time, I’ll research it more, but for now, I’ll give an opinion on it because apparently, “gut feelings” carry more weight in today’s society than factual information, anyway.
It doesn’t appear to be a black and white issue that will benefit the majority. Something definitely needs to be done, although I’m not sure that this is it.
It appears to be just like a general award wage that covers all industries, not just one?
A low safety net that can be controlled and potentially manipulated to equalise all forms of unskilled and semi-skilled labour, making each job of equal worth and pay.
Improving the safety net and maintaining a reasonable living standard for those on low incomes, no incomes and unstable incomes is vital, as is preparing for the inevitable job losses that will come with automation in blue and white-collar industries … maybe there’s another way, or at least, maybe a mix of ways…
Imagine if income tax was removed completely.
If you earn $60,000 a year, that is what you take home, minus your Medicare levy and superannuation contribution, which could be deducted by the employer, as we’re removing income tax, not payroll tax or the jobs associated with it.
If you earn $500,000, that’s also what you take home.
All goods and services would be on a sliding scale, taxed at different rates, depending on whether they are considered essentials or luxuries, as it is now. Of course, the rates will need to be increased, but maybe not by as much as we may assume.
The cash economy, which is impossible to control or regulate under current taxation laws, would be automatically included in the tax base. This unregulated revenue stream, which we are told is worth more than that declared by ordinary taxpayers, could, if that is true, virtually double our economy overnight.
Everyone that buys any goods or services pays tax, the same amount of tax as everyone else.
Under the current system roughly $5,000 is paid in tax for every $10,000 earned over $90,000.
Those who earn a million a year pay $475,000 in tax. How many actually pay it under the present system?
It’s routinely and legally put into trusts or off-shored. These high earners may be better off than those on a low income, as in wages against living expenses and savings, but we, as a society, suffer greatly from this lost capital.
This is the added advantage for all of us in an ‘income tax free’ regime. That it will free up that capital lost to us, allowing those that legally reduce their personal income tax to freely reinvest those earnings in Australian businesses, any businesses, or just leave it in the bank to accumulate interest … taxing that interest is another issue.
Maybe a universal income for the unemployed, those on a pension and those in insecure or seasonal employment could work. We could also offer an incentive for those that have a hard time jumping through all the hoops of claiming unemployment benefits and that would welcome an opportunity to work, meet people from different backgrounds and travel.
The hoops that the unemployed and those with a disability have to jump through to claim assistance is another great example of false logic being used to make life far more difficult than it should be and causing stresses that actually hinder our citizens from finding work or recover from an impermanent disability.
The media and certain politicians love to inform us of the efforts they go to in order to “tighten the rules” and “stop bludgers from sponging off the hard-working taxpayers.” There are people that do rort the system, there’s no doubt of that, but to make things so difficult for the majority of those who are barely getting by as it is, is extremely unfair and actually costs the taxpayers more in enforcement than we lose to those “doing the wrong thing”.
Again, our logic is being compromised by extreme events.
We could just as easily use a few examples of individuals tramping the streets every day, resume in hand and using low cost, nutritious food and preparation methods to feed their healthy 2.7 children, and able to get by reasonably well under trying circumstances. I’m sure it happens, but it’s an extreme that doesn’t sell the message that “responsible government” wants us, the majority, to hear.
One idea may even improve some of our other social issues, whilst also helping business at the same time.
This “thought bubble”, if implemented, could also have the potential to bring the pension age back to 65, maybe even less, to allow for younger workers to provide for their families and apply their skills and training in fields for which they have paid good money for, but which offer little opportunity for them to practise their craft. Or for those without skills and only the prospect of mind numbing work, with poor wages and the low self-esteem that goes hand in hand with that … ask the British workers that initially welcomed the prospect of working for Amazon in their giant warehouses and the disillusionment that followed.
Our farmers and growers need seasonal labour. We need to ensure they pay a living wage and don’t exploit foreign or domestic workers in order to reduce labour costs. I’m not saying that this is the norm’, just that it’s not unknown in the industry, especially with the growth of privatisation of labour hire and the outsourcing of employment services.
The importance of government employment in maintaining our health and safety, as well as enforcing reasonable standards of conduct by business should never be overlooked. The rise in the importation of dangerous products into our country, lead painted toys and asbestos panelling for example, would not be an issue if we maintained a well-financed and well-staffed monitoring and enforcement agency.
Australian youth are mostly well-educated, and it’s often said that they “want it all now and are not prepared to do the hard yards first”…
Apprenticeships are harder to come by now, the government doesn’t actively assist employers the way they did in the past and these employers don’t want the responsibility of training a young worker for up to four years, they mostly want someone trained and capable of doing the job now. Someone that will help them to make a profit and keep their business alive … who can blame them?
The employer led solution, promoted by the multinational corporations and large business groups, copied by those wishing to compete against them for market share, is unpaid internships that can be easily abused if not monitored effectively or imported labour.
Small business is tough these days, insurance, labour costs, competition for contracts, purchasing materials, often paying the supplier before invoicing the customer.
The abuse of sub-contractors has created a situation where less and less businesses are, technically, employers. An increasing proportion of labour is responsible for their own insurances, superannuation, workplace safety and tax obligations.
The agricultural sector use imported labour and those in working/tourist type visas to harvest their crops and pick their fruit because, as it’s often claimed in the media and by our politicians, that “Australians don’t want to do the work”.
The reality is that they don’t want to do the work for the pittance they will earn.
Unemployment, particularly amongst those under 25 and over 55 is high. Even without the concept of removing income tax, as long as governments were prepared to forgo a small amount of revenue and offer a small incentive, in order to make the work attractive to people, this labour market could thrive.
My proposal would be for the work to be on a tax-free basis, except for the Medicare levy, which would be paid at the level of what would be paid on gross earnings if income tax was still deducted. The same for compulsory superannuation deductions.
The primary producers would benefit from a stable source of labour when its required and also pay a living wage without themselves having to pay more.
As the work is not permanent and involved a large amount of travel with no reimbursement for expenses, perhaps an upfront interest free loan of $5,000 could be offered, in order to purchase a vehicle and allow for initial preparation and travel requirements.
The financial boost, adventure and independence this style of employment could provide for our youth would not only reduce unemployment, it would give them valuable experiences that will influence them for life.
For those over 55 and unable to access their superannuation, too young to qualify for a pension and no longer able to find employment in their previous occupations, it could offer gainful employment that would ease them into retirement and provide a reasonably healthy lifestyle, as well as boosting their sense of self-worth. The life of the “grey nomad” need not only be available to those of independent means.
To go even further, providing certain conditions are met, it doesn’t seem impossible to allow those presently in offshore detention awaiting confirmation of their refugee status to be a part of this itinerant workforce. The damage to their mental health caused by incarceration of undetermined duration is well documented and this could be a way to ease them into our communities and familiarise themselves with our Australian way of life.
This may seem a little like forced labour, but so is the “work for the dole” program and our government doesn’t seem to have any moral qualms about that.
Of course, they will have a choice, but with detention in the remote Pacific the only other present option, I believe the uptake would be high. Obviously, there’s legal issues around their status once they’ve entered Australia, hence the “offshore detention”, but that difficulty is not insurmountable.
Education level is not important for the work required and the physical nature of the employment would greatly improve their health, not to mention their mental state.
Working alongside Australian workers would also offer an opportunity for everyone to benefit from the contact. To understand each other’s background and culture. To see each other as people, with different ways of living, different customs and religious beliefs. Also, firsthand, why they have arrived on our shores at all.
“Backpackers” would not be excluded from working to extend their visas or earning money while they travel either. In fact, this would offer them protection from exploitation of their labour and their ignorance of Australian workplace laws.
At present, we’ve been informed that the cost of offshore detention is in the order of $500,000 per detainee, per year … a ridiculous amount of money. Taxpayers’ money.
Border Force or some other agency would be required for security reasons, but there are other employment opportunities for Australians as well. Agencies set up in regional towns to organise accommodation, meals and transport to where their labour is required. Not just for the detainees either.
The reliance of labour hire, designed around maximising profit, often at the expense of the employee, is not really suitable for my vision of this industrial model. Preferably, producers would pay the wages directly to a government department specifically designed for this purpose, for all participants.
The wages of refugees could be placed in trust with living expenses taken out and an allowance for spending paid to them fortnightly. The rest of the accumulated funds would be returned to them when their status is confirmed. Either to prepare for a life in Australia or as money in the bank if they are refused permanent settlement.
Maybe some of them would be happy to settle in the parts of Australia they visit and any fears they may have, which causes many of the more recent settlers to our country to form communities from similar backgrounds, would be dispelled.
As is well known, but possibly an issue out of proportion to the reality (we only pay attention to extreme news reports remember), accommodation and meal costs deducted from the wages earned by seasonal labour can border on the exorbitant. The newly formed government agency could be responsible for setting a reasonable limit to these deductions and monitoring health and safety at the properties.
Interpreters and councillors, as well as payroll and other office staff would also be required. Perhaps multi lingual teachers to accompany the children to the local schools so they don’t miss out on an education and the opportunity to mix with other kids from the country their parents wish to call their own.
The boost to regional communities would be great and, I believe, cost a lot less that the half a million dollars we are paying each year for each person in offshore detention. Private industry could be involved, but their participation should be adequately monitored, and oversight should stay firmly in government hands.
The influx of workers from former Soviet countries, among others, into Britain and the social changes they, as well as the closing down of traditional industries and replacement with low paid, low skilled employment, have bought to the country have created a situation where ordinary citizens have decided that being part of the EU is not in their best interests. Even though ‘pooling’ resources have its benefits, the average citizen feels disillusioned and, as most of them have a vote, they exerted their collective will at the ballot box. This disillusion is not confined to the northern hemisphere and we are not going to get many chances to create a fairer society for all of us and adequately address some of the social issues created by immigration, those seeking refuge from war, diminishing employment opportunities, automation and the global impact of multi nationals that, in some cases, are worth more than the combined GDP of many countries.
Changing the rules can only benefit us all, it’s just a shame that we only see the world from extremes examples and with a bi polarity. We concentrate so much on the “left wing” and the “right wing” that we forget about the rest of the chicken, which has more than enough meat to feed us all.
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Yes, taxation an example of repressive tolerant subjugation within capitalism. Pointless atavistic feudalism mindlessly reducing real economics, particularly as a civilising redistribution mechanism.
Another flew over the cuckoo’s nest, the asylum run by the lunatics.
For all his faults Joh had one good idea; a flat tax of two percent (2%) off the top of total personal income for natural persons, an idea that could be extended to five percent (5%) for corporate entities on gross turnover, with all tax deductions, rebates, concessions and other perks removed, thus allowing the undeserving wealthy and corporates to pay their fair share to maintain the “ship of state” in which they have been financially successful because the state has provided the peaceful conditions required by everyone to create wealth.
Overcoming youth unemployment may occur by requiring, as a condition of having a licence to work in a trade, all tradespersons to have at least one apprentice. The problem then becomes “what to do with unemployable tertiary graduates”.
Ideally these educated persons would be included in research projects producing better widgets and anything else that requires improvement or original research development. However, with the LNP focussed on entering the 19th century before the next Federal election this may require a change of government to be implemented.
At present the undeserving wealthy are gifted about $150 BILLION PER YEAR by Federal governments of all persuasions, free, gratis and for nothing!! So fixing the “BUDGET DEFICIT” simply requires some intestinal fortitude by politicians to remove this largesse for the benefit of the Australian people. There is no benefit in paying foreign owned multinational corporations for the pleasure of having them trade to their own advantage in Australia under international taxation laws designed to return nothing to their market economies in Australia.
The intended focus upon taxes, as rightly pointed out for the benefit of corporates, is hardly original and reeks of the ‘Kochtopus’ libertarian ideology and ‘architecture’ of policy influence through (specific) academics, think tanks, media and policy makers; very long game.
There are many quotes that are likeable. One of my favourites, in this context is:
‘I have never paid full price for anything in my life. That person does not pay an equal share of gst?
The pollie has a pie and pays a subsidised price that is a gst discount?
Access to the black market provides gst discounts of 100%
The tax free threshold could be the level of the retirement pension and a flat tax of 20% on the rest of the gross income with no deductions..
I find it amazing that individuals who pay no income tax can spend a $1m of their daughter’s wedding or buy their fiance a $2m ring?
The tax office should at least levy an income tax assessment on those totals?
Still we are rich and until we are no longer rich the world can please itself.
The world may not be ending but the climate is sure as hell a-changing. We still have summer here in South Oz, balmy high 20’s in what was once a cooling autumn period coming into winter.
We moved from Sydney to Southern Highlands. When looking for places to live in , the local estate agents told us that they had hardly had a summer the last few years…
That suited me coming originally from the cold climates. Now we are supposed to have a coolish autumn, instead we are experiencing our second never-ending summer… Just as well we installed a costly air-conditioning unit, not to keep us warm in winter, but cool in in summer..
The heating and the double glazing were already sorted…