Rich tax dodgers to face bigger risks

A new agreement will help the Federal government catch rich tax dodgers, the Treasurer, Wayne Swan, said today.

He made the declaration Wednesday, after the G8 committed itself to a new global standard for the exchange of tax information.

Mr Swan welcomed the G8′s announcement, saying: “Governments around the world have a responsibility to make sure that their tax systems are both fair and transparent.”

He said this automatic information exchange would lead to even greater coordination between global tax authorities.

Mr Swan said the Australian government already co-operates extensively with other governments overseas, to protect its tax base.

That would be strengthened by the new agreement.

“The Government will not shy away from this challenge,” Mr Swan said.

“We’ll continue our reform of the tax laws to ensure that multinationals and high wealth individuals pay their fair share.

He said this would ensure that families and small businesses do not pay “disproportionate” shares of the nation’s tax burden in future.

Prospects brighten, but…

Australia’s growth is likely to rise, but that might not be sustained.

These prospects are reflected in annualised growth rate of the Westpac Melbourne Institute Leading Index, which hit 5.4 per cent in April.

This figure, which has just been released, is comfortably above its long term trend of 3.0 per cent.

Two factors drove most of the 2.4 percentage point pick-up.

These were improvements corporate profits and productivity.

Both added 1.1 percentage points to the pace of growth

Westpac Senior Economist, Matthew Hassan, said that: “After a slight moderation in March, the Leading Index picked up again in April.

“ However we remain concerned that this above trend pace will not be sustained over the course of 2013,” Mr Hassan warned.

“…our chief concern is that the first few months of the year saw rallies in commodity prices, profits and the equity market that have all since reversed,” he added.

Warning on trade issued ahead of the Brisbane G20 summit

The world’s trading system is in trouble and G20 leaders must fix it.

These calls were made ahead of a G20 meeting to be held in Brisbane on November 15 and 16.

Mark Thirlwell, of the Lowy Institute, warned that : “Opting to stand by while the multilateral system unravels is precisely the kind of risky, high-stakes gamble that world leaders should be working hard to avoid.”

In a new study, Mr Thirwell argues that repeated failures to complete the Doha Round of trade negotiations had led to growth in ‘murky’ protectionism.

He said that, and the rise of mega-regional agreements, including the TTP and the new EU-US trade talks launched this week, reflect serious strains in the multilateral trading system.

Yet for more than half a century that system had facilitated the growth of world trade and global prosperity.

‘It’s time for leaders to reverse the slide of trade down the G20 agenda,” Mr Thirwell said.

World leaders must make a renewed commitment to save the multilateral trading system.

Small business owners:A word from the Treasurer

Small businesses now have only a short time left to take advantage of new tax reforms.

The Treasurer, Wayne Swan, reminded the nation’s 3.2 million small business owners that small businesses which invest in new equipment this financial year will be able to claim an immediate deduction in this year’s tax return under Labor’s $6,500 instant asset write-off.

And the financial year, of course, ends on June 30.

“Those businesses buying assets costing under $6,500 can deduct the full amount against income earned this year,” Mr Swan said.

He said this: “…will ease the burden of bookkeeping having to depreciate assets over a number of years.

The Treasurer also said the Government had also simplified depreciation arrangements for assets costing $6,500 or more.

“These businesses can depreciate these assets in a single pool, claiming 15 per cent in the first year and 30 per cent each year after,” he said.

“In addition, small businesses purchasing a motor vehicle will be able to claim an immediate deduction for the first $5,000 before depreciating the rest in the single depreciation pool.

“For example, a small business that purchases a ute for $20,000 by June 30 will be able to deduct $7250 in this year’s tax return.

“ If they also bought machinery worth $5000 they would also receive an immediate deduction of the full amount, enabling them to claim $12,250 in tax deductions in the first year and access cash sooner.

Need more?

Increase Newstart now:ACOSS

A major welfare organisation says an increase in the Newstart allowance is now urgent.

The Australian Council of Social Service made the call after a Senate Committee recommended that the payment, which was cut in January, be increased.

ACOSS endorsed the report by the Senate Education, Employment and Workplace Relations Legislation Committee.

It said the latest committee report had gone further than previous inquiries which had acknowledged that the payment is too low by also recommending that it be increased.

ACOSS chief, Dr Cassandra Goldie, said most of the 80,000 single parents affected had lost between $60-100 per week, when the payment was cut, earlier this year.

“ It’s time the Government listened to this irrefutable and overwhelming mountain of evidence, including from its own government Committees, and immediately move to increase the single rate of Allowance payments by $50 a week,” Dr Goldie said.

Mistakes with money:how to avoid them

Even small mistakes with money can be very expensive.

So it’s best to avoid them.

The Australian Securities and Investments Commission has stepped in to help.

It is meant to help the young, in particular.

The Commission has launched a new initiative that will help 16–25 year olds avoid expensive ‘rookie errors’ when they make first big financial decisions.

Its ‘MoneySmart Rookie’ plan involves a series of videos, case studies, information and tools to help young people make smarter financial decisions.

It also gives educators guides that have been produced for mentors and advisers working with young people.

The launch follows 18 months of extensive research and consultation with youth experts, youth organisations and young people to understand what challenges they face when managing their money.

The content can be found by searching the ASIC site.

Rates could fall further

Australians are starting to borrow more.

And more rate cuts are possible.

Both developments were noted in the minutes of the Reserve Bank Board’s latest meeting.

Although the meeting was held earlier this month, the minutes have only just been released.

On rates, the bank said: “The Board … judged that the inflation outlook as currently assessed might provide some scope for further easing, should that be required to support demand.

On borrowing, it said there are “signs that the appetite for borrowing in the household sector was picking up.”

This could have important consequences.

As the bank noted “…the housing market generally appeared to be improving, as the effects of the most recent and earlier reductions in the cash rate worked their way through the economy.”

It added: “Forward-looking indicators of labour demand were consistent with further moderate growth in employment.

“Wages growth had slowed over recent quarters, which would help to contain inflation as the exchange rate depreciated.”

The bank noted too, that: “Interest rates had declined further as a result of the Board’s decision at the May meeting.

“The exchange rate had also depreciated noticeably, though it remained at a high level considering the decline in export prices that had taken place over the past year and a half.”

The bank said too, that it is possible that the exchange rate would depreciate further over time as the terms of trade declined.

It said that would help to foster a rebalancing of growth in the economy.

Abbott quiet on polls

Perhaps wisely, Tony Abbott refused today to comment on what he called “the ups and downs of opinion polls.”

But he must have been tempted. At that point, the latest poll showed the Coalition up, at 57 per cent, and Labor trailing on just 43 per cent, on a two party preferred basis.

Fairfax papers, which published that poll, attributed Labor’s fall, from 46 per cent the previous week, to male voters turning away from the party, after Julia Gillard’s contentious remarks last week on abortion and pale blue ties.

However the Morgan poll, published later in the day, had a different story to tell.

It showed L-NP support down 2.5 per cent in a week, to 53.5 per cent, and Labor’s up, by the same amount, to 46.5 per cent, also on a two party preferred basis.

Either way, if figures like these were replicated in the September 14 elections, Mr Abbott would become Australia’s next Prime Minister.
However, the commentary accompanying the Morgan poll was interesting.

It was headed: “Female support rises strongly for the government, after Howard Sattler’s interview with the Prime Minister.”
In that – widely condemned – interview the – subsequently sacked – West Australian shock – jock, had asked Ms Gillard if her partner, Tim Mathieson, is gay.

The Fairfax poll, though, concluded that the Prime Minister, had gained no ground with women, at all, by attempting to make both abortion – and misogyny – election issues.

Take your pick.