by Alan Thornhill
A new report says big miners – and tobacco companies – would be among the main winners from the Federal government’s proposed tax cuts.
The report, funded by the Get Up organisation, concluded that shareholders in the USA, UK and Japan would collect 15 per cent of the offshore benefits.
The authors described these as the “most significant” gains produced by the proposed scheme, which they described as the “centerpiece” of the Turnbull government’s economic plan.
It was produced in consultation with corporate tax experts, including Associate Professor Roman Lanis, Dr Brett Govendir and Mr Ross McClure from the University of Technology Sydney, with help from to Mikhail Shashnov.
The government has yet to comment on the report.
Its authors reviewed the 250 largest payers of corporate tax in 2013-14 – the most recent year for which Tax office data was available.
It was used to identify the percentage of overseas-based shareholders and calculate the proportion of the corporate tax cut that would flow to them in the form of increased dividend payments.
A detailed analysis of the top 20 corporations was then undertaken.
The results were then assessed to determine who the main beneficiaries of the corporate tax cut were.
This had shown that if the corporate tax rate was cut to 25 per cent, in the planned five year period, those companies would get a total tax benefit of $5.526 billion per annum.
The report also said: “an astonishing 40 per cent – at least $2.176 billion – would be lost to offshore investors in dividend payments.”
It said too, that:- : “corporations operating in the finance and materials sectors receive the lion’s share of total tax benefits at 38 per cent and and 30 per cent respectively.
“This includes banks, insurance, and mining companies.
“Seven of the top 20 corporations are mining and energy corporations.
“They receive a $1.56 billion windfall, of which 63 per cent would flow offshore.
“This is on top of the $7.7 billion the industry receives each year in taxpayer-funded fossil fuel subsidies.
It also said two of the top 20 beneficiaries are Big Tobacco companies – British American Tobacco and Philip Morris.”
The report said these companies stand to receive a combined benefit of $88.5 million, of which 100 per cent would flow offshore.
by Alan Thornhill
Malcolm Turnbull’s policy speech yesterday was a polished performance.
He managed to suggest, for example, that something very like the Brexit disaster could well sink Australia, too, if we don’t vote the right way on July 2.
Without actually saying so.
So is there a danger, in his message that might not be immediately apparent?
Is the lustre, of his carefully crafted message, for example, brighter than its bluster?
The Prime Minister assured voters, constantly, throughout his speech, that his Coalition has a plan to deal with all eventualities, that might arise over the next three years.
Without saying, too specifically, what it was
He also boasted that some 300,000 new jobs had been created, on his government’s watch.
Without mentioning that most of them are part time positions, with pay rates that don’t cover grocery bills
This has left many Australians, particularly the young and the old, without a place in Australia’s modern work-force
So it might well be worth looking again at just what the Turnbull forces are planning to do, as well as what Mr Turnbull, himself, is actually saying.
Tax cuts, both for Australians on high incomes – and the big corporates – are at the heart of his plan.
It may well be worth remembering, at this point, that much of the vote for Britain’s exit, from the EU, came from poor areas, in Britain’s north.
That is from the very people who have suffered most, over the years, from the austerity that came with Thatcherism, and its successors.
Eminent economists, like America’s Paul Krugman are not impressed by arguments that rising wealth for the rich will produce more jobs for the poor.
Krugman says that’s like relying on “the austerity fairy” to overcome unemployment.
However that argument still appeals, even if its strongest appeal is to those who benefit most from it.
by Alan Thornhill
Malcolm Turnbull says: “the shockwaves in the past 48 hours from Britain’s vote to exit the European Union are a sharp reminder of the volatility in the global economy.”
Delivering his policy speech in Sydney for the July 2 elections, the Prime Minister also spoke of the need for stable majority government, experienced economic leadership and a national economic plan.
An edited copy of his 4,000 word speech is reproduced below.
After praising senior Liberals who attended the launch, Mr Turnbull said Australia needs a national economic plan which “recognises the nature of our times – both the opportunities and challenges – and gives us the resilience we need to succeed.”
“Only the Liberal National Coalition can deliver that plan, that security, that leadership,” he added.
“Everything we seek to achieve, all of our hopes, our dreams depend on strong economic growth, “ Mr Turnbull said.
In a strong economy, business is confident and prepared to risk investing, expanding and hiring.”
Mr Turnbull said: “Our business tax cuts encourage small and medium businesses to do just that.
“A strong economy means a mum whose kids are now at school and wants to work a few more days, or work full time, will have plenty of opportunities to do so,” Mr Turnbull said.
“And our childcare reforms will make it easier for her to do so too,” he added.
“It means that young men and women who have left school and are looking for a job will find an employer who is hiring and is happy to give them a start.”
“Our PaTH program with job training and internships will provide additional support to youth employment,”Mr Turnbull added.
A strong economy means we can fund our Innovation and Science Agenda to ensure our kids learn the digital skills of the 21st century, our research is commercialised to create jobs here at home and investors support start-up companies.
A strong economy means that senior Australians know their children will be in good jobs, their investments will deliver better returns and that Government will have growing revenues to support their pensions and health care.
It means that the farmer is getting much better prices for his cattle and can afford to hire a local contractor to replace his fences, clean out a dam or build a new hay shed.
It means the cafe, the restaurant, the hotel has more tourists and they hire more staff to cater for them.
All thanks to our export trade deals.
A strong economy means that builders will be hard at work on new homes and tradesmen will have more jobs.
It means that a manufacturer has more export orders, can buy more equipment, hire more workers and expand their business.
A stronger economy means we can fund over $50 billion in 21st century road, rail and other infrastructure including the Western Sydney Airport and the 39,000 jobs it will create.
“A stronger economy means we can afford to fund world-class education and health services, including Medicare, without weighing down our children and grandchildren with more debt and deficits,” Mr Turnbull said.
A strong economy means we can meet and beat our international obligations to address climate change and do so without massive hikes in electricity prices as Labor would do.
“We have a national economic plan because the prosperity and security of 24 million Australians depend on it,” he said.
Mr Turnbull said success in the 21st Century cannot be taken for granted.
“Always expect the unexpected.”
“We will need to renegotiate vital trade deals with Europe and Britain,” Mr Turnbull said.
“We concluded five in the last three years – Japan, Korea, China, Singapore and the Trans Pacific Partnership.
“In six years Labor concluded none,” he said.
“We have carefully considered what we need to do to succeed, to make the transition from an economy fired up by a once in a century mining construction boom to one that is more diverse, more innovative, smarter, more productive – an economy that wins, and keeps on winning.”
“So there is a clear cut choice at this election,” Mr Turnbull said.
“We present our fellow Australians with a national economic plan every element of which supports more investment, stronger economic growth and more jobs.
“Our plan invests $1.1 billion to promote leading-edge innovation in our industries and to prepare our children for the jobs of the future.”
Our plan promotes export trade deals to generate 19,000 new export opportunities, giving our businesses premium access to the biggest economies in our region.
Our plan invests in local defence industries to ensure every defence dollar possible supports advanced manufacturers and thousands of Australians jobs.
Our Enterprise Tax Plan provides tax relief to tens of thousands of small-to-medium family businesses now and to all companies over time so they can invest, grow and hire more Australians.
“On the other hand, our opponents in the Labor Party have no economic plan.”
“Labor believes its best hope of being elected is to have trade union officials phone frail and elderly Australians in their homes at night, to scare them into thinking they are about to lose something which has never been at risk,” Mr Turnbull said.
“That’s not an alternative government, that’s an Opposition unfit to govern.”
Every element of Labor’s platform would discourage investment and employment.
He described it as: “a recipe for economic stagnation.”
“If returned at this election, we will convene a joint sitting to restore the rule of law in the construction industry and reinstate the Australian Building and Construction Commission, Mr Turnbull said.
So Australians could have the building infrastructure they need “at a price they can afford.”
He said: “housing values would fall in a fragile property market and rents would rise, because of Labor’s investment destroying ban on negative gearing and 50 per cent hike in capital gains tax.
“This threat is real.
“ So we need to be crystal-clear about what our votes will mean,” Mr Turnbull said.
“If your local vote is for Labor, Greens or an Independent, and you are in one of the 20 or so key battleground seats across the country, it is a vote for the chaos of a hung Parliament, a budget black hole, big Labor taxes, less jobs and more boats,” he warned.
Only a Liberal or National vote ensures stable government, a clear economic plan, real funding for the aged, Medicare and education; more jobs and strong borders.
Mr Turnbull urged Australians to: ““Vote for your local Liberal or National in the House and in the Senate.”
“In the last calendar year, there were 300,000 new jobs,” the Prime Minister said.
“Our unemployment rate of 5.7 per cent is well beneath what was anticipated when the Coalition came to office,” he added.
None of this happens by chance. Strong economic leadership supporting hard-working Australians means that, even with difficult global headwinds, we continue to grow our economy and expand our workforce.
And, today, I can announce additional policies from our Coalition team to support our national economic plan for jobs and growth.
Mr Turnbull said his government is determined to ensure none of our regional communities are left behind as we make the transition to a stronger new economy.
“… our regions must be at the frontline of the drive for innovation, jobs and growth,” Mr Turnbull said.
Our ‘Regional Jobs Fund’ is a major commitment… he added.
“As we build a stronger economy, it is vital that we also do all we can to ensure all Australians, especially young Australians, are not left behind,” he added.
So the Coalition woulds deliver a record $73.6 billion over the next four years for all Australian schools,” he said.
“Today, I can announce an additional $48 million for scholarships under the Smith Family’s Learning for Life program, to help disadvantaged students to complete year 12 and transition to work or further education and training,” he added.
“The Coalition will also invest $31 million in programs to encourage more girls and women to study and work in science, technology, engineering and mathematics,” Mr Turnbull said.
It would also help older Australians get smartphones.
He said only about one household in five, with people aged 60 or above, had a smartphone.
“To make their lives easier, to help them retain their independence, and to keep them connected to families and friends, I am announcing today a $50 million Coalition strategy to assist seniors who want to improve their digital literacy skills,” he said.
“And as announced earlier today, my Government will be investing $192 million more in front line mental health services including twelve suicide prevention sites around Australia and ten more headspace centres; and at the same time using smart phone and other technology to make these services more accessible,” he said.
This complements our support for Veterans’ mental health programs, itself a reminder that we best honour the diggers of Gallipoli and Fromelles by supporting the veterans and their families of today.
Mr Turnbull said; “only a strong Australia can be a safe Australia.
“After six years of abject Labor neglect and indecision, our continuous shipbuilding strategy will ensure Australia retains a sovereign capability to build and sustain naval vessels, securing thousands of advanced manufacturing jobs for decades to come,” he added.
Mr Turnbull said:”Labor’s abandonment of John Howard’s proven border protection policy opened the door to the people-smugglers:
The results had included:-
- 50,000 unauthorised arrivals on 800 boats,
- 1200 deaths at sea, of which we know,
- Over 8000 children put into detention,
- 17 detention centres opened, and
- An $11 billion border protection budget blowout.
“In contrast, the Coalition has restored security at the border, integrity to our immigration program – and with it, public trust,” he said.
“I am proud to announce that today marks 700 days without a successful people-smuggling venture to our country,” he added.
“I am also very proud to announce that we have removed every child from detention in Australia,” Mr Turnbull said.
Labor had failed Australia before.
“The people-smugglers are looking for the earliest sign that an Australian government will waver,” he added.
Mr Turnbull said: “our policies are tough.
“But these policies have stopped the drownings at sea, and restored the integrity of, and trust in, our large but orderly immigration and refugee programs,” he added.
To further strengthen our domestic security I announce initiatives that go to that most fundamental of liberties – the right to live without fear of violence.
Mr Turnbull also said: “my first announcement as Prime Minister was a new $100 million package to encourage all Australians to confront squarely and honestly the ugly truth of violence against women and children in our society.
“Today, I can announce a $64 million commitment to crack down on the trafficking of illegal firearms on our streets, in particular by criminal gangs,” he added.
He said he is asking Australians to make a clear choice — to back a strong and stable Coalition majority government that can press ahead with its plan for a stronger new economy.
That would deliver the economic security that enables Australians to fulfill their aspirations.
“That is why I am asking my fellow Australians at this election to support our Coalition’s National Economic Plan for a Strong New Economy,” he said.
by Alan Thornhill
The UK Prime Minister, David Cameron, announced today that he is planning to resign before a Conservative Party conference in October.
His statement follows the failure of a referendum he promoted to keep Britain in the European Union, which it joined 43 years ago.
The loss sent global currency and share markets into chaos and pushed the British pound to its lowest point in 25 years.
The BBC put the number of votes urging Britain to leave the EU at 17,410,742 or 51.9 per cent of the total cast.
It said, too, that 16,141,241 votes were cast, by those who want Britain to stay in the EU.
This was 48.1 per cent of the total vote.
Australia’s Prime Minister, Malcolm Turnbull, said: “ This is a momentous and historic decision and we respect the wishes of the British people, expressed through this referendum“
However he added: “I want to say that Australians….will be concerned by the uncertainty and instability in global markets, falls in currencies, including the Australian dollar and in equity markets.”
But Mr Turnbull said, too, that: “it is important to remember that the Australian economy is strong and resilient and has weathered global shocks before and weathered them well.”
“So there is no cause for Australians to be alarmed by these developments,” Mr Turnbull said.
But he said there would be a “… a period of uncertainty and some instability in global markets.”
“ I’ve no doubt that European leaders will provide reassurance and leadership that will in due course, settle many if not all of those uncertainties,” Mr Turnbull said.
However he added: “…now more than ever Australia needs a stable majority Coalition Government .”
He said the nation also needed a strong economic plan that sets Australia up for a prosperous future.
This would enable Australia to take advantage of new opportunities and resiliently meet the challenges and the headwinds “that we cannot always anticipate and that we cannot always influence.”
“But but they will always be there,” Mr Turnbull said.
by Alan Thornhill
The British Prime Minister, David Cameron, is thinking of stepping down in the wake of his defeat in a campaign to keep his country in the European Union.
Although the count in the referendum on this issue is not yet complete, experts at the BBC were predicting, early this afternoon Australian time, that Britain would see a 52-48 per cent vote in favour of Britain leaving the EU, which it joined 43 years ago.
The vote in favour of leaving was unexpectedly high, particularly in Britain’s north.
The BBC said 15,580,755 Britons had voted to leave the EU at that point, while just 14,439,820 had voted to stay.
The knock-on effects were immediate.
Australian shares were 3.57 per cent down at 2.15 PM AEST, while the $A was then hovering at 73.44US cents, a 3.84 per cent fall on the day.
And confusion reigned on global financial markets.
Mr Cameron had campaigned hard to keep Britain in the European Union.
So his apparent failure to do so is both a big personal and political set back for him.
The British pound dropped to levels not seen in 25 years, as news of the referendum result spread.
Austerity measures, adopted by his government, are believed to have made a big contribution to the result of the referendum.
It has lessons, too, for Australia which is to hold a Federal election on July 2.
Perhaps, though, the main one is that there is, in the end, only one poll that really counts.
For opinion polls, published just one day before the referendum in Britain, suggested
that Mr Cameron’s forces would prevail.
by Alan Thornhill
The $A tumbled today, as the vote to leave the EU came in higher than expected.
However, a short time ago, the BBC still had the vote to stay higher than the vote to leave.
At that point, 2,933,388 Britons had voted to stay in the EU.
But 2,841,709 had voted to leave.
The $A fell by 1.35 per cent, to 75.35 US cents in the confusion that followed the unexpectedly high vote to leave.
That vote is seen, in large part, as a product of British impatience with calls for austerity.
But British Conservatives are being urged today to maintain their faith in the British Prime Minister, David Cameron, who campaigned hard for the no vote, that would keep Britain in the EU.
by Alan Thornhill
Labor says it is planning to ensure that temporary workers are not exploited and that local workers get priority.
In a statement early today, the opposition leader, Bill Shorten, said: “Australians have rightly been appalled by the systematic exploitation of workers on temporary work visas.”
He said thousands of employees at 7-Eleven stores had been exploited through the underpayment of more than $100 million in wages.”
The issue of temporary work visas has already become controversial in the current election campaign, with the National Party urging the government to clarify issues with 457 visas.
These allow farmers to employ visiting students, on pay rates they consider affordable.
Mr Shorten said: “Labor believes the temporary work visa system must have robust safeguards in place to protect all workers.”
It must not be used as a back door avenue to source cheap labour.
“This means that we need policies and systems in place that support a growing economy, prioritise Australian workers, allow industry to access the skills they need, and importantly, ensure and importantly, ensure workers are not disadvantaged or exploited,” Mr Shorten said.
He said Labor’s policies would meet these tests.
by Alan Thornhill
The investment watchdog has launched court proceedings against Macquarie Investment Management.
In a statement today, the Australian Securities and Investments Commission said Macquarie had been the responsible entity of the van Eyk Blueprint International Shares Fund (VBI Fund).
ASIC said the proceedings involve investments of $30 million made by the VBI Fund in 2012 into a Cayman Islands based fund.
It said that fund was known as Artefact Partners Global Opportunities Fund (Artefact).
ASIC also said the VBI Fund was one of the Blueprint series of funds of which van Eyk Research Pty Limited (now in liquidation) was investment manager.
And MIML was responsible entity, the commission added.
It said: “MIML has admitted to five contraventions of the Corporations Act and the parties have filed an Agreed Statement of Facts.”
Commissioner Greg Tanzer said, ‘The Corporations Act places important obligations on responsible entities which protect the interests of investors.”
He said: “Those obligations require responsible entities to have a supervisory and monitoring role in relation to funds, even where external investment managers have been appointed.
“ ASIC will take action against responsible entities when they fail to meet their obligations,” he added.
The Supreme Court of New South Wales will be asked to set apropriate penalties.
An early hearing is expected.
Weathercoast by Alan Thornhill
A novel on the murder of seven young Anglican Christian Brothers in the Solomon Islands.
Available now on the iTunes store.
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
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