Browsing articles in "Tax"
Friday 22nd April 2016 - 9:53 am
Comments Off on Tax:who to believe?

Tax:who to believe?

by Alan Thornhill

Malcolm Turnbull is finding it hard to convince voters that his government is serious about tackling the kind of corporate tax avoidance confirmed in the Panama Papers.

And the Prime Minister did not help his case by giving an apparently confused answer to a reporter’s question on the role his government is actually playing, in this matter.

Meanwhile the Federal Opposition, keen to take whatever advantage it can from this situation, issued a press release today, seeking to do just that.

Its Shadow Assistant Treasurer Andrew Leigh, said the reply Mr Fraser had given conflicted with one a senior tax official had given, to a parliamentary committee.

Mr Leigh noted that that Mr Turnbull had said Australia is “leading the charge globally in going through the Panama Papers”.

Mark Konza had told parliament’s Economic Reference Committee that Australia is part of an international leadership group, that is tackling the matter.

“…I don’t want to say we’re leading, but we’re batting above our weight,” Mr Konza had added.

However Mr Leigh said Mr Turnbull had gone well beyond Mr Konza’s, relatively modest position, when he replied to the reporter’s question.

Mr Konza, Deputy Commissioner, International, ATO, had said only that “ What we are doing is we are taking a, we are part of a leadership group at the OECD.

“ I don’t want to say we’re leading, but we’re batting above our weight,” the tax official had added.

Mr Leigh said:” A Government that has slashed 4,700 ATO jobs and watered down tax transparency laws cannot be trusted in clamping down on tax avoidance.”

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Thursday 31st March 2016 - 4:55 pm
Comments Off on Malcolm Turnbull puts a dodgy case to the Premiers

Malcolm Turnbull puts a dodgy case to the Premiers

by Alan Thornhill

The Federal government will use its economic heft, over the next few days, to force the States to impose their own income taxes, to cover an $80 billion cut in Federal health and education funding.

It says the cuts, over 10 years, have been necessitated by shortfalls in expected  revenue growth.

However figures published by the Australian Bureau of Statistics today, suggest otherwise.

They strongly suggest, that the argument Malcolm Turnbull has advanced, in this case, represents little more than an elaborate job shuffle.

At first, it all seems simple.

The Federal government and the States remain at odds over a tax reform plan that Malcolm Turnbull will put to the Premiers over the next few days.

The Prime Minister will urge the Premiers, at a dinner he will host for them tonight, to impose their own State income taxes to cover an $80 billion cut in Federal revenue, over the next 10 years.

The dinner will  launch proceedings in the latest meeting of the Council of Australian Governments, or COAG.

But Mr Turnbull’s already widely discussed proposal  has not found favour with the Premiers.

However the Prime Minister will insist that shortfalls in expected economic growth have made the cuts necessary.

He will, almost certainly, urge the Premiers over the next few days, to show patience as there are now fresh signs of strength emerging in the economy.

So what do we have, so far?

Another predictable argument between the Federal government and the States, over the carve up of the money used to govern this country.

Ho hum.

But let’s take a closer look at the figures the ABS published today.

They show a remarkably strong trend increase of 3.1 per cent in the number of job vacancies between in Australia between November  last year and February this year .

That left  Australia with 172,900 job vacancies in February this year.

The Bureau also reported  a spectacular trend rise – of 13.4 of cent – in these vacancies since February  last year.

Remarkably, the public sector led the way – with a 24.8 per cent trend rise – over the year, to February.

The  private sector also turned in a strong performance with a 12.4 per cent trend rise.

But as the Federal government is urging the States to do something they don’t want to do – that is impose their own taxes – they would be quite entitled to ask what these figures mean.

Does the spectacular rise in public sector job vacancies, for example, cover a lot of job churning?

The Premiers might  ask, for example, whether highly publicised job cuts – imposed by the Federal  government, were real or illusory.

That is were there a significant number of  Federal public servants who were sacked in  economy drives,  say on Fridays, who were back at new desks, perhaps by the following Mondays.

If job churning of this kind was significant, doesn’t  that cause the Commonwealth case for State income taxes  to collapse?

In any case, the   Federal  government will be hoping that all vacancies are filled quickly.

That would mean that many more people would – once again –  be paying tax and easing the Federal government’s budgetary problems.

Monday 8th February 2016 - 7:04 am
Comments Off on PM speaks more cautiously about a higher GST

PM speaks more cautiously about a higher GST

by Alan Thornhill

Ma1colm Turnbull’s enthusiasm for a higher Goods and Service Tax appears to be fading in the shadow of approaching Federal elections.

The Prime Minister has been careful, in the past, to remain non-committal on the idea, although he has confirmed that his government has been considering it.

That led Labor to mount what Mr Turnbull calls a scare campaign on the issue.

That, in turn, produced distinct unease among government MPs, particularly those in marginal seats.

However, in an ABC television interview, Mr Turnbull said his government would be looking to increase productivity with the tax reforms it would introduce in its May budget this year.

He said:” With the GST income tax swap proposal, it has not yet passed that first test and that’s the analysis that is being undertaken.”

This was, perhaps, the first time that Mr Turnbull has been so frank, on this subject.

But he set out the government’s objectives quite bluntly.

“… we have not made a decision on that yet,” he said“ and it does pose a lot of complexity.”
“ The objectives of this or any other tax change have got to be fairness, no increase in net taxes.”
“W don’t want to increase the total tax take….
“And it’s got to deliver a strong growth and jobs outcome,””otherwise it isn’t worth the trouble and expense of making the change.”

Mr Turnbull said the present proposals had not yet passed the first test in that regard.

Friday 5th February 2016 - 11:05 am
Comments Off on Tax reform:why you are on the drip

Tax reform:why you are on the drip

by Alan Thornhill

The Federal government’s plans for tax reform – including the GST – are likely to be released gradually over coming months.

The Prime Minister, Malcolm Turnbull made this clear in an interview with an Adelaide radio station early today.

He said the full extent of the reforms would “of course” be revealed on Budget night in May.

However Mr Turnbull added the government might make some announcements before then.

There have been persistent reports that the government is considering increasing the goods and services tax from its present rate of 10 to 15 per cent and broadening its Impact, possibly to include food.

The government has refused either to confirm or deny these reports.

That led the Opposition Leader, Bill Shorten, to criticise the government for what he calls its “lack of transparency” on the issue.

T ax reform is likely to be a major issue at the next Federal elections.

The present government’s term expires in September.

But the election to choose a replacement could be delayed until 2016.

Mr Turnbull warned Coalition MPs early this week that an early election could also be “a live issue” in certain circumstances.

That has left some, particularly those in marginal electorates, very  nervous.

They point out that any increase in the GST would be unpopular and warn, too, that Mr Turnbull has left himself little time to convince voters that such a change is necessary, if he does decide to go down that path.

 

 

 

 

 

 

Monday 1st February 2016 - 6:11 pm
Comments Off on Centrelink’s standards “slipping”

Centrelink’s standards “slipping”

by Alan Thornhill

Centrelink’s service standards are continuing to fall, according to the Federal Opposition.

In a statement today the Shadow Minister for Human Services, Doug Cameron said  “irrefutable evidence from the DHS (Department of Human Services.). Annual Report, Australian National Audit Office (ANAO) reports, Commonwealth Ombudman’s reports, Senate Estimates answers and citizens’ experiences,” confirms this.

Senator Cameron said: “The number of calls answered by Centrelink (initially by its Interactive Voice Response system) has dropped by 3 million in one year.

The percentage of calls answered dropped by 11.1 per cent.

Centrelink is now only answering 64.3 per cent of calls from customers, down from 75.43 per cent in 2013-14.

Yet the “Minister for Human Services Stuart Robert continues to deny that there are significant service problems at the Department of Human Service.).

“The number of calls answered by Centrelink (initially by its Interactive Voice Response system) has dropped by 3 million in one year.

 

“And even if they improve on calls answered, that doesn’t mean people’s problems are resolved.

DHS needs to develop, along with Centrelink users, better performance indicators that actually measure the effectiveness of the whole system, rather than just whether the call has been answered.

“We know that dealing with Centrelink and DHS is becoming more, not less, difficult day to day.

The dread of having to try to get them on the phone when you have a problem is palpable.

The DHS Annual Report shows complaints are up 18.8 per cent n last year, and customer satisfaction is down by 8 per cent.

“The evidence is very clear, DHS is not heading in the right direction when it comes to customer satisfaction or the number of calls,” Senator Cameron said.

“And forcing people online isn’t working either – 37 per cent of people using the Medicare mobile app have experienced problems using it. 40 per cent of calls to Centrelink arise because of difficulty using the apps or website,” he added.

“The Minister’s go-to response when faced with these issues is to say that the Government is spending billions on the welfare infrastructure payment transformation program. But they’re only spending $60m over the next four years, and it isn’t due to be completed until 2022.

“It’s very hard to see how wait times or service standards will improve over the next four years if that’s their only response.”

“This Government is incapable of delivering basic services to the Australian public. Despite the change of leadership in the Liberal Party, they continue to focus on each other instead of delivering timely and quality services to the Australian public.” Senator Cameron said.

So far, the government  has not replied to his latest statement.

Friday 29th January 2016 - 11:27 am
Comments Off on Treasury Secretary explains his budgeting

Treasury Secretary explains his budgeting

by Alan Thornhill

 

 

 

The Treasury Secretary, John Fraser, warned last night that government spending has reached very high levels.

It said it has been estimated that this spending will reach 25.9 per cent of economic output in 2015-16.

Mr Fraser said this assessment was made last December, at the time of the Federal government’s Mid-Year Economic and Fiscal Outlook publication (MYEFO).

Speaking in Sydney, he added:” There have only been four other periods since 1970 when this ratio has exceeded 25 per cent.

“Three of these are associated with economic recession and deficit blowouts – during the early 1980s and the 1990s, and of course just after the GFC.”

Mr Fraser said it’s important that Australia retains “its top credit rating.”

He said Australia about one of only 10 countries in the world to have a triple-A rating from all three major ratings agencies.

But he said that is not at risk.

In fact the agencies assessing the Federal government’s situation last December had been “quite impressed” with its progress towards a budgetary balance.”

But Mr Fraser said that, increasingly, “…we need to frame a Budget over the four years of the forward estimates.”

“ If anything, the forward estimates now seem to be a little more important.”

Mr Fraser said:“There have only been four other periods since 1970 when the government spending to output ratio has exceeded 25 per cent.

“Three of these are associated with economic recession and deficit blowouts – during the early 1980s and the 1990s, and of course just after the Global Financial Crisis.

Mr Fraser added that:“We are a rich country in so many ways and we can look forward to sustained economic growth if we have the right attitude and policies.”

Then he added:“A stronger long term fiscal position will go hand-in-hand with other policies to lift our growth and living standards.”

 

 

Sunday 24th January 2016 - 1:14 pm
Comments Off on Critics question Google’s tax affairs

Critics question Google’s tax affairs

by Alan Thornhill

Analysis

 

Google’s agreement to pay a big back tax bill in Britain has – inevitably – set critics loose in Australia.

The Independent Senator, Nick Xenophon, for example says the internet giant could owe “hundreds of millions” of dollars in this country.

Yet the Treasurer, Scott Morrison, talks of a need for both lower company tax and income tax rates, to keep Australia “competitive.”

Google has, arguably, jumped the gun on that one.

The search engine giant pays tax in Singapore on its Australian advertising revenue.

Official figures showed that it paid $9.2 million in tax in 2014, an amount well below the Australian company tax rate of 30 per cent.

The critics are unlikely to be silenced, while this continues.

Google has used complex tax minimization schemes, to lower its tax bills in Britain.

Such as the “double Irish” and the “Dutch sandwich.”

Senator Xenophon believes it is reasonable to ask whether it has adopted similar strategies in Australia.

That’s a question he says he will put to the ABC’s incoming Managing Director, Michelle Guthrie, when she takes up her new post in May.

Ms Guthrie is already a Singapore based Google executive.

Senator Xenophon sits on the Senate’s multinational tax avoidance inquiry.

Watch this space.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Friday 22nd January 2016 - 7:22 am
Comments Off on Seize our chances:Leigh

Seize our chances:Leigh

by Alan Thornhill

A senior Labor figure says the government should recognise the “stimulatory factors” that Australia now faces.

Speaking in an ABC interview yesterday. the Shadow Assistant Treasurer, Andrew Leigh, said:“ It’s important that you recognise that there’s stimulatory factors for the Australian economy.”

He said these include low oil prices, historically low interest rates and a low Australian dollar.

However Mr Leigh also said the government must outline to the Australia people how it woudl deal with challenges and how “you’ll build the case for productivity.”

The Treasurer “Scott Morrison says that it’s important to protect consumption, ” Mr Leigh said.

However Mr Morrison “won’t rule out raising the GST,”Mr Leigh added.

And that ” is, of a course, a tax on consumption.”

“You’d expect that to hit to consumption just as it did when the GST was first introduced.”

Mr Leigh said all this flowed from the fact that Australia is a “small, open economy.”

This is really important at a time when the global economy faces a set of downside risks,” he said.

“There’s the possibility that China’s contraction will get worse with currency and stock controls, the huge falls on stock markets,” Mr Leigh added.

“Tthe Australian stock market has already lost $136 billion this year – the uncertainties going on around what’ll happen in the global oil market, and yesterday’s Westpac-Melbourne Institute consumer sentiment index falling as well. ”

“All of these things demand a Government that has a long-term economic strategy, not just for tax but also for productivity,” Mr Leigh said.

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