Browsing articles in "Tax"
Monday 30th November 2015 - 5:38 pm
Comments Off on Pollster says support for Turnbull government still strong

Pollster says support for Turnbull government still strong

by Alan Thornhill

The Turnbull government has maintained its lead over Labor in the latest Morgan poll.

 

It would easily win an election held today.

 

The poll results, published today , give the government 56 per cent support, on a two party preferred basis, to Labor’s 44 per cent.

 

They also show confidence in the government up 2.5 points to 122, its highest level since March 2011.

 

Pollster Gary Morgan said the study showed the Turnbull Government’s honeymoon continuing  as Australia heads towards Christmas.

 

This week Prime Minister Turnbull has travelled to the Commonwealth Heads of Government Meeting in Malta – his first meeting with the Queen since becoming Prime Minister – and on to the United Nations Climate Conference in Paris.

 

“However, despite the issues of Global Warming and terrorism dominating the news headlines lately, Turnbull’s most important task as Prime Minister is to ensure a growing Australian economy which provides gainful employment to as many Australians as possible.”

 

“Ultimately it is job creation and sustainable economic growth in Australia which will decide the success or otherwise of Turnbull’s Prime Ministership,” Mr Morgan said.
“To be a successful Prime Minister Turnbull needs to take advantage of the boost to confidence his ascension to the top job has created …. and not allow Labor and the Greens to obstruct the implementation of overdue reforms to the Australian economy.

 

“If they continue to hold-up needed reforms, Turnbull must bypass this ‘blackmail’ and let Australian electors decide by calling an election early in 2016.” Mr Morgan added.

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Friday 27th November 2015 - 7:30 am
Comments Off on Malcolm;s big statement

Malcolm;s big statement

by Alan Thornhill

Some might call it a mini-budget.

 

All the Prime Minister said, in an interview with Leigh Sales on the ABC last night, though, is that his government would release “an innovation statement” within the next two weeks.

 

Well, perhaps he did add a little dressing, to make the prospect enticing.

 

How?

By promising, for example, that he would would “set out a very large number of substantial measures. to drive the innovation that would ensure that Australians, their children and grandchildren, will have great jobs.”

 

“…better jobs in the future that will drive our economy,” he added.

 

Then he laid it on the line.
“I don’t think anybody has any doubt that if we are to remain the high wage, generous social welfare net country, first world country that we want to be then we need to be more innovative, more competitive, more productive and the innovation statement will be a good example of the measures the government is undertaking to achieve that.”

 

Yet Mr Turnbull, himself, has some catching up to do in this regard.
He saddled Australia with the pursuit of an internet system which, even if achieved, would offer speeds be well below those of many other first world countries, such as France.
Of course, with its vast expanses to connect, Australia does have difficult – and expensive – problems to overcome, in building anything that could – even remotely – be called a fast internet system.

 

Yet the picture emerging from Mr Turnbull’s attempt to do so – on the cheap – has not been impressive, so far.

 

Long waits for connection.

Cost over-runs.

 

There can be no doubt about one thing.

 

This “innovation statement, when it appears, will be drawn up to underwrite Mr Turnbull’s bid for re-election next year.

 

Politically, his situation has its difficulties, despite what some are calling his initial “honeymoon” period.

 

He is still the man who became Prime Minister, without a popular mandate.

 

And he is not short of opponents who stand ready to remind him of that fact, if he starts making mistakes, as most Prime Ministers do, as they start to settle into office.

Mr Turnbull also declared during his interview last night that he is “comfortable” in his new job.

 

But make no mistake.

 

His handling of the Brough affair is already being watched very closely.

Monday 23rd November 2015 - 11:51 am
Comments Off on Chef cooks the books

Chef cooks the books

by Alan Thornhill

A Sydney chef bas been caught cooking the books.

 

Her crime was exposed by the corporate watchdog, the Australian Securities and Investments Commission.

 

In a statement today ASIC said:“Sydney-based chef Nicole Annette McIlwaine has been convicted of dishonestly using her position as director with the intention of causing detriment to a company.”

 
It added:”An ASIC investigation found that Ms McIlwaine dishonestly obtained $62,151.68 from the sale of a leasehold held by her company Stockmarket Cafe Pty Limited, at a time when she had stated she was aware that the company would be liquidated and that the money should be used to pay company creditors.

 

 

“ As a result no funds were recovered by the liquidator and no funds were returned to the principal creditor, the Australian Tax Office.

 
“Ms McIlwaine was convicted ex-parte of the offence and on 17 November 2015 the conviction was confirmed and she was sentenced to a $500 two year good behaviour bond.

 
“As a result of the conviction Ms McIlwaine is automatically disqualified from managing corporations until 16 November 2020.
‘The Court found that Ms McIlwaine had quite clearly dishonestly obtained and spent company money,” ASIC Commissioner Greg Tanzer said.

 
‘The action against her shows how serious ASIC is about cracking down on this type of behaviour from company directors.”
he matter was prosecuted by the Commonwealth Director of Public Prosecutions.

Tuesday 10th November 2015 - 5:50 pm
Comments Off on A bigger GST:can it be justified?

A bigger GST:can it be justified?

by Alan Thornhill

“The OECD agrees with the government.”

 

“But the Opposition does not.” Malcolm Turnbull.

 

This is how the Prime Minister sought to recruit the acknowledged expertise of the Organisation for Economic Cooperation and Develoment in Parliament today strengthen his case for tax reform, with a bigger GST and appropriate compensation for low to middle income earners.

 
However, in interviews throughout the day, senior Labor figures continued to argue, that low to middle income earners would be the  very people who would be hit hardest by a bigger goods and services tax.

 

The Shadow Treasurer, Chris Bowen, cited independent research, to back Labor’s case.

 

It concluded that a family on $172,638 would lose 8.8 per cent of its disposable income, if the kind of tax reform the government has been talking about were introduced.

 

However a family on $26,131 would lose 20.1 per cent.

 

 

“It’s just not fair,” Mr Bowen said.

 

Mr Turnbull insists, though, that a Coalition government would not introduce any reforms that are not fair.

 

Labor acknowledges that Mr Turnbull is “persuasive,” with one senior Opposition figure describing him as a “sweet talker.”

 

But it is determined to undermine his credibility, before the Federal elections late next year.

 

A bigger GST, favoured by Federal Treasury and a number of conventional economists, is synonymous with the phrase tax reform, in Malcolm Turnbull’s mind.

 

You can’t have one without the other.

 

And Mr Turnbull, himself, acknowledged in Parliament today that there are “elements” of the GST which can be “regressive.”

 

That is hit the poor harder than the rich.

 

But, he insisted, these are probably not as “big” or as “bad” as once thought.

 

He insists, though, that fairness, on this front, will be achieved through offsetting elements of the tax reform package he will introduce.

 

As the details of that package have not yet been released, the public is not yet in a position to make a final judgement.

 

Both the National Centre for Social and Economic Modelling and the Parliamentary Library have concluded, on broad principles though, that comparable amounts of revenue can be raised, through the rival proposals of Liberal style tax reform, and the carbon tax, favoured by Labor.

 

But they also conclude the carbon tax would be much cheaper for low to middle income families, than Liberal style tax reform.

 

The debate still has a long way to go.

 

But it bears close watching, on both tax and environmental fronts.

Monday 9th November 2015 - 10:22 am
Comments Off on Tax:if penguins could vote

Tax:if penguins could vote

by Alan Thornhill

Analysis

 

The emperor penguins of Antarctica have their own ways of coping with extreme cold.

 

One, featured in a current BBC documentary, shows them huddling together in a gradual circular motion.

 

But is the penguin in the middle  getting too hot now,as a result of global warming?

 

And, if so, is this majestic penguin gradually assuming a role once filled by the humble coal mine canary?

 

That is warning mankind of the potentially catastrophic consequences of the build up of dangerous gases.

 

Such as carbon dioxide, which contributes to global warming.

 

The South sea islanders the Federal Opposition Leader, Bill Shorten visited last week, left him in no doubt about about their fears on this topic.

 

They dread the catastrophic inundation of their low-lying island homelands, if the Antarctic ice shelf melts, as global warming advances.

 

We can expect to hear more from Mr Shorten, on this subject, when Federal Parliament resumes this week.

 

Surprising as it might well be, all this will have a direct impact on the Federal election, that is to be held in Australia late next year.

 

That is already reflected, in the current tax debate.

 

The reasons for that are powerful.

 

The new government, of whatever colour, will need more revenue, to start curbing still growing deficits.

 

The Liberals are toying with the idea of increasing the GST, or broadening its base, to achieve that.

 

And Labor might well re-introduce a carbon tax, if it is elected next year.

 

So long-suffering Australian voters can expect not one, but two scare campaigns before then.

 

That is as each side kindly explains the disastrous consequences of accepting the other’s still not fully explained proposals.

 

All this makes research published by both the National Centre for Social and Economic Modelling and the Parliamentary Library very valuable.

 

What they mean is that, for once, voters will have some useful independent advice, before a controversy that directly affects not only their finances, but the very future of the earth, itself, really gets under way.

 

The Greens Treasury Spokesman, Adam Bandt, came close to the heart of the matter, when he noted that the Parliamentary Library had reported that both a higher GST and a carbon tax could raise useful amounts of extra revenue.

 

It found, for example, that raising the GST rate from 10 to 12.5 per cent, might raise an extra $10 to $15 billion a year and

a comparable amount could be expected from re-introduction of a carbon tax at $29 a tonne.

 

However it also found significant differences.

 

The GST proposal, for example, could be expected to add $31 a week to the bills low to moderate income families must pay each week.

 

However a carbon tax, at that rate, which would raise a comparable amount of revenue, would cost the average family a lot less than that.

 

Just under $11 a week, in fact.

 

Our Emperor penguins might well be be expected to solidly back the carbon tax proposal over the higher GST, if they could vote.

 

After all, there was clear evidence that, in its first outing, that the carbon tax was having at least some impact on Australia’s pollution levels, though not enough.

 

The Coalition also insists that its policies of paying big polluters to stop are working.

 

But statistical support, for that claim, has been scarce.

 

Not enough to set Happy Feet dancing in Antarctica, anyway.

Thursday 5th November 2015 - 7:58 am
Comments Off on A higher GST? take care

A higher GST? take care

by Alan Thornhill

There’s been a lot of talk about a higher GST.

 

Raising the rate from 10 to 15 per cent, perhaps.

 

Then using the extra revenue to fund  “much needed” cuts to income and company taxes.

 

A peak welfare body, the Australian Council of Social Service says that’s all hogwash.

 

It says that path leads straight to  tax breaks for the rich at the expense of the poor.

 

It bases that declaration on detailed economic modelling, that it commissioned from the National Centre for Social and Economic Modelling.

 

That research is being published today – and there is a lot at stake.

 

So let’s have a look.

 

NATSEM says its study confirms that using an increase in the GST to fund income tax cuts will mean households on low and modest incomes are significantly worse off and higher income households are the winners, paying less tax overall as a proportion of their income.

 

That’s not what advocates of a higher GST have been saying.

 

A shiftt towards a greater reliance on direct taxes can have advantages.

 

However the NATSEM modelling suggests that lifting the GST to 15 per cent has its dark places, too.

So what are they?

NATSEM found that either  raising the the GST rate from 10 15 per cent or  broadening its base to include fresh food, health and education confirms that either change would be regressive.

 

“Low and modest income households would clearly pay a higher proportion of their income, in comparison to higher income households through an increase in the GST, whether by increasing the rate or broadening the base by removing the exemptions,”  ACOSS CEO, Dr Cassandra Goldie said.

 

Ben Phillips of NATSEM agreed, saying:“An increase in the GST has a much bigger impact on low and modest income households because they spend more of their overall income to meet their living costs, in comparison to people on higher incomes who are better able to save.”

 

An increase in the rate of the GST to 15 per cent would require people in the lowest 20 per cent of the income brackets to pay 7 per cent more, people in the middle 20 per cent 4.2 per cent more, and people in the highest 20 per cent just 3 per cent  more of their income.

 

Mr Phillips also said, “A broadening of the base of the GST to fresh food, health, water and education would also be regressive, with people on lower incomes paying proportionately more of their incomes on these essentials.”

 

The relative impacts are clear: 4.6 per cent of income for people in the lowest income brackets, 2.7 per cent for people in the middle, and just 1.7 per cent for the highest income earners.

 

A higher GST to fund income tax cuts?

 

“NATSEM has also modelled the impact of raising the GST to 15 per cent to pay for a cut of 5  per cent in all personal income tax rates…

 

It says “ The results are stark.”

 

“Ttwo thirds of households – on incomes up to about $100 000 –  would be worse off and the top 40 per cent would gain at the expense of the bottom 60 per cent.

 

The lowest 20 per cent of households by income would lose $33 a week (6.6 per cent of income) on average while the top 20 per cent would gain an average of $69 a week (2.1 per cent of income),” Mr Phillips said.

 

Dr Goldie said, “Increasing the GST to fund income tax cuts is a also a big, complicated revenue ‘churn’ that would do nothing to ease the pressure on State health, education and welfare budgets,….”

 

 

“If it’s not about raising more revenue, the Government has to justify why this option is being considered at all,” she warned.

 

“Raising the GST to fund cuts to personal income tax across the board, as some advocate, is a recipe for more inequality, not a stronger economy,”  Dr  Goldie said .

Monday 19th October 2015 - 7:19 pm
Comments Off on It’s just a honeymoon:Labor

It’s just a honeymoon:Labor

by Alan Thornhill

A senior Labor MP, Anthony Albanese, says he expected the “honeymoon” that the new Prime Minister, Malcolm Turnbull, is enjoying in the polls.

 

The latest – a Morgan poll – published today confirmed that the Coalition is well ahead of Labor, with 56-44 per cent lead on a two party preferred split.

 

This trend has also been evident in other recent public opinion polls.

 

It would give the government an easy victory in an early election, if one were held now.

 

That is a major reversal.

 

Labor had been consistently ahead in the polls, until Mr Turnbull successfully challenged Mr Abbott for Liberal leadership last month, defeating him 54-44 in the subsequent party room ballot.

 

But Mr Albanese said Australians are just pleased that the previous unpopular Prime Minister, Tony Abbott, has gone.

 
With a Federal election due next year – or early in 2017 – the Coalition’s resurgence in the polls   has left some Labor people wondering if the Opposition Leader, Bill Shorten, really is the right person for the job.

 

However Mr Albanese, who stood against Mr Shorten in the most recent ballot for Labor leadership, said he is certain that there will not be a fresh challenge to Mr Shorten.

 

Speaking on ABC radio, Mr Albanese said people would soon realise that although there had been a change of leadership, the government is still working on its old  inadequate policies.

 

“I think what people are interested in is policy solutions for Australia,” Mr Albanese said.

Wednesday 14th October 2015 - 4:09 pm
Comments Off on PM defends Cayman Islands investments

PM defends Cayman Islands investments

by Alan Thornhill

Malcolm Turnbull told parliament today that the purpose of an investment he has in the Cayman islands is to ensure that his overseas income is taxed at full Australian rates.

 

The Prime Minister faced a barrage of opposition questions on the issue today after a Labor Senator raised it in the upper house.

 

Sam Dastyari said nearly 19,000 corporations claim to be registered in Ugland house in the Caymans.

 

“This is not any ordinary house,” Senator Dastyari said.

 

“In describing this house, President Obama said:“Either this is the largest building in the world or the largest tax scam in the world.”

“Ugland House on Grand Cayman Island is one of the most pre-eminent addresses in the world for tax minimisation,” Senator Dastyari said.

“You have to ask: who invests in the companies that claim to be headquartered in this house?” he added.

 

“Well, friends, among them is our Prime Minister, Mr Malcolm Turnbull.”
How do we know this?

 

“In January this year, Mr Turnbull altered his Register of Members’ Interests entry to include investments in Zebedee Growth Fund, which is incorporated in Ugland House,” Senator Dastyari added.

 

“Zebedee requires any outside investor to front up with at least a quarter of a million US dollars.

 

“And this is not even the only investment the Prime Minister has in the Cayman Islands.”

 

A Labor MP asked Mr Turnbull if his entry in the register was accurate.

 

The Prime Minister said that as far as he knew it was.

 

But if any-one knew otherwise, he would be happy to correct it.

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