Browsing articles in "Tax"
Wednesday 14th October 2015 - 12:07 pm
Comments Off on Drinkers:who you are shouting

Drinkers:who you are shouting

by Alan Thornhill

Drinkers are paying $6 billion a year in taxes for their pleasures under complex systems which impose widely different rates, according to a new report.
The report, by the Parliamentary Budget Office, broadly supports the findings of an earlier study carried out for the Federal government’s White Paper on Tax Reform.
It notes that current effective excise rates on alcoholic products range from 1.71 per cent for low strength, non commercial beer to 79.38 per cent on spirits.
And it concedes that the present systems of taxing alcohol in Australia “are complex and have evolved over many years.”
“Alcohol is taxed on either a volume or a value basis,” the report says.
And there are a range of effective tax rates applying, depending on ”the type of beverage and packaging, alcohol strength, place of manufacture and the method or scale of manufacture.”
The report notes that from a revenue perspective, the importance of alcohol taxation has declined over time.

However it adds:” This long run trend has been interrupted by several policy changes, most notably the abolition of the wholesale sales tax.”
And it notes:” The complexity has arisen from changes to the system that have been based on specific objectives at the time the changes were made, rather than having been designed from a set of consistent principles.”

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Thursday 1st October 2015 - 12:40 pm
Comments Off on Why some are worrying about PM’s mini-summit

Why some are worrying about PM’s mini-summit

by Alan Thornhill

Events like today’s economic mini-summit can worry particular groups.

And this one is no exception.

That shouldn’t surprise anyone.

After all, it’s no secret that some very high powered – and persuasive – people in Canberra believe a higher GST would be good for the nation.

However others are arguing – anxiously – that this is not the time to take that path.

The Urban Development Institute of Australia (UDIA) is among them.

The UDIA, which describes itself as the peak body representing Australia’s urban development industry isn’t opposed to tax reform.
In fact, in a statement today, it renews its call “for a major shakeup of Australia’s tax system.”
But it also warns that a higher GST would present “a negative shock to both housing affordability and the economy,

In a statement today, it said:” the UDIA is urging recently appointed Prime Minister Malcolm Turnbull and his new ministry to revitalise tax reform discussions with businesses and the broader community, so that a well-considered package of reforms can be taken to next year’s election.

The UDIA ‘s National President Cameron Shephard said: “a great deal of Australia’s economic potential is being held back and squandered by a tax system that has failed to keep up with the times.”

“Inefficient taxes and charges are dragging on economic growth and productivity, holding back jobs, and worsening Australia’s housing affordability crisis.”

“For example, stamp duties are well known to be among the least efficient and most economically damaging taxes available to governments and there is a strong and growing consensus across the community about the need for governments to replace them with something better” Mr Shephard said

“They reduce labour mobility and productivity by locking people into a certain location and – along with other high up front taxes and charges – reduce housing affordability and the supply of new housing. ”

“In contrast, the GST and taxes on the value of land are widely recognised as being much more efficient from an economic perspective, particularly when applied across a broad base.”

However UDIA has strongly warned against raising the rate of the GST, which could raise the cost of new housing substantially at a time when housing affordability is a major concern. ”

“Increasing the GST by just a few percent could result in tens of thousands of dollars in additional tax on new homes, which would push up prices further and reduce the supply of new dwellings”

The UDIA has even done some sums, to bolster its case.

It calculated how much raising the GST from 10 to 15 per cent would add to house prices in Australia’s capitals.

It’s results were

Sydney……………… $42,266
Melbourne…………..$31273
Darwin……………….$28,409
Canberra……………$25,455
Perth………………….$24,318
Brisbane…………….$21,591
Adelaide…………….$19,330
Hobart……………….$17,386

Wednesday 23rd September 2015 - 3:56 pm
Comments Off on Government services hit as pay strike spreads

Government services hit as pay strike spreads

by Alan Thornhill

Strikes over a bitter pay dispute are continuing to disrupt Federal public services and they are expected to spread on Thursday afternoon.

The Community and Public Sector Union said in a statement Wednesday that tens of thousands of public sector workers would be out when Medicare, Tax Office staff and others join industrial action that has already hit international airports.

Their half-day action will begin at lunchtime.
It will also involve workers from the departments of Human Services, Employment, Environment, Education, Agriculture, Defence and Veteran Affairs, along with the Tax Office, the Bureau of Meteorology and the Bureau of Statistics.

The uinion’s National Secretary Nadine Flood said: “These workers are extremely frustrated with the Government’s 18-month attack on their rights and conditions.”

She said:“ We are calling on Prime Minister Malcolm Turnbull and Minister Michaelia Cash (who assists him with public service matters) to rethink this failed bargaining policy and work with the union to find a sensible way forward.”

Ms Flood also said: “This dispute was caused by Government policy requiring Commonwealth agencies to go to war with their own workforce.”

Important workplace rights and conditions had been stripped from enterprise agreements.

Ms Flood said the strikers would include “mums and dads working at Centrelink and Medicare who are are deeply worried about the loss of family-friendly conditions.”

“The previous Minister responsible, Senator Eric Abetz, refused to even meet with the union to discuss these concerns since January,  2014,”  Ms Flood said.

She said the on-going industrial action is sending a clear message to the government.

“Minister Cash now has a clear opportunity to move away from the failed bargaining policy of her predecessor and instead take a modern, productive approach to public sector workplace relations,” she added.

Ms Flood  noted that Mr Turnbull had clearly stated that he does not want to wage war with workers or unions.

“We are calling on the Government to change the way it deals with its own workforce,” she declared.

She said, though, that  many government departments still do not have new enterprise agreements..

“Earlier this week workers with the Department of Immigration and Border Protection became the latest to emphatically reject the Government’s negotiating approach to date,” Ms Flood said.

 

 

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Tuesday 22nd September 2015 - 3:27 pm
Comments Off on Why we need tax reform: Bowen

Why we need tax reform: Bowen

by Alan Thornhill

Chris Bowen says tax reform is needed to promote economic growth.

Addressing the Australian Financial Review’s Tax Reform Summit in Sydney, the Shadow Treasurer said Australians have just seen five quarters of declining living standards.

“Barring the GFC, this is the first time this has occurred since records began,” he said.

Monetary policy was no longer as effective in boosting growth as it had been.

And Australia could no longer rely on its terms of trade for that purpose.

So other paths, such as tax reform, had to be tried.

Explaining the problem, as he saw it, Mr Bowen said:” Australia’s growth rate averaged 3.5 per cent between 1992 and 2008.”

“ It reached 5 per cent in 1999.

“And now, growth is running at just 2 per cent, not enough to see unemployment come down.

He said :”sometimes people ask: “Is the age of reform over?”

They ask:“Has the 24 hour media cycle and the rise of social media killed it?”

“Has the fact that no working person today under 40 has lived through a recession meant that reform is just too hard?”

My answer is: “We can’t afford to let the age of reform be over.”

But Mr Bowen  said tax reform is never easy.

Agreeing on the need for reform is relatively easy.

“ Agreeing on what that reform should look like, however, is the harder part.

“Unquestionably though, tax reform must be part of that reform process.

“It helps to be clear about the problem.

“Too many taxes.

“Too much collected by inefficient taxes.

“A not always coherent distribution of responsibilities between the levels of government.

“But let us also be very clear about what the solution is not.
“More regressive taxes.

A tax system which takes us backwards on inequality instead of making our society fairer.”

“I believe there is a sensible discussion to be had about tax reform,” Mr Bowen said.

I believe the Australian people understand that that sensible discussion will not involve every individual being better off.

“But people rightly expect that every tax change which primarily affects higher income earners shouldn’t be automatically ruled out while the tax debate inevitably and continually gets dragged backed to taxes which predominantly hit low and middle income earners.”

“So Labor is happy to participate in the tax reform discussion.

“In fact, objectively we have been leading it,” Mr Bowen said.

Wednesday 16th September 2015 - 6:24 pm
Comments Off on We’re “leading the world in dealing with tax dodgers” Hockey

We’re “leading the world in dealing with tax dodgers” Hockey

by Alan Thornhill

Joe Hockey says “Australia is leading the world in cracking down on multinationals that are not paying their fair share of tax.”

The Federal Treasurer, was speaking to reporters in Canberra.

He said that he had told European authorities, while on a recent visit to Turkey that Australia would introduce the toughest legislation in the world to deal with companies not paying their fair share of tax.

“ I understand a number of multinationals have already come forward to identify profits previously unseen in relation to their activities in Australia,” Mr Hockey said.

He said, too, that these companies: “… are prepared to restructure their businesses to pay their fair share of tax in Australia

Mr Hockey also revealed that he had ordered a crack-down on foreign investors who are holding residential property illegally in Australia.

“I can advise you that, as of today, there are now over 500 investigations into over one billion dollars of residential real estate that may be held unlawfully by foreign nationals in Australia,” Mr Hockey said.

Seven have already been ordered to sell these properties.

Monday 14th September 2015 - 2:07 pm
Comments Off on Leadership speculation rising in Canberra

Leadership speculation rising in Canberra

by Alan Thornhill

Speculation about a leadership challenge was, once again rising in Parliament House, Canberra,, today.

That is a politicians’ nightmare at any time.

Particularly so when a by-election is imminent.

Yet that is the situation the Liberals face now.

But Tony Abbott is having none of it.

The Prime Minister said – once again – this morning:” I am just not going to play Canberra games.”

The Prime Minister is letting it be known that he expects to lead the Coalition into the Canning by-election next Saturday – and beyond.

Yet even he must have been shaken by a poll in Fairfax newspapers today, showing Labor heading for the swing of more than 12 per cent it would need to win that seat .

Restive Liberals have been saying little, if anything, on the issue today.

However there was a mood of expectation in Parliament House, Canberra, this morning as MPs and staffers started gathering for a fresh week’s sittings.

The Prime Minister, himself, was in South Australia spruiking big new infrastructure projects.

He, once again, dismissed talk of a leadership spill when he met reporters today.

Mr Abbott said he expects to lead his Coalition into the next General election late next year.

And until then, he and his government would be doing what they had been elected to do.

That is governing for the good of all Australians.

 

 

 

 

 

Friday 28th August 2015 - 11:23 am
Comments Off on Risky politics rising

Risky politics rising

by Alan Thornhill

Can Tony Abbott be over-thrown before his first term has expired?

Local Labor activists in WA certainly believe so.

Even though the Liberal party is, at least nominally, taking a 12 per cent lead into the Canning by-election that is to be held on September 19.

The Federal Labor leader, Bill Shorten, has urged caution pointing to the apparent size of the lead the Liberals are taking into the by-election, following the death of a popular local member.

But local Labor party workers are having none of it.

Their organisation, Get-Up, is planning an ” an all-out, banners blazing election campaign.

And it just might work.

Get-Up is circulating its members with a strong message.

It is saying:” Here’s what you need to know. Canning in WA was a safe Liberal seat, by a nearly 12% margin.

“But thanks to the unpopularity of the Abbott Government’s radical right wing agenda, the race is virtually tied: 50.1% Labor, 49.9% Coalition.

“Senior Liberal figures say the loss from a swing of this size will likely cost Tony Abbott his job.

“And Liberal MPs in marginal seats are “mildly terrified” about their future, meaning a loss in Canning could force a political retreat on this government’s unpopular attacks on health, education and clean energy.

“A few hundred votes could tip the balance, and that’s when our movement is at its most powerful.

“But we need to act fast.

“We’re armed with polling from Canning voters telling us the very issues that will shift these key votes.

“Local GetUp members will hit the streets, joining grassroots efforts on the ground.

“And to back them up, we’ll blanket the electorate with hard-hitting outdoor, print and digital advertising.

” But ad space is in high demand and we have to make decisions now about “what we can afford to do.”

What follows in this message is the traditional appeal for fighting funds.

And then a little encouragement, in these words: “Imagine it. An end to the relentless attacks on our public schools and hospitals, pensioners and young people, a clean energy future, and fair go for all Australians.

“That’s exactly what we could see if the Abbott leadership meets its downfall on 19 September in Canning.

“Even Mr Abbott has said that Canning will be the ‘real’ test for how people feel about his government.

“The West Australian was more emphatic: “If the ReachTEL poll is reflected on polling day, it would certainly spell the end of Tony Abbott’s prime ministership.”

“The battle lines have been drawn, but how much we can tip the scales in the next 23 days depends on how much we can raise.

“It’s been two years since Mr Abbott became top dog, and in this time we’ve lost so much.

“Massive cuts to our ABC and the SBS, thousands of experts forced out of the CSIRO, attacks on clean energy, pensions and social welfare – not to mention efforts to dismantle our world-class Australian healthcare and education systems.

“No generation has been spared, no working family left unscathed.

“And despite widespread public consensus they’ve overstepped their mark, Mr Abbott’s Government continues to pig-headedly ram through his radically conservative agenda.

“But the people of Canning could change all that when they cast their ballots on 19 September, in a by-election that’s become a full-blown referendum on Tony Abbott’s agenda.

“Throwing an election campaign together in three weeks is ambitious, but rapid grassroots campaigning and cutting-edge political advertising is what GetUp does best.

“There are billboards available now in major Canning commuter corridors, but we’ve only 24 hours to book them in if we’re to get them up in time,” Get-Up says.

And – on the other side of the continent – an extra-ordinary advertisement appeared in The Canberra Times and – presumably – other Fairfax newspapers today.

It shows Parliament House, Canberra, as a house of cards and talks of “our unstable government” warning that “it could all come toppling down.”

“Then it urges Australian business leaders to prepare themselves, with the “insights” they can expect from reading the Financial Review.

This might sell newspapers.

It certainly won’t win this newspaper any friends in Canberra.

Wednesday 26th August 2015 - 8:21 am
Comments Off on Would you like a GST with that?

Would you like a GST with that?

by Alan Thornhill

Joe Hockey would have to extend the GST to health, education and fresh food to pay for his income tax cuts, the Greens say.

Their Treasury spokesman, Adam Bandt, said this is shown in new research.

“The Treasurer is planning a tax shift, not a tax cut,” Mr Bandt said.

“He’s ruled out balancing the books by reforming unfair tax breaks for the wealthy, but he remains happy to talk about making everyone else pay through a broader GST.”

“To cover the cost of his income tax cuts in the way he clearly has in mind, the Treasurer would have to extend the GST not just to health but to education and food as well,” Mr Bandt said.

“If he doesn’t have the courage to axe unfair tax breaks to the wealthy, the only way Joe Hockey can make his surplus goal is through savage cuts to services or by raising other taxes.”

The Prime Minister has backed his Treasurer’s promise of income tax cuts.

Mr Abbott did so while speaking to reporters during a visit to Thursday Island.

However he is signalling that voters may not see his government’s detailed plans for tax reform until the run-up to the next Federal elections.

They are due either late next year or early in 2017.

Mr Abbott told one reporter, who questioned him on the subject: “you’ll see detailed plans from us in the run-up to the election.

“And I want to assure you that this Government wants lower, simpler, fairer taxes.

“This Government believes in tax reform,” Mr Abbott said.

“We’ve delivered the first installment of tax reform with the abolition of the carbon tax, the abolition of the mining tax, the biggest tax cuts ever for small business.

“It’s in our DNA to want to deliver further tax cuts and we will in the run-up to the election,”the Prime Minister said.”

Meanwhile Mr Hockey has continued to press his case.

He has spent much time this week in a round of radio interviews giving it the hard sell.

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Alan Thornhill is a parliamentary press gallery journalist.
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