by Alan Thornhill
Australians might well have to pay more to see their doctors if next year’s Federal elections are fought on tax cuts, the Greens warned today.
Adam Bandt,the Greens Treasury spokesperson, gave the warning after the Treasurer, Joe Hockey, signalled that he would be seeking to make tax cuts an issue at that election.
Mr Bandt is urging Labor not to join the Treasurer in making the next Federal Election a tax cuts arms race.
He said that would be “a recipe for austerity.”
“With the government bereft of any positive agenda, the Treasurer is now desperately trying to start a tax cuts arms race,” Mr Bandt said.
“At the very time that government faces a revenue crisis, the Treasurer proposes that wealthy people pay less tax,” he added.
He said the government’s revenue base would be eroded, if the next election is fought on tax cuts.
Then we would see cuts to the services Australians “rightly expect,” Mr Bandt warned.
Mr Hockey is expected to use a speech he will be giving to the Tax Institute and Chartered Accountants Australia and New Zealand this morning in Sydney to argue the case for tax cuts.
But Mr Bandt said: “instead of focusing on income tax cuts to some of the wealthiest Australians, right now, the Treasurer should be looking at phasing out unfair tax breaks, like negative gearing and capital gains tax exemptions.
“This could bring in an extra $13 billion and go a long way to funding schools and hospitals.”
“I urge Labor not to follow Joe Hockey.
” We must not turn the next election into a tax cuts arms race,” Mr Bandt said.
“If we do, there will be less money available to fund hospitals, doctors and schools and we’ll see more moves to make the rest of the country pay more through a GP Fee or higher GST.”
But Mr Hockey is expected to argue that:-
* “bracket creep” is already driving low, middle-income earners into higher brackets and
* tax changes will help economy by encouraging people to stay in workforce.
by Alan Thornhill
Australia’s shopkeepers have welcomed today’s decision to apply GST to all online purchases ordered from overseas suppliers from July 2017.
The decision was taken at a meeting of Federal, State and Territory treasurers in Canberra today.
At present, the tax only applies to overseas online purchases worth $1,000 or more.
The Federal Treasurer, Joe Hockey, said this low-value GST-free threshold would be abolished from that time.
He said:”This will deliver competitive neutrality for Australian businesses it will ensure there is a fair and equal treatment of all goods and services.”
Anna McPhee, who is CEO of the Retail Council, described this decision as an important step forward in ensuring our tax system is fair and efficient.??
“This is sensible reform that delivers greater consistency in our consumption tax system,” she said.
“We commend Treasurer Hockey for his leadership in progressing the removal of the current GST exemption for goods bought internationally…,” she added.
Ms Mcphee said:”The additional revenue will relieve some pressure on State budgets and go toward delivering important services for the community.”
She said modelling ordered by the Retail Council had shown that extending the GST to all imported consumer goods would result in a net increase in GST collections of more than $1 billion in 2015-16 and $1.7 billion in 2020-21.
The collection costs would be just $37 million.??
“We are encouraged by the demonstrated commitment from governments to progress meaningful reform of our tax system…”Ms Mcphee said.
It would help to support demand for better schools, roads and hospitals for Australians.
??“This is an important first step forward in tax reform to ensure our system is fair and efficient,” she said.
“We are again encouraged to see our leaders maintain an open mind on tax reform and recognise the importance of maintaining principles of fairness and efficiency in discussions about the design of Australia’s tax system.”
Ms McPhee said the Retail Council has been seeking the removal of this low-value threshold since 2012.??
by Alan Thornhill
The Federal Treasurer, Joe Hockey, says his meeting with his State and Territory counterparts in Canberra today is “a unique opportunity” for “consensus” on tax reform.
“We believe that Australia’s personal and corporate tax rates are too high and that we need to reduce the burden of tax on hardworking Australians,” he said in a statement he issued on the eve of the meeting.
Perhaps Mr Hockey felt a need to put his objectives for today’s meeting in writing, as raucous verbal exchanges in Federal parliament yesterday, may have left some people confused.
His written statement on the matter,though,was quite clear.
“The Australian people will be looking to us to reach agreement on reform options that will promote economic growth and create jobs to ensure Australia’s continued standard of living,” he said.
“All governments across Australia must work together to improve the economic climate for business, and ensure the efficient delivery of government services while keeping taxes as low as possible.”
“At the recent Council of Australian governments retreat, leaders agreed there is an opportunity to consider more durable revenue arrangements to address growing financial pressures facing all governments. In addition, any revenue arrangements need to be fair, efficient and sustainable.”
“…we will have a broad discussion on the strategic issues facing Australia’s tax system and seek to develop a shared perspective for progressing the tax reform process.”
“As Federal Treasurer, I will take the opportunity to advise my state and territory counterparts of the six principles that the Commonwealth is pursuing through the Tax White Paper process.”
“Also on (the) agenda are a number of specific measures to promote greater integrity in the tax system.”
“These include the draft legislation to ensure greater consistency in the application of the GST to digital products and services and the request by COAG to broaden the GST to cover overseas online transactions (physical goods) under $1,000.
The Commonwealth will report to the states and territories on progress in these areas and provide reports on progress by various working groups led by the states on other areas of reform.
by Alan Thornhill
A higher Goods and Services Tax will be squarely on the agenda when the Federal Treasurer, Joe Hockey, meets his State counterparts in Canberra today.
And – despite Tony Abbott’s pre-election promise of “no new taxes – no increased taxes” – that will be discussed.
In a jovial mood yesterday, Mr Hockey told Federal parliament yesterday that all that is needed at this stage is the agreement of the States.
However that is by no means assured, even though the States do need more money.
Mr Hockey prepared for the inevitable public outcry, if the GST is increased, by testing a fresh anecdote in parliament yesterday.
He revealed that, after the last election, he had asked Treasury officials if the Coalition’s (Labor) predecessors had asked for any modelling to be done on a higher GST.
The officials said yes, that had been done.
But when the new rulers asked to see it, all that could be found was some modelling labelled Scenario 3.
That examined the likely impact of a broader, 15 per cent GST.
“Where were Scenario 1 and Scenario 2?” Mr Hockey asked rhetorically?
He had no hesitation in saying what he believed all this meant about Labor’s vocal opposition to a higher or broader GST.
“Hypocrisy” he called out.
All part of the day’s raucous debate in Parliament.
Mr Hockey’s wish to increase the GST is well known.
His ability to do so will be tested today.
by Alan Thornhill
The Tax Office will get new compliance powers in an investment reform package that the Treasurer, Joe Hockey, introduced into Federal parliament today.
Mr Hockey also said the Foreign Investment Review Board, too, would be given extra powers, so that Australians could be assured that the rules governing foreign investment would be properly enforced.
Addressing parliament, Mr Hockey said:” Mr Speaker, Australians expect our foreign investment rules to be strong, effective and enforceable.
“Our foreign investment rules have not been significantly revised since introduction in 1975 and have not kept pace with the changes in global investment.
“The Government recognises the changing landscape and has already taken active steps to enforce the existing rules and act decisively on foreign investment breaches,” Mr Hockey said.
“One such step is to encourage those who are in breach to come forward and self-report,” the Treasurer added.
” In so doing, we have announced a reduced penalty period for foreign investors who come forward and self-report non-compliance before 30 November 2015. ”
“This legislative package shall ensure Australia maintains a welcoming environment for investment – but one that ensures that the investment is not contrary to our national interest,” Mr Hockey said.
“These reforms shall ensure that from 1 December 2015, Australia’s foreign investment framework is more modern, simple and effective.
“Importantly, it will add integrity to the system, so that everybody plays by the rules.
“With integrity comes compliance,” the Treasurer said.
“… consistent with the recommendations of the House Economics Committee, the Bill introduces a range of new and stricter penalties that are commensurate to the severity of the breach and ensure that those who break the rules do not profit by their actions,” he added.
“Criminal penalties will be increased from $90,000 to $135,000 for individuals and will be supplemented by civil pecuniary penalties and infringement notices for less serious breaches of the residential real estate rules.
“Third parties such as real estate agents, migration agents, conveyancers and lawyers who knowingly assist a foreign investor to breach the rules will also now be subject to both civil and criminal penalties.”
by Alan Thornhill
So where does Australia stand now, on hot button issues like climate change and same sex marriage?
After just one day of debate, in the Federal parliament, the nation is looking for the “confused queue” on both issues.
Although most government MPs now recognise the threats posed by global warming, Federal cabinet decided early yesterday to reduce Australia’s carbon emissions by just 26 to 28 per cent – from 2005 levels – by 2030.
This was – quite literally – the least Australia could do – ahead of an international meeting on climate issues in Paris late this year.
And, after a five hour party meeting later in the day, Tony Abbott effectively killed off a plan to give government MPs a free vote on same sex marriage.
All thoughts of introducing a bill to legalise marriage equality, died too at that time.
The government’s own Climate Change Authority had advised the government that emissions must be cut by 40 – 60 per cent – from 2000 levels.
One critic asked the Prime Minister, Tony Abbott, in Parliament yesterday, why his response should not be regarded as weak, risky and dangerous.
Mr Abbott declared, in reply, that substantial cuts in emissions would involve substantial expense, that could run into billions of dollars a year.
And he said he was not prepared to risk the economy in that way.
Mr Abbott’s grip on the nation’s top job appeared to be threatened at one point yesterday.
That was when Liberal front-bencher, Christopher Pyne, warned that Mr Abbott could be accused of “branch-stacking.”
Mr Pyne did that because he was angered at Mr Abbott’s insistence that conservative National Party MPs should be in the room – along with Liberals – when the governing parties decided wether there should be a free vote on same-sex marriage.
That move was lost – and with it all thought of legalising marriage equality in the near future.
The Greens condemned this outcome.
“What a disgraceful lack of leadership from the Prime Minister, who has shown yet again that he is out of touch with the community,” Senator Janet Rice, who speaks for the Greens on marriage and related issues, said.
“Australia is lagging behind the rest of the world on marriage.
“Australians want us to catch up, but Tony Abbott is determined to hold us back, Senator Rice said.
The vote on climate change led one critic to say that the only science that interests the Prime Minister is political science.
Mark Butler, the Shadow Minister for the Environment, was equally sceptical.
Speaking in parliament yesterday, he said: “today confirms that the Prime Minister wants Australia to follow.
“He does not want Australia to lead.
“He does not want Australia even to stay in touch with the rest of the world on the issue of climate change and the enormous opportunities that are presented in investment, jobs and households’ control over their energy by the renewables revolution.
“Labor wants to keep faith with future generations on climate change.
“We want to embrace the jobs and the investment opportunities that are available in a clean energy future.”
by Alan Thornhill
Tax breaks, announced in the May budget, appear to have lifted the spirits of Australians operating small to medium sized businesses.
That is reflected in the results of the National Australia Bank’s June quarter survey of these sectors.
The results, published today, show that the conditions and confidence indices rising by 2 points to +4 and +5 index points respectively.
Within the sub-indicators of SME business conditions, trading conditions stood out to be the strongest, which flowed into better profitability conditions.
However, the sectors’ continued reluctance to hire was reflected in the sustained lull in the employment conditions index, which lapsed into negative territory in the quarter.
Analysis by the size of SME businesses, though, suggested that firms have generally experienced better conditions and confidence in the quarter, with the exception of conditions for mid-tier firms.
Despite a recent improvement, low-tier firms with an annual turnover of $2-3m continued to under-perform consistently across major indicators relative to their larger counterparts.
In particular, these firms fared poorly in their cash flow conditions, with their cash flow index falling by 11 points to -17 index points.
Conditions by industry continued to paint a mixed picture, with service-oriented industries maintaining momentum ahead of non-service industries in general.
Property, business services and finance firms continued to do well, although conditions of property firms have moderated compared to last year.
Conditions in manufacturing were largely unchanged around the neutral mark. Meanwhile, retail and construction (which includes residential, non-residential and mining-related construction) overtook wholesale and transport as the worst-performing industries in the quarter, with conditions in the latter two improving significantly, albeit still marginally negative.
SMEs’ overall confidence improved slightly in the quarter to +5 to be at similar levels with that of general businesses’ as measured by the NAB Quarterly Business Survey (QBS).
Most industries recorded an improvement in confidence in the quarter except for manufacturing and accommodations, cafes & restaurants. Property and construction firms were the most confident in the quarter, while finance experienced the weakest.
Confidence by health SME firms rebounded sharply from -21 to around the neutral mark this quarter, but this could prove to be a blip in the data due to a small sample size.
Conditions across states were mixed in the quarter, with NSW continuing to claim the top spot, while a 10-point surprise jump in the conditions for South Australia (to +6) propelled it to a tie second position with Victoria.
Meanwhile, WA (-7) and Qld (-6) fared the worst in the quarter.
Forward orders leapt into positive territory at +4 index point in the quarter, with the positive reading largely driven by high-tier SME firms.
SMEs’ capacity utilisation (78.2 per cent) diverged further away from that of general businesses’ (80.9 per cent), to decrease further below its long-term average of 79.8 per cent.
by Alan Thornhill
Nick McKim, the former Tasmanian Greens Leader, is to fill a casual vacancy in the Senate, created by the resignation of Christine Milne.
This follows a ballot held to identify a candidate for the position.
The Senator elect welcomed the result.
“I want to thank the Tasmanian Greens members for giving me this honour and I will do everything I can to repay the faith they have put in me,” Mr McKim said.
“Replacing someone of Christine’s calibre will be a huge challenge, but one that I’m really looking forward to,” he added.
He was not so kind, though, in his assessment of the Federal government.
“Australia has rarely seen such a reckless and self-serving government,” he said.
Nick McKim declared that:” The Greens mission is more urgent now than ever and I can’t wait to join my new colleagues in standing up for a cleaner, healthier and smarter Australia. ”
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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