News & Current Affairs
18 April 2015
by John Lord
It’s a Taxing Time for ”All But the Rich”
Never in the history of this nation have corporations, rich individuals, and the Government that supports them, been so openly brazen. The Australian Tax system is absolutely riddled with rorts for corporations and the privileged.
The Abbott Government has shown an insensitivity to the common good that goes beyond any thoughtful examination. Ideology and governance for their supporters has determined every decision they have made since coming to power.
But ordinary Australians, those who believe in a fair go, recently have, by virtue of a factual avalanche of evidence, come to realise the extent of the unfair pampering that this government is giving the top end of town and wealthy individuals.
Yet it’s the pensioners, the unemployed and welfare recipients who are being asked to tighten their belts in the public interest.
The recent Senate enquiry into the amount of tax that giant corporations like Apple, Google Transfield, Ikea and others pay in this country has opened the eyes of the average Australian who during an extended period of affluence have had them closed. Now with clear vision they can see the unfairness of it all. In fact there is more than just a perception of anger. There is palpable wrath.
Unfair was the word that so characterized Hockey’s first budget. A budget framed on the pretext that Labor had stuffed the economy and that a crisis of monumental proportion was about to hit. Repair had to take place, he would do it, and the poor pensioners and others would bare the brunt.
It’s a pity this compassion starved Government didn’t have the same fervor for cutting tax avoidance by the rich and privileged as it does for cutting welfare for the poor.
And all from a man who takes advantage of Negative Gearing for the privileged by paying off homes with his living away from home parliamentary expenses.
And while he and Abbott blamed Labor for the countries woes Joe was busy adding $45 billion to the country’s debt.
Now he is faced with presenting a second budget while at the same time major cost savings from his first still have not passed the senate. It would not surprise if he has the gall to carry over the savings.
The problem for Hockey is that ideology forbids the raising of new taxes. It is anathema to them. And of course further cuts to health, education and welfare would be unpalatable by the electorate.
This quote by Scott Morrison is indicative of the Governments disdain for the concept of fairness and governance for the common good:
I know the business community wants to see the budget come back into balance ; well if that’s the case I would like to see them out there supporting the changes to family tax benefits, the changes to retirement savings that we put in place in the last budget
The word unfairness has struck a chord with the electorate. They are now asking questions. Why does the Treasurer and the Prime Minister lie so much about the economy?
Why are they so out of step with other ministers, and indeed each other, when talking about the framework of the next budget?
Why are fabulously wealthy international corporations able to manipulate the tax system to the extent where they virtually pay no tax at all. And when they are asked to explain, mock, laugh and act deplorably toward their Senate inquisitors.
Their collective belligerence would have sickened the average PAYE Taxpayer and the many Australian based companies who do the right thing.
Why is it, according to the Australian Tax Office, that 75 Australians who made more than $1 million in 2011-12 paid zero tax?
Why is it that 900 companies so effectively claim deductions that they only pay a tax rate of 19.3%
Why is it that high income earners are given a tax discount on their superannuation which means they effectively pay 15% less tax. The unfairness of it is staggering, but understandable if you look at this government’s ideological approach to its decision-making processes since being elected.
It is now faced with explaining to taxpayers, in its budget, just why the less well-off should subsidise these unjustifiable and immoral tax breaks. In the next few years they will be costing as much as the pension.
There is a consensus that the current concessions to wealthier retirees are unsustainable and unfair. Unfair because the poor are being asked to pay for them.
Official government data shows that 24,000 of the richest superannuation holders each with more than $2 million in their accounts receive about $5.2 billion in tax-free income annually. And that’s not all, a further 51,700 retirees with $1 million to $2 million in their accounts receive $4.9 billion tax-free. It’s a legacy of the decision of the Howard–Costello government in 2006 to scrap taxes on retirement income from superannuation.
Why is it that the taxpayer is subsidising enormously profitable mining companies who send their profits overseas and pay little tax themselves?
Richard Dennis director of leftist think tank The Australia Institute states that over the past 6 years, state mining subsidies could have delivered:
- Queensland: $9.5 billion, or 9 major hospitals
- Western Australia: $6.2 billion or 52 new airport terminals
- New South Wales: $872 million or 116 new schools
- Northern Territory: $407 million or 799 doctors
- South Australia: $316 million or 620 nurses
- Victoria: $206 million or 377 police
- Tasmania: $54 million or 116 teachers
The Federal Government throws in an additional $4 billion which includes:
- $1,900 million in fuel subsidies
- $550 million in reduced tax payments for the gas industry’s production of condensate
- $368 million on tax write-offs for capital works
- $330 million on deductions for exploration and prospecting
- $312 million in accelerated depreciation write-offs.
Significantly, this is likely to be an underestimate as it does not include State subsidies (the Queensland Government alone is spending $1.4 billion each year in subsidies to the mining industry) or sweeteners like fringe benefits tax exemptions, benefits from publically-funded infrastructure projects.
Why is it that our taxation laws are so open to exploitation that you could drive the proverbial truck through them? Here is a list of schemes the rich and the privileged are always exploiting.
Why is it that Negative Gearing and Capital Gains Tax which so disenfranchises first home buyers isn’t subject to some review. Perhaps it’s because many politicians, including the Treasurer use it as an investment contrivance to minimise tax.
A recent ACOSS report said that over half of the benefit of “negative gearing” deductions goes to the top 10 per cent of personal taxpayers, earning more than $100,000 a year. Eliminating negative gearing would save 1billion and make it easier for new home buyers to enter the market.
There are any number of methods available to the privileged of society to avoid paying tax. John Howard was cynically nicknames ‘’honest John’’ during his tenure as treasurer for not dealing with the Bottom of the Harbour schemes of the 1980s.
Of course they are not confined to just a couple of schemes. They have a five-star menu. There’s sure to be something on the capitalistic menu from which to choose. Tax havens, Family Trusts. Profit shifting, Asset shifting.
Alas we live in a failed system. Capitalism does not allow for an equitable flow of economic resources. With this system a small privileged few are rich beyond conscience and almost all others are doomed to be poor at some level.
So why does all this tax dodging arise. Well on the one hand you might say that people or corporations are simply taking advantage of laws that enable them to do so. On the other hand you might also say that it is pure greed. Greed of the most lamentable kind.