It’s a cry for adjustment not systemic change (ODT)
It’s a cry for adjustment not systemic change (ODT)
It’s still Trickle Down Economics (ODT)
The Coalition’s philosophy is about restraining tax as a share of the economy, even if that means it will need to shrink government spending as a share of GDP (in ways that are not yet unexplained).
Labor is signalling that it is more comfortable with the tax share creeping up — mostly thanks to increased contributions from high income earners — but it will make sure lower income earners don’t end up worse off.
Who says elections aren’t a contest of ideas?
This is a classic example of how to lie with statistics. It’s shameless but effective propaganda, which is why the people with the most to gain from it pay propagandists to spread it widely. Anyone pushing this is trying to fool you, and you should ignore anything they say on any subject.
This means the rich pay a far lower payroll tax rate than regular people. A nurse making a salary of $50,000 per year pays (counting both the employee and employer side) 12.4 percent in OASDI taxes (for Social Security and disability insurance). But a sitcom star making a thousand times that, or $50 million a year, will pay the 12.4 percent only on the initial $130,000 of their salary, working out to a total OASDI tax rate of just 0.03 percent on their $50 million. And because OASDI taxes are only levied on earned income — meaning, money you make from a job — a billionaire investor with a $50 million annual income from dividends and capital gains will pay exactly zero percent in OASDI taxes. (Keep Reading)
Mnuchin is not yet complying with the Democrats’ request for Trump’s tax return partially because he does not see “the legitimacy of the asserted legislative purpose.”
The history of the provision shows, however, that Congress enacted this measure to enable investigations into private individuals and the highest-ranking government officials to ensure that they are not getting favorable treatment or evading their taxes.
Maryanne Trump Barry, the president’s sister, resigned her seat as a federal appeals court judge on Thursday to avoid an investigation into her ― and her brother’s ― alleged tax fraud.
We need to set this anti-tax nonsense aside. Tax is how government pays for itself. Indeed, it is necessary to fund all the crap that conservatives love. On a wider scale, tax is citizens contributing financially to their society. This in turn pays for the government services those citizens enjoy. This is Rousseau’s social contract. In the modern world, this means that everyone contributes to the cost of, and enjoys, health, education, infrastructure, transportation and other essential services. But that’s communism according to conservatives. My response to that is if you hate socialism so much, resign from office immediately and claim not one penny of that big, fat pension. As I have said previously, conservatives do not hate socialism per se, they hate certain recipients.
The anti-tax propaganda needs to go and we need to, as the line goes, be a society, not just an economy.
In 2016 the realease of the Panama Papers resulted in the shining of a light on the participants in the very secret tax evasion and money laundering schemes of the world’s 1%. The Trump name appeared over 4000 times. What happened in Australia and it’s list of names. Moreover the LNP hasn’t increased regulation but continued it’s ambition to decrease it. In fact coupled with this measure this government intends to make tax evasion and money laundering easier.(ODT)
The Australian Taxation Office has said it is investigating about 800 Australians in relation to the Panama Papers. However, in 2014 the ATO also gave amnesty to a number of wealthy individuals with offshore income and assets.
http://List of people named in the Panama Papers
Australia’s top companies and richlisters
Unions have demanded the government come clean on which businesses lobbied it to drop plans to introduce a register to help stamp out multinational tax avoidance.
The government has previously made clear its commitment to introduce a beneficial ownership register, a simple and effective transparency measure that curbs profit-shifting and tax avoidance by showing the public who is really behind often-complex corporate structures.
The former assistant treasurer Kelly O’Dwyer and current assistant treasurer, Stuart Robert, both pledged to introduce a register.
Coalition abandons plan for register to help beat tax avoidance
But Treasury is now saying no such commitment was made.
the system is designed by the lackeys of those who have an interest as a class in not paying tax, or in paying as little as possible. The argument that companies “pay all the tax as legally required” fails to address the question of why the tax system is rigged in their favour.
Speaking of political influence, it is interesting to note that some of the big contributors to the political coffers of the Coalition are also companies which pay no tax.
As Gareth Hutchens and Nick Evershed reported in The Guardian:
… the Greens have pointed out at least eight of the largest companies paid more money in donations to the Labor and Liberal and National parties in 2016-17 than they paid in corporate tax that year.
Chevron paid $82,228 in political donations in 2016-17, Origin Energy $103,574, Woodside Petroleum $279,000, Whitehaven Coal $30,000, and Santos $102,516, but none of them paid corporate tax that year.
Even when they are making a loss (either because of market conditions or tax avoidance or other circumstances) should big business not be paying a contribution, such as an operating fee or licence perhaps to the rest of us? This could be based on their gross income for the privilege of carrying on business here, and using the infrastructure, educated workforce and other benefits paid for by our taxes.
They do elsewhere (ODT)
About one-third of large companies have failed to pay tax, even though they made a gross profit, but the Tax Office says most have good reasons, according to the latest corporate tax transparency report released today.
Of the 2,109 entities monitored by the ATO in data covering 2016-17, 66 per cent paid tax although the remainder did not as they claimed tax losses and concessions that can go back several years.
Wealth inequality is even greater than income inequality and is on the rise, says new report
Let’s start at the beginning. We knew the Liberals, in concert with their media arm, the Murdoch press, would launch a propaganda scare campaign against Labor’s very sensible, fiscally responsible, wealth-inequality battling policy to no longer give self-funded retirees cash they don’t need. How did we know? Because that’s what the Liberals and their media arm, the Murdoch press, exist to do. The sky is falling. Everyone is ruined. The economy will rise up like an angry god and smite us all for hurting those who have bestowed trickle-down wealth upon us. And so on and so forth.
I must admit, it’s a sad turn of events that the likes of Leigh Sales on ABC’s 730 is also playing this game, seeking out Lyle-we need those dividends to live-Essery, to show their sad sad faces on TV, to tell Labor how naughty and mean they are for hurting Jean and Lyle, who did nothing to deserve this. But that’s the thing. Jean and Lyle did do nothing to deserve this magical cash-back bribe from Howard and Costello, other than possibly considering voting for Pauline Hanson, and no one should be rewarded for that dirty idea.
The tax treatment of earnings generated from owning shares is complicated. Because it is complicated most people think it is boring. Because it’s boring we don’t discuss it much. However Australia’s dividend imputation system is important, unique to the world and comes with approximately a $30 billion dollar a year price tag. So whatever you think about Bill Shorten and Chris Bowen’s announcement it is a good thing they have got us talking about one of the least understood aspects of tax policy in Australia.
The complexity of the Australian tax system hides many sins, one of the most inequitable of which is the fact that some of Australia’s wealthiest citizens pay negative tax. The ATO actually hands other people’s money to some of the wealthiest people in the country. Indeed, while Centrelink chases some of our poorest citizens for seven-year-old debt, one lucky non-taxpayer actually received $2.5 million in “tax credits” in a single year.
This is not what Malcolm Turnbull is saying in Australia. To complain according to Finance Minister Corman is just “Envy Politics” that Corporations and the rich are getting richer. (OD)
While corporations are enjoying a permanent tax cut which has mainly benefited their shareholders, small businesses also say the law has done little to even the playing field
Just a few months after President Donald Trump’s tax reform passed, small businesses are pushing back against Republican claims that the law will bolster their ability to hire new employees and give out raises to workers—as corporations reap the vast majority of the benefits of the legislation.
Large corporations made clear even before the plan was passed in December that they would use the $1.3 trillion they expect to save as a result of the law to line the pockets of their shareholders—not invest in their employees and new hires as Republicans claimed. Now, small businesses are saying that their workers aren’t benefiting much from the tax law either.
The advocacy group Businesses for Responsible Tax Reform polled entrepreneurs in Maine, Arizona, Tennessee, and Nevada and found that seven in 10 had no plans to hire new employees as a result of the tax plan, while 60 percent said their workers would not be given raises.
More than half of the owners said the law favored large businesses over small ones and did nothing to put smaller companies on a level playing field with big corporations.
The Koch Brothers alone will spend $20 million on ads selling the tax bill. This is a drop in the bucket compared to the $1.4 billion they stand to gain every year in tax breaks. It’s also a tiny fraction of their overall campaign spending on the 2018 midterms elections, which is projected to reach $400 million.
The Kochs have their work cut out for them. A new poll from Politico shows most workers report seeing no increase in their take home pay after the new tax laws took effect.
This is important.
The whole premise behind adding $1.5 trillion to the debt, giving massive handouts to the ultra-wealthy, and giving a tax break to the nation’s most profitable corporations was that working folks would also get a bit of cash.
Turns out, they’re not seeing that money. But the PR push is having an impact.
CityLink toll road operator Transurban paid no company tax to the Australian government for three years despite revenues of nearly $6 billion.
But how much tax revenue is bleeding? The answer is, almost exactly the same quantum as the $30-40 billion annual deficit.
The free tax ride for religious institutions in Australia is about 400 years past its use by date, argues Brian Morris. In 1587, Dr John Bridges coined the phrase “A fool and his money are soon parted”. Just 14 years later Queen Elizabeth the First issued her 1601 Statute on Charities making “the advancement ofMore
It’s time to reclaim our waste.
The Turnbull Government’s $4 billion raid on tax-dodging multinationals appears to amount to little more than the natural dividend of hiring extra staff to the depleted ranks of the Australian Tax Office, according to tax transparency campaigners and Labor.
John Passant examines negative gearing and the sectors that continue to benefit from this and other tax concessions favoured by the Turnbull Government.
The measure, once pushed by the White House, will today be backed by the Greens. They argue the funds raised could be used to help reverse cuts to health and education. Max Chalmers reports. The Greens are set to become the first significantly sized Australian political party to support the implementation of the ‘Buffett Rule’, aMore
Whether it’s pressuring Telstra over same-sex marriage or receiving tax breaks, organised religion has enjoyed a fair amount of power. Polling suggests that could be about to change.
Wilson Parking seems to be burdened by uncannily high costs.
Income tax for the states. Really? Yes, really. That’s the plan Prime Minister Malcolm Turnbull is putting to the states and territories at the Council of Australian Governments meeting tomorrow in Canberra. The Coalition has been looking ragged for much of 2016, after walking back from tax reform in the shape of a higher goodsMore
Four Corners reporter Marian Willkinson reveals how hard it was to get through the front door of law firm Mossack Fonseca — the parallel world of tax havens.
Face reality: we can’t vote for better schools and hospitals in state elections and lowers taxes in federal elections and expect to get both.
Paying tax has become optional for 56 of Australia’s highest earners. Newly-released tax statistics show each of the 56 paid next to no income tax in 2013–14, not even the Medicare Levy, even though each more than $1 million.
Multinational corporations are taking advantage of global tax treaties to avoid paying their fair share, thereby fueling poverty around the world, according to a groundbreaking report released this week.
Many of us would welcome bracket creep if it meant actually getting a pay rise.
There must be a debate about the ethics of tax avoidance and evasion. Board members who approve this behaviour should be forced to answer for it
The tax booby trap left behind by Labor’s former assistant treasurer David Bradbury was designed to blow up in the face of the Coalition in 2015.
Large private companies face having to disclose how much tax they pay after the Senate overturned a controversial shield law passed by the Turnbull government less than a month ago.
United States corporations avoid an estimated $US1.45 billion ($2.06 billion) of tax in Australia each year by shifting their profits to low or no tax countries, research shows.
Dick Smith says Prime Minister Malcolm Turnbull will be “ratting on typical Australians who pay their tax” if the Coalition goes through with plans to shield large private companies from having to disclose how much tax they pay.
One in five privately-owned companies with revenues in excess of $100 million paid no tax last year, the Australian Tax Office has revealed.
If this isn’t a good enough reason to legalize it, we don’t know what is.
If you go to Tony Abbott’s facebook page, at time of writing, you will find six threads about the Martin Place siege and one about the slaughter of innocent children in Pakistan. Four days after its release, you will not find any comment about Hockey’s MYEFO. That in itself should be cause for concern.
Tony Abbott has admitted he has little interest in the “dismal science” of economics and it appears he is hoping that applies to the rest of us. He is sticking to his forte – death cults and shirt-fronting.
Despite telling us all to carry on our lives as normal, he seems determined to class the acts of one deranged individual as a terrorist attack on home soil.
When Australians responded by showing solidarity with the Muslim community through the “I’ll ride with you” campaign, the odious Miranda Devine found a new target.
“Thus it was that on Monday, while real people were suffering at the hands of an Islamic State-inspired terrorist in Martin Place, hashtag activists sprang to the defence of theoretical victims of an Islamophobia that wasn’t occurring.
The meaningless, narcissistic, one-sided nature of this “near silent encounter” perfectly symbolises the leftist approach to Islamist terrorism.
Denial, deflection, projection. They see themselves as morally superior to the rest of Australia, which they imagine as a sea of ignorant rednecks. In their eyes the threat is not terrorism but Islamophobia.”
This view was endorsed by LNP member for Dawson, George Christensen who tweeted
“#illridewithyou is a typical pathetic left wing black arm band brigade campaign, casting Aussies as racists who will endanger Muslims”
The colourful characters who frequent Andrew Bolt‘s blog joined in with a barrage of hate.
Whilst Abbott, Devine, Bolt and Christensen continue to pander to the minority of xenophobic racist rednecks, others have been commenting on the policy direction of this government and none of it is good.
Firstly, Joe Hockey has cost us $28.6 billion in foregone revenue over the forward estimates through his own decisions.
Carbon Tax $12.8 billion
MRRT $3.4 billion
FBT on cars $1.8 billion
Tax on super earnings $313 million
Work-related self-education $266.7 million
Closing corporate tax avoidance $775 million
RBA $8.8 billion (classed as foregone dividends)
Add to that his spending on Direct Action, the “war on terror” at home and abroad, and the extra spending on Operation Sovereign Borders and PPL and we would go close to wiping out his deficit of over $40 billion.
So when you hear the girlinator Cormann talking about Layboor’s debt and deficit disaster, understand you are being sold snake oil by a con man.
Speaking of con men, the G20 leaders must be wondering about our commitment to join the war on corporate tax avoidance which has been shown to be yet another example of Joe “over my dead body” Hockey’s ‘tell em what they wanna hear’.
The head of the Australian Tax Office, Chris Jordan, has described a tax lurk for multinational companies that is being retained by the Abbott government as having been “abused” by foreign corporations at a cost of “hundreds of millions of dollars” a year to the Commonwealth but Hockey, following consultation with the big four accountancy firms and the Corporate Tax Association, which represents the biggest listed companies, decided not to tinker with section 25-90 of the act. And they had the hide to criticise Gillard and Swan for caving in on the mining tax though that was one time I found myself in agreement.
And they will have more pressure coming as the world insists that we take action on climate change.
During an appearance before a British parliamentary committee meeting held early Wednesday morning Australian time, British Prime Minister David Cameron was asked by an MP whether there was hope Australia would do more because “the new Australian government is in denial” on the issue.
Mr Cameron did not disagree and told the hearing there was hope Australia would step up its efforts.
“Australia will respond to international pressure and do more on climate change because it will not want to be seen as the “back marker”.”
The new revised GP co-payment has also been blasted.
The Australian Medical Association (AMA) has expressed its formal opposition to the Federal Government’s new co-payment model, labelling it a “wrecking ball”.
“That this should be instituted and ready to go by January 19 is, I think, absurd,” Associate Professor Owler said. “Particularly when there has been absolutely no consultation on this issue.”
The OECD was also not impressed with Hockeynomics slamming his budget measures and stating that ‘close monitoring’ was required mentioning everything from changes to Newstart and pensions through to Direct Action, deregulation of uni fees, and choice of infrastructure spending. They were particularly critical of superannuation tax concessions. The overall implication was “you haven’t thought these measures through”.
And as Abbott has his photo taken in front of lots of Christmas trees, presents are being delivered around the country.
Australia has transformed into the global Scrooge just in time for Christmas, with spending on foreign aid set to plunge compared to other wealthy industrial countries.
An analysis of Treasurer Joe Hockey’s $3.7 billion cut to the aid budget announced on Monday – on top of the $7.6 billion cut in May – reveals that Australia’s generosity towards the world’s poor will fall to an all-time low.
Australia will soon devote a paltry 22¢ cents in every $100 of national income to foreign aid – less than half the amount spent by the Coalition government more than 40 years ago.
This is the news Tony Abbott and his band of elves don’t want you to discuss as they take from the poorest in the world to give generously to wealthy corporations and mining companies. Gina and Rupert should be well pleased.
|Thursday, 11 December 2014 13:31|
|Fresh from its new Petrol Tax and GP Tax, the Abbott Government has today quietly announced a new $900 NBN Tax as part of its “proposed approach to the provision of telecommunications infrastructure in new developments.”
On page five of the Government’s policy document released today, it has announced that new home owners will now be hit with a new $300 NBN connection fee, while developers will also be charged a new $600 deployment charge for homes which they can pass on to home buyers.
Telecommunications infrastructure in new developments – page 5
This $900 tax will be even higher in areas where NBN Co has no ready access to backhaul. Merry Christmas new home buyers.
No wonder the Australian people don’t trust Tony Abbott. Since the election he has broken promises like they are plates at a Greek wedding. This is just the latest.
Home prices are already very high. This tax will hit those who can afford it the least—young families just starting out. The last thing new home buyers need is a new NBN tax.
This tax is also unfair. It means that if you buy an existing home you don’t have to pay anything extra for the NBN. Your taxes pay for it. But if you buy a new home, you have to pay for it twice.
In his first press conference as Prime Minister Tony Abbott said: “I don’t intend on making promises that I won’t keep.” That turned out to be the lie that laid the platform for more and more lies.
For more information on the Abbott Government’s broken promises visit www.abbottslies.com.au
Rupert Murdoch’s special address to an exclusive meeting of the world’s most powerful finance ministers got a second airing this week.
In a breathless front-page “exclusive” in The Australian, Paul Kelly reported that his boss warned the world’s financial grandees their policies were serving to widen the gap between rich and poor, which was leading to social polarisation.
Kelly’s article was not an “exclusive” – others had reported the same speech on October 17 – and it was not “news” as the dinner had been held on October 9.
While the headline – Equality at risk in the West – suggested that “Citizen Murdoch” had astonishingly morphed into “Comrade Murdoch,” a careful reading of the article reveals his prescriptions for global prosperity were the standard Murdoch fare of deregulation and reducing corporate tax rates.
Presumably, the newly-formed wealth created by these policies will trickle down to the poor of the earth. This argument was refuted almost immediately by Alan Kohler in Business Spectator, who pointed out that:
“Rising inequality began in the 1980s and was the direct result of Reganomics” and his pursuit of tax breaks for the rich.
Murdoch also segued into the evils of tax avoidance, and particularly the unprincipled tactics used by Google. He went on to explain that Google paid hardly any tax in the countries where it made its profits, instead using complex corporate structures to transfer those profits to tax havens.
Certainly companies that sell over the internet have invented new ways of reducing their tax bill. In the case of Google, it books profits from sales made in Australia to overseas subsidiaries that are located in low-taxing countries. As a result, in 2011 Google paid US$74,000 tax, rising to US$7.1 million in 2013 from a revenue base of $1.8 billion.
Other tech companies, Apple and Microsoft in particular, have used similar strategies to reduce the amount of tax they pay.
This was dangerous territory for Murdoch to step into as News Corporation (operating under the umbrella of 21st Century Fox) has engaged in some creative tax engineering of its own. According to a report by the Tax Justice Network Australia, Murdoch’s companies paid the Australian Tax Office a miserly 1.1% on pre-tax profits of A$5.54 billion over the period 2004-2013, which was helped by complex financial transactions among its 146 subsidiaries, including 25 in the Virgin Islands and 19 in Mauritius.
Murdoch’s mauling of Google came as no surprise, as for years he had been feuding with the internet behemoth, a cause that has been predictably picked up by his newspapers, led by the Wall Street Journal.
In his speech, Murdoch accused Google of “piracy”. Behind his rhetoric, Murdoch fears Google is eroding his profits by aggregating free news sources and supporting his competitors, and is limiting the visibility of his company’s news sites because their content is hidden behind paywalls.
Google has not taken these attacks lying down and has created a blog, cheekily titled Dear Rupert, refuting his allegations of piracy.
What the world economic policy elite made of Murdoch’s use of their forum to pursue a commercial feud was not reported, although they must have been scratching their heads on how this was relevant to returning the world to prosperity.
Murdoch’s entry on the international stage is a timely reminder some in the business community will use every opportunity to pursue their own vested interests. In most cases they will cleverly dress them up as sound policy, but in this instance Murdoch carelessly let the veil fall as he used the occasion to savage a commercial competitor.
The question left hanging is whether Hockey supports Murdoch’s narrow view on tax avoidance and whether he is promoting it among his G20 colleagues. Does this signal that he is unlikely to support aggressive policies by the G20 to end old-fashioned tax avoidance by multinational firms, as expertly executed by transnational firms like News Corporation, and only focus on the new kids on the block, who have found new ways to game the system?
Up to now, the G20 has only agreed to automatic exchange of tax information, but has not yet shown it has the stomach to seriously tackle the widespread use of tax havens and transfer pricing, and ensuring profits are taxed in the location where the economic activity takes place.
As the host of the G20, Australia is in a position to lead the way. However, it sent out all the wrong signals by allowing Murdoch to lecture the world’s leading finance ministers on tax.
Jean Tirole has won a deserved Nobel prize. The French economist from Toulouse 1 his work in the field of industrial organisation that particularly stands out, and which drew admiring words from the the Nobel Committee:
Jean Tirole is one of the most influential economists of our time. He has made important theoretical research contributions in a number of areas, but most of all he has clarified how to understand and regulate industries with a few powerful firms.
This field of research answers questions about how market power distorts market outcomes and hurts consumers. It also attempts to describe what governments can do about it.
Power gamesWe can all see the new Nobel laureate’s relevance in the modern world by looking in some detail at just one of his innovations. The privatisation of utility companies in the 1980s and 1990s in many countries, both in Europe and elsewhere, was designed to bring entrepreneurship and private investment into this industry. However, it was clear from the outset that this market would be dominated by a few large firms and that competition would not serve to limit the prices these firms charge to customers. It was clear that government intervention is needed to do this – and an obvious regulatory policy measure was at the time to cap the prices of these firms.
However, the early work of Tirole with Jean-Jacques Laffont pointed out that this early regulatory measure is counter productive. Low prices ultimately require low costs, hence the regulator also wants to ensure that the utility companies reduce their costs. Unfortunately, price caps induce utility companies which have less scope for cost reduction to reduce the quality of their service in order to lower their costs. Since the regulator does not know which firm has more scope for cost reduction and which has less, it cannot cap prices differently across firms.
Tirole and Laffont’s work implied that if the regulator offered two types of contract for utility companies – one with the usual price cap, and another one where the government shares the costs with the utility company, the former will be chosen by firms who can reduce costs more easily and the latter by firms who find it more difficult. Both then will have an incentive to reduce costs. This is less costly for society than the simple price-cap.
The newly awarded Nobel Prize for economics challenges Joe Hockey’s voodoo economics prescription for Australian economic growth, writes Alan Austin.
THE NOBEL PRIZE FOR ECONOMICS announced yesterday bolsters the campaign for better industry regulation in Australia.
The prestigious award – officially, the Sveriges Riksbank Prize in Economic Sciences – went to Professor Jean Tirole of the Toulouse School of Economics in France. It recognises his work on how poorly regulated corporations operate to the community’s detriment. And how the problems can be fixed.
Drawing attention to industry regulation is timely for Australia as the Abbott Government strives to wind back regulation brought in by previous administrations, but with little success.
Tirole’s analysis of corporate market power has shown how big companies damage the communities in which they operate. And also how they may be regulated to everyone’s advantage. He believes different industries require quite different regulation.
The Academy noted that Tirole’s work not only described the negative outcomes of regulation failure, but recommended specific responses:
‘The best regulation or competition policy should therefore be carefully adapted to every industry’s specific conditions. In a series of articles and books, Jean Tirole has presented a general framework for designing such policies and applied it to a number of industries, ranging from telecommunications to banking. Drawing on these new insights, governments can better encourage powerful firms to become more productive and, at the same time, prevent them from harming competitors and customers.’
The French Government, however, is delighted.
Spokesman Stéphane Le Foll said:
‘The Nobel Academy making this award is also a reflection of the absolute necessity in today’s crisis that we have regulation and mechanisms for stability. We must not just leave management of the economy to the free market.’
Will the global discussion this award is generating engage hapless Treasurer Joe Hockey and the Abbott Government?
Clearly, the mindless mantras he mouthed before the 2013 election have not materialised into benefits for Australia’s businesses or people.
Hockey promised this:
‘Reducing the burden of taxes and regulation, ensuring fair and competitive markets, and reducing the size of government will boost business investment and spending. And from investment and spending will come growth and jobs.’
The Abbott Government then undertook a highly visible exercise in deregulation with its Autumn Repeal Day last March — the first of two promised every year. The Government boasted that 10,000 regulations and acts would be removed from the statute books.
So what has been the result? How much better is the economy now performing?
It is, in fact, performing much worse. In the 13 months since Hockey became treasurer, business confidence has slumped, the value of the all ordinaries on the Australian Stock Exchange has fallen, consumer confidence has collapsed, the Aussie dollar is at the lowest level since 2010, inflation is up from 2.4% to 3.0% and rising, unemployment is at the highest level in a decade and government debt has blown out by $39 billion – up 22%.
The failure to regulate appropriately, Tirole shows, risks not just weaker company profits and a poorer community, but another financial crisis:
‘The gradual lowering of regulatory standards predated the recent crisis. To be sure, other developments such as “irrational exuberance,” loose monetary policy, and global macroeconomic imbalances also contributed to the crisis. But underregulation or ineffective regulation is rightly blamed for playing a central role in the crisis.’
Much of the world is now listening to Jean Tirole. Which is just as well.
But is Joe Hockey?
Most working Australians pay at least 30-35% of their wage or salary in income tax. And then they pay 10% GST on most purchases, tax on petrol (about 65% of the cost of petrol are taxes), stamp duty on house or car purchases, land rates, utility taxes, road tax, and a Medicare levy. On top of all those added taxes they still have to pay school fees, university fees, and in some cases, medical fees. The list goes on and on.
So what amount of your income are you really paying in taxes? I bet most people have never bothered to sit down and work it out and would be shocked if they knew the answer. At a conservative calculation around 65%-70% of your income is going to taxes in one form or another.
And yet many Australians are still happy to let the mining sector and other multinational “non-Australian” companies pay less than 2% taxes? Really?
Now what do you get in return for all those taxes you are paying?
A government who now tells you that you are not entitled to anything for those taxes you pay. You now have to pay for you own medical and health care, own retirement, own education, own disability costs (if you have one), and own unemployment support should you be one of the victims of poor government that does you out of a job. Oh, and don’t be fooled into thinking your taxes pay for things like utilities, roads and infrastructure, because you are already paying for all that directly or indirectly.
So then were are all your taxes getting spent? Subsidies for multinational foreign owner mining corporations who pay barely a fraction of their returns in taxes or any of their capital in Australia. Subsides on coal and oil industry rather than renewables. American made fighter jets to protect our shores from boat people. A nice fat tax refund of $880 million to Rupert Murdoch’s News Corp. A war on terror that is half way around the world trumped up by lies, fear mongering and distortion. Politicians who retire on a nice big lifetime retirement package, while you will be expected to work until you’re 70. Companies like Google or Apple who evade paying nearly a billion dollars in taxes while taking advantage of off-shore tax havens.
Then to add to the burden, the governments sell off the farm. Letting China and other foreign companies buy up Australian land and properties and our core industries. They sell off what your forefather’s taxes paid for like all the tax paid utilities and infrastructure. Yet our own children can no longer afford to buy their own houses.
So are people still feeling good about paying 65%-70% of their income in taxes and what you get back in return? Still happy to wipe out the mining tax and carbon tax and to let your own taxes subsidise all those foreign companies?