Company tax breaks to continue

Multinational companies are off the hook from paying the correct tax in Australia.

Company tax breaks to continue

One line in the Mid Year Economic Financial Outlook (MYEFO) has let multinational companies off the hook from paying the correct tax in Australia.

In 2013, as part of measures to tackle tax minimisation by global companies, the previous government signalled its intention to close the loophole with a projected benefit of $600 million to the taxpayer. Shortly after being voted into power, Joe Hockey and his then deputy Arthur Sinodinos said they would not adopt Labor’s policy, as it would require Australian companies with overseas subsidiaries to incur “unreasonable compliance costs”.

One year on at the G20, Joe Hockey announced that he would develop his own plan to end tax avoidance by introducing "a targeted anti-avoidance provision after detailed consultation with stakeholders". But a closer look at the MYEFO highlights that this plan too has been scrapped, "The government will not proceed with a targeted anti-avoidance provision to address certain conduit arrangements involving foreign multinational enterprises, first announced in the 2013/14 MYEFO."

Large Australian companies with operations overseas, such as BHP Billiton, benefit from the loophole, as international subsidiaries are tax exempt from overseas operations, while the interest on money borrowed to grow such operations is an allowable tax deduction.

Shadow Assistant Treasurer Andrew Leigh has accused the Government of allowing another giveaway for large multinational companies, while watching the budget deficit almost double. "Yet again the Treasurer has shown that he is happy to let big companies off the hook while hacking into foreign aid, schools, hospitals and pensions," Mr Leigh said.

In a statement in response to questions on the issue, Finance Minister Mathias Cormann, who took over the portfolio from Arthur Sinodinos, said “no promise was broken”. "Following consultation with stakeholders and the Australian Taxation Office, it became very clear that a targeted anti-avoidance provision would be ineffective," he said.

"It is important to remember that the proposed changes to section 25-90 were never advocated in isolation, but were part of a broader package to address profit shifting by excessive allocation of debt to the Australian operations of multinationals. 

The government has implemented key elements of this package, including tightening the thin capitalisation safe harbour limits and ensuring the foreign non-portfolio dividend exemption for Australian companies only applies to returns on equity. 

"As a result of these changes, all debt used to fund Australian operations, including debt used to fund offshore investments which give rise to 25-90 deductions, is now subject to the binding constraint of the thin capitalisation rules, which provide protection against abuse of section 25-90 deductions."

Read more at SMH.com.au

Opinion: Another day, another ‘backflip’

The ‘he said, she said’ blame game, which has become the cornerstone of Australian politics looks set to stay, but in the interim, our economy is suffering, badly.

While the headlines scream of broken promises and backflips, the real crux of the matter goes unaddressed – how can we ‘fix’ the economy? Of course, to fix something it has to be broken and it seems Joe Hockey can’t quite decide whether the economy is actually broken. On the lead up to the May Federal Budget, we were told we were in dire straits, that our expenditure was unsustainable and we must accept cuts and tough budget measures to help return the country’s budget to surplus. Yet, on delivering the MYEFO, Joe Hockey, while advising us that the budget deficit would blow out to $40 billion, then told us not to worry as the Commonwealth budget is stronger today than it was last year," he offered. Finance Minister Mathias Cormann echoed this sentiment by stating that "there's much more work to be done of course, but we're on track". 

Well, thank goodness for that.

However, what is alarming is that the work to be done will be done by those least fit and able to undertake the necessary heavy lifting. Many of the proposed Budget measures from May have yet to pass as legislation and several of these measure will take money from those who spend every cent they have to feed, cloth and provide a roof over their heads. These budget measures will cost jobs that people can’t afford to be without, and in return, will reduce the amount of money people have to spend to keep the economy turning. But everyone needs to chip in and do their bit, right?

Yet, at the big end of town no one is asking our friends BHP Billiton and Rio Tinto to hand over the tax they manage to avoid through loop holes and clever accounting. No one is asking investors to shun negative gearing and pay their fair share. No, because that would, as Mathias Cormann himself said, “be ineffective”. Really?

What is ineffective is asking those who can least afford it to bear the brunt of the budget ‘pain’ and banging heads to try and get unfair measures legislated. It’s time to stop the ‘back-flipping’ and ‘promise breaking’ and to draw a line in the sand and move forward. With five months to the next Federal Budget it’s time to accept that a strong economy is good for all Australians, from big companies to pensioners, students and workers. It’s time to stop getting hung up on delivering a surplus and to start working out how best to keep money flowing into the economy, keeping jobs in Australia and making sure everyone pays their fair share.

Should large companies get preferential tax breaks while individual Australians see their incomes cut? Would the Budget measures considered harsh be more palatable if big companies were also seen to be doing their bit?





    COMMENTS

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    pate
    17th Dec 2014
    10:59am
    We all know that the bigger the fish the more it fights and the big money never pays tax or at least nowhere near enough. Joe needs to come uop with some decent ideas not Tony's truing to charge yhe small earner & pensiomners for everything that moves. Stop giving billions per year to countrys like Malaysia...
    Anonymous
    17th Dec 2014
    9:10pm
    Joe is a gutless wonder with no talent and no idea. Once you get past that you will see how much his views and statements mean in the real world.

    Same for the Cormanator.... the sooner they are both gone the sooner some sense will return to the Australian economy.
    Anonymous
    21st Dec 2014
    4:48pm
    Can someone name one person in Labor who would be a better Treasurer and don't for goodness sake say Swan! We saw him in action.
    MICK
    24th Dec 2014
    10:23pm
    This should not come as a surprise to anyone.
    First the 'bad, bad' Carbon Tax which now gives the polluters an annual windfall of $8 billion: paid for with higher taxes on, you guessed it, you and I.
    And then the "Repair the Budget" BS which repays not a single dollar of debt. But this budget does deliver a 1.5% company tax cut to the rich and is paid for via cuts to basic needs of most Australians. This is the reverse Robin Hood approach, better known as theft. So where is the much used "mandate" for this?
    Expect more of the same if this government is re-elected.
    This is not about who would make a good treasurer. It is about whose interests are being served. For this government it is the rich who have contributed to election funding and are now wanting a return on this.
    Clover
    17th Dec 2014
    11:05am
    Wasn't fair tax rates for multinational companies, an agenda item at the G20 in Brisbane, or at least a point of informal discussion for Tony Abbott and Joe Hockey? or was I hallucinating? Someone in the Parliament needs to come up with visionary and common sense policy ideas and implement them And stop surreptitiously eating away at the incomes of persons who are unable to work or those struggling to work and bring up families on low incomes. As far as Joe Hockey's advice to spend at Christmas, he and his colleagues and persons on high incomes are more likely to afford to do this, while those who are less able to afford to spend will concentrate on giving things which are free, like a kind wish for Christmas, a helping hand for a neighbour, or directing someone who is struggling to cope to the generous not for profits or philanthropic individuals.
    Anonymous
    17th Dec 2014
    9:14pm
    Yes - but Joe and Co are going to 'consult' with them on their taxes. The same government that comes out with veiled and blatant threats to public servants who refuse a 1% pay rise and loss of conditions.

    http://www.ozpolitic.com/forum/YaBB.pl?num=1418761475

    "One of the guarantees of a free society is the free flow of information!" JFK
    Patriot
    18th Dec 2014
    9:21am
    Wonder why JFK got killed?
    disillusioned
    17th Dec 2014
    11:22am
    Why go for big companies to pay fair taxes when you can easily hit the taxpayer. Very lazy but effective way to gather more from us. Also wasn't half of the Tax Office made redundant recently? I'd be very surprised if the government can mount the required expertise from the Tax Office to investigate these companies.
    MICK
    24th Dec 2014
    10:26pm
    Big companies lobby governments and run anti government media campaigns. Poor people run around with their favourite party and fail to understand that they are being done over because of their own stupidity.
    When voters act like minded against the crooks who run government only then will the problems we see be fixed. Until then the same game will continue to play out.
    wally
    17th Dec 2014
    12:45pm
    So how long is a piece of string? How do we determine how to tax big business fairly without ruining whatever competitive edge against overseas competitors they might have? Do we tax them until they give up on Australia and leave? What happens to the workers?
    Despite all of the sound and fury from the "Tax 'Em Till They Squeal" advocates, businesses large and small have been closing up shop at an alarming rate due to a number of reasons. Exchange rate making Australian made products too expensive to compete, high wages making Australian made products to expensive to compete, cheap foreign made goods pouring into Australia (thanks to the Free Trade Agreements) making Australian products too expensive to compete. So now, we need to increase the tax burden on these already struggling companies to make them even less competitive?
    If we look at the big businesses in the service industries, we see another story. Are Australia's "Big Five" banks paying enough money? Insurance companies? Information Technology? Insurance companies? Tele communicatons and transport companies? Airlines?How about overseas owned service providing companies like Google, Facebook and Twitter? What is the proportion of Australian workers to overseas workers in these companies? Can they absorb higher taxes without putting Australian jobs at risk?
    Would an increased tax on these companies adversely affect their competitive ability to the point that they would sack their Australian work force and use foreign labour instead? So it isn't just raising tax on top of tax rises as a sort of legalized extortion.
    These things are not that simple. You might wind up throwing the baby (workers) out with the bathwater in an impulsive tax grab.
    SGW
    17th Dec 2014
    1:11pm
    Good point but if these companies are shifting money around to stop paying tax, and we the public are paying that tax, lets use people power to stop giving them money and avoid these companies and anyone dealing with them
    miss aisle
    17th Dec 2014
    1:53pm
    Spot on Wally. You add clarity into the uncertainty.
    MITZY
    17th Dec 2014
    3:32pm
    It's not a case of tax them till they squeal wally, it's a case of making them pay a reasonable amount of tax of their profits. Small business and workers on salary and wages remuneration are tax more in proportion. What the people of Australia are looking for is a "fairness monitor" - the average Mr. & Mrs. Joe Blow are doing all the heavy lifting.
    I think they probably can absorb higher taxes than they currently pay (i.e. practically nil) and I doubt they will all be running away from the land of milk and honey for them. It's certainly not the land of milk and honey for the pensioners and low income earners and small businesses.
    Jen
    17th Dec 2014
    4:23pm
    Dead right Mitzy. I'm unsure where Wally gets his information about multinationals "closing up shop" and "struggling." Fairness is all that's expected. Unfairness is what we're getting.
    Jen
    17th Dec 2014
    4:48pm
    Years ago I worked for an American pharmaceutical company who's medications would most likely be in all of our medicine cabinets. My boss, one of the highest ranking executives of this company in Australia, told me "The profits this company is making are immoral." Can't afford to pay their fair share of tax. Yair right.
    wally
    17th Dec 2014
    5:52pm
    Hi Jen. So you haven't heard of multi national companies closing up shop? Have you ever heard of the car maker Mitsubishi, who made Sigmas and Magnas in Australia? FYI they are being followed out by Ford, GMH and Toyota in the next couple of years. Why? Were they competitive with the imports? Did their sales improve since, say, 2004? How many cars did they ship overseas? You can talk about fairness. but you, like probably 99+% of us, would be hard pressed to determine what "fairness" is without being privy to all the facts.
    Facts are what we need, not opinion, which will vary from person to person. Likewise what is fair for one company will be grossly unfair for another. The old expedient of "One Size Fits All" approach (as favoured as a time saving device by the bureaucrats being pressurized to produce something on time) negates a tax deal made through discussion and compromise.
    So it isn't as easy as it might first seem to beat first glance.
    Thus it is back to the length of a piece of string.
    Anonymous
    17th Dec 2014
    9:26pm
    So all those 'service industry' mega-companies that rely on global sales are just going to pack up and leave?

    I think not..... unlike cars that can be produced by anyone with machines - such things as 'service' need to be sold on a market that will see it as valuable by the standards of the society buying.

    How long before all these offshored car manucfaturing companies go down the tubes?

    I give you 3-5 years......
    Anonymous
    17th Dec 2014
    9:32pm
    Any 'global economy' - even going back to the days of the sailing clippers - relies on a vast imbalance in real incomes between the country producing and the country selling. That is where we, Australia, have gone wrong - we are selling raw materials and buying back finished products while selling nothing in the way of finished products.

    So - tell me, O Great Ones..... when most Asians cannot afford to buy a Holden.... and most Australians can't afford to buy one..... where is the market for this product?

    When you chop off your own market and its workers who can afford a product, and have no viable substitute... your only pathway is down.
    MITZY
    18th Dec 2014
    10:44am
    Wally: At YLC every day we receive a story about a particular subject followed by YLC's opinion and we are asked to give our opinion. That's what we do. Sometimes the facts we are fed need further scrutiny, but all we are asked to do is give an opinion. I think a lot of posters here know what is fair and unfair. They only have to apply the facts they have been given about the May budget to come to a conclusion and an opinion. We are all still talking about "unfairness" 6 to 7 months since the budget was brought down, we do have opinions.
    wally
    19th Dec 2014
    1:57pm
    MITZI Everybody is entitled to have an opinion. A lot of the opinions expressed here show how uninformed those who share those opinions are. As far as fair and unfair is concerned, are we being fair to those organizations or people when we say they are ********** without providing a reason for holding this opinion?
    Does informed opinion "appear on your radar" as being fair or unfair? Is expressing informed opinions being unfair to those who recycle abusive slogans as if they are spreading Divine Truth? If giving your opinion is all you think you need to do, so be it. A knee jerk thoughtless response to a question hardly makes an opinion particularly valid and people should be mindful of what they choose to say.
    Kato
    19th Dec 2014
    10:23pm
    http://thenewdaily.com.au/money/2014/12/16/hockey-protecting-fiscal-monkey-trap/?utm_medium=email&utm_campaign=The+New+Daily+Wednesday+171214&utm_content=The+New+Daily+Wednesday+171214+CID_b1d4fa78b7549cb5afba9cc2e24fe4b2&utm_source=&utm_term=Joe%20Hockeys%20monkey%20trap%20by%20Rob%20Burgess
    Anonymous
    21st Dec 2014
    2:28pm
    People need to think this through.
    Who are the biggest employers of people in Australia...the private sector? Tax them into oblivion then they will close down or go offshore.
    Anonymous
    21st Dec 2014
    4:51pm
    In case some dont know the government is already having a big crack down on companies and individuals who have off shore accounts. They had a certain time to fess up and I think the deadline has passed.

    http://www.businessinsider.com.au/now-is-the-time-to-come-clean-if-youre-hiding-money-in-an-offshore-bank-account-2014-5

    The government apparently know who they are.
    wally
    21st Dec 2014
    5:54pm
    You might think that when our parliamentarians vote to enact new tax laws or amend old tax laws, they might try to eliminate loop holes. The bigger corporations have big budgets to hire armies of tax lawyer experts to find and exploit these loop holes. The result is that the big companies pay less tax because their tax lawyers are smarter than the politicians that make the tax laws. The flaws and loop holes in the tax laws are there when the laws are enacted. They are there to be found and exploited, leaving it to the working people to come up with the tax money to make up for the unpaid tax the big companies avoid paying.
    A case in point is the recent Gillard government's Mining Resource Tax. This legislative gem was to raise $Billions and Wayne Swan even allocated and promised to spend the amount he hoped the Mining Tax would produce before a cent was raised. When the hoped for billions did nor eventuate, Labor went ahead and "spent" the allocation anyway. Then they pretended the gaping shortfall between the promised and the collected tax revenue somehow did not exist! They simply borrowed more money from the Chinese to keep Australia afloat.

    The tone of what some posters in this forum have to say about the current government and how they yearn for a return of a Labor Government in Canberra. it is no wonder the Politicians regard the voters as mugs and fools. Labor calls them "True Believers."
    MICK
    24th Dec 2014
    10:33pm
    wally: your use of the word "fairly" is to the point. We both know that no matter how low taxes are for the rich they will continue to cry 'not fair'.
    Whilst you and the other political trolls continue to cry about Labor (always the same rhetoric) you fail to mention that the Mining Tax would have captured significant revenue if Labor had not caved in to the prime time media campaign from the mega rich miners who did not want to part with money they made from selling Australian resources to overseas customers. And of course we now pay the fossil fuel industry $8 billion a year because Abbott was allowed to repeal the Carbon Tax...which was NEVER a bad tax. Despite both of the above the mining industry is still screaming poor and wanting lower tax rates. This is what you and the other trolls are supporting. And average Australians are meant to pay and continue paying as bad decisions made by governments (betting the nation on mining and selling off out assets) now plunge us all into tough times.
    DC
    17th Dec 2014
    1:01pm
    Maybe, just maybe it might be a good idea if this publication were to actually suggest something more useful than banging on about the current governments failings etc etc.
    Such as suggesting the blooming Senate actually does its work and stops trying to run the place! Saying "No" to everything that is supposed to improve our bottom line is totally counter-productive and does not reduce the crazy amount we pay alone in daily interest for the national credit card.
    Its very easy to throw free money around, a la Rudd/Gillard, but most definitely not so simple to put the break on afterwards. I really do not understand why anyone on the current opposite side still insists, all is just great and all the economic problems are of the Governments making?!
    miss aisle
    17th Dec 2014
    1:56pm
    Agree with every word, DC
    Everyone would benefit from looking
    at the bigger picture.
    Patriot
    17th Dec 2014
    2:24pm
    Do you guys mean that the Senate should just be a "rubber stamp" for the Government?
    That's not how wise men with a High level of Integrity & much wisdom about the "Human Psyche & Greed" designed the Constitution!
    Not that the system is perfect but is certainly is much better than without the Senate.
    Wonder how you guys would feel about the same issue if the "Name of the Government" was called Labour of Greens?
    Bet you would be gratefull for the Senate than!!!

    Just have a "Look at the Bigger Picture" was suggested by someone.
    Let's have alook at the Bigger Picture then.
    ghoti
    17th Dec 2014
    3:07pm
    The Senate is doing precisely what it's there for - what it was elected to do. It's making a stand against the LNP's blatant lies that helped it win the election. Any perceived Senate negativity is nothing compared to the destructive negativity of the Abbott Opposition.
    Anonymous
    17th Dec 2014
    4:16pm
    What did Abbott do in opposition??? said NO to everything, now the shoe is on the other foot they're complaining??!! its called politics, they need to get a life! they would get agreement from the Senate if the money grab was not aimed unfairly as those least able to afford it. Same old story.......
    Jen
    17th Dec 2014
    4:30pm
    Exactly trood. Not so easy is it? With debt growing, and unemployment growing, this visionless government is trying to build a country by bashing it down.
    Patriot
    17th Dec 2014
    8:22pm
    Points must be proven unconditionally as the govt trolls are leaving it alone now!
    Adrianus
    18th Dec 2014
    8:16am
    DC, I often wonder about that too. I can only think of greed as their motivation.
    MITZY
    18th Dec 2014
    11:47am
    DC: YLC in the past on more than one occasion has asked us to come up with subjects that we would like to give our opinion on. Unfortunately, it doesn't matter what they try to do, you only have to look at the poor response (i.e. the number of comments posted) to see that the majority of posters give their opinion in droves when it comes to the subject of politics, either Labor or Coalition. The only other items that get a reasonable response are "disasters". We've become jaded.
    Kato
    19th Dec 2014
    10:23pm
    cigar smoke and mirrors.
    http://thenewdaily.com.au/money/2014/12/16/hockey-protecting-fiscal-monkey-trap/?utm_medium=email&utm_campaign=The+New+Daily+Wednesday+171214&utm_content=The+New+Daily+Wednesday+171214+CID_b1d4fa78b7549cb5afba9cc2e24fe4b2&utm_source=&utm_term=Joe%20Hockeys%20monkey%20trap%20by%20Rob%20Burgess
    Travellersjoy
    17th Dec 2014
    1:47pm
    Time to tax wealth, not just income.

    Death taxes should return to the national and state budgets.

    Tax payers who work for their living have no obligation to subsidise inheritances for the children of the very well off.
    wally
    17th Dec 2014
    5:58pm
    So what is your definition of "well off"? Is it owning your own home when you retire? Does it mean how much your home is worth? Do we discourage people from achieving something for them selves and turn them into the human equivalent of the workers in an ant hill? Or do we just let our kids turn into layabouts, beach bums and dole bludgers? More detail and fewer slogans, please.
    Anonymous
    21st Dec 2014
    4:44pm
    I think that is stupid myself. Do we want to live in a socialist country, I dont.
    Worked hard all my life to get what I have and I am not a burden on the taxpayer.
    gxh
    17th Dec 2014
    1:49pm
    Yep, that's right, impose more tax on Australian companies with overseas operations.....and watch them move their headquarters overseas with a loss of high-level Australian jobs. Rio did this, do we really want BHP to do it as well?
    Let's be careful before we fall for the trap of knee-jerk reactions to complex tax issues.
    MITZY
    17th Dec 2014
    3:35pm
    I doubt they'll leave the land of milk and honey which is what it is to these multi-nationals. Years ago it used to be the land of milk and honey for one and all.
    MITZY
    17th Dec 2014
    3:39pm
    gxh: Rio Tinto are still here aren't they? They disbanded the refinery business because it was not viable, but they are still well and truly operating in Australia. Have a look at their profile.
    Anonymous
    17th Dec 2014
    4:18pm
    I doubt McDonalds, Coca Cola, Ikea etc etc would leave, they are making a motza and would still be even if they paid more tax
    wally
    17th Dec 2014
    6:06pm
    MITZY, what might work for one company does not mean that it is going to work the rest of them. I hope you are correct about Rio. Not long ago Pacific Brands, the car makers , the petrol refineries and other companies looked pretty good. If the declines in Consumer and business confidence we see being reported turn out to be true, we may see more trouble ahead for businesses, employees and even the government tax collectors.
    Oars
    17th Dec 2014
    8:44pm
    gxh - most of those big boys have their head office overseas, their CEO based overseas, their top execitives living overseas, and directing opertions to lower level executives here in OZ. BHP is one such giant- no longer OZ- sold out to Pom interests years ago. You really should read more about these companies- I read Financial Review over many years and read between the lines. It is staggering how much of this great country is controlled from overseas. But I still have my BBQ here in OZ- with NSW "snarlers".
    MITZY
    18th Dec 2014
    11:12am
    wally: As I said have a look at what Rio does here - google Rio.
    My cousin from the U.K. spent a couple of years in Oz living with me and worked for various companies temping while here. One company she worked for was Rio Tinto. She now is the CEO's P.A. in London. She has seen three CEO's at Rio U.K. in the time she has been P.A. for each of them. Two of these CEO's were situate here in Oz and promoted to the U.K. H.O. My cousin has a glorious job, she speaks French, German, Spanish, Japanese besides her native tongue and because of her languages is a real asset and gets to liaise and interpret for all the overseas visitors to Rio U.K. and sometimes she travels with the company for the same reason. I've worked in government and private enterprise and seen the waste, I've worked through recessions and seen the multi-nationals shed the people they employ .... after all one head of a large publishing organisation said to me one day "I am not in the business of employing people". Good and bad times come and go but take a look around, the majority of those well-known brands are still here, however, look at how these businesses survive, there still here, but what they produce is in a lot of cases being imported from Asia. They grab the opportunity to make more profits, greed is the feeder. When they really need employees in the "good" times to keep up with demand, greed again enters the picture and they employ. Along comes recession(s) and the like, out go the employed and the cream at the top chugs along with all their perks, riding the current storm, they really don't pull their belts in like the average Joe Blow. It works just the same with governments, these MP's don't suffer. There are never too many MP's unemployed in their life-time. Business and Consumer confidence is caused by governments with negative thinking talking down the economy all the time. The last decade has been all doom and gloom from governments and it is now up to them to stop moaning and create new opportunities. How can a government say they are going to create thousands of jobs in the next couple of years and not tell us how they are going to do it; yet at the same time they are shedding jobs. How does that help consumers spend, not knowing if they are next on the unemployed list.
    wally
    19th Dec 2014
    2:31pm
    MITZY I think you missed the pint I was trying to make when I said that what works for one company will not necessarily guarantee success for another. We all know Pizza Hut has made $billions making and selling pizzas. Does that mean that if every Tom, Dick and Harry were to open their own pizza parlours, (in your opinion, of course,) that each one of these 3 pizza shop entrepeneurs would likewise make $Billions?
    The restaurant "game" is a risky one and the survival rate is not high in that industry. Lucky are those who start a restaurant are still in business ten years later.
    PS Never mind about the politicians. They are like cockroaches. When you get rid of one bunch, you wind up being infested with another bunch of them!
    wally
    19th Dec 2014
    2:35pm
    Sorry, MITZY. I meant to say "point" and not "pint". No, I do not want to follow any train of thought that might suggest that you would be missing "pints" no matter what they might contain!!
    Patriot
    17th Dec 2014
    2:50pm
    NO, Large Companies Should NOT get Preferential Tax breaks!
    This could mean that they would make room for many small business men would build many small businesses which would then employ many TaxPayers.
    These businesses would than make fair rather than excessive profit made by the Big end of Town. They would also be able to provide some FAIR (finally) competition and hopefully rune the CARTELS out-of-town
    We could even take this one step further and suggest that "business Ownership" by the employees should be the preferred option of business in Australia!
    No problems with "Lack of Productivity" and/or unions then as employees would peovide a "Self-Controlling" interest on these businesses and would keep the Multinationals HONEST!
    Paradise would return to the LAND ocerflowing of Milk & Honey called Australia.

    GET RID OF THE LEECHES !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    Adrianus
    17th Dec 2014
    6:02pm
    The Unions railed against employee share schemes. I thought they were a great idea.
    wally
    17th Dec 2014
    6:09pm
    And throw the people that work for the LEECHES you are getting rid of into unemployment.
    Patriot
    17th Dec 2014
    8:06pm
    wally,
    They'll own the company
    Oars
    17th Dec 2014
    8:39pm
    Patriot, you should read the history of one great Oz company SYDCHROME who had staff ownership in the mid 80's. They finally were wound up as nobody wanted to take the lead. Great idea, but the staff had no guts, hiding behind meetings to make "collective decisions" when a threat loomed. By the way they were not communists nor ant-union- just folk that had a great idea that worked while the winds were blowing nicely for them. Pity, as I liked that ideal.
    Anonymous
    17th Dec 2014
    9:36pm
    "just folk that had a great idea that worked while the winds were blowing nicely for them"...

    Sounds like our cu8rrent two governments - the incumbent and the alternative.... lost in space...
    Adrianus
    18th Dec 2014
    8:42am
    Sydchrome was a success story in the early days post WW2. A little like this website, started with one perfect tool, then.......
    Labor have always made things difficult for business and when it looks like you're going down if you have that crucial number of employees, what ever that may be, Labor will throw money at you as they did with Pacific Brands. I wonder how Tuffeys and Tuffets are going?
    Adrianus
    18th Dec 2014
    9:45am
    I recall Rudd insisting Pacific Brands take back $20m of taxpayers money. Was it to appease the electorate? Appease the workers at PB? Or was it out of guilt? If it was guilt it didn't last too long, because he was demanding it back after 12 months.
    MITZY
    18th Dec 2014
    11:36am
    Patriot: I worked for 11 years with a small business firm (1965 to 1976) that imported packaging machinery there was myself, the two bosses, a technician for installing the machinery and that was the sum total. I started with them in their infancy and in a matter of three years or so, they were so successful and fully appreciative of the two employees. I had a salary approximately $25 more per week than the average in the last five years I worked with them. Then they decided we had contributed so much that we would receive twice a year a bonus based on 1% of the total number of machinery sold each year. They made such good profits and were good people and because they had complete faith in us they did other good things, one joined on a voluntary basis for a whole twelve months and went overseas for the World Health Organisation, the other worked in charities for the poor. They had achieved all they needed to achieve and retired at an early age to enjoy life and help others. One of them was Polish the other Swiss and they hardly ever uttered a word that was not collective. It was never "their" business it was our business. To say this happened in that earlier period 1965 to 1976 was a miracle to us, I never experienced it anywhere else again even though my efforts in employment were always the same, treat the client, customer, whoever with the utmost respect and treat the job as if I owned it. Working with solicitors/accountants in later years I've been in situations where I've been face to face with some of the MP's from both sides of politics and its a rare event if you find one who isn't "full of his/her own importance" or thinks they own you. However, there was one lovely one that for years after he retired from government used to catch a train to the Sydney CBD a couple of times a week and he recognised me one day on the train and for a couple of years I used to travel in and out of the City chatting to him.
    Adrianus
    18th Dec 2014
    12:33pm
    Gee Patriot, If only businesses didn't grow?! I wonder how you people plan to stop small businesses becoming big businesses? If only there were no tall poppies? If only CJ Coles, Visy Board etc etc did not grow you would be happy. Typical leftist view. Limit success. I would not have liked being a child trying to grow in your household.
    maxchugg
    17th Dec 2014
    3:06pm
    Another source of income that must be massive and goes untaxed is hal al certification of food.
    Not only is there a loss of income there is also a security question because it is not improbable that some of this money goes into the hands of terrorists who must be looking for other forms of revenue now that their oil wells have been bombed.
    miss aisle
    17th Dec 2014
    4:08pm
    My sentiments exactly maxchugg.
    This income for muslims does not just cover food,
    milk, cheese, bread, bottles of drink, etc,
    but toilet paper, womens' products, etc.

    I was horrorfied when I looked up a web site
    for halal certified products -
    hundreds & hundreds of them.
    And evertime we shop for basic (or other)
    items,
    some of our money is going into their coffer.
    Anonymous
    17th Dec 2014
    4:30pm
    Halal is Sharia law, why are we paying for this claptrap? Why are we entertaining this law in Australia?
    Their animal slaughter is cruel, unnecessary and outdated; it should not be allowed in Australia either. Why should animals suffer for their stupid law?
    Halal toilet paper? come on already!!!! greedy manufacturer's who adopt halal certification do it for no other reason than more sales, profit!!
    Polly Esther
    17th Dec 2014
    4:31pm
    We should leave these people be, some are just trying to get a head in this country.
    Adrianus
    17th Dec 2014
    5:59pm
    Why not tax religious organisations?
    That is where the big money is.
    wally
    17th Dec 2014
    6:17pm
    A lot of Australian food companies have their products branded Halal so people in Muslim countries will be more likely to buy Australian goods. This is especially true in Indonesia. It also seems to be cheaper not to change packaging for the same products they sell in non Muslim countries. As usual, it is more about money than religious fanaticism in forcing us all to eat Halal food.
    It's not quite the same as going to a Mosque to sell bacon sandwiches!
    wally
    17th Dec 2014
    6:21pm
    PS trood, if there is such a thing as halal toilet paper and you refuse to use it, you will have 2 choices. Left Hand or Right Hand.
    Adrianus
    17th Dec 2014
    6:51pm
    Wally don't you eat with the right hand?
    Oars
    17th Dec 2014
    8:09pm
    Ten if the sale of Muslim food goes to these terrorists, maybe should watch the profits of overseas drug barons. Where does their profits go to ?? Does the CIA have an audit or is that just my late night TV attacking my old head again ?
    Patriot
    17th Dec 2014
    8:32pm
    Agree, Tax Religious organisations to the hilt!
    However, make tax dedectability acts where they provide PROVEN help/aid to the Poor & Needy.
    This should mean we just about get 100% recoverable tax from this stream because few (from what I have observed) provide true humanitarian aid!
    When I worked in 3rd world countries churches would close down missions when the price of copra came down to a level where the entreprise was NOT profitable anymore and the mission stopped making money.
    So much for charitability!
    Anonymous
    21st Dec 2014
    4:45pm
    Tax the Scientology lot and there are a few others like them.
    Anonymous
    21st Dec 2014
    4:53pm
    Companies have to "pay" to have the halal logo ....some who have refused have paid the price.
    Rumour has it that halal certification funds terrorism.
    Bes
    17th Dec 2014
    3:38pm
    Labor left us with a massive debt and as historically it is the Liberals who gain power and take us through the hard yards to get rid of the deficit.
    If the multinational companies who use our resources cannot be taxed then that leaves only two options.
    Tax the Australian population with the budget as it was first handed down. Indirect tax.
    Or raise the GST to 12.5%
    And just to be silly, if the multinationals base themselves offshore to gain tax relief, could we do the same with the government? Lol.
    Patriot
    17th Dec 2014
    8:08pm
    Don't forget that this is the GST - according to John Howard before and election - that we were NEVER going to have !!!!
    Oars
    17th Dec 2014
    8:14pm
    Bes. Please read my two sections around 7 pm to 8pm tonight. These are unbiased details that only scratch the surface of this complicated tax issue. It is clear to me that Oz has taken their resources sector for granted, and got lazy commerciually. We are now well and truly in the middle of a Fincial pressure bubble and we must face that. This internal taxation is only one of the solutions. I am not an accountant but I know how to run a business. It requires HARD WORK, RISK TAKING, SELECTIVE STAFFING, encouragement from others- to list a few. Then there is looking around the next corner and trying to be prepared for most outcomes. The other one is to pray- that works a lot.
    wally
    19th Dec 2014
    2:14pm
    Patriot, At least Howard told the voters he had changed his mind about bringing in the GST before the election. He was re elected. Compare that with Julia Gillard on the "No Carbon Tax" promise she made prior to the 2010 election. Did you forget about how she back flipped on that? If you tell the voters you are going to do something before an election, you are giving the voters the choice of supporting yourself and your policy. Should you win the election, you should stick to that promise.
    Julia back flipped and caved in to Bob Brown's demand for the Carbon Tax as the price for Green support for Julia's government. This shows how her weakness and lack of principle and would show how she would do anything to gain and cling to power and fatally damage Labor's electoral chances in the 2013 election.
    Anonymous
    21st Dec 2014
    4:56pm
    It is incorrect to say John Howard brought in the GST without letting the public know. He took it to the election which he won.

    Here is the truth about John Howard and the introduction of the GST. It is all here the history of it.

    http://news.smh.com.au/breaking-news-national/gst-on-john-howards-agenda-in-1979-20100101-ll77.html
    Polly Esther
    17th Dec 2014
    3:56pm
    I've just about abandoned all hope now of ever receiving my free pink batts, free light globes, and free shower heads, $700 bonus cheques etc. etc. Still waiting, Ruddy, Gilly, anyone. Hello!
    bartpcb
    17th Dec 2014
    4:14pm
    Mr Hockey needs to stand up to his wally of a party leader. If he is implementing all this stuff because he's the one proposing them, then he's just as big a wally. As usual this right wing government won't go after the big boys in the playground, they'll do what arrogant bullies usually do and go for the ones who can't defend themselves.
    Adrianus
    17th Dec 2014
    5:52pm
    The OECD has suggested we catch up with the rest of the world and increase our GST to 15-18% and not exclude any section of the community from paying it. This sounds like a smart move. However, the timing is not quite right in my humble opinion. Ideally it should be introduced when the economy is strong and the deficit and debt are under control. Although the States may have other ideas?
    Oars
    17th Dec 2014
    8:04pm
    Frank, an increase in GST will scim a bit of money off all spenders. The bigger their income and expenditure the bigger the bundle of GST gained tax. However, there needs to be a GST system with a low threshold for the battlers, as they need to be assured that their BASIC essentials are within their reach. Try recycling more- like us oldies do often, and stop trying to "keep up with the Jones's".
    Adrianus
    17th Dec 2014
    8:09pm
    That's where we keep making the mistake with our GST. Instead of modifying the GST for battlers and excluding some G&S from the T. Why not compensate the Battlers through the welfare system?
    Adrianus
    17th Dec 2014
    8:12pm
    Oars, I forgot to highlight the fact that businesses are the biggest GST collectors/payers. I think consumption tax/user pays is the only fair way and allows less loopholes.
    Oars
    17th Dec 2014
    8:31pm
    Frank. You and I seem to be preparing the next GST tax summit on this column. Pity I am too old to banter around the details with self-interest fools. Part of the problem with previous tax reform is that the reformers were too close to the "vested interested". I am not sure that paying a welfare to the battlers is sound. Too much of welfare payments fall into the hands of the "less needy".
    Adrianus
    18th Dec 2014
    12:10pm
    Oars, I am also too old when I get a glimpse and reminder of the obstacles one puts up with in order to make life better for those creating the obstacles.
    We are already providing the welfare. I'm not talking about the Labor cash splash, which had lump sums flying all over the country even to dead people. I'm suggesting cost of living increases to income streams. Reductions in income tax for low income earners. Governments have indicated a desire to head in this direction but have not quite got there.
    wally
    21st Dec 2014
    6:01pm
    It would be interesting to know how many of our YLC people buy things on line from overseas suppliers. They might also be avoiding GST on these purchases.
    Oars
    17th Dec 2014
    7:24pm
    Gang. Before we beef off into our selective political corners, please try to understand the complexity of tax paid by all businesses. The simple (ideological) call is for all companies to pay tax at the place they make the profit. That is called the "regional tax" case. However, the two words are the "place" and "profit". Say if company sells goods in Oz and as part of it's EXPENSE it has large setting up loans- that they borrow from overseas investors who require a payment back into their region. These expenses reduce the effective profit on which tax is equated. To disallow these companies would hinder the chance of employment in OZ. I will discuss the profit later as tea calls.
    Oars
    17th Dec 2014
    7:58pm
    Tea is over- now back to some enlightening tax talk. The second point was "profit". Take the typical investment for equity ( means the investor gets a slice of the company). Then as the company grows it can spend it's pre-tax money. One is to pay the investor and have bugger all left, and the other is to plow the pre-tax money into expansion. But they have made no net profit, so they pay no tax. However, if they do the second alternative, the business should grow, which means more jobs ( and associated income tax) and more products ( GST tax) made here in Oz- and less reliant on overseas junk. Get it. So if we want to EXPAND (including our mindset) then we need (i) overseas investment and pay them a dividend and (ii) plow the balance into machinery, staff and new systems. The short term is the lack of profit ( and the associated tax) yet the long term is to develop a thriving local business community that creates jobs, machinery etc. That is a simple review of my assessment of what may/should happen- irespective of your politics, intelligence, or mindset. Try it- it works - long term.
    Bes
    17th Dec 2014
    8:12pm
    Hi Oars, is this what Clive Palmer suggested over 2 years ago, that companies pay tax at the end of the year based on profit and not in advance?
    Cheers,
    Bes
    Oars
    17th Dec 2014
    8:24pm
    Bes. I cannot let old Clive get any credit for this -(if he ever kept to such simple economics). The mindset of OZ population is on the whole - play safe, and let the other bloke take a punt- but TALK as though you already know and DID it yourself. There are few who take the risk- with a "hedging" mindset- they set aside a few bucks for the possible failure but FOCUS on success. These words are printed through most modern business text books- but very few ACT on them. Pity. I like a trier, and will always give encouragement to someone who actually HAS A GO. It's better to have loved and lost, than never have loved at all. Sounds familiar anyone ?

    17th Dec 2014
    9:08pm
    My only problem with Joe and Mattie is that they will garner a nice pension for being total losers and miscreants.

    It is only to be expected of these cretins that they will cower down to the big money and shag the poor end of town relentlessly...

    I wouldn't give you five cents for the pair of them - privileged dick-heads both and in total keeping with their party at this time.
    Ahjay
    17th Dec 2014
    10:30pm
    100% correct!
    Reeper
    18th Dec 2014
    1:46am
    Here we go again, Debbie McTaggart, the Socialists answer to mediocracy in journalism geeing up the usual anti ELECTED government morons who will slavishly make comments about how useless Hockey is.....when they probably can't even spell Treasurer. Get a life you people..you spent all the lolly the ALP took out of the account and you want someone to pay it back for you now the bank balance is diving as a result.....idiots!
    Fred
    18th Dec 2014
    8:03am
    I just wonder how many of the people complaining about Big Companies getting tax brakes claim as many work expenses deductions as they can when doing their tax returns. A little aside in the late 1960 and early 1970s England was charging their high earners 90% and the country was going down the tube fast as factory after factory closed down leaving people unemployed. If you do tax the rich to high they will say in the end good bye.
    Oars
    18th Dec 2014
    11:38am
    INCENTIVE is the word you are looking for. Without true incentive, mankind -not only OZ- will smoulder into mediocrity. The mindset for INCENTIVES is understood by folk who want to work and get rewarded accordingly. Those against it are frequently looking for the easy way out- like bludgers.
    Frank. I've done it again- blunt, yet to the point (pun intended ).
    wally
    21st Dec 2014
    6:03pm
    Or buy things on line from overseas suppliers and dodge paying GST?
    Anonymous
    22nd Dec 2014
    4:45pm
    Bonds, King Gee and Hard Yakka have all taken their businesses off shore. How many jobs were lost when they did so??
    darolcavanagh
    18th Dec 2014
    11:34am
    I used to enjoy these posts but the level of debate has deteriorated somewhat into political posturing and unsubstantiated opinion of many.
    One advantage of this is that much of the debate can be ignored. Scan reading skill comes in handy. Any way back to the post. Has anyone thought that the clock needs to be turned back to government ownership now that privatisation has obviously failed with the current set of statistics pointing to the disasters of unemployment, little competition, no G revenue except for highly selective tax receipts based on an ever diminishing worker base, high transfer payments, super profits from banks and multinationals,GST burden on small business, high health costs, depressed dollar,university and Tafe fees, high council rates and on it goes. One solution appears to be to determine what governments are there for for example: High employment, low taxes, secure nation, stable currency, high standard of living, equity and so on. I am old enough to remember why the Australian people paid for G assets to be established and it was to control prices in the major economic sectors of finance, defence, currency, communications, water, employment etc. The lunacy of disposing of assets that generate these social goods was a mistake. I remember the old Council employment adage: one man/woman digging the hole and 20 others looking into it. This generated full employment, tax revenue, spending power etc etc. What we have forgotten in supply side economics is that without the worker, there is no wage and no money to spend or tax! Hence shut down the economy
    Oars
    18th Dec 2014
    11:42am
    Dasso- wot ARE you on- are you harking back to the good old days when Pom Union organisers used to threaten workers to buckle down, or have a brick thrown through their front window. Things have changed -now it's drug wars .
    MITZY
    18th Dec 2014
    12:27pm
    Not too many government assets left to sell these days DC. Not being very politically aware when I got my first job when arriving in Australia, in 1957, I worked at the Taxation Office which had all the floors above the Commonwealth Bank in Martin Place/Castlereagh/Elizabeth Streets. On my meagre salary at the time I was able to pay my parents board; took my lunch to work several days; treated myself a couple of days; paid my transport to and from work; went to the cinema once a week with my cousin; usually bought a new outfit every couple of weeks to be well-dressed at work; shoes and handbag and "gloves" the following pay-day and still managed to have a small amount, usually ten shillings left in the bank per pay day. The basic wage rises would come along and you got a little bit more to work with but the prices of goods went up too, but not like they do today. Going into a sparsely found supermarket to buy "specials" with my parents after the basic wage rise would be a half-penny or a penny more. Currency changed and we lost a few coins and speculation is there that the five cents will bite the dust in the future ..... I really did like those happy carefree days when a lot of people were happy with their lot. How things have changed, how children have changed, children are like adults in half the time they should be.
    The changes in our world are enormous but politicians seem to be "unchanged".
    Same old lines, feed the people rubbish. I often go back with the "marvel" of the Internet and read the speeches of politiians gone by and all you really need to do is plagiarise the data for today's bunch.
    darolcavanagh
    18th Dec 2014
    6:37pm
    No I'm not harking back to any days. Unions from my reading of the text were to allow workers to organise for bargaining purposes against the well organised various employer groups and governments for conditions that enabled workers to work for a decent wage in a safe environment and for a determined period so that the worker could enjoy other human activity beside work.However the way unions have been demonised over the years as if they are some extra group outside the workers does not allow me to comprehend the model that workers are referring to when they claim "brick throwing' incidents i.e. union processes rather than organisational details. The assets I thought belonged to the people and as such no government can claim a mandate to sell them simply because they were elected! These were revenue raising instrumentalities e.g Government Insurance office, Commonwealth Bank, Telstra, Qantas,Railways, roads, electrical/gas power,and of course the unions had petrol stations and super markets. Now what have they got to raise revenue? Tax.
    geomac
    21st Dec 2014
    11:28pm
    Talking sense darol.
    geomac
    21st Dec 2014
    1:18pm
    Maybe Hockey is waiting for the rest of the world to pass laws to stop multinationals from avoiding tax ? All that bluster but when it comes to actually doing anything he does nothing. He who pays the piper calls the tune. Political donations seem more important than the voters who vote them in.

    22nd Dec 2014
    2:21pm
    Why are we still paying GST on the stamp duty when we pay all our insurances.

    We were original told when GST was introduced all stamp duty would be abolished but we are still paying stamp duty and GST on most insurance policies and we are paying the GST on the stamp duty.
    Not Senile Yet!
    30th Dec 2014
    8:36pm
    Labour or Liberal...Left or Right...it is irrelevant argument in Politics!!!1 Why??? Because both are handicapped by their BIASED views and therefore incompetent when it come to managing the economy or deciding how to administer a fairer tax system!!!
    By the way...the greatest mistake made by Governments at present is to have a Penalising Mentality instead of a Rewarding one.....especially with Taxation!!!
    Tax based on Gross Income is out of date and contributes greatly to our current system being UNFAIR!!!! Not only to the Worker ......but also the employer!!!!
    No one should be taxed on what one does not get/receive!!!!
    Companies pay less because they are allowed a wider range of deductions...ie for investors & expenses!!!
    Employees should be allowed the same privilege...within reason!!!
    You should not tax someone based on a figure that they never receive!!!! Regardless of them being an employer or an employee!!!
    Businesses that succeed and employ more workers need to be rewarded through the taxation system...either by accruing tax credits to cover the hard times or by Government Grants for expansion. Employees need a similar system.....either subsidised training or tax discounts in return.
    A Reward System of Government will work far better than JUST a system that PENALISES!!!!!
    All rules for Retirement and Super should apply to everyone...regardless of their Success or Failure!!!
    That means what it says...No Access before retirement unless you are Unemployed or Sick/ill. Of course the access for unemployed needs to be restricted to immediate expenses and re-training!!!
    The restrictive manner of the part-time employment hours and penalties should be removed!!!
    Part-time employment allows the gaining of experience and should not be penalised through tax. Anyone on less than 24 hrs should get tax breaks because their hourly rate does not include A/L or Sick Leave....until they become fully employed. Again an extra % when employed for the period Part-time employed...would encourage...not deflate....their efforts!!
    Employers Tax rate should be on a sliding scale based on how many they employ and the Profit they make....NOT their Gross Income before expenses ......Governments need to step away from Taxing based JUST ON GROSS Income......no one ever gets that....not the employers nor the employees!!!!!
    Ecomonies need money moving......they need people to keep it moving.....and they need Governments prepared to CHANGE their taxation methods to enable that to happen!!!
    Taking more and more tax.......limits the spending power of everyone and shrinks the economy!!! Cutting back or slashing too much has the same effect......it removes money from the economy......puts people on the Dole and the endless disruption is not a help!!!!
    The Slash & Burn Budget responses do not help the Economy one bit!!
    With regard to Businesses and Tax .....taxation needs to rise for businesses in Australia...however it needs to be gradual and it needs to be based on profit after it has been made NOT BEFORE.
    We as voters need to understand that the Party MP's will not change with the times...they cannot....they are only puppets doing as they are told by the Party Back Room...which has a biased Agenda!!!!
    So Stop voting them Back In!!!!
    If you want change....first YOU need to CHANGE...to get a different Outcome!!!
    darolcavanagh
    31st Dec 2014
    3:04pm
    At last some suggestions. Incidently my limited understanding of GST is that consumers pay not business. Business collect GST keep it for a while depending on their BAS statements then balance what they have "paid". The problem for small business is that the Government has handed over the collection regime to business without payment so they could sack workers in the government collection agencies. However the effect of a GST is a regressive (flat) tax the poorer you are the more you feel it. Income tax is at this stage, for costumers, progressive tax. The poorer you are the less proportionately you pay. True regressive tax goes from 1 cent in the dollar for low income to 99 cents in the dollar for huge incomes. Now with a fixed tax for business set at 26 cents one doesn't have to be a mathematical whizz to see who reaps the benefit. Huge corporations. Now if the corporation can mechanise or computerise then wages is not a problem. All that remains is for corporations to teach machines and computers to spend, for workers obviously will not have the wages to buy the corporation output.


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