HuffPost, 25 May 2017
If you have to blame anyone, blame Napoleon.
In response to the young French general’s early military successes, Britain in 1798 imposed the world’s first progressive income tax, with rates ranging from 1 percent to 10 percent. To save the English from having to speak French, Prime Minister William Pitt the Younger decided that the rich shouldn’t just pay more money, but actually pay a higher rate.
Today, there are a handful of countries that levy flat income taxes. In Russia, for example, all income taxpayers pay 13 per cent. But in most nations, taxes are progressive, meaning that the more you earn, the higher rate you pay. When the Beatles sang ‘Taxman’, they were complaining about the fact that their success had pushed them into the top tax bracket, where they paid a marginal rate of 95 per cent.
Unfortunately, when it comes to discussing Turnbull Government’s Medicare Levy increase, a surprising number of political commentators today seem to be confusing flat and progressive taxes.
Liberal Senator Scott Ryan thundered 'The top tax bracket - $180,000 and above – seven per cent of all income earners or just under, they’ll pay 27 per cent of the increase in the Medicare levy so it is highly progressive.'
Commentator Mungo MacCallum observed 'raising the Medicare levy, which in fact means an overall tax increase, is sensible policy, and, crucially it is fair.It is not a flat-rate, across-the-board, slug'.
An editorial in The Australian claimed 'Scott Morrison proposed lifting the Medicare levy from 2 per cent to 2.5 per cent from 2019 to meet the NDIS shortfall identified by the government. However unwelcome for taxpayers, that strategy at least affirmed “we are all in this together”. The levy is a progressive tax.'
All of them are wrong. When you ask a hairdresser and a surgeon to each pay 0.5 percent of their income, that’s a flat tax.Read more
CANBERRA DESERVES BETTER
Inside Canberra, 19 May 2017
Canberra got a dud deal from the Coalition’s 2017 budget. In at least five significant ways, the bush capital will be left worse off as a result of deliberate decisions by the Turnbull Government.
First, one of Canberra’s largest export earners is education, with university teaching and research vital to sustaining the ACT economy. Cutting $2.7 billion from universities in addition to the 2.5 per cent efficiency dividend and lowering the repayment threshold for HELP loans will hold back important institutions like the University of Canberra, the Australian National University, ACU (Canberra) and UNSW (Canberra).
Second, the Turnbull Government’s own budget papers show that they are ripping $22 billion from schools. ACT schools are the hardest hit in the country. Annual average growth rate in per student funding is only 1.6 per cent for the ACT over the decade, compared with 4.1 per cent growth for Australia as a whole. Tanya Plibersek, our Shadow Education Minister, has pledged that a Labor Government will reverse every single cent of the $22 billion cut. We won’t be giving a $65 billion handout to big business. Instead, we will be investing in our nation’s schools.Read more
FRIDAY, 19 MAY 2017
SUBJECT/S: ATO tax fraud case, federal corruption commission, Labor’s tax haven transparency package, whistleblower protections, Labor’s budget reply.
SABRA LANE, PRESENTER: The Government in last week's Budget revealed that is was pushing ahead with stronger anti-tax avoidance measures to try and ensure multinational companies pay their fair share of tax here. It's banking on the Australian Tax Office collecting more than $4 billion extra as a result during the next financial year. Labor this morning is proposing other measures like forcing companies to declare where they pay tax, and greater incentives for whistleblowers.
Joining me now to discuss it is the Shadow Assistant Treasurer, Andrew Leigh, from our Sydney studio. Mr Leigh, good morning.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good morning Sabra, great to be with you.
LANE: We'll discuss your ideas in a moment. First, there's a lot of attention on the ATO right now given the arrests over an alleged $165 million fraud case. There are some concerns that this might actually jeopardise another investigation into the Panama Papers. Do you share those concerns?
LEIGH: That's certainly my first concern. It is obviously good that the Tax Office's systems flagged this issue up, but it is an incredibly serious challenge. Obviously I don't want to go to any of the specifics of the individual who has now been charged, but Labor is concerned that those ongoing multinational tax investigations continue to take place. We do believe that this reinforces the need for the Senate investigation into a national integrity commission which we have been calling for quite some time now.Read more
CHRIS BOWEN MP
MEMBER FOR MCMAHON
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
SHADOW MINISTER FOR TRADE IN SERVICES
MEMBER FOR FENNER
A FAIRER TAX SYSTEM FOR MILLIONS, NOT MILLIONAIRES
A Shorten Labor Government will make Australia’s tax system fairer by clamping down on the loopholes used by millionaires that force the rest of Australia pay more.
We will cap the tax deductible expenses paid to lawyers and accountants that wealthy individuals use to reduce taxable incomes to zero.
Labor will also take steps to keep more of the money owed to Australia in Australia by cracking down on the use of tax havens and tax avoidance.
Malcolm Turnbull has a simple choice: he can stand up and fight for Australian workers and businesses who paytheir fair share, or defend tax havens and million-dollar deductions.
Managing Tax Affairs
In 2014-15, 48 individuals earned more than $1 million but paid zero tax. Nineteen of these people claimed an average of $1.1 million in deductions for the use of the lawyers and tax advisors that helped them pay no tax.
This is a rort. Allowing high-income individuals to reduce their taxable income to zero and then charging the taxpayer for the privilege is the sort of unfairness Australians are sick of.
Should an individual choose to pay an accountant more than $3000 to manage their tax affairs, that extra expense will be borne solely by them, not subsidised by other taxpayers.
Less than one per cent of all taxpayers will be affected by this measure.
Tax Haven Transparency
Tax havens hold an estimated $7.5 trillion of the world’s financial wealth, costing the global economy $200 billion in lost taxes every year. As Tax Commissioner Chris Jordan recently noted: ‘Many of these matters involve deliberate tax evasion, often using overseas tax havens or complex corporate structures to avoid detection and recovery.’
Malcolm Turnbull’s Government shirks every opportunity to clamp down on tax havens.
Unlike Malcolm Turnbull, Labor is not content to let wealthy individuals and corporations use tax havens such as the Cayman Islands, Panama, and the British Virgin Islands to rip of their fellow Australians who do the right thing.Read more
FRIDAY, 12 MAY 2017
SUBJECT/S: Labor’s Budget reply, 2017 Federal Budget for millionaires and multinationals, Superannuation raid for housing deposit, Medicare levy, Drug testing for welfare recipients
DAVID LIPSON, PRESENTER: Angus Taylor, Andrew Leigh, welcome to Lateline. Andrew Leigh, I want to start with you. Something you had to say on morning radio with Dan Bourchier of ABC Canberra about the government's housing affordability plan. You said it was a raid on superannuation of young people. Can you explain that?
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: David, our superannuation system ought to have one purpose, which is to ensure the security of people's retirement. It shouldn't be raided in order to support the buying of first home buyers.
LIPSON: How is it a raid if it’s money that’s going in over and above compulsory super contributions?
LEIGH: There ought to be one purpose for superannuation, David. This is raiding people's superannuation accounts in a manner that Malcolm Turnbull last year said was "a thoroughly bad idea".Read more
SKY NEWS TO THE POINT
MONDAY, 8 MAY 2017
SUBJECT/S: Federal budget, housing affordability, Government inaction on negative gearing / Capital Gains Tax discount, corporate tax cuts rates for banks, Government’s $22 billion in cuts to schools, Eliud Kipchoge
KRISTINA KENEALLY, PRESENTER: Let's bring in our guest today, Shadow Assistant Treasurer Andrew Leigh. Joining us, not out of Perth, but Canberra. Great to see you.
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Thanks Kristina, great to be with you. G'day Peter
PETER VAN ONSELEN, PRESENTER: G'day, what do you think of Sam Dastyari not getting the approval of residents whose houses in some cases he mocked, in others he made legitimate statements about. What do you think of him rabbiting on about housing affordability when he himself has an investment property in Sydney, taking advantage of all of those perks of negative gearing.
LEIGH: Peter, I think young Australians are less worried about four-letter words and more worried about seven-digit house prices. These rapid house price rises we've seen over the last few years have been well in excess of what wages have been doing, driving houses out of the affordability range for so many young people. They come up to me at my street stalls - a young couple the other month, a builder and a teacher, saying they thought they were there in the market and then the prices just accelerated away from them. Why are they doing that?Read more
WHY THE 1% THINK THEY'RE THE BOTTOM 99%
Business Insider, 3 May 2017
Reducing economic inequality means addressing the widening social gap in Australia. New research shows that the income gaps within our cities have grown larger since the 1990s. Compared with two decades ago, well-paid workers are less likely to live in places with low average incomes. University of New South Wales economist Bruce Bradbury, who carried out the study, sums up his findings with the old joke: ‘What did the rich man say to the poor man? Nothing, they never met.’
A major risk of social bifurcation is that policymakers and commentators become disconnected from the reality of lived experience in Australia. Looking out from the boardroom, the parliament or the newsroom, it’s easy to forget that half of all households have disposable incomes below $80,000.Read more
THE HON. BILL SHORTEN MP
LEADER OF THE OPPOSITION
SHADOW MINISTER FOR INDIGENOUS AFFAIRS AND ABORIGINAL AND TORRES STRAIT ISLANDERS
MEMBER FOR MARIBYRNONG
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
SHADOW MINISTER FOR TRADE IN SERVICES
MEMBER FOR FENNER
LABOR TIGHTENING MULTINATIONAL RORTS
A Shorten Labor Government will improve the Budget bottom line by $5.4 billion over the decade through reforms ensuring multinational companies are no longer given a free pass to use the Liberals' tax loopholes.
Labor’s five point plan will restore integrity to the Australian tax system through stronger laws which will close loopholes and increase tax scrutiny.
Labor’s package - Their Fair Share –includes measures that will:
1. Tighten debt-deduction loopholes used by multinational companies, improving the Budget by $4.6 billion over the decade.
2. Increase compliance activity by the Australian Taxation Office
3. Remove tax advantages and inconsistencies between Multiple Entry Consolidated Groups (consisting of Australian-resident entities that share a common ultimate foreign owner) and Australian-owned ordinary consolidated groups.
4. Deliver more tax transparency by restoring Labor’s $100 million threshold for public reporting of tax data for private companies. This threshold was raised to $200 million in another deal with the Liberals and the Greens political party.
5. Appoint a community sector representative to the Board of Taxation to ensure community sector voices are heard in tax design and review processes.
Labor’s laws helped deliver victory to the Australian Tax Office against Chevron – Malcolm Turnbull is only interested in delivering a $50 billion tax handout to big business and the banks.
Malcolm Turnbull has a simple choice: to stand up and fight for Australian workers and businesses who pay their fair share, or sit idly by as budget revenue and fairness slip away.
A fact sheet is available here
The Bush Capital Shouldn’t Go Bush
Canberra Chronicle, 2 May
Earle Page may not have been Prime Minister for long, but his shrewd advocacy for Canberra merits him a proud place in our city’s story. Faced with a Canberra-bashing MP, Page invited the man to visit from Western Australia for a weekend. They went trout fishing one night (the visitor caught three large ones), hare shooting the next morning, and quail shooting in the afternoon. After that, Page recalled, the MP became a Canberra enthusiast.
Canberra’s advocates have found different things to love about the nation’s capital. Andrew Fisher championed the art collection. Joseph Lyons believed a ‘young country’ needed a great National Library. John Curtin enjoyed the fact that Canberra left governments less vulnerable to special interests. Robert Menzies initiated the annual Prime Minister's XI cricket match, and aimed to 'build up Canberra as a capital in the eyes and minds of the Australian people'.
Telling the proud history of Canberra isn’t just a matter of civic pride – it’s critical to ensuring that the national purpose of our city isn’t eroded. The decision to relocate the Australian Pesticides and Veterinary Medicines Authority will cost taxpayers more, produce worse scientific outcomes, and disrupt hundreds of staff. Since 2013, one in 13 federal public servants have lost their jobs – a virtual decimation of the national bureaucracy. Now, the successors of Earle Page and Robert Menzies are telling departments that they have to justify staying in Canberra.
Already, six out of ten federal public servants live outside Canberra. But the policy role needs to be in the national capital for the simple reason that proximity produces better outcomes. If you like efficiency and joined-up government, you should love Canberra. Recently, a friend told me the story of how she had solved a problem that crossed departments. The solution came on the soccer field, where the two public servants played in a local tournament. It saved taxpayer money, and would never have happened if the departments had been located in different towns. Enough bashing the bush capital.
WHY WE NEED TO FIX FUNDRAISING
Canberra Times, Saturday 29 April
In the year before she took her life, 92 year-old Olive Cooke received 466 letters from charities asking for money. Nearly 100 charities were asking her for money, and many were passing her details on to others. Ms Cooke was a generous donor, but she suffered from depression, and her family said that the pressure from charities ‘led to her feeling distressed and overwhelmed’. Her 2015 suicide led to a spate of media reports on the pressure that British charities were applying to their donors. Trust in charities in Britain is now at an all-time low.
For Australia’s charitable sector, the events in Britain are a reminder of the importance of maintaining public trust and confidence. Every day, thousands of Australian charities help the homeless, clean up our environment, assist people with disabilities, and tackle global poverty. Every year, Australians provide around $11 billion to help our charities do their important work.
Unfortunately, the laws that govern fundraising are hopelessly outdated. Charities in Australia who want to raise money online must register in seven states and territories (only the Northern Territory does not require registration). Each state’s rules are subtly different. In Queensland, charities need to advertise in the paper. Western Australia requires police checks. Some states want bank details.
We don’t make Australian drivers get a new driver license when they want to cross a state border. We don’t make our companies register again if they want to sell a product interstate. So it makes little sense to tell charities that they have to register everywhere if they want to fundraise online.
Faced with such a heavy paperwork burden, small charities often decide not to bother registering everywhere. They just cross their fingers and hope they don’t get caught. Larger charities tend to comply, a process that can cost around seven working days a year. I’m yet to meet a donor who wants to see their money wasted in complying with duplicate rules.
To address these challenges, dozens of charities have joined together on a campaign to ‘Fix Fundraising’, arguing that one set of national fundraising rules should be written into the Australian Consumer Law. Because it’s a law written and administered by states, territories and the federal government, the states wouldn’t need to give up control.
Fixing fundraising would be a sensible step now that the Turnbull Government has come to its senses on charity regulation. The Coalition spent most of its first term in office trying to kill the Australian Charities and Not-for-Profits Commission, a body that had been set up in 2012. Supported by four out of five charities and recommended by more than a dozen inquiries, the charities commission was helping reduce red tape – so it always seemed bizarre that the Coalition fought to close it in the basis of ‘red tape reduction’.
Thankfully, the Turnbull Government performed a clumsy backflip on the issue last March, and is now committed to keeping the charities commission. This has allowed states and territories to start working with the national body on scrapping duplicate regulation.
The Australian Charities and Not-for-Profits Commission also plays a valuable role in checking up on dodgy charities – investigating and deregistering about a dozen each year, so that they don’t tarnish the good name of the thousands of great charities that serve our community. If someone knocks on your door, it’s now easy to log ontowww.acnc.gov.au to check out their credentials.
Sensible fundraising laws are fundamental to a strong charitable sector – which is in turn vital to a healthy society. And as any good economist knows, life is about more than money. As Adam Smith wrote in The Theory of Moral Sentiments, ‘to be amiable and be meritorious, that is to deserve love and deserve reward, are the great characters of virtue. Man naturally desires not only to be loved, but to be lovely. To be that thing which is the natural and proper object of love.’
Most people don’t just want to do well, they want to do good. We seek that sense of inner tranquillity that comes from feeling that we are decent, ethical and admirable. In Smith’s formulation, most of us want to be ‘lovely’. Helping voluntary organisations is one way we can do that. Having charities that spend their time on filling hearts rather than filling forms will make us a happier, healthier and more connected community.
This is an edited extract of a speech delivered at the launch of the ‘Fix Fundraising’ campaign, and was first published in The Canberra Times on Saturday 29 April 2017.
MEDIA CONTACT: NICK GREEN 0402 575 042