LIBS SUFFER TRUTH DEFICIT
The Daily Telegraph, Herald Sun and Courier Mail, 29 March 2019
Con artist George Parker was 20 years old when he first sold the Brooklyn Bridge. The trick was to start by asking a passing tourist for help on the tollbooth of the newly opened bridge. When the tourist got interested in the economics, Parker professed not to be much interested in the big picture, and suggested that the passer-by might want to purchase the whole structure. Parker reputedly sold the Brooklyn Bridge many times over, at prices ranging from $50 to $50,000.Read more
FEDERAL MEMBER FOR BASS
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
SHADOW MINISTER FOR TRADE IN SERVICES
SHADOW MINISTER FOR CHARITIES AND NOT-FOR-PROFITS
FEDERAL MEMBER FOR FENNER
ENDING TAX REFUNDS FOR FRANKING CREDITS
Launceston Examiner, 21 March 2019
Tax loopholes occur when we write our tax laws in a way that inadvertently allows revenue to slip away. Those who use loopholes aren’t breaking the law, but the effect is that we don’t raise the revenue we need to fund vital services.
That’s what’s happened with refundable franking credits.Read more
UPTURNING THE MONOPOLY BOARD
Crikey, 20 March 2019
As a parent, I hate the board game Monopoly. It never takes long before one lucky player has bought up a slab of real estate, and the rest are mortgaging their properties just to survive. No matter how happy the kids are when they start the game, it invariably seems to end up in tears.
As it turns out, that’s how most economists feel about real monopolies. From the British East India Company to Standard Oil, monopolies produce too little, and charge too much. Like the strongest kid in the schoolyard, they sometimes throw their weight around - threatening to bankrupt or buy off competitors. Monopolies can become fat and lazy, living off their dominant market position rather than looking for ways to produce better and cheaper products.
In recent decades, Australia’s monopoly problem has come into stark relief. To see the size of it, Australian National University researcher Adam Triggs and I analysed hundreds of Australian industries. Across half the economy, we found that the biggest four players controlled more than one-third of the market.Read more
CRACKING THE CONFUSOPOLY
DevPolicy Blog, 15 March 2019
Okeny Secondo is a disability support worker in his early-30s who lives in Redbank Plains, a suburb of Ipswich. Born in Sudan, he fled to Uganda as a child, then migrated to Australia. Mr Secondo and his wife, who works as a meat industry processor, send almost one-third of their income back to help friends and families in Africa.
‘I know what it’s like to live with uncertainty in a war-torn country’, he says. ‘I’m very happy to be able to support my family and friends to make them more secure. Sometimes we get urgent requests for emergencies and it’s great to be able to get money to them immediately.’
Mr Secondo is among thousands who send remittances to help people in developing nations. With international migration projected to account for a growing share of the population in the future, remittances will only grow in importance. When a grandparent falls ill, or a child needs to pay school fees, families in developing countries often turn to generous relatives in countries like Australia to send over some cash.Read more
WHAT IF CASH REFUNDS FOR FRANKING CREDITS DIDN’T EXIST?
Australian Financial Review, 11 March 2019
Suppose that Australia - like every other country in the world - did not provide cash refunds of franking credits to anyone except pensioners.
Now imagine that a government decided to implement such a policy.
How would it fund it? For starters, the cost would be significant - nearly $6 billion a year. That’s over $200 for every man, woman and child in Australia. So it might raise income taxes on middle-income earners or increase the GST. Or it could rip money out of the health or education system.Read more
SUBBIES WILL GET BEST DEAL WITH LABOR GOVERNMENT
Courier Mail, 6 March 2019
Queensland One Homes collapsed in 2017, owing more than $5 million. Fencers, roofers, electricians and painters were left out of pocket. The liquidator’s report detailed debts of $380,000 to the federal government, $90,000 to the Queensland government, and millions of dollar of debts to Gold Coast small businesses.
Allegations of “phoenixing” have also been referred to the corporate regulator, ASIC. Phoenixing is defined by the Australian Taxation Office as when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts. The practice is not illegal.Read more
LABOR PROMISES FAIRER FEES FOR MONEY TRANSFERS
Australian Muslim Times, 4 March 2019
Every year Australians send billions of dollars overseas to family and friends. This might be taxi drivers working an extra shift to help out somebody who’s fallen on hard times back home. It could be someone who’s working a bit extra in a pharmacy in order to help put a nephew through school.
Right now the pricing of remittances is bamboozling. It’s too confusing and it means you get an incredible spread of prices. Australians pay more for remittances than do people in the United States or in Korea.
Just to give you some sense of the size of what the fees look like, an Australian who wants to send $1000 overseas will pay according to the World Bank $77 in exchange rate mark ups and flat fees.Read more
BRINGING THE HIGH FLYERS DOWN TO EARTH
The Canberra Time, 23 February 2019
When Clive Palmer was recently revealed to have registered his Cessna Citation X in the Cayman Islands, sources close to the billionaire said that it was for three reasons: ‘for tax benefits and cheaper operational and maintenance costs’.
The idea that Palmer can save money by getting his jet serviced in a small island 15,000 kilometres away is, frankly, ludicrous. Indeed, his $4 million plane may never even have touched down there. But the Caymans charges no taxes, and is notoriously uncooperative with other governments - which is helpful when your creditors are chasing you for hundreds of millions of dollars.
Those who choose to use tax havens are mixing it with a group of characters that make the bar-room scene in Star Wars look like a church picnic. As recent leaks have revealed, tax havens are used by drug dealers and extortionists, kidnappers and kleptocrats. Many have just a virtual presence - one building in the Caymans is home to 18,000 companies. Others visit occasionally, just to ensure that the lawyers are keeping their affairs secret and untaxed. According to one estimate, four out of every five dollars in tax havens are there in breach of other countries’ tax laws.Read more
THE HON RICHARD MARLES MP
MEMBER FOR CORIO
ANDREW LEIGH MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR COMPETITION AND PRODUCTIVITY
MEMBER FOR FENNER
LABOR CANDIDATE FOR CORANGAMITE
LABOR TAKES THE WHEEL FOR MECHANICS IN CORIO AND CORANGAMITE
Labor is driving a better deal for car owners and independent mechanics with a plan to give them access to the technical information they need to get cars fixed.
No matter what you kind of vehicle you own, everyone should be able to choose where they get their car serviced. But independent repairers are struggling to get fair access to the standard service information they need.Read more
THE GOLDEN WHISTLE
The Sydney Morning Herald, 30 January 2019
When investigative journalist Bastian Obermayer received the millions of leaked files from Panamanian law firm Mossack Fonseca, he was not having a good day. As the German reporter told Fraud Magazine, the rest of his family were sick, and he had just changed his sons’ sheets when the email arrived. ‘It went from being a bad day to a very good one’.
The Mossack Fonseca leak showed that the Panamanian law firm had established shell companies that were being used to perpetrate tax fraud and dodging global sanctions. The Icelandic Prime Minister resigned, as did other prominent officials. The Australian Tax Office began investigations into 800 people identified in what became known as ‘the Panama Papers’.
Just knowing an insider might blow the whistle makes firms less likely to break the law. A recent study of Israel’s tax whistleblowing scheme concluded that it significantly increased the amount of tax paid; particularly in industries that are more prone to tax evasion. The scheme had a powerful deterrent effect on tax dodging. Once firms knew that there was an incentive for employees to report wrongdoing, they were more inclined to pay what they owed. Tax revenue increased by more than one-quarter.
Whether it’s tax or other kinds of corporate fraud, whistleblowers are crucial. A study by Alexander Dyck and coauthors analysed hundreds of US corporate fraud cases. They found that the Securities and Exchange Commission caught just 7 percent, while auditors detected only 10 percent. By contrast, the media uncovered 13 percent of fraud cases, while the employees exposed another 17 percent.Read more