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
WEDNESDAY, 24 MAY 2017
Subject/s: Cracking down on dodgy company directors
TOM ELLIOT: Ok, phoenix companies – the Labor Party today has released a policy suggesting how they would deal with the problem posed by phoenix businesses, where businesses suddenly go out of business owing a lot of money and pop up again under a new corporate guise. Joining us on the line now is Shadow Assistant Treasurer Dr Andrew Leigh. Dr Leigh, good afternoon
ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon Tom, great to be with you again.
ELLIOT: Thank you for joining us. I’ve read your media release on what you would do with phoenix companies. Maybe you could just outline the few steps that you want to take?
LEIGH: Well, Tom, the biggest challenge in phoenixing is the risk that directors pop up again and again. They get barred and then they go back on and set up again pretending to be a different director. The reason they can do that is that it’s currently easier to register as a director than open a bank account. So our proposal is a director identification number, something which has been recommended by the Productivity Commission, Monash and Melbourne Universities, supported by the Australian Institute of Company Directors. It was indeed supported today by the small business ombudsperson. It’s a measure which makes it harder for dodgy directors to rip off firms and workers and taxpayers.
ELLIOT: Ok, well, I agree because I’m a director of a number of companies and pretty much all you do is say your name and address and away you go. So you’re asking to show my passport and my driver’s license and whatever else. Do you think that will actually change things very much?
LEIGH: It certainly provides a first line of defence, which is why all of these organisations have been calling for some time for director identification numbers. Tom, I’ve frankly been flabbergasted the government hasn’t moved on this. University experts have been putting out reports for the past three years.Read more
WHO SUPPORTS LABOR’S PLAN FOR A DIRECTOR IDENTIFICATION NUMBER,
TO CRACK DOWN ON PHOENIX COMPANIES?
Organisations that support Labor’s proposed Director Identification Number, to help catch dodgy directors of fraudulent phoenix companies:
- Australian Institute of Company Directors
- Australian Small Business and Family Enterprise Ombudsman
- Productivity Commission
- Australian Chamber of Commerce and Industry
- Master Builders Australia
- Australian Council of Trade Unions
- Australian Restructuring Insolvency and Turnaround Association
- Phoenix Project, comprising experts from Melbourne University Law School and Monash University Business School
Groups that have not yet indicated their support for a Director Identification Number:
- The Turnbull Government
THURSDAY, 25 MAY 2017
PARLIAMENT HOUSE, CANBERRA
WEDNESDAY, 24 MAY 2017
SUBJECT/S: Labor’s policy to crack down on dodgy directors; regulation of labour hire.
BRENDAN O'CONNOR, SHADOW MINISTER FOR EMPLOYMENT: I'm here with the Shadow Assistant Treasurer, Andrew Leigh and we're announcing a Labor policy to crackdown on abuse by directors and the real problems associated with phoenixing in this country. There has been too little done by the Turnbull Government to crackdown on misconduct by directors who seek to strip away assets from a company to avoid their obligations to pay creditors, in particular to pay workers who deserve those entitlements. And for that reason, Labor is announcing a suite of reforms that will provide greater accountability and transparency of directors, higher penalties if there are breaches and indeed a better way of ensuring that workers’ entitlements are paid to them.Read more
EXPOSING DODGY DIRECTORS
Today, Labor has announced a Shorten Labor Government will act to protect employees and small businesses from dodgy phoenix activity through a package of reforms.
Labor will crack down on dodgy directors who engage in ‘phoenix activity’, where they deliberately burn companies in an attempt to avoid their obligations to employees, government and honest businesses.
The package will see employees and business owners benefit from new enforcement tools for the Australian Securities and Investments Commission, tightened laws protecting employee entitlements, and harsher penalties to deter and punish insidious phoenix activity.Read more
The Liberal's Plan to Decentralise the National Capital
Monday 22 May, 2017
Prior to the 2013 election, the coalition pledged that no more than 12,000 public service jobs would go. We heard very clearly from the member for Sturt:
There is no ambiguity about the coalition's position … if elected, we will reduce the Commonwealth Public Service by 12,000 through natural attrition.
The then Leader of the Liberal Party, the member for Warringah, said:
I really want to stress that we are not talking about forced redundancies. We are talking about not replacing everyone who leaves; that's all.
Since the election of the coalition we have seen anything but. We have seen people forced out of their jobs, agencies sent interstate—in the case of the Australian Pesticides and Veterinary Medicines Authority, to the electorate of the minister responsible for managing that agency, despite the fact that a cost-benefit study showed it was a bad deal for the taxpayer. According to figures from the Community and Public Sector Union, the latest budget sees staffing reductions in 17 of the 25 agencies that they analysed.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
A Few Big Firms*
Andrew Leigh and Adam Triggs
The Monthly, 17 May 2017
A few years ago, a pair of young economists noticed something odd in the Australian petrol market. Melbourne University’s David Byrne and Sydney University’s Nicolas de Roos saw that petrol retailers were suddenly coordinating their prices much more precisely than ever before. Relative to the price of crude oil, motorists were paying more at the bowser.Read more
RECONNECTED - BUILDING SOCIAL CAPITAL & CIVIC ENGAGEMENT
I’m hoping to identify the most innovative community-building projects in Australia – particularly those ideas which are readily transplanted into a new organisation – and to help to share the key elements of their success across the sector.
DATE 19 May 2017
9.30am – 12.15 pm
VENUE: Trades Hall Auditorium
(enter through the foyer at 377 Sussex Street)
To get to the Trades Hall Auditorium, enter through the foyer at 377 Sussex Street, go past the lifts and down the stairs to the Auditorium atrium.Read more