Cuts no solution to Tax Office outages - Media Release




The Turnbull Government is planning to keep cutting the Tax Office at a time when they are struggling to stay online.

Despite repeated outages, there are reports today that the Turnbull Government is planning to continue with its cuts over the next three years, climbing to almost $30 million.

This is madness.

The Turnbull Government needs to support our public servants and come clean on the rolling outages, which have disrupted so many Australians’ tax time.

Labor has repeatedly called for an investigation into these interruptions, but Malcolm Turnbull has team have done nothing to reassure the public.

The Turnbull Government hasn’t explained how the current staff will be able to cope with the on-going disruption of outages during tax time 2017 – not to mention the disruption to tax agents and the general public.

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Mind the inequality gap, Mr Morrison - Media Release


The Reserve Bank Governor has confirmed what many Australians already know – that inequality is indeed increasing.

Dr Lowe told an event organised by the Australian Business Economists that inequality "grew quite a lot in the 1980s and the 1990s and it has risen a little bit just recently… It has become more pronounced in the past few years because of the of the rise in assets prices and people that own those assets have seen their wealth go up".

The facts tell a clear story. Since the mid-1970s, earnings have risen three times as fast for the top tenth of Australians as for the bottom tenth. The labour share in the economy is at a four-decade low, and the home ownership rate is at a six-decade low.

Labor will tackle inequality through fair tax reforms, needs-based school funding and defending universal health care. The Turnbull Government prefers to prevaricate and procrastinate.

Since they came to office, the Abbott and Turnbull Governments have proposed slowing the rate of pension increases, cutting the income support bonus, and removing consumer protections from the financial advice market.

They have reduced the pay of the men and women who clean their offices, and just delivered a $16,400 tax cut to those with million-dollar incomes.

As the saying goes, when you’re in a hole, stop digging. Scott Morrison needs to admit that his claims about falling inequality are bunkum, and join the constructive conversation about building a more equal Australia.


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Scott Morrison isn't entitled to his own facts on inequality - OpEd, Business Insider

Why Scott Morrison isn't entitled to his own facts on inequality in Australia

 Business Insider, 26 July 2017

“You are entitled to your own opinion, but you are not entitled to your own facts”, the great American professor-turned-senator Daniel Patrick Moynihan used to enjoy saying to opponents.

I thought of Moynihan’s words this week when Scott Morrison claimed that inequality has “actually got better”. From a twitter troll, the claim might be laughed off. But when the Treasurer of Australia is making up the numbers, it’s nothing to chuckle about.

Since 1975, the Australian Bureau of Statistics has collected data on earnings inequality. Over this period, real wages have grown by 72% for the top tenth, but just 23% for the bottom tenth. Put another way, the top tenth of earners earned twice as much as the bottom tenth in 1975, but by 2014 they earned nearly three times as much. If low-wage earners had enjoyed the same percentage gains as the highest paid, they would be $16,000 a year better off.

Across the economy today, plenty of workers are seeing their pay packets grow more slowly than consumer prices. Many Australians are today suffering a real wage cut. As Per Capita’s David Hetherington has pointed out, the labour income share in the economy has fallen from 75% in 1975 to 60% today. Fat profits – skinny paychecks.

But earnings aren’t the only measure of inequality. By contrast, Scott Morrison tells us that his favourite metric is the gini coefficient for household income. So let’s see what that measure says. Writing in the latest issue of Australian Quarterly, inequality expert Peter Whiteford shows that household income inequality – after taxes and transfers – became much more unequal.

Whiteford shows that the gini in 1981-82 was 0.27, but by 2013-14 had risen to either 0.30 or 0.33, depending on whether you use the Melbourne Institute’s Household, Income and Labour Dynamics in Australia survey, or Australian Bureau of Statistics income surveys.

For a longer perspective, my own estimates of the pre-tax gini coefficient for men span the period 1942-2010.

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Inequality, Australia's big challenge - Transcript, ABC Melbourne Drive





Subjects: Trusts, inequality.

RAF EPSTEIN: Andrew Leigh joins us, he is the Shadow Assistant Treasurer. Good afternoon.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Good afternoon, Raf. Great to be with you.

EPSTEIN: Are you doing stuff with trusts?

LEIGH: Raf, we’re looking at a range of different tax loopholes as you’d expect from a sensible Opposition that cares deeply about inequality. We’ve led the debate around superannuation tax concessions, brought policies to the last election closing loopholes on negative gearing and the capital gains tax discount and we’re looking across the board at ways to make our tax system fairer at a time when inequality has been rising for the last generation.

EPSTEIN: And I’m keen to talk about inequality and that was a fantastic bit of advocacy for the Labor Party-

LEIGH: [laughter] Thank you very much.

EPSTEIN: But not at all an answer to my question. Are you going to look at trusts in any way?

LEIGH: Raf, I’m on your show today to offer fresh perspectives rather than new announcements. Certainly, we’re not ruling out the issue of trusts. You’d be aware of the Australia Institute report that came out at the end of last week which suggested that around a fifth of national income was going through trusts and that half of the distributions from trusts were going to people with incomes over half a million dollars. Think about that for a moment. I mean, superannuation, negative gearing, capital gains tax discount – they all skew a bit to the top end, but half the distributions of trusts according, to the Australia Institute, are going to people with incomes over $500,000.

EPSTEIN: But people are still paying income tax. They’re still paying tax at their marginal tax rate, nothing – I mean, there’s nothing legally wrong with what they’re doing, is there?

LEIGH: No one is suggesting that people are behaving illegally at the moment. What’s important is that an Opposition that cares passionately about fairness, about maintaining the great egalitarian project that Australians prize is looking at each of these tax loopholes. Past tax reviews, including the Henry Review, have looked at this one and it needs to be part of the focus for an opposition that wants to make sure we don’t have what Bill Shorten has correctly called a ‘two class’ tax system.

EPSTEIN: And can I just ask you about the Henry Review – people may remember Ken Henry, former head of Treasury, did a big tax review for then Prime Minister Kevin Rudd. Why didn’t Labor take up that recommendation last time, do you know?

LEIGH: Well, we picked up a range of the recommendations out of that review. 

EPSTEIN: I’m just wondering if you know why that one wasn’t followed.

LEIGH: Part of the challenge in government, Raf, is prioritising issues. So if you look at the previous big tax review, the 1975 Asprey tax review, that took the best part of a quarter century in order to implement. I think Ken Henry when he was doing his 2010 review didn’t envisage he was doing a review that would all be implemented in a single burst, but that he was laying a set of ideas that people would pick up in years to come. And we did many of the things recommended there – we tripled the tax free threshold, took a million people out of the burden of having to file a tax return every year for example.

EPSTEIN: So look, I assume you’re happy to have the government fulminating about the end of the world as we know it for farmers and small businesses. Because, I suspect, you’re ahead in the polls you’re not too worried about that-

LEIGH: Well, Raf, I’d prefer it if they weren’t fulminating. I’d prefer if they were dealing with climate change, if they were worried about bringing down record government debt, I’d prefer if they were thinking about how to fund our schools properly. Fulminating at Labor is not the job of a sensible government.

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ATO outages: enough is enough - Media Release




Australia has woken up to news of yet another ATO outage.

While Labor is the leading light on tax reform, the Government can’t keep the lights on at the Tax Office.

Enough is enough. Labor has urged the Turnbull Government to come clean on what is happening, but Malcolm Turnbull remains silent.

The Turnbull Government needs to explain to individuals and tax agents exactly what impact this will have on their ability to lodge tax returns for the rest of this tax season.

We have also repeatedly called for an investigation into these outages, something else the Government has ignored.

It's not good enough to blame the public servants, who have been left struggling after the Turnbull Government slashed more than 3000 jobs.

Malcolm Turnbull needs to tell Australians how many outages there have been and for how long. Taxpayers deserve to know what the Turnbull Government is doing - if anything - to fix this problem.

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Stop the infighting and join the real battle - Media Release


Regulators have got phoenix operators in their sights, but they need better laws to help them protect hardworking Australians and crack down on dodgy directors.

The Australian Financial Review reports that the Australian Tax Office and the Australian Securities and Investments Commission are targeting advisors who seek out struggling companies and direct them to strip their assets and rip off the taxpayer.

Their job would be much easier if a number of simple measures proposed by Labor were agreed to by Malcolm Turnbull.

Labor is calling for the introduction a director identification number, so those flouting the laws can be stopped in their tracks. It’s an idea which has the backing of a range of legal and industry groups, as well as Liberal MP Nicole Flint.

We also want to increase penalties associated with phoenix activity, to make it less tempting for people to rip off legitimate businesses and workers.

Labor has urged the Turnbull Government to adopt its sensible measures to tackle this dodgy behaviour, which costs billions of dollars a year. It’s time Malcolm Turnbull stopped fighting Tony Abbott and turned his attention to the real battle.


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The great Australian egalitarian project - Transcript, RN Drive




FRIDAY, 21 JULY 2017

SUBJECTS: Inequality, tax reform, Buffett Rule, offshore processing.

PATRICIA KARVELAS: Andrew Leigh is the Shadow Assistant Treasurer and joins us tonight. Welcome.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: G’day, Patricia. Great to be with you.

KARVELAS: Bill Shorten said in his speech today that inequality is on the march and is the biggest threat to our health as an economy and our cohesion as society. But Australia is really on a golden run – a world record 26 years of economic growth. Where’s the evidence that society is starting to fracture?

LEIGH: One place to look, Patricia, is housing where increasingly we’re seeing a market dominated by investors and first home buyers being shut out. Another place to look is the wage system, where we’ve seen stagnant wage growth, wages growing three times as fast at the top as at the bottom. Average workers in some cases going backwards after inflation. We look too at the prison population, which as a share of population is as high as it’s been since Federation. So, there’s a range of indicators that on that basic issue of egalitarianism – the thing that’s always been critical to Australia’s identity – there’s something askew. That’s what Bill put his finger on today.

KARVELAS: OK. You say that Labor wants and Bill Shorten says that Labor wants the whole picture – revenue and expenditure including tax subsidies and reforms that in the past we might have dismissed as too political difficult to be on the table. So what’s your starting point here? What are those taxes in the too hard basket that you’ll have another look at?

LEIGH: Well, we took the last election a set of policies around curtailing the capital gains tax discount and grandfathering negative gearing. We take the view that these tax benefits go disproportionately to those at the top of the distribution and they’re not fair, because they’re not accessible to everybody in Australia. 

KARVELAS: Ok, but they’re already stated policies. He’s said that you’re going to look at other taxes in the too hard basket – what are those?

LEIGH: Well, indeed, we’ve also looked at the tax deductions that are being claimed for accountants’ fees. Again, this is something which affects less than one in 100 taxpayers, but we’ve said that Labor would place a $3000 cap on how much you could deduct for managing your tax affairs. In the area of multinational taxation, we’ve got packages on the table worth around $5 billion, which the government won’t touch because it’s not willing to take on tax avoidance from the big end of town.

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Liberal says phoenix reform ‘makes a lot of sense to me’ - Media Release


“Something so simple. It makes a lot of sense to me.”

~ Liberal MP Nicole Flint, responding to an expert’s call for a Director Identification Number.

As experts have noted, a Director Identification Number will help detect, deter and disrupt illegal phoenix activity by dodgy directors. Labor announced this measure in May, as part of our package to crack down on phoenixing.

Supporters of a Director Identification Number now include:

  • Australian Institute of Company Directors
  • Australian Small Business and Family Enterprise Ombudsman
  • Productivity Commission
  • Tax Justice Network
  • 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
  • Nicole Flint MP

Alas, one body has failed to support a Director Identification Number:

  • The Turnbull Government (with the honourable exception of Nicole Flint MP).


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'Shades of Bottom of the Harbour' - Media Release


CPA Australia is the latest organisation to speak out on the need for reform in our director registration system.

CPA Australia’s head of policy Paul Drum today told a parliamentary committee that other countries have had robust systems for detecting dodgy directors in place for decades, while Australia has been “so lackadaisical”.

“I think that certainly needs to be toughened up.  To me, it was shades of ‘Bottom of the Harbour’,” Mr Drum said.

Mr Drum also referenced the push for 100 point ID check for prospective company directors, something Labor proposed as part of a Director Identification Number.

Supporters of a Director Identification Number now include:

  • Australian Institute of Company Directors
  • Australian Small Business and Family Enterprise Ombudsman
  • Productivity Commission
  • Tax Justice Network
  • 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
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It’s important that Australia always maintains our values - Transcript, Sky News Agenda




MONDAY, 17 JULY 2017

Subjects: Counter terror laws and encryption, Donald Trump, Clean Energy Target, Israel and Palestine, poker machine reform.

TOM CONNELL: Joining me now for more on this is the Shadow Assistant Treasurer, Andrew Leigh. Thanks for your time today.

ANDREW LEIGH, SHADOW ASSISTANT TREASURER: Pleasure, Tom. Great to be with you.

CONNELL: Your thoughts on this, first of all – for people who have read a lot on the Lindt Café siege, in particular that review of it, it seems to make sense, this ability to have the military, the best people sometimes with the best equipment, the best training in these situations.

LEIGH: Tom, we certainly welcome the review of the Defence Act and the prospect of improving the way in which the ADF work with local law enforcement personnel is important. We need to see the detail, but Labor is in principle supportive of improvements in those relationships.

CONNELL: Labor said a similar thing on this encryption element last week. The Government wants to be able to, you know, Facebook, Apple, it might be WhatsApp, whatever, that they want to be able to access information where there might be a suspicion of terror activity. So far tech companies are resisting this – this is a problem for both sides of politics, isn’t it?

LEIGH: Tom, that’s one where I think the detail is far less clear. We’ll be waiting to see precisely what the Government’s proposing. Tech companies have voluntarily handed over hundreds of thousands of pieces of information to law enforcement authorities over the years and making sure that that cooperation continues is very important.

CONNELL: This is about changing who has this key though, right? At the moment, it’s not just an option – they say this is our privacy level, we respect that so there’s no way to decrypt it. Changing that would be a change of mindset for tech companies.

LEIGH: And people have certainly raised concerns about the potential for backdoors to be used by nefarious agents, indeed some of the recent problems seem to have occurred through those backdoors being leaked to the bad guys. I think it’s important that the Government gets the detail right on this and also that it doesn’t go bull-at-a-gate into battle with companies which are already providing some reasonable level of voluntary compliance.

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