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
REFUGEES ADD TO OUR RICH TAPESTRY
The Chronicle, 22 January 2019
A decade ago, Pakao Sorn came close to dying as she took her first steps towards a new life. Fleeing Burma on foot, she endured crowded detention centres, rough terrain, and so much rainfall that she thought she might drown.
A few years later, she found out that she had been granted refugee status in Australia. Her first thought was ‘Oh my god, so far away. I never flew before.’Read more
POLITICAL PARENTING CAN BE MORTIFYING – BUT THE IMPERFECTIONS CAN BE GLORIOUS
The Guardian, 16 January 2016
At first glance, it seemed the last photo you’d put on the front of your Christmas card. Gweneth and I were smiling at the cameras, along with our eldest two boys. What we didn’t realise was that our toddler had left the group, and was sitting a metre away, with the world’s biggest scowl on his face.
But when we sent out the card, friends loved it. People didn’t want to see airbrushed politics; they preferred to know that our kids were just as grumpy as everyone else’s. Then someone put it online, and within a week, it had found its way into the global media, including a cameo appearance on the US Today Show.
Combining politics with parenting can be hazardous. A few months afterwards, I was live on my local ABC radio station when the interviewer asked “is that your child howling in the background?” I was torn as to whether to stick to my theme of castigating the Coalition’s economic mismanagement, or explaining that when you have three young boys, silence is as rare as a sleep-in.
Mixing kids with life can have mortifying results, yet the imperfections can be glorious. If you go to the website of Robert Kelly, the Korea expert whose BBC interview was interrupted when his children gatecrashed his home office, you’ll see his bio page starts with “Firstly, yes, I am ‘BBC Dad‘ – the guy who got interrupted on BBC news by his kids in March 2017. Here and here are our family statements on that event.” Kelly is one of the foremost experts on the inter-Korean tinderbox, but most of the world knows him for his irrepressible kids.Read more
SHINE A LIGHT ON OUR QUIET ACHIEVERS
The Chronicle, 8 January 2019
WHEN working with people with disabilities, Pam Beckhouse kept faith that her students had the capacity to learn.
“Be positive. Never stop. Keep trying,” she counsels.
“One day, something will happen and you’ll realise they were taking it in all that time.”Read more
TYRES AND TAX HAVENS
The Herald Sun, 29 December 2018
At its worst, Melbourne’s Stawell tyre dump held nine million tyres. The tyre recycling firm that owned the site was refusing to clean it up. Authorities were worried about the fire risk. Eventually, the Environment Protection Authority stepped in. Over two months, they took away 380 truckloads of tyres, at a cost to the taxpayer of $4.5 million.
But when they looked at where to send the bill, the Authority discovered something fishy. Ownership of the dump had been shifted from the Used Tyre Recycling Corporation to a firm called Internet Marketing Solutions Corp. It was based in Panama. That’s right - one of Melbourne’s ugliest eyesores was technically owned by an internet company based in a beautiful nation on the other side of the world.Read more
HOW THE FAT DUCK SLIMMED ITS TAX BILL
The Age, 19 December 2018
In the 1600s, Louis XIV’s finance minister famously described the art of taxation as being to get the maximum amount of feathers from the goose, with the least amount of hissing. At London’s Fat Duck restaurant, they’ve taken a different approach. By using tax havens, Heston Blumenthal’s restaurants appear to have goosed the tax authorities. By flying the profits to the tax haven of Nevis, which charges no company tax on the profits of foreign companies, the famous restaurant chain seems to have feathered its own nest at the expense of the rest of us.
Heston Blumenthal, who also operates the Dinner restaurant at Melbourne’s Southbank, isn’t the only one apparently using tax havens. By one estimate, four out of every ten dollars of multinational profits are now routed through tax havens. Dubbed ‘Treasure Islands’ by one expert, places like Panama and Bermuda have become infamous for their willingness to house companies and their unwillingness to share information about them.Read more
Loneliness a Problem We Must Tackle Together
The Herald Sun, 4 February 2018
Berenice Benson has always wanted to go to New York. At age 85, and suffering from dementia, the walls of her nursing home room are covered with pictures of the famous city. She told staff at the Uniting Care Mirinjani retirement village that if she couldn’t visit, the next best thing would be to meet a New York police officer.
It took two years, but a few weeks ago the staff arranged for her dream to come true. Detective Howard Shank, visiting from New York, stepped into the nursing home in her uniform and introduced himself with a smile. Ms Benson burst into tears. When she recovered her composure, she said ‘this has been the best day of my life’. She felt 20 years old again.Read more
Published by the John Curtin Research Centre
Issue 2, October 2017
The twentieth century saw an explosion in technologies, from aircraft to radio, antibiotics to smartphones. Living standards rose massively. Yet the middle of that century – the 1920s to the 1970s – saw the largest reduction in inequality in Australian history.
Australia today faces two intertwined challenges. First, how do we continue the pace of innovation in the twenty-first century that we saw in the twentieth? Second, how do we ensure that prosperity is broadly shared? As it happens, I will argue that a single policy recommendation offers the greatest promise to make us more entrepreneurial and more equal.Read more
Australia can prevent the Global Gag Rule’s catastrophic statistics, Huffington Post, Friday 31 March 2017
Do you remember when Donald Trump described himself as “very pro-choice”.
I also vividly remember the photo of President Trump in the White House – surrounded by men – signing the Global Gag Rule he supercharged this year.
While some Madagascan women and girls may have missed that photo, many of them will suffer mightily from this Global Gag Rule’s implementation.
This is because President Trump signed into existence a much more extreme and destructive Global Gag Rule. Previous versions of the rule prohibited any non-governmental organization from having any involvement with abortion in order for it to receive any funding from the U.S. for family planning activities.
The rule meant that an organization couldn’t even use its own money to provide abortions, or to assist a doctor to provide or counsel a patient as to her best care, or refer that patient to another place for necessary medical care. It meant that patients couldn’t be given condoms to reduce HIV transmission.
The President aggravated this directive by extending it to all global health funding for any aid program that was linked in any way to abortion funding, not just family planning. The rule now applies to 15 times more funding, which will result in over US$9 billion in global health funding being affected.Read more
Why Corporate Australia Should Care About Inequality, Business Insider, Friday, 30 March 2017
When we talk about tax policy, we often say that good tax reform needs to be efficient, equitable and simple. But too often, equity becomes the ugly duckling of that troika – forgotten as soon as it has been uttered. Unless we put equity at the heart of tax policy, our economic debates will fail to address one of the central challenges of our age. Just as no business today can afford to ignore climate change, human capital or social responsibility, so too no business can afford to ignore inequality.
Over the past generation, wages have risen three times as fast for the top tenth (people such as financial dealers and anaesthetists) as for the bottom tenth (people such as apprentices and hairdressers). According to research that I did with the late Tony Atkinson, inequality in Australia is now at a 75-year high. Compared with other countries in the advanced world, Australia isn’t the most unequal. But we are among the upper third for inequality in the OECD.
There are three reasons that business should care about inequality.
First, because more inequality means lower levels of wellbeing. Like the slow shifts of Arctic Glaciers, this can be hard to notice at first – but it’s obvious when you think about the extremes. If we took all the income in Australia and gave it to one person, the average would be unchanged.
But do we really think that we would all be equally happy? In a similar way, the past few decades in Australia have been good times for professionals with harbour views, but hard times for a school cleaner with limited formal education. In economic terms, we’ve seen a rise in both top incomes and relative poverty.
As economists intuitively know, our discipline isn’t about maximising the total amount of money in a society; it’s about maximising the amount of happiness, or utility. If you think that a dollar brings more pleasure to a battler than a billionaire, then you intuitively recognise the prime reason why policymakers should care about inequality. If you’re a utilitarian, you should probably also be an egalitarian.Read more