When asked what Australia’s national pastime is, most people would answer cricket, swimming, or football of some description.
My suggestion would be tax avoidance, and its more devious offshoot – tax evasion.
Australians hate paying tax. We dodge it, minimise it, and grumble about it. Elections are won and lost on the propositions of tax policy.
The recent announcement by the Australian Taxation Office of up to $8.7 billion in lost tax revenue in 2014-15 due to individual taxpayer ‘non-compliance’ comes as no surprise.
The non-compliance came in the form of individuals falsely claiming deductions, incorrectly claiming private expenses and not declaring cash payments as income. The Australian Taxation Office also said it would be using technology and data matching to find mistakes in tax returns lodged for the last financial year, and will be targeting “a smaller number of people who are deliberately doing the wrong thing – that has a significant impact on revenue. These people can expect closer attention from us, especially this tax time.”
When asked for a comment on the remarks of the Taxation Office, Prime Minister Malcolm Turnbull said it was vital individuals and businesses paid their fair share. “We’re in favour of lower taxes but – and this is a big ‘but’ – paying taxes is compulsory,” he said.
Has there ever been a more hypocritical remark made by a political leader?
If there was gold medal for tax avoidance, Malcolm Turnbull would be on top of the podium.
Malcolm Turnbull ‘donates’ his parliamentary salary to the Turnbull Foundation – established by him and his wife, which is what is called a ‘private ancillary fund’ and has the status of charity. Only 5 per cent of the value of a private ancillary fund is legally required to be annually donated to non-profit organisations and registered charities. The balance of the fund can be used to pay tax-free directors’ fees into superannuation, and pay for property and expenses for ‘associated persons and entities’.
The Australian Taxation Office identifies these funds as ‘high risk’ – noting “by operating their business or income-producing activities through such a foundation, participants are able to ‘opt out of’, or disregard the tax system”.
Private Ancillary Funds were created under the Howard Government to encourage private philanthropy, and there is no doubt the Turnbull Foundation does donate to philanthropic causes (such as grass roots organisations like Scots College and Rhodes Scholarships).
But there is also no doubt that the Foundation reeks of aggressive tax minimisation. Bear in mind Prime Minister Turnbull has investments in hedge funds domiciled in the Cayman Islands – home of zero per cent business tax rate and what President Obama describes as the “biggest tax scam in the world”. PM Turnbull was also named in the Panama Papers – the leak of tax and financial papers from Panamanian law firm Mossack Fonseca that named directors of dubious offshore shell companies they had set up.
The PM’s credibility on taxation matters is therefore zero. During his impassioned advocacy for company tax cuts, apparently required to lift the wages of ordinary workers and fuel economic activity, he always gives the impression of someone with little experience with a PAYG tax system. At other times he preaches on the threat of bracket creep to the hopes and aspirations of the working class, thinking the notion of a higher paid job (rather than the crazy idea of a living wage or full employment) was a concern to us wage slaves.
And let’s remember what has occurred in the USA since their company tax cuts came into effect – the ones the PM urged should be copied by Australia – corporations are buying back their own stock, and wage growth is varying between zero and 0.1 per cent.
For example – McDonalds has rewarded shareholders with $US7.7 billion in share buy backs, yet have reneged on paying low-wage workers $1 per hour over the poverty level minimum wage.
The PM is entitled to his wealth, but what he epitomises is the ability by the wealthy to use tax loopholes, investment vehicles and creative accounting to aggressively reduce the amount of tax paid. These methods are not available to the ‘working families’ targeted before an election, but if we are to believe the PM, he has these citizens’ financial welfare front and centre when he asks for their vote.
Is it any wonder working families and individual taxpayers claim a small false deduction here or a slightly dodgy expense there? Champion level tax minimisation is being denied to them.
Taxation debate shouldn’t descend into class warfare. I’ll pay my share because it is part of the social contract to fund essential government services.
But I won’t be told to pay my fair share of tax by a Prime Minister who turned up at a soup kitchen last Christmas in a $850 Dolce & Gabbana shirt to hand out meals to the homeless.
By his own admission, Greg Smart was born 40 years old and is in training to be a cranky old man. He spends his time avoiding commercial television and bad coffee.