Why We Feel Good About Higher Taxes

In last month’s Federal Budget, the Government announced the introduction of an additional tax on the Financial Services Sector, or at least on five of the larger banks operating in the sector. This comes at a time when the Government is on one hand, advocating policies to reduce company tax, while increasing taxes on the other. (So unlike Governments to have contradictory agendas!)

The Liberal Government is ‘banking’ on this new tax levy being more popular than Labor’s failed Mining Tax, which the coalition Government subsequently repealed. This new populist policy is the Government’s attempt to leverage off the creed that all Australians hate banks, apparently because they are well managed global businesses whose apposite profits are too big.

Therefore, the thinking is that the public will be happy if the so-called ‘greedy’ banks are taxed more than other companies and as a consequence, the Government gains a popularity lift from you, the electorate. This is a desperate ‘socialist solution’ by a Government who is supposed to be encouraging private enterprise to grow the economy; no wonder we are confused about what this Government is supposed to stand for!

The Government is taking advantage of the public’s naive ‘bank bashing’ mindset by virtually condoning hatred against a small number of profitable institutions just so they can pass their bias, uncompetitive and oppressive policies unimpeded. The Government is counting on the gullibility of the public who have been conditioned by successive financially incompetent Governments, and the media, to believe we have been ripped off when in fact the Bank’s ‘Return on Equity’ is somewhat moderate compared to many other publicly listed companies (see below).

I keep hearing the media and politicians say that the Banks should pay this new levy and not complain because they (the banks) are so hated and more unpopular than politicians, (if that’s possible). But who are they? Well, ‘they’ is essentially you, whether as an individual shareholder or more likely in your superannuation fund, or if you have a bank mortgage or a bank account, not to mention if you have exposure to any of these banks’ subsidiaries.

Anyone with any relationship, direct or otherwise, with the Banks will pay for this new levy/tax. If there is an additional cost to business, someone pays and in the final analysis, the people who own and deal with the banks will pay the additional tax the Government has conned you into feeling good about.

Let’s face it, I don’t think that getting a dividend yield of 6% as a shareholder of a Bank is an ‘obscene’ return, in fact, far from it given the ‘capital risk’ you carry. So this ‘clever’ new policy is only a slick revenue grab, that somehow ‘the constituency’ has been duped into thinking they’ll love!

If Government-cultivated hatred and loathing is driving a prejudicial policy agenda in Australia, where we single out and indiscriminately penalise certain groups or sectors in our community; then we are on a slippery totalitarian slope with despotic overtones. 

Another consideration in this subterfuge is the randomness of the policy, there is no reasonable basis for the new tax. Apparently, the Australian Government supports a Fair Taxation System unless the ignorant decide the industry is so unpopular that it justifies a discriminatory socialist policy. If you implement a tax just because you make a large profit, then why not apply the new tax to companies that make larger ‘returns’ than the Banks do and if not, why not? Would that not be a reasonable and equitable basis to apply a tax, with a just ‘outcome’ for all Australians under the ‘Fair Taxation System’?

I have scanned the various market segments and randomly identified 14 companies with a higher ‘Return on Equity’ (RoE) than the five banks targeted. Should companies like those listed below also be identified as ‘bad profitable corporate citizens’ to be singled out and penalised for being commercially viable?

What is going on in Australia when you virtually need to apologise for being successful and profitable? Talk about the tall poppy syndrome; it’s economic emasculation of epic proportions! If making a profit is so obscene and offensive that we need to disincentivise success, then it is a crippling legacy to pass on to the youth of Australia: a future of limited opportunity courtesy of a pathetic, lazy, short-sighted, spiritless and tired leadership.

Return on Equity:

  • Amcor 86.9%                          
  • CSL 41.5%
  • JB Hi Fi 37.8%
  • Woolworths 32.1%
  • Rea Group 28%
  • Sirtex Medical 27.7%
  • Telstra 26.8%
  • McMillan Shakespeare 23%
  • ResMed 21.2%
  • Breville Group 20.4%
  • Flight Centre 20%
  • Ainsworth 18.2%
  • BHP 16%
  • Corporate Travel 16%
  • CBA 15.7%
  • MQG 14.2%
  • WPC 13.2%
  • NAB 12.2%
  • ANZ 10.1% 

‘He knows nothing; and he thinks he knows everything. That points clearly to a political career’ – George Bernard Shaw

3rd June 2017

Advertisements

Human Rights, 8 Commissioners & 18C’s

There seems to be a lot of noise and discussion about repealing or overhauling Section 18C because of claims that it restricts freedom of speech and also diminishes the right to a fair trial.

Section 18C of the Racial Discrimination Act makes it unlawful for someone to do an act that is reasonably likely to offend, insult, humiliate or intimidate someone because of their race or ethnicity.

It seems to me that perhaps the problem isn’t so much with the law but rather the bureaucrats at the Australian Human Rights Commission (AHRC) who allow the ‘intent of the law’ to be abused by entertaining vexatious complaints. The AHRC misguidedly believe they are instigating audacious actions against Australia’s vilest bigots and racists, who are in their opinion a couple of young honest university students in Queensland and a  respected Cartoonist/Artist. The AHRC clearly don’t get outback much!

The AHRC mustn’t have much to do if these cases are the absolute worst racial discrimination injustices in Australia needing prosecution. Their actions actually diminish the integrity of 18C, and I question how they justify their existence: whether taxpayers are getting value for money; whether the AHRC is contributing to the betterment of our society and whether these bureaucrats are meeting the public’s expectations?

So what is really going on out there? The head of the Prime Minister’s Indigenous Advisory Council, Nyunggai Warren Mundine’s recent article in The Australian details the crimes being committed against indigenous women and children, violent physical assault, death and abuse perpetrated against people who cannot protect themselves. Yet we continue to tolerate inept bureaucratic ‘Government Agencies’, like the stewards at the AHRC, who fail in their responsibilities to protect the human rights of truly vulnerable Australians.

That is why the spurious actions of the AHRC have the effect of diluting the efficacy of 18C; suppressing debate on the real injustices occurring in remote indigenous communities and empowering the predators and abusers who perpetrate despicable assaults/crimes against indigenous women and children.

The contemptible indignity of it is that while indigenous women are being brutally beaten to death, the Australian Human Rights Commission is preoccupied with people who have had their ‘feelings hurt’…shameful!

To add insult to bereavement, taxpayers fund the AHRC to the extent of approx. $23,000,000.00 p.a. The average remuneration of an AHRC employees is approx. $140,000.00 p.a. so you can see that the ‘fat cats’ certainly look after themselves and you can also understand why there is no money left for the victims of the real injustices perpetrated against indigenous communities.

Why does the AHRC muzzle the truth by suppressing debate and shutting down free speech, which has the effect of continuing to deny traditional Australians their basic Human Rights?

1st November 2016.

Cereal Charity & the Corporate Box

Does anyone think they are paying too much tax? If so, are you looking for a solution to minimise your taxation using the same method that has been mastered by the Squires at the top end of town?

Well, you won’t be the first, but at least have a think about establishing a tax-exempt charity or possibly a religious institution as a solution. After all, there are only about 60,000 in Australia, largely unregulated, highly duplicated, with a value of about $60 billion p.a. and most seem to be dedicated to curing cancer or promoting causes in the name of religion.

So what is actually going on here with approximately 2,000 new tax-exempt charities each year? Is there an epidemic of philanthropy contaminating the wealthy or has this something to do with minimising tax?

Well, one thing is for sure: it’s certainly not about cash going to charity, its about Tax minimisation where you claim all your socialising costs (attendance at a major high-profile gala, sporting events, theatrical openings, fundraising balls and general entertainment), as deductible expenses, all written off to your charity.

Then, of course, you employ all your family and friends to work and administer the charity on generous remunerations, all at the expense of your charity. Ever wondered why like-minded charities with the same ‘cause and purpose’ never amalgamate to ‘gain synergies’ and reduce administrative costs? It would be counterproductive for these individuals even if the charities beneficiaries stood to gain! It doesn’t seem to matter to the Australian Tax Office that in many cases, very little money actually goes to charity.

So, the next time you are eating your tax-exempt Weetbix, have a think about why a company with revenue of $300 million p.a. is exempt from tax!

30th October 2016