Like many Australians, I was dismayed when I read that almost a third of our private and public companies and that 56 Australians who earnt over a million dollars paid absolutely no tax.
I was even more disturbed to find out that rather than addressing this serious issue, the Turnbull Liberal Government wants to spend more than $50 billion on tax cuts for big business.
The 99 per cent of people who live in Tasmania that earn less than $180,000 won’t see an extra cent from the Liberals’ tax cuts for high income earners.
At the same time, a person who earns a million dollars a year will get an extra $16,715 back from the government through expensive tax cuts.
I believe that precious taxpayer dollars should be used to the benefit of all Australians, not just wealthy companies and individuals.
Labor has already put forward a number of alternative taxation measures that will help to address these excessive tax concessions that disproportionately go to very wealthy Australians.
The Turnbull Liberal Government’s own Financial System Inquiry found that 10 per cent of Australians receive 38 per cent of Australia’s super tax concessions, more than the combined benefit that goes to the bottom 70 per cent of Australians.
Labor will address these inequities and save $14.3 billion over the decade by:
- Reforming the tax exemption for earnings on superannuation balances that exceed $1.5 million.
- Reducing the Higher Income Superannuation Charge (HISC) threshold to $250,000 from $300,000 each year.
Detailed information on Labor’s plan for fairer super is available here.
FAIR TAX FOR MULTINATIONALS
It’s not right that multinational companies are setting up complex measures to avoid paying their fair share of tax. Every tax dollar that goes offshore is a dollar that can’t be spent on vital services.
While the Liberals have cut four thousand staff from the Australian Taxation Office (ATO) and voted against greater tax transparency for large companies, Labor has a plan to shut loopholes that multinationals use to channel their profits overseas. These measures include:
· Changes to the arrangements for how multinational companies claim tax deductions.
· Greater compliance work by the ATO to track down and tackle corporate tax avoidance.
· Cracking down on multinational companies using hybrid structures to reduce tax.
· Improved transparency and data matching.
These measures have been independently costed to return $7.2 billion over the next decade. Detailed information is available here.
TAX CONCESSIONS FOR PROPERTY INVESTORS
This year the Federal Government will spend over $10 billion on negative gearing and the capital gains discount. Staggeringly, this is more than the government spends on child care or higher education.
The data tells us that Tasmanians benefit least from these arrangements, with the majority of the benefits going to wealthy mainland investors.
In fact, less than 1 per cent of the national negative gearing losses are claimed in Tasmania. This means that 99 per cent of the benefits of this unfair policy are flowing to mainland investors.
We also know that the top 10 per cent of earners get almost half the negative gearing tax deductions and three-quarters of the concessionally taxed capital gains. This creates an uneven playing field for first home buyers and places an enormous financial strain on the federal budget.
In order to undertake budget repair that’s fair, Labor will reform negative gearing and the capital tax discount effective from 1 July 2017, levelling the playing field for first home buyers trying to enter the housing market. From 1 July 2017, negative gearing won’t be available on existing homes, just new homes. Importantly, if you are already negatively gearing there is no change for you, as Labor’s changes are fully grandfathered.
Labor’s plan to target negative gearing at new housing will boost the supply of properties, which is good news for renters. Labor’s plan also saves $32 billion over 10 years which helps pay for health and education.
Learn more about Labor’s plan for housing affordability and fair budget repair here.