21 November, 2015

Corporations need to pay their fair share of tax?

I find this current national debate (and inquiry) around corporate tax avoidance a complete farce.

Notwithstanding the facts that corporations should absolutely follow the law, and also bearing in mind that the directors of public corporations are legally bound to follow the law as well as operate the company in the best interest of its shareholders, this debate is getting rather silly.

And I don’t mean the answers that are being offered by corporate representatives at the Senate inquiry.

The entire premise of the debate is completely distorted.

Firstly, corporations are not “real”. They are legal fictions. It is people (employees and shareholders) who profit from the activities of the corporation. To talk about “corporate profits”, and demanding that “corporations need to pay their fair share of tax” is a strange concept indeed.

With this in mind, you have to ask why we have corporate tax at all?

In years gone by, nations would compete to try and attract business operations to their shores. But those days seem to be long gone as the G20 are no longer seeking to create a competitive marketplace, rather they are only interested in a marketplace where our “legal fiction” corporations are seen by governments as revenue streams for public coffers.

If our governments were serious about business growth and employment opportunities for their citizens, they would be doing whatever they could to create an environment where companies want to come here, to set up shop here, and to employ a lot of people here.

The simplest thing they could do is to drop corporate taxes. To zero!

Of course, also by the wayside would be tax deductions (it does not make sense to have tax deductions if you don’t pay tax). They would also need to better police the use of corporate funds for personal expenses (such as buying yachts, etc., for so-called “entertainment” purposes).

In such a regime, you just watch the stampede of multi-national companies flocking to Australia to set up their operations here.

What about government revenues, you say?

I fully expect that the dramatic rise in business activity that would result from such a tax regime would create so much more employment (and hence payroll tax) and business-to-business transactions (and hence GST revenue) that this will more than make up for lost corporation taxes.

But, even if it doesn’t, the government has many other ways of generating revenue from business operations without crippling the ecosystem via a corporation tax. For example, they could increase royalties for the use of natural resources, or impose more savvy import duties, or change the nature of the GST, or impose an array of licensing fees for certain types of operations, etc.

Such a regime will also serve to truly level the playing field between large multi-nations and local small and medium businesses (who don’t have the luxury of being able to arrange their international tax affairs as savvily as the big boys).

The entire notion of corporations “paying their fair share of tax” is a fictional paradigm that serves no real purpose, and is absolutely unnecessary.

There are better ways to stimulate business growth in this country, and the grow government revenue streams.

So let’s stop deluding ourselves on this issue. Let’s make Australia open for business, so that we can all benefit from business success.

Facts first to fall at Senate’s corporate tax avoidance inquiry:
Chevron’s vice president and general tax counsel, Sandy Macfarlane (left) and Chevron managing director Australia Roy Krzywosinski.

30 October, 2015

Global capital inflows underpin house prices

This is one element that’s driving foreign private capital into Australia real estate.

Local commentators who refuse to acknowledge the role of global capital in supporting Australia’s real estate market are missing an enormous piece of the puzzle. They underestimate the sheer volume of private capital that has been (and is continuing to be) relocated to Australia.

With the AUD/USD having dropped some 40% from its peak, foreign capital has already seen the Australian real estate market crash (in their own currency, not the AUD), and are now coming in to snap up bargains. Locals, however, are still seeing the market go up (or at least, not going down much).

And, many of these foreign buyers are buying with cash. So they are not posing a risk to the mortgage market in any way.

Whilst domestic prices are still expected to soften (note: “soften”, not “crash”) in the coming few years, this enormous influx of foreign capital will ensure that there is a support level for prices in the cities.

Transaction delay saves couple $557,000 in purchase of Eureka Tower apartment:
Apartment 7701 in Eureka Tower sold for $1,988,888 in October.

29 October, 2015

Why aren’t flawed climate predictions prompting a rethink of climate science?

When actual temperate increases are consistently far below predicted cataclysmic increases, we must consider the possibility that the established understanding of climate science has some fundamental flaws, and hence needs some fundamental rethinking.

Sadly, society is way too deeply entrenched in the established (flawed) understandings. It will take a cataclysmic climate shift in the opposite direction to wake up genuinely open and discovery-driven science again.

The Coming Revelation Of The ‘Global Warming’ Fraud Resembles The Obamacare Lie:


15 October, 2015

The beginning of the end for cheap capital

Yesterday, Westpac Bank announced that it was increasing all of its mortgage interest rates, apparently because of increasing capital requirements being imposed by the Government.

Today, the columnist Michael Pascoe is speculating that in fact this rate rise is all about increasing shareholder returns for Westpac.

So, did Westpac raise rates because of capital requirements, or to increase dividends?

Or, maybe, just maybe, it’s because globally we are seeing capital shift away from long bonds, thereby increasing rates for capital. Hence, our banks will have no choice but to raise rates, regardless of what our RBA decides to do.

Or maybe, just maybe, it’s because globally, capital is selling out of long-term bonds and thereby increasing interest rates for these longer-term capital borrowings. In which case, you absolutely know that all banks will be raising rates, and even raising them if the RBA lowers.

The age of cheap capital is coming to and end, and there's nothing that central banks can do about it.

Westpac rate rise: Dividends rule, OK?:
Everyone goes home a winner in Westpac’s money-go-round — except for home loan customers.

11 October, 2015

Climate change is not what it seems

Read a wonderful news story today that highlights the results of a critical analysis of climate models (the same climate models that predict alarming rates of anthropogenic climate change).

A thorough critical analysis (as opposed to a sycophant analysis that only self-selves) reveals that whilst humans probably do have a meaningful impact on long-term climate trends, the observed rates of global warming are largely driven by other (natural) forces.

Can’t wait to read the peer-reviewed article…

Perth electrical engineer’s discovery will change climate change debate:
Dr David Evans has unpacked the architecture of the basic climate model which underpins all climate science.

04 September, 2015

Tony Abbott vs Tony Abbott

Tony Abbott debates Tony Abbott in the Australian Parliament. A very true telling about how the Australian Parliament actually functions. The faces may change, but the same silliness goes round and round ad infinitum.


02 September, 2015

Citizen terrorists are a sign of government failure

When the citizenry are identified as the prime terror threat against a country, this is indicative of a failure of government to address the concerns of the citizens.

Sadly, governments don’t see it this way. In their view, the government is not to blame, therefore they must do whatever it takes to crush the citizens rather than examine their own shortcomings.

No wonder Trump is leading the Republican polls in the USA, whilst here in Australia both major parties are enjoying their highest disapproval ratings in a very long time.

The #1 Terrorist Group = Domestic Citizens:


21 August, 2015

The moral decay starts in Canberra

In the wake of the Ashley Madison security breach, it has been revealed that the suburbs around Parliament House in Canberra are the the worst offenders for cheating in the ACT, and amongst the top worst offenders in the country.

What does this say about our politicians and senior public servants (who are key residents of these areas)?

Oh… my… goodness…

If anyone’s wondering where Australia’s moral decay is coming from, they can start by looking at our politicians and our public servants.

Ashley Madison hack: Top cheating suburbs:
Ashley Madison

05 August, 2015

We really don’t need entitlements for our politicians

This entire scenario around travel entitlements for Australian politicians it turning into a disaster for all concerned.

In days gone by, nobody said anything because if a Labor person shone a light on questionable travel arrangements of a Liberal person, there would be a retaliation and another Liberal person would hit back with questions over the travel of another Labor person.

This is pretty much what is happening. Once the fingers started pointing, each side is desperately trying to get one-up on the other.

But what’s really sad here is that the extremely generous entitlements (including travel and pensions) that politicians receive are supposed to be as generous as they are in order to remove the risk of corruption. In theory.

In practice, however, these cheapskates continue to abuse the system in whatever ways they think they can get away with.

When Bronwyn Bishop eventually resigns, she’ll get a guaranteed pension of over a quarter of a million dollars per year, plus even more travel perks (even though she would no longer be serving the electorate).

In order to make the remuneration system fairer for everyone, how about we change it so that politicians get exactly the same benefits as ordinary workers!

A salary commensurate with their responsibilities (the current base salary is pretty fair, I think, as are the top-ups for special positions such as Ministers). However, they should get paid exactly the same superannuation as every Australian… 9.5%. And, this should be in a market-based contribution super fund, not a taxpayer guaranteed black hole.

This one change will pretty much force politicians to seriously look at the superannuation and pension system more sensibly.

Then there’s travel entitlements. Fair enough if it’s a work expense. Members should have a reasonable discretionary travel budget for to-from their home and their constituency (WA politicians would expect to receive a more generous travel budget than ACT politicians, for obvious reasons). Committee’s should have a budget for operations that would include a travel component, and Members would need to get Committee approval for travel on Committee business. Travel with official delegations should be approved by Cabinet, and Ministers’ travel should come with a travel budget for their portfolio.

Pretty simple and sensible stuff.

And, definitely no perks beyond their years of service. If they’ve worked hard to create a respectful and successful retirement system, then they have no need to have additional perks.

Getting back to Bronwyn. She’s currently served more than 18 years in Parliament. 18 years!

We really are jokers if we accept that spending any more than, say, 10 years in Parliament is going to produce good outcomes. I’d even say that 5 years would be pushing it!

Democracies all around the world don’t need career politicians. We need genuine representation.

The best way to ensure this is to impose term limits, to ensure that only committed people enter politics in the first place, and second so they can turn their energies towards serving the electorate’s interests best rather than how to get re-elected themselves.

Bronwyn Bishop would retire on a pension of $255,000 a year, plus free flights:
Bronwyn Bishop has served in Parliament for 29 years.

24 July, 2015

Tax the rich! Tax the rich!

The Australian Labor Party’s annual conference is a critical event for the party that is desperately trying to regain its standing with the electorate.

So it’s little surprise that they are adopting superficial policies that make for excellent sound-bites, but will have zero (even negative) meaningful impact.

The policy, in particular, of what I speak is their newly adopted position to introduce a tax regime that takes aim at high income earners.

“Take aim”… yes. But meaningful… no.

It simply goes to show that the ALP is trying to buy votes from lower-income earners by promising to take more money from the rich.

Not that tax on “the rich” shouldn’t be more equitable. For that matter, tax on the rest of us should be more equitable also… why should we be financially penalised via taxation so the government can waste our productivity on meaningless, ineffective and unnecessary activities (or, rather, lack of activity).

That aside, these so-called “rich” have options. This includes accountants and lawyers who advice them on how to structure their affairs (including the nature of how their income is earned).

These options are exactly why “the rich” pay so little tax in the first place. They work within whatever the rules are. And if the ALP changes the rules, then “the rich” will simply change the way they play the game. Or leave. They can do that too, don’t you know.

Net result: “the rich” will not end up paying significantly more tax; the government will spend more, in anticipation of raising more revenue from “the rich”, and; ultimately, the government will raise taxes on lower income earners to make up for all of the government’s overspending.

Three cheers for politics… always screwing the little people, every time, even when they tell you they’re trying to screw the big shots.

Labor to slap new minimum tax rate on the super wealthy:
Anthony Albanese (left) with other Labor frontbenchers at the conference.