Corporate taxation in Oz: Is morality relevant?

“New research has revealed 76 of Australia’s biggest multinationals pay an average effective tax rate of just 16.2% – half the corporate tax rate.

It has also discovered the commonwealth government lost $5.4bn in potential tax revenue in 2013 and 2014 from those same companies, as they shifted billions of dollars in profits offshore.

Corporate tax experts from the University of Technology, Sydney, have worked with the activist group GetUp! to examine the financial records of the top 100 multinational corporations with operations in Australia.

They say large pharmaceutical corporations are paying the lowest effective tax rate at just 5.7%, compared with 7.5% for hi-tech corporations and 20% for energy corporations.

Australia’s official corporate tax rate is 30%.

A new report, Closing the Caribbean Connection: Solving Aggressive Tax Avoidance by Top Foreign Multinationals Operating in Australia, shows their findings.

It says the largest corporations with operations in Australia favour two tax minimisation techniques over any others.

The first technique, called “debt loading,” is favoured by energy companies. It finds foreign multinationals lending capital to their Australian operations at unusually high interest rates, with any profit made in Australia used to repay the foreign subsidiary. For the purposes of company tax records in Australia, the profits are then recorded as a loss in the form of an interest payment on the loan.

The second technique is called “profit alienation” and is preferred by pharmaceutical and hi-tech firms. It finds corporations holding intellectual property rights in low or zero tax jurisdictions. Any profits made in Australia are then used to pay the parent company for the use of its intellectual property.” … …

“The report’s authors say the Turnbull government needs to follow Hong Kong’s example in tackling debt loading abuse, by eliminating interest deductions and other financial payments on loans from foreign subsidiaries located in low or no tax jurisdictions.

It also says the government should introduce a diverted profits tax, set at 30% to reflect the current statutory tax rate for companies, as in the United Kingdom.

“Everyday Australians are paying tax at a higher rate than billionaire corporations like Chevron, Apple and Google,” Getup! campaigner Daney Faddoul said. “These foreign multinationals are inflating their losses and shifting their profits to rob Australia of crucial investment in our local hospitals and schools.”

(The above paragraphs are extracts from  Guardian Australia’s tax report of 20 April 2016.)

Representative government, anyone? One lot believes that, in the exciting times we live in, reducing company tax will result in instantaneous wealth creation (for whose benefit?). The other lot tells us what it might do one day. Will they work together for the benefit of the populace? What we have are legal loopholes benefiting from moral loopholes.     

 

 

 

It is a weird nation- or what?

Let me say at the outset that I am quite proud of my adopted nation. After more than 65 years’ residence (as an adult) I can claim that I know (and understand) Australia and its peoples as well as anyone else. After all, there are not too many people of my vintage around; the others would have moved on to a happier place by now.

What is fascinating about Australia, in spite of coming across as somewhat weird in many aspects of significance, is that there is an aura of a people who are likeable, tolerant of change (incredibly vast changes in the last 40 years), somewhat laidback, increasingly colour-blind, and with a sense of human dignity (aided by high wages and plentiful welfare). Relative to the rest of the world, we are well fed and well watered.

On the flip side, there are many ‘takers,’ to be found at all levels of society. ‘Other peoples’ money is sought, and availed of, assiduously. I knew a few ‘disability pensioners’ who were fit, both physically and mentally. It does not seem difficult to be as a ‘carer’ to look after someone who is fit. A tradesman can retire early before age 60, and be paid as a carer to continue to look after his mother – who has lived with him and his wife for years.

As well, the ready availability of welfare payments can be enough to dissuade a young couple with children from seeking employment. Moving into a coastal village with no employment prospects is availed of by middle-aged couples; one can guess the source of their income. Then, a couple on the age pension is allowed to have assets (other than their home) of up to $1.2 million! Who is paying for such largesse?

Unlike the ‘olden days,’ when itinerant rural workers were available, now backpackers from overseas are needed. The use of labour hire contractors protects the farm producer from any deficiencies in the payment process. Deficiencies in the efficacy of oversight by relevant bureaucracies abound in key areas. For example, a number of young men were electrocuted under a new policy; but were any bureaucrats held responsible? Other examples are: a solid chunk of money intended for educational facilities was reportedly paid to a contractor as ‘middleman’; a US-style tertiary education innovation has been said to have cost the government vast amounts of money; a seemingly loosely-administered temporary entry visa scheme apparently brings in skilled workers because no such workers are available in Australia! How gullible are we? Where are the skilled workers laid off in large numbers in recent years?

Australia does come off as a bumbling nation, with its reported corruption comparable to petty theft against the grand larceny seemingly prevalent in some countries. But, we are a middle power, right? What is our record in backing the USA in its chosen wars? However, we did better in the invasion of Iraq by the Coalition of the Chilling (or was it Willing?)

Thus, the people are generally OK, but what can one say about the ‘takers’ and our rulers?

‘Light on the darkness of the mind’ (fiction by RAR)

The phone rings.  It is in a largely empty office.  Downsising is now an art form.  Insurance is, after all, very expensive.  Eventually, the phone is answered.  ‘Hopalong Insurance Company’ says a high-pitched female voice.  Before she could say anything else, the caller asks ‘Is that you, Tripalong?’

‘Pardon?’  queries the female.  ‘Never mind’ says the caller.  ‘I want to speak to Mr. Ali.’  ‘We do not have a Mr. Ali here’ says the female.  ‘Has he left the company?’ asks the caller.  ‘We have never had a Mr. Ali .  But, my boss is named Ellie.’  Before the caller can respond, female voice no. 1 is replaced by a deeper female voice.    ‘Ellie speaking’ she says, with an inviting voice.

‘I don’t want to speak with you, Ellie.  I want Mr. Ali.  He wrote to me about my policies’ says the caller.  He sounds quite testy.  ‘I wrote to you.  I am Ellie.’  Female voice no. 2 sounds testy too.  ‘If your name is Ellie, why do you sign your name as Ali?’   ‘That is my name.’  She feels quite cross.  Her voice has risen an octave.  It is almost squeaky with indignation.

An angry voice at the other end of the phone shouts.  ’Why do you, a woman, use a good Muslim man’s name?  Have you no shame?  You insult the Prophet!’  At that point Ellie becomes mindful of the company’s future.  An image of a fire-bomb fills her mind.  She calms down a little.  She now says ‘Could I have your name please?’  ‘No!’ roars the caller.  ‘I want Ali.  He will be more sensible.’  ‘Please, mister, there is no Ali here.’  Since the caller obviously doesn’t believe her, she continues.  ‘I am in charge of the policy renewal section.  I wrote to all our customers last week.  How can I help you?’

‘Listen dumdum Ellie, …’   Before he could say further, Ellie shouts.  ‘Don’t you dumdum me, you Islamist hoon.  Give me your name.  I will delete it from our files.’  At that, the caller remembers reality.  The reality of cash.  ‘Wait, wait!  Your company offered me a 20% discount if I placed all my insurance with you.  You know, house, contents, my life, car, boat.’

Even in the hot darkness of her mind, Ellie (written as Ali) realises what her boss will be saying to her were this customer to take his business elsewhere.  The cold light of reality dampens her anger.  She speaks sweetly.  ‘Could we meet in the coffee shop downstairs to discuss your policies please?’  The caller is now confused.  He thinks:  ‘I want that discount.  What do I care if she is Ellie or Ali?’  ‘O.K.’ he says.  He gives her his name and other identification.  They agree, with shared anger under control, on a date and a time for the policy renewal- with- coffee.

On the day, they approach each other warily.  When their eyes meet, that well-known spark lights the darkness of wariness in both of them.  The light of mutual attraction casts aside all preconceptions.  They sign the renewal policies amicably.  They arrange to meet for another coffee, very, very soon.  The hoon and the dumdum seem quite compatible.  Hopalong Insurance continues to operate successfully.

Some time into their marriage, she asks about Tripalong.  Who was she?  He explains.  She was the wife of a film actor.  He rode long distances on his horse, singing away merrily.  His name was Hopalong Cassidy.  Because she always accompanied him on his travels, his wife was referred to as Tripalong.    Thus, ‘Islamic  hoon’ and ‘dumdum Ellie’ (written as Ali) tripped along the path of life happily, but without any horses.

 

 

Post-colonialism: Expatriate advisers

When the Board of the Central Bank in a small recently-decolonised Asian nation sought input from an appropriate international agency about an appropriate policy for the future, it was to convince an inexperienced government. The government was more likely to accept a suggested plan from an expatriate authorised adviser than one developed from within the Bank.

I was told the following story by a friend from that nation. The international expert sat down with each of the ‘Young Turks’ (overseas-trained, fast-rising, young economists). Obtaining their ideas about an appropriate development plan, he packaged into his report to the Board a consolidated version. Everyone was happy. The expert went home with a fat cheque.

Believing that what a European can do could surely also be done by an Asian, one of the Young Turks took off to advise one of the African nations for 3 years. It was lucrative.

He was not the first from that nation to become an expatriate consultant – on expatriate European levels of remuneration – to advise an African nation. As another friend of mine from that nation wrote to me, from his post as an expatriate consultant, the Africans were paying ‘white man’ fees to black consultants.

By the 1960s, there were quite a few economists from that nation in one or more international agencies. Perhaps appointments to such agencies did not involve the intangible, sub-surface, and allegedly flexible processes which were said to apply in nations in the developing world. Personal contacts and relative influence seem to have been disproportionately prevalent in these nations.

However, could even the most sensible, pragmatic, development plans devised by expatriate consultants overcome the stranglehold by the neo-colonial nations over the economies of developing nations? Then, there is the competition provided in the international market-place by developed nations such as Australia establishing themselves as growers of rice, tea, coffee, and tropical fruits, and thus damaging the much-needed export markets of the under-developed nations all over the world. As well, there is the confluence of the greed of some national leaders and the rapacity of the neo-colonial nations.

Add to that the foreign loans which have to be repaid; and the private charity monies which are reportedly deflected into non-development accounts in the receiving nation. In the 1960s, it was reported that, within 9 months, monies lent or given to certain Latin American nations would be back in U.S. bank accounts.

Expatriate advisers can only point the way forward.

The myth of a poverty-line

Although a lower middle-class youth (defined by relative income, not by education), I once went without food for a whole weekend; I had no money. For months I survived by finding casual work, but was forced to move from rented room to rented room as I struggled to pay the rent.

Later, my wife and I lived on the edge of financial survival, although happy. Through circumstances beyond my control, I have lived frugally all my life. That is destiny.

My sensitivity to the poverty of others began during my boyhood in British Malaya; true poverty reigned around us. It is also impossible for me to forget the sight, during the Japanese occupation of Malaya, of fellow-humans starving, lying on the ground adjacent to the local shops, for what seemed to me for months. No one stopped (to my knowledge) to offer them any food; I was already semi-starved. Evidence? I was caught and slapped for stealing a piece of tapioca root from the college grounds; I was seen eating it raw.

Today, there is a lot of talk about poverty in Australia. But those who had experienced real poverty, especially during the Great Depression, are long gone. If you have a residential address, and need sustenance, you will (I have been told) receive welfare payments. That is, no one is without an income, except those who, because of mental health problems, are incapable of handling money responsibly. As a nation, we also support a large number of asylum seekers through welfare.

The welfare industry, supported by financially irresponsible politicians and others, reportedly seek more OP (other peoples) money to be given to welfare recipients. Is this just, and in the national interest? They do not say. They remind me of that guy who calls the faithful to prayer at dawn; is that the limit to his responsibility?

Welfare paid on the basis of need is a historical by-line. Welfare has now become an asserted right – but unsustainable on national budgetary terms. Our governments will not acknowledge that. Indeed, middle class welfare is also here to stay. Any effort by the government to reduce the largesse, even slightly, is challenged by the media, which sheds crocodile tears on behalf of those who will be ‘worse off’! Shock! Horror!

Then, for a while, there was a great effort to define a ‘poverty line’ for the nation. This was not based on a measure of minimum need. It was a measure based on the nation’s relative wealth. Those whose incomes are below the median line (the half-way level) would be deemed to be in ‘poverty.’ Amazing!

There was no mention by the proponents of this mystical measure of poverty about anyone finding the wherewithal to fund any official effort to lift the incomes of those experiencing this poverty. As the median level rises in time, would those on the new bottom half of incomes be in need of a financial support?

Reminds me of a dog chasing its own tail!

Other peoples’ money – hallelujah!

After the regular meeting of Wolf Cubs at our school, a fellow-Cub and I, on our long walk home, would steal a piece of fruit each from a particular backyard. To do that, we had to slide through a gap in the fence. It was all good fun, until one late afternoon, when 2 large Chinese ladies came out through the back door and said cheerfully ‘Help yourselves, boys’! That spoilt our joy. We did not visit that backyard again. Mini-theft had been fun.

Theft is quite common when the very poor are juxtaposed with others better off, generally a reflection of need. In a modern nation, however, theft would reflect (mainly) greed, not need. In Australia today, greed is manifest in: tax evasion (illegal); tax minimisation (exploiting loopholes created or discovered by professional advisers, seemingly lawfully); the abuse of welfare by those not in need of succour, stimulated by the government’s pork-barrelling vote-catching policies; and tax subsidies being provided to the relatively well-off (up to the very rich) through official policies allegedly geared to ‘wealth creation’ (a lovely euphemism used by politicians to justify giving hard-earned ‘other peoples’ money to their party supporters).

Reportedly, some churches and church communities now want the government (which will not be able to balance its annual budget for a decade or more) to increase the nation’s yearly intake of recognised (UNHCR) refugees as well as opportunistic asylum seekers (all of the latter having allegedly ‘suffered torture and trauma’ – ask the ‘talking heads’ on tv).

I have not, however, heard of any private offers to house, feed, teach English, educate the children, and generally look after any refugees (real or otherwise). Surprise! Surprise! The government (using other peoples’ money) is expected to fund these heart-warming bubble-thoughts. Charity is limited to kind thoughts. And a bit of marching on the streets.

Since only 9% of the accepted Afghan asylum seekers are apparently employed after 5 years, ‘other peoples’ should prepare themselves to be fleeced more heavily, and for ever.

Is it not wonderful to be so caring when someone else will pay the cost? Could this be a new form of theft? Of course not! Then what is it? Who cares for those who work hard to earn an income, only to find increasing demands that the government should take a rising share of that income for challengeable, if not irresponsible, purposes?

There seem to be a lot if irresponsible vocal people about.

Immigrants and citizenship – for whose benefit?

Once upon a time – and this is not a fairy tale – Australian immigration officials based overseas assessed applicants for immigration as to whether they could settle in their new home successfully. Immigrants were to benefit the nation. Why else take them? Alternatively, the vast intake necessitated by needed development would, if not selected carefully, de-stabilise the host nation; and the government was not looking for cheap labour.

Selected immigrants sought to better themselves, and settled in successfully – with initial support from Good Neighbour Councils of Anglo-Australians. Very expensive settlement services were then provided by the government. I was responsible for their implementation, sequentially over the years, of all of them (bar the English language program). That is how I was able to write ‘Destiny Will Out,’ which demonstrated how well our migrants were looked after.

These settlers accepted Australia’s institutional framework, and adapted themselves to the prevailing (and evolving) social mores. No ‘ghettos’ were formed. Imported tribal tensions and sectarian prejudices were quietly nipped in the bud.

Now we have immigrants who want the host nation to amend its laws to suit their religio-cultural preferences. As well, whether they arrive by boat without entry visas or by air with visas, many demand a right to stay, to move freely, and to be supported by taxpaying Australia. Quaintly, some ‘single-issue’ politicians, and ‘legal eagles’ seeking to open up the entry door, supported by caring (but financially irresponsible) people, support free entry!

Thus, secure national borders and the financial self-sufficiency of immigrants – the requirements of honest, tax-paying residents – move backstage against the ethos of entitlement to other people’s money, and the demands of the welfare industry. An indication of undesirable outcomes: a ‘snakehead’ (people smuggler), granted asylum as a refugee, reportedly went back to Asia to continue his business, while his wife was given public housing ahead of a long waiting list of residents.

A critical observer might look askance at the laborious process of assessing asylum claims, and the unemployment record of accepted ‘refugees.’ For example, a well-respected reporter wrote that, 5 years after acceptance, only 9% of Afghans were employed. But then, our asylum seekers may be traders, ‘middlemen,’ and suchlike, rather than factory or rural workers.

What is the benefit to the nation of those who will seek and live on welfare (an attraction in Europe as well) for years? Some of the jihadists now overseas were reportedly on Australian welfare. Ask those whose taxes are being handed out so freely, not UN officials, spokesmen for NGOs spruiking ‘human rights,’ or those local politicians who participate in ‘pork-barrelling.’

A travesty of justice

“The maltreatment of many of these ‘pounded’ children (the ‘stolen generation’) is now well documented. They were forbidden to speak their language; denied food, clothing and blankets at times; physically and sexually abused; and not taught to read and write. So said many of the survivors of the policy. The priesthood does not come out too well from this experiment either. But, why punish the children for the sins of their parents?

Who were the sinners? Weren’t they the white men who sired them so casually without accepting responsibility? Or, like rape victims, does one blame the women, or perhaps their ‘culture’? To claim that the intent of the practice of removing the fairer children was of the highest order was to ignore what actually happened. For those clever people denying that there was a travesty of justice in the ‘pounding’ program, to then argue that only the adversarial process in a court of law can establish reliably the facts of the ‘pounding’, is to reject a very substantial part of official history, archaeology, and similar studies, and related academic disciplines.

There seems to be clear evidence of white males in the outback travelling with a black teenager in tow (a sort of multi-purpose slave); of masters of cattle stations and their white employees ‘begatting’ and then ignoring their mixed-blood offspring; of black drovers being ordered to stay out until the sun went down, so that the white men “… could go and f..k … the gins …”; of Aboriginal women who had been “… raped by whites, Greeks, Japanese, Chinese or whatever …” (indicating the common ends of many men in the outback).

Yet, there are people attempting to play down the atrocities of the past by seeking to denigrate anyone who displays undue sympathy for the blacks, and to diminish the blacks themselves in significant ways. In this context, I am generally spoken to as an honorary white. “

(These extracts from ‘Hidden Footprints of Unity’ will upset those who claim that any unsavoury past should be forgotten. However, if we do not learn from the past … … ? Anyway, the guilty would have been ‘recycled’ long before the present, to experience any lessons reflecting cosmic justice.

If a Court of Cosmic Justice exists (I fervently hope it does), it must be awfully busy all over the world offering learning to those who ignored the obvious – that we humans have an obligation to all other humans by having been bonded by Creation; and that, since everything in the Cosmos is interlinked, any adverse ripple in the fabric of our environment caused by insensitive humans has ongoing after-effects. Over time, cumulatively, such ripples degrade what it should mean to be human.)

More issues for asylum seeker supporters

“When due process leads to denial of asylum, and the taxpayer has spent a large sum of scarce funds, one can find some queer counter-proposals. These reflect sympathy for the asylum seekers, most of whom are most likely to be economic migrants who would not qualify for entry by the front door, or even the side door. Then, there are those who assert that, since Australia does not experience the floods of asylum seekers inundating Europe, we should take all comers. Isn’t the availability of a lifetime on welfare in Australia, plus Medicare, plus family reunion a probable drawcard? Shall we just open the immigration door?

Most relevantly, is there no part of Afghanistan which is safe for the Hazaras or other Afghans? Isn’t there a district in Afghanistan which is dominated by the Hazaras? Are there not large areas of Iraq which are predominantly Sunni, Shia or Kurd, to which an Iraqi asylum seeker could move, thus avoiding the large outlays of money, the risk of drowning, the detention (but with care provided at the Australian tax¬payers’ expense), and the risk of mental health problems? If there is somewhere else to go to, could the government negotiate with the governments we have put in place in Iraq and Afghanistan to take the boat arrivals? Would they not then be living within their own culture? And does not the UN convention also provide that asylum seekers have to show that there is nowhere else they can go?

On the issue of living with one’s own people, some Moslem settlers from countries with limited personal and political rights already seek to have Australia’s institutions amended to incorporate sharia law, when Islam has no separation between the law and religion. Would the pre¬dominantly Middle Eastern asylum seekers add to this pres¬sure? Historically, there were those who wished to turn a secular nation into one ruled by what they call natural law (which is not the same as a law of nature in science). Do our Tweedledum vs. Tweedledee governments have the integrity to retain Australia as a secular democratic nation, with religion kept separate from governance?

Do the uncritical Anglo-Australian supporters of boat arrivals condone the destruction of identification papers; and the irresponsible placement of women and children in unsafe boats which have no doubt been written off by their owners, the fishermen manning the boats being themselves probably dispensable? How do they condone the queue-breaking by those who obviously have money, but are not willing to be assessed as immigrants or as refugees by representatives of UNHCR (United Nations High Commissioner for Refugees). An asylum seeker is not a refugee until accepted as a refugee. This is something some in the media have to accept.

There is a common practice for Australian Customs/Immigration officers at airports to return to the country of embarkation those they consider on arrival not to be ‘bona fide’, even when they hold entry visas. They are kept in detention and placed on the next available plane going back. Arrivals by plane who have destroyed their papers after dis¬embarkation at our airports are treated the same way. It is not that difficult to track their travel. Boat arrivals without papers should surely be treated the same way.”

(Those who do not believe in an interventionist god, or in Santa Claus, may be excused were they not to expect any in-depth dialogue between apparently caring supporters of asylum seekers they have never met, and those who seek responsible policies in relation to the intake of immigrants and real refugees, unless they can see squadrons of pigs surfing through the air.

What the above extracts from ‘Musings at Death’s Door’ raise is this significant question: is the age of entitlement in Australia being extended to cover anyone who manages to arrive on our borders? A related issue: if we taxpayers are to be generous with our money, should we not be spending it on those who are clearly needy out in the real world? What a waste of scarce money (yes, it is scarce) in coping with opportunist entrants! )

Questions about refugee policy

“Eventually, I was directed … to close down the White Russian and East Timorese policies; they were not needed. The other ethno-specific regional HE policies were far too sensitive politically; our global HE policy did not obviously pay adequate respect to the tribo-cultural sensitivities of the communities affected.

There had to have been great flexibility in approvals at certain overseas posts. Why? Because, surprisingly, many HEs, especially the Poles, subsequently returned home to obtain jobs in keeping with their qualifications (such jobs not readily available in Australia). Vietnamese HEs who had allegedly fled the takeover by the communists went back to Vietnam as Australians to conduct businesses. So much for their earlier ‘genuine’ fear of persecution or discrimination!

One cannot obviously be a puritan in the administration of entry policy. … … This is also where back door entry policy, the admission of asylum seekers comes in. Equipped with a passport from one’s country of nationality, a return airline ticket, enough money to cover the nominated period of the visit, a visa or other documentation identifying one as a businessman, visitor, student, etc., one can, after arrival, convert to asylum seeker. The applicant cannot be thrown out as an over-stayer while awaiting a decision. … …

A Singhalese person claiming a fear of persecution in Singhalese Sri Lanka, or a Malaysian Chinese making a similar claim about Chinese-dominated Malaysia, indicate the waste of investigatory resources arising from asylum claims, and the opportunism of applicants and their very vocal supporters.

The public has little to no information about what happens to those legal arrivals, the ones who arrive by air with an appropriate entry document. These represent the greater part of these asylum seekers. Reportedly, most of these applicants are allowed to remain. On what basis? Surely all those accepted could not have produced evidence of persecution or discrimination. Were they also assessed as capable of earning a living in Australia? Are the rejects only those who have failed security checks? Who provides the necessary information? The authorities from whom the applicant claims to be fleeing? Since there seems to be no shortage of local supporters for these applicants, is this form of entry a variation of family reunion?

On the other hand, we are flooded with information about unlawful boat arrivals. Their very vocal Anglo-Australian supporters present them as a form of sacred cow. For instance, we are not allowed to describe them as illegal arrivals! Australia is not to be allowed to reject any, in spite of a seemingly unlimited right of access to appeal courts at taxpayer expense. No reject can be sent home. Indeed, there was that incredible claim that there should be a separate entry category for rejected asylum seekers!”

(Seeking to be declared a refugee is probably the biggest racket going. I recall the then Minister asking me “What do you think about opening the immigration door completely?” This was more than a decade after the introduction of a non-discriminatory entry policy! My spontaneous response was “Why should we believe that we already have the best crooks in the world?” (Refer ‘Musings at Death’s Door’)

Special entry treatment has been sought by a major church (a bigger flock) and by ethnic community leaders (increased electoral power). Caring people used to the government (not the poor scalped taxpayer obviously) handing out money willy-nilly, opportunistic practitioners seeking to open more legal loopholes, rent-a-crowd supporters seeking excitement, and seriously unthinking politicians, all contribute to a dearth of responsible policies regarding side and back door entry into the nation.

However, the tsunami of budgetary deficits beginning to gather strength and direction will no doubt provide a cold shower where this is obviously needed.)