Jan 9, 2017

Why Australia’s economy is failing

Why is Australia's economy in such a bad way? Could be because the richest companies are not paying their fair share of tax, writes economics reporter Alan Austin.

What better way to spend lazy holiday afternoons than comparing last month’s tax transparency report from the Australian Tax Office (ATO) with the one a year earlier? Everyone wanted to do this. Crikey actually did it.

This gives us a pretty good estimate of the company tax revenue now bleeding from the federal budget. Fortunately some brandy was left over from the Christmas pudding, as the outcome might otherwise have dampened the season’s cheer.

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24 thoughts on “Why Australia’s economy is failing

  1. Flynn

    The Chevron situation is absolute farce, Michael West has a good account of that on his website.

    All this money extracted from the Australian population simply leaving our shores and our leaders swan about decrying the low-growth economic environment. How will we achieve action on this, what is the way forward?

    1. David Coles

      Perhaps the system of company tax should be turned on its head. All businesses pay a specified base percentage with additional payment falling due if they don’t engage in research and development, don’t have headquarters in other countries etc, etc.

  2. Graeski

    It’s time to start kicking the tax bludgers rather than the dole bludgers. It’s simple business sense. Kick a dole bludger (assuming for the moment that he or she actually is a ‘bludger’) and at best you’ll claw back a few hundred a week. Kick a tax bludger and can claw back millions.

  3. Dog's Breakfast

    True dat! So much easier to kick a pensioner or an invalid than a multi-national corporation.

    That would take courage!

    1. zut alors

      Exactly, Dog’s. The bully’s modus operandi is to make a public display by targeting the weak, never anyone with true muscle & might.

      While government supporters congratulate each other on how ‘tough’ their LNP is on the low- income/below the poverty line demographics, they ignore the rivers of gold being squirrelled away by corporations. Instead, they are gleaning peanuts.

      1. Chris ConnorTH

        Yes – Bastars!

    2. Chris ConnorTH

      Sorrow about the “d” omitted from the next “reply”.

  4. John Hall

    I am naive on fininacial matters – but I assume that at the transfer point to a financial instituting that a relatively modest government service tax could be unilaterally imposed. Leave it up to big business to justify its return AFTER the event. This puts them on the same footing as the poorer PAYE wage & salary earners. By the way why can’t Australia go completely cashless, so closing the black economy? No need for a Mint & stopping money laundering at the Casinos.

    1. Will

      Sound’s great. How about a 15% tax on all company net cash flows to start with? Any tax paid here could be deducted from current payable annual company tax, but at least a minimum 15% would be collected from the rat f***ers.

  5. CML

    Thank you Alan…good article (with facts!) as usual.
    The tax NOT collected from the top-end-of-town is simply outrageous.
    How can the government justify its on-going attacks on Centrelink customers…while allowing this scandalous situation to continue?

  6. klewso

    Ah Woodside … Timor-Leste of course.

  7. AR

    Thank you for a lucid exegesis – you deserve the bigbuck$ for ploughing through that and garnering the yield. Brilliantly comprehensible.
    My personal, stroke of the legislative pen, favourite is simple turnover tax, as fellow financial naif John Hall above, at the point of money movement. Each and every transaction.
    Pay first, argue costs afterwards and while we are dreaming of reform, how about simply not accepting “advertising” as a tax deductible input. Think of all those brilliant minds currently wasted on such frippery.
    And tax lawyers, suddenly utterly redundant, superfluous, otiose, devoid of function or reason to exist. Good riddance.

    1. Charlie Chaplin

      Totally agree about the advertising, AR. You wanna be a capitalist and flog product, advertising’s the name of the game. Why should the public purse subsidise you?

  8. Steve Caddas

    Don’t worry folks, the GST on imported books and nick nacks will kick in soon. That’l fix it.

  9. Walter KOMARNICKI

    thanks Crikey for doing the hard yards and actually going through and comparing last year’s and this year’s tax transparency reports.
    I used to be a low-level worker at the ATO but I noticed the high stress and burnout rate from workers in the debt collection area, and how little negotiation there was with taxpayers who owed a few hundred or thousand as compared to those who owed tens of millions or hundreds of millions: the former were given deadlines and ultimatums to pay or else…, the latter could have negotiations at their convenience and have their debts settled amicably…

    a metaphor of the inequality that obtains in our society as a whole, and why nobody is game to change the system and level the playing field, even if it means that ultimately the budget could one day be balanced, or better still, get into the black again…


    1. Chris ConnorTH

      Good comment – it seems the sponsorship paid by the big profit earners to our political parties gives them the right to pay little or no tax. One law for the wealthy & an other for the rest – just look at Centrelink.

  10. Kirsty

    So sad. A great article.

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