While the Australia Day Honours list recognises the diverse ways in which individual Australians contribute to our community, inevitably the list includes some scoundrels as well. Over the years Australians as diverse as Rolf Harris and Alan Bond have been stripped of their Orders of Australia for breaking the law. The removal of such awards is arguably a more powerful symbolic act than their initial granting.
I believe that anyone found guilty of tax evasion, either in their personal affairs or as a director of a company, should be automatically stripped of any Australia Day Awards. No one found guilty of deliberately breaking the law to reduce their financial contribution to our country can be considered to be “in service” to Australia. On the contrary, those who shirk their responsibilities to pay their taxes while reaping the benefits of living in this country have sought to place Australia in service to them.
Tax evasion is big business in Australia. Tax Office statistics show that in 2014 there were 56 people who received more than $1 million in income but paid not a cent in tax. Tax Office data also shows that this group who paid no tax spent more than $46 million on accountants and lawyers to help them minimise their contribution to the Commonwealth.
While aggressive tax minimisation is not necessarily illegal, it is a warning sign. However, as the Abbott government decided to shed more than 3000 staff from the Australian Tax Office, its capacity to detect and prosecute tax evasion has been significantly diminished.
As a result of transparency measures introduced by the Gillard government (and watered down by the current government) we now know that more than one-third of Australia’s biggest companies paid zero tax in 2015. Again, the fact that companies with billions in revenue don’t pay a cent in tax is not proof of illegality; we need to carefully examine the conduct of companies that engineer ways to return funds to their shareholders but not to their community.
When companies are found guilty of tax evasion they are usually fined and key individuals are sometimes jailed, but I believe that all of the directors of such companies should face the moral sanction of having any awards stripped from them even if it is their underlings who have faced court. Company directors have a responsibility to shape corporate culture as well as ensure corporate compliance, and in turn, if the companies that they lead have steered in the wrong direction it is ultimately their responsibility. Those often very comfortable directors’ fees do not come without commensurate responsibilities.
Of course many individuals and companies do pay their fair share and are appalled at those who shirk their responsibilities. If we are to rebuild not just our finances, but our faith in each other, we must not just pursue the non-compliant but recognise those who make a significant contribution.
The BRW Rich List has become a source of fascination, and status, for many Australians. But while we publicly celebrate the accumulation of our wealthiest Australians we do not publicly acknowledge the contribution by our largest ethical taxpayers.
I would love to see an annual list of the 100 biggest individual taxpayers. Not only would it provide a simple way to acknowledge their contribution, it would highlight the chasm between those who have accumulated the most for themselves and those who have contributed the most to others.
Tax is the price we pay to live in a civilised society. Whether someone is a billionaire or a battler we need to recognise those who pay their fair share and identify those who evade their responsibilities. Donald Trump claimed that his ability to avoid paying tax was proof that he was smart. We know Trump’s is a special kind of intelligence, unfathomable to the rest of us, but a country full of people that “smart” is on the road to civic ruin.
This is not about some dry matter of accounting or bureaucracy. It is about that most sacred of things — our duty to each other as citizens. When individuals and companies evade their fair share of tax, it is not as if there are no consequences: others — invariably the less well off –must pay more or we must all accept diminished services. Those who are doing the right thing should be acknowledged, not expected to subsidise those who want a free ride.
If the business community and the Turnbull government were serious about tax reform they would declare war on tax evasion before they demanded $50 billion worth of cuts in corporate tax.
* Wayne Swan MP was deputy prime minister and treasurer of Australia for six years and a regular participant in the G-20 Finance Ministers Meetings. His most recent book is The Good Fight: Six years, two prime ministers and staring down the Great Recession. (Twitter, Facebook)