It’s probably best that Andrew “Twiggy” Forrest took delivery of his new $100 million private jet last week given the global post-COVID push for higher tax rates on everyone from corporates to the super wealthy.
Otherwise we might have had to suffer another PR stunt of “poor” Twiggy on the back of a flatbed truck, megaphone in hand, alongside fellow WA iron ore billionaire Gina Rinehart, chanting “axe the tax” as they did in response to Rudd’s incendiary resources super profits tax (RSPT).
I mean it just wouldn’t have the same impact on a tarmac with a Bombardier Global Express 7500 in the background.
At that 2010 rally Twiggy even went so far as to accuse the government of turning into a communist dictatorship and compared Australia unfavourably with the more “capitalist” China. Yes, he was at it even back then.
While Twiggy and Gina are both now among Australia’s larger taxpayers (everything is relative), that’s due to the billions they are raking in on the current iron ore boom which is obviously benefiting WA taxpayers and Australia as a whole.
But it has also prompted calls for a revival of that original mining tax from the 2010 Henry tax review. Last month the Greens released a paper claiming the RSPT would have raised an extra $34.6 billion. The paper also proposed a 6% “wealth tax” on billionaires like Twiggy, Gina and Clive Palmer to combat inequality.
But this time their proposals are not quite so extreme, given a worldwide push for governments to raise taxes to overcome the giant deficits left by the coronavirus economic shock.
Last weekend even the International Monetary Fund (IMF) appeared to be channelling Greens policy with a report suggesting taxes on “excess” profits such as the ill-fated mining resource rent tax. And to be fair, the IMF report also suggested other nations could follow the Abbott government’s temporary budget repair levy which it brought in between 2014 and 2017.
The push for higher taxes for the top end of town is gaining speed around the world. In early March, Boris Johnson’s conservative government hiked corporate taxes from 19% to 25% to pay for COVID, reversing a previous policy to bring them down to 17%.
The Biden administration has already been warning it will raise taxes on businesses and the wealthy to fund its ambitious $3 trillion infrastructure spend. Overnight, US Treasury Secretary Janet Yellen used her first major address to call for a minimum global corporate tax rate to stop the “race to the bottom”. She specifically referred to a more level playing field in the taxing of multinational corporations and discouraging profit shifting, an area in which Australia has received credit for its strong efforts in recent years.
Meanwhile across the Tasman, the NZ government announced major tax changes last week which included increasing the top tax rate for the country’s highest earners to 39%. More importantly, it had the balls to kill off its version of negative gearing in an attempt to wrestle control of a runaway housing market.
Can’t wait to see how brave our lot will be in the budget to be announced five weeks from today.
Should the Australian government increase taxes on the super wealthy? Let us know your thoughts by writing to email@example.com. Please include your full name to be considered for publication in Crikey’s Your Say section.