Bill Shorten's tax plans don’t add up, but too few are asking questions.
The Conservative Party will oppose Labor's proposed changes if forms government and we need your vote in the Senate to help us block them.
Judith Sloan writes in The Australian:
"Labor’s locker of radical policies has been given a very light go over by the media, with coverage of some measures — changes to negative gearing, the elimination of cash refunds for franking credits , and climate change policies spring to mind — but almost no coverage of others.
Labor has avoided serious scrutiny of its major policy proposals , particularly during interviews on our public broadcaster.
Take negative gearing. Labor’s changes were squarely based on improving housing affordability - it was there in the documents until they were deleted from Labor’s website.
But when Bill Shorten has been asked about the impact of the changes to negative gearing on house prices, the Opposition Leader has insisted there will be little.
So what then is the point of the changes if housing will not become more affordable? If lowering house prices was the main rationale for the removal of negative gearing, what is the reason for the change now? No highly paid interviewer has bothered to ask.
The fact Shorten continues to spout the nonsense that cash refunds for franking credits are a gift for people who don’t pay tax when in fact the tax has been paid on their behalf by the company is another sad indictment of many senior journalists.
Then there is the furphy about Australia being the only country with this arrangement. That would be because very few countries in the world operate dividend imputation. And of the countries that do, their tax arrangements involve tax-free accumulation for retirement followed by normal taxation for retirees — the reverse of ours.
The comparison that Labor makes is a complete crock. But have you heard one journalist pull Shorten or his Treasury spokesman , Chris Bowen, up on it?
Then there is the complete obfuscation by Labor about the cost of its climate change policies involving a 45 per cent emissions reduction target by 2030. That Labor has never been pressured to come up with a figure about the cost of this policy is extraordinary and reflects poorly on parts of the media. Shorten’s glib response that the cost of inaction is higher is gobbledygook. No one believes that Australia can achieve anything on its own when it comes to climate change — just ask the Chief Scientist.
Shorten might argue that by having a much more ambitious target than most countries, particularly the populous ones, we could persuade others to follow suit. He hasn’t chanced his arm with this contention because he has no evidence to back it up.
He may have worried that some curious journalists could ask foreign leaders whether they intend to follow Labor’s 45 per cent target, although these fears surely would have been unfounded.
At least negative gearing, cash refunds for franking credits and climate change policies have been mentioned by the media. There are other elements of Labor’s high-taxing strategy that barely have been discussed. A significant one is the changed taxation arrangements of trusts.
Most political journalists wouldn’t have a clue about the role trusts play in the economy or how they are taxed. There is probably a suspicion that trusts are for the wealthy and used to minimise tax. That is pretty much the naive view of Bowen.
In what is a remarkably brief statement of a policy that has profound implications for many small-business owners and selfmanaged superannuation trustees , Bowen simply claims “discretionary trusts have attractive tax advantages and are used by high-wealth individuals to minimise their tax obligations” .
But many small businesses are structured as trusts for reasons that have nothing to do with reducing tax obligations.
As the Council of Small Business has observed, “It’s a case of Labor going after hardworking small business because they are a soft target.”
So as the scouts say: be prepared . If Labor wins on Saturday, there are massive shocks in the offing. And it won’t be the big end of the town that is affected — it will be small-business owners, retirees on modest incomes and homeowners.
But you won’t have learned much about this from most media — many of the journalists are simply not interested. They go along with the fanciful idea that these deliberate features of the tax system are loopholes — the Labor line — and hardworking people must be punished. It tells you a lot."
To read Judith Sloan's full article, click here.
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