The newly amended Stage 3 tax cuts are making headlines at the moment. Political point scoring about broken promises has been less effective than usual. Perhaps the cost of living crisis and the unfairness of the tax regime may have something to do with that. Australia has a tax system which unfairly taxes the working poor rather than the wealthy. The LNP Coalition under the aegis of former PM Scott Morrison wanted to accentuate that even further via the regressive stage 3 tax cuts for the highest earning Australians. Their federal replacement, the Albanese Labor government amended those tax cuts to be shared more broadly with middle Australia.
Ordinary Australians Pay The Most Via Income Tax
Despite this relatively good news for the working poor the tax burden remains unfairly skewed in favour of the wealthy. The capital gains tax omission on the family home no matter the value of the designated home means billionaires can squirrel away untold millions via this measure. Family trusts are another tax minimisation way for the wealthy to avoid paying taxation in Australia. Superannuation in Australia has been another bolthole for the seriously rich to avoid tax on their wealth. Income tax is the workhorse of the taxation system in this country and the burden falls most heavily on those that can afford it least.
Why Doesn’t Australia Tax Fossil Fuel Corporations Properly?
In Australia we subsidise large multinational fossil fuel corporations and mining companies by lessening their tax burden for some strange reason. State and federal governments cut lucrative deals for these big companies. One wonders why? Few other nations around the globe make it so financially attractive for these multinationals to extract their profitable resources. Australia, unlike many other places offers a stable and friendly environment in which to mine. Australia is the third largest exporter of energy resources in the world. Our LPG gas is fuelling Japan and many other nations. Our petroleum rent tax brings in bugger all in the greater scheme of things, especially when compared to similar schemes elsewhere. It is as if some of our people have cut deals to benefit themselves at the expense of what could be raised for the nation as a whole.
“Norway’s Ministry of Finance projects that tax revenue from oil and gas will be a staggering A$127 billion or around $23,500 per Norwegian citizen in 2023 alone.”
Australia’s Petroleum Rent Tax Revenue
“There are 10 entities in the 2020–21 PRRT transparency population, with total PRRT payable of $926 million. The number of entities paying PRRT decreased from 12 in the previous year, and PRRT payable increased from $881.1 million.”
Richard Denniss, the chief economist at the Australia Institute, recently presented a speech on tax at the National Press Club. He made these observations about our tax system and the unfair burden it places on ordinary workers. It seems in Australia we have allowed our politicians to rig a tax regime favouring the wealthy and the big end of town. Could this be a result of lobbying by the fossil fuel industry and political donations to our two major political parties? If you look at the records you will see the fossil fuel sector is the most active lobby group and the biggest political donor.
“Four of the nation’s biggest fossil fuels companies paid over 13,000 times more in “donations” to the major political parties last financial year than they collectively paid in taxes in 2020-21. Australian Electoral Commission (AEC) data released this morning shows Chevron, Santos, Whitehaven Coal and Woodside together made $390,930 in political “donations” to the ALP and the Liberal and National parties last financial year.”
Australians Being Screwed By Vested Interests
It is pretty bloody obvious that we are being screwed by a process tainting our governments and without recourse to proper oversight or remedy. Governments and the current political system are failing us. Meanwhile, the smokescreen of cultural warfare and the politics of grievance continues. Neocons beat up emotive narratives about Australia Day merchandise not being available in Woolworths and misplaced corporate conscience regarding the colonial invasion of the continent on that day. More inflammatory is the war in Gaza and the accusations of rampant antisemitism by anyone standing up for the Palestinian’s right to exist. Of course, the Palestinian people are in fact Semitic themselves. The protest against genocide by the Israel state is anti- Zionist if a label is required. Over in America the GOP are virulently anti-woke, attacking LGBTQIA folk and their right to exist. The culture wars hide the real stuff going on, which is the control of our governments by big money. Corporate dollars get politicians re-elected and they are, therefore, beholden to the donors and their interests. Our tax system reflects this relationship.
https://www.housetherapy.com.au/social-housing/
Until we effectively ban all corporate and private donations to political parties we will continue to be at the mercy of their power and influence. One citizen, one vote does not work if the democratic system is being undermined by large political donations by wealthy folk and corporations. Big money is always the loudest voice in the room. The unfair nature of our current taxation regime is proof positive of that. Australia has a tax system which unfairly taxes the working poor rather than the wealthy.
https://www.youtube.com/watch?v=y7mwGnb4CkA
Robert Sudha Hamilton is the author of Money Matters: Navigating Credit, Debt, and Financial Freedom.
©HouseTherapy
