Google to pay $481.5m in win for Australian Tax Office bringing total collected from IT giants to $1.25 billion

The Guardian, 18 December 2019:

The search engine giant Google has agreed to pay $481.5m to the Australian Tax Office in a major win for the agency in its battle to force big technology companies to pay tax in Australia.

The settlement, which covers a decade’s worth of tax between 2008 and 2018, will also help bolster a federal budget surplus that has been undermined by weak economic growth and the collapse of the Morrison government’s robodebt scheme.

It follows a lengthy campaign to get multinationals, especially technology and resources giants, to pay tax in Australia that was launched in 2015 by the then treasurer, Joe Hockey, and spearheaded by the tax commissioner, Chris Jordan.

Moves included more audits of tech and resources companies through a special ATO taskforce and introducing a suite of laws designed to force tech companies to book sales made in Australia locally, rather than running them through a tax haven such as Singapore or Ireland.

Deputy commissioner Mark Konza, who has overseen much of the ATO’s work dealing with tax-shy multinationals, said the settlement was “another great outcome for the Australian tax system”.

The ATO said Google’s settlement, together with others made by companies including Microsoft, Apple and Facebook, brought the total extra amount of cash collected from ecommerce industry players to $1.25bn.....

Unfortunately as Australia's federal budget blackhole is currently $2.1 billion and will reach a cumulative total of at least $7 billion by June 2021, the back taxes paid to date by these multinational corporations will be only a slight, passing relief for the national economy.

The Morrison Government's Budget 2019-20 appears to be fooling very few

By 26 August 2018 North Coast Voices was posting this……

There are now 108,000 older Australians on the waiting list for Home Care Packages.

On this list are individuals who have:

* not yet been approved for home care;

* been previously assessed and approved, but who have not yet been assigned a home care package; or

* are receiving care at an interim level awaiting assignment of a home care package at their approved level.

Waiting time is calculated from the date of a home care package approval and this is not a an ideal situation, given package approval times range from est. 27 to 98 days and the time taken to approve high level home care packages is now [more] than twelve months - with actual delivery dates occurring at least 12 months later on average….

By June 2017 New South Wales had the largest number of persons on the home care waiting list at 30,685.

Given the high number of residents over 60 years of age in regional areas like the Northern Rivers, this waiting list gives pause for thought.

This was the Morrison Government announcement of 17 December 2018 reported online…….

Community Care Review magazine, 17 December 2018:

The federal government has announced $553 million in aged care spending including the release of 10,000 home care packages and increased residential supplements for the homeless and people in regional areas.

The splash-out is a centerpiece of the federal government’s Mid Year Economic and Fiscal Outlook, which forecasts a return to budget surplus and a raft of new aged care spending initiatives.

The new high-care home care packages will be available within weeks, Prime Minister Scott Morrison said. Funding will be split across 5,000 level 3 and 5,000 level 4 care packages, providing up to $50,000 per person in services each year.

This is the Morrison Government pretending that the 10,000 aged care packages it announced last year are a new round of age care packages in Budget 2019-20……

Budget Papers 2019-20:

To support older Australians who choose to remain in their own homes for longer, the Government is providing $282.4 million for 10,000 home care packages….

However, not everyone was fooled……

The Conversation, 2 April 2019:

In aged care, the government will fund 10,000 home care packages, which have been previously announced, at a cost of $282 million over five years, and will allocate $84 million for carer respite. But long wait times for home care packages remain.

A federal budget for hopeless optimists was delivered by the Morrison Government on 2 April 2019

https://youtu.be/C64ZC-0Oju4

This was Australian treasurer and Liberal MP for Kooyong Josh Frydenberg delivering his first budget speech on 2 April 2019:

Tonight, I announce that the budget is back in the black and Australia is back on track.

For the first time in 12 years, our nation is again paying its own way….

John Howard and Peter Costello paid off Labor’s debt. And tonight the Morrison government sets a path to do it again, without increasing taxes.

This matters because over the last year the interest bill on the national debt was $18bn.

And this was in a low interest rate environment.

This is money that could have built 500 schools or a world-class hospital in each state and territory.

We are reducing the debt and this interest bill.

Not through higher taxes, but by responsible budget management and by growing the economy.

In the actual budget papers he asserts that:

Net debt in 2019-20 is expected to be $361 billion, representing 18 per cent of GDP. By 2022-23, net debt is expected to decline to $326.1 billion (14.4 per cent of GDP). Net debt is then projected to be eliminated over the medium term (2029-30)

So whose debt is Frydenberg complaing about and why is the economic furture so suddenly rosy?

At the end of the month in 2013 in which Tony Abbott became Prime Minister of Australia the gross national debt stood at est. $220.67 billion and net national debt was $174.55 billion. At the time net national debt was in the vicinity of 13% of GDP.

By 2 April 2019 the Abbott-Turnbull-Morrison Government had raised the gross national debt to $534.42 billion. 

That's more than double the national debt left by the previous Labor federal government.

Frydenberg is predicting that gross national will rise to $627.26 billion by end of June 2019 with net national debt coming in at $373.47 billion and net debt predicted to come in at 19.2% of GDP by end of June. 

By 30 June the federal government will have paid $18.15 billion in interest on this debt in the 2018-19 financial year.

I don't know about anyone else but to me it definitely looks as though the Liberal-Nationals Coalition governments have well and truly contribted to the national debt in the last five and a haf years.

According to the 2019-20 Budget that Frydenberg just delivered gross national debt is expected to rise for the next three financial years while at the same time it is hoped that net national debt will decrease.

When it comes to national debt a net decrease in the debt does not always mean the actual government debt is falling - it simply means that the government of the day expects to have enough assets and income to honour the total debt if the entire amount was theoretically called in by the debtors.

However, Frydenberg predicts that both net national debt and interest that the gross debt attracts will fall over the next four financial years, despite federal government expenses increasing and expected tax receipts (including GST receipts) being revised down by $26 billion over those same four years.

Frydenberg also says the Morrison Government will deliver an underlying cash balance of $7.1 billion by 30 June next year even though that underlying cash balance is $4.1 billion in deficit this year. To do that the Treasurer has to pull $11.2 billion out of his back pocket in the next fourteen months.

Months in which it is committed to delivering the cash splash it has included in this pre-election budget.

An ordinary voter like myself has to ask: Where's the money coming from to supposedly get the government books back into the black?

The Morrison Government must be privately asking itself the same question as Budget Statement 7 only gives that government a 70 per cent chance of being able to bring in a $7.1 billion suplus this coming financial year

Budget 2019-20 papers can be found here.

NOTE:

Only one item in the Morrison Government 2019-20 budget is likely to be passed on 3 April 2019 before the Australian Parliament is dissolved to meet the required timeline to issue  writs for the federal election. This means that all the budget promises made by Frydenberg are on the never never and if the Coalition Government wins that election it may change some budget details come 30 June.