Let's talk about excess franking credits and why they have been money for jam for the last 17 years

This is what the Australian Taxation Office (ATO) states about imputation:

Refunding excess franking credits – individuals

Dividends paid to shareholders by Australian resident companies are taxed under a system known as imputation. This is where the tax the company pays is imputed, or attributed, to the shareholders. The tax paid by the company is allocated to shareholders as franking credits attached to the dividends they receive.

Dividends and franking credits

If you receive franking credits on your dividends, you need to let us know your:

* franked amount

* franking credit.

If you are an Australian resident, we will use this information to:

* reduce your tax liability from all forms of income (not just dividends) and from your taxable net capital gain

* refund any excess franking to you after any of your income tax and Medicare levy liabilities have been met.

Eligibility for arefund

You are eligible for a refund of excess franking credits if all of the following apply:

* You receive franked dividends, on or after 1 July 2000, either directly or through a trust or partnership.

* Your basic tax liability is less than your franking credits after taking into account any other tax offsets you are entitled to.

* You meet our anti-avoidance rules, which are designed to ensure everyone pays their fair share of tax.

If you have received a dividend that has Australian franking credits attached from a New Zealand franking company, you may be eligible to claim the Australian sourced franking credits.

The policy of giving cash back for unused franking credits was introduced in 2000 by then Howard Government treasurer Peter Costello and for the last 17 years it has been systematically rorted by superannuation funds, private corporations, trusts and individuals - to the point where Treasury pays out an est. $6 billion per annum under this scheme.

With one individual whopaid no income tax reportedly received millions claiming cash for unused franking credits and the average unused credits cash back payment for people in the top 1% of self-managed super funds being est. $83,000 a year.

In March 2018 Federal Labor announced a policy effective January 2019 which removes claims for franking credits - but only in those years that the prospective claimant has no income tax liability payable.

So ending taxpayer-subsidised money for jam for around est. 9 per cent of the population who were receiving cash refunds for tax they had never paid .

Turnbull, Morrison & Co then came out fighting – accusing Opposition Leader Bill Shorten of robbing low income self-funded retirees and aged pensioners.

At that point, somewhat predictably, embarrassment for the Turnbull Government began…..

What Treasurer and Liberal MP for Cook Scott Morrison considered low income retirees was elucidated.

The Australian, 14 March 2018:

A retired couple living in a $2m house, with $3.2m in super, are classified as ‘‘low income’’. They have no income tax liability. They could also have an investment property and still wouldn’t have a tax liability because of the bizarre “senior and pensioners’ tax offset”, which lifts their effective tax-free threshold to about $58,000.

Turnbull & Co were accused of telling political lies.

The Guardian, 14 March 2018:

You won’t have missed the foghorn blast from the Turnbull government and its media amplifiers that has accompanied Labor’s latest bold foray on tax policy.

Scott Morrison has declared Labor is stealing tax refunds from pensioners and low-income retirees, and Malcolm Turnbull says Bill Shorten “is going after the savings of your parents and their friends and their contemporaries”.

So how do these terrifying-sounding claims stack up?

Let’s bring in the respected economist Saul Eslake, who has no political dog in this race. Eslake is blunt. He says the government’s posturing is “misleading in the same way that most of what Scott Morrison said about Labor’s policy on negative gearing was misleading”.

To understand precisely what is misleading – the first thing to know is when we are talking about Australian retirees having low incomes, often what that means is people have low taxable incomes.

Income from superannuation funds is tax free once people turn 60. Eslake says the decision to make income from super tax free is “top of my list of the dumbest tax policy decisions of the last 25 years”.

It means people with substantial assets, and big super balances – millionaires in fact – are in a position to report low taxable income, and in fact structure their affairs to ensure they have low taxable income.

They were also quite rightly accused of knowing that dividend imputation à la Costello is an expensive rort.

The Sydney Morning Herald, 13 March 2018:

Treasury considered dividend imputation reform in the lead up to Treasurer Scott Morrison's last budget, creating a dossier entitled "Tax Policy - Dividend Imputation" more than a year before Labor announced it would target the tax refunds of more than one million Australians on Tuesday.

The confidential file itemised in a list required to be disclosed by departments as part of freedom of information requirements was opened by Treasury in the first-half of last year.

Fairfax Media understands Treasury has been examining withholding dividend cheques from non-taxpaying shareholders ahead of this year's May budget.

Investigating potential savings needed to fund budget initiatives such as personal income tax cuts is normal practice in the pre-budget period.

Mr Morrison said on Tuesday the "government has never entertained" changes to the way it gives cash back to shareholders in response to a policy he described as a "cruel blow for retirees and pensioners," but his predecessor Joe Hockey first asked how dividend imputation could be improved - not replaced - three years ago. 

A white discussion paper on tax reform commissioned by Mr Hockey and completed by Treasury in 2015 found "there are some revenue concerns with the refundability of imputation credits," indicating the department was receiving lower tax revenues than it expected. 

"It provides a greater incentive for shareholders of closely held companies to delay distributions until a time when individual owners are subject to a relatively low tax rate, to receive a refund of tax paid by the company." 

The list published by Treasury shows the department's work on dividend imputation policy continued after Mr Morrison became Treasurer in 2016…..

Labor, which has not released Parliamentary Budget Office costings of its policy, said it planned on cancelling an average cash refund of $5000 on share dividends from 8 per cent of taxpayers, including 200,000 voters who self-manage their own super funds and 1 per cent of full pensioners..….

Image found on Twitter

"Rethink: Better tax, better Australia" discussion paper information here and submissions here.

So Prime Minister Turnbull has been bitiching again about the ABC's reporting

On 14 February 2018 ABC News’ economic journalist Emma Alberici wrote:

It's also disingenuous to talk about a 30 per cent rate when so few companies pay anything like that thanks to tax legislation that allows them to avoid paying corporate tax. Exclusive analysis released by ABC today reveals one in five of Australia's top companies has paid zero tax for the past three years.

On that same day the House of Representatives Hansard recorded these mentions:

Mr THISTLETHWAITE (Kingsford Smith) (10:12): ………All of these hardworking Australians would be thrilled to know—very pleased to know—that the ABC has uncovered that about one in five Australian companies pay no company tax whatsoever in this country. Yes, that's right: 380 of Australia's largest companies pay absolutely no income tax at all—a big doughnut; a big fat zero. They include airlines, banks, financial service companies, mining, energy, clothing, steel, and telecommunications companies. There's even a condom manufacturer. That's rather appropriate, given what they've just done to the Australian taxpayer in paying no tax at all during the course of the last couple of years…..

Mr THISTLETHWAITE (Kingsford Smith) (13:49): As mums and dads pack up the kids, send them off to school and head off to work; as pensioners struggle to put the air-conditioner on because of rising electricity costs; and as students face increases in their fees because of cuts to TAFE and cuts to funding for education—these hard-working Australians, as they head off to jobs and study today, would be pleased to know that the ABC has uncovered that one in five Australian companies pay absolutely no company tax in this country. That's right, 380 of Australia's largest companies paid absolutely zero company tax over the course of the last three years. They include airlines, energy companies, mining companies, clothing companies, banks, insurance companies and a manufacturer of condoms—which is highly appropriate, given the rogering that they've just given Australian hardworking taxpayers by paying no tax. Now, given that these companies pay no corporate tax, what is the response of the Turnbull government? The response of the Turnbull government is to give them a tax cut. These companies are struggling so much that we're going to give them a tax cut! Yes, that's right: 380 of the largest companies that pay no tax will get a tax cut, despite the fact that they're increasing taxes for Australian workers by putting up the Medicare levy. We won't cop it. Labor will oppose these tax cuts and we'll stand up for average, hard-working, battling Australians……

Mr TURNBULL (Wentworth—Prime Minister) (14:03): I thank the honourable member for her question. The government is supporting and delivering lower business taxes because we know they will result in more investment and more jobs. Company tax is ultimately a tax on workers. When nearly nine in 10 Australians work for private business, surely it is obvious that it's in the national interest to support the companies that employ the overwhelming majority of Australians. But, instead of supporting policies that will create jobs and grow wages, the opposition is busy peddling the myth that business does not care about the level of tax and doesn't in fact pay tax. I'm not sure where the $68 billion of company tax receipts came from, but, according to the Labor Party, companies don't pay tax. The Labor Party wants to increase taxes; the government wants to reduce them. But we do not believe that paying tax is optional. Every Australian and every business that makes a profit in Australia must pay their fair share of tax. You'd think that was common sense, but not for the opposition. Like everything the opposition leader does, he calls for action one minute and then opposes it the next. He called for action against multinational tax avoidance and then he voted against some of the toughest anti-avoidance laws in the world. If this isn't clear enough for the members opposite, we'd be happy to arrange a briefing with officials from the Australian Taxation Office. We have introduced and, no thanks to the Labor Party, passed through the parliament some of the toughest multinational tax avoidance laws in the world. At that briefing from the ATO, I am sure that those distinguished officials will be able to provide a tutorial on the difference between revenue and profit because members opposite either don't understand the difference or they're now calling for businesses to be taxed on revenue—not profit— even if the business makes a loss. We saw that they were busily retweeting the article—one of the most confused and poorly researched articles I've seen on this topic on the ABC's website. Of course, the ABC is an enterprise that understands profit and loss.

Opposition members interjecting—

Mr TURNBULL: It does! It understands taxes; they're recipients of them. They receive them—taxpayers' funds. They understand the difference: the hard work of investing and struggling and losing money one year and then being able to offset it against profit the next—or not. No, the ABC has the same understanding of the commercial world as does the opposition. (Time expired)

The Australian Financial Review scenting blood after the prime minister’s criticism went to print with this disingenuous take on 15 February 2018:

Both premises fatally expose their author's innumeracy. The first is demonstrably false. Freely available data produced by the Australian Taxation Office show that 32 of Australia's 50 largest companies paid $19.33 billion in company tax in FY16 (FY17 figures are not yet available). The other 18 paid nothing. Why? They lost money, or were carrying over previous losses.

I’m sure North Coast Voices readers will quickly notice that Alberici was citing statistics for a baseline of around 1,900 companies and the ‘Fin Review’ columnist was citing a baseline of 50 companies - so of course the number of companies paying no tax to the number of companies paying tax is going to differ between the two baselines.

Reading the full text there does not appear to be any factuall inaccuracies in the Alberici article being complained about.

Meanwhile ABC News withdrew the online version of the economic analysis

 and updated Alberici’s companion article in order to provide further information and context.

The companion article still contains those same statistics:

Analysis by the ABC reveals Qantas is not alone — about 380, or one in five, of Australia's largest companies have paid no tax for at least the past three years.

However, these opening lines written by Alberici in the article “There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” on 14 February are now missing in action as this analysis gently sinks to the bottom of the Internet:

There is no compelling evidence that giving the country's biggest companies a tax cut sees that money passed on to workers in the form of higher wages.

Treasury modelling relies on theories that belie the reality that's playing out around the world.

Since the peak of the commodities boom in 2011-12, profit margins have risen to levels not seen since the early 2000s but wages growth has been slower than at any time since the 1960s.

The Guardian reported on 16 February that:

Guardian Australia understands ABC News management has been in crisis meetings for two days after the prime minister attacked the articles in question time and then wrote formal letters of complaint to management.

I suspect that what Turnbull took umbrage to in the first place was the fact that one article took a stronger position on why corporate tax cuts were not good for the economy or wages growth and, therefore were unlikely to benefit workers and their families and, the other article which is still online did not address this aspect of government taxation policy.

So he set out to shoot the message down and be damned to the fate of the messenger.

Of course in attempting this Turnbull created a Steisand Effect With A Twist - ensuring that the full text of “There's no case for a corporate tax cut when one in five of Australia's top companies don't pay it” has been copied onto websites he can't bully and the article's analysis is still being discussed by voters.

BACKGROUND

Do your job or quit ABC, Turnbull tells board members - The Australian

https://www.theaustralian.com.au/...abc-turnbull.../story-fna045gd-1226869241476?...

Jan 26, 2018 - COMMUNICATIONS Minister Malcolm Turnbull says ABC board members who do not want to get involved in ensuring news content on the public broadcaster is accurate and impartial should get off the board. Revealing he receives hundreds of complaints about the ABC each week, MrTurnbull said “the ..

Q&A: Malcolm Turnbull phones ABC boss Mark Scott to complain about crude Tony Abbott tweet 26 August 2015

Malcolm Turnbull slams ABC boss Mark Scott over Indonesian spy ...

https://www.dailytelegraph.com.au/...turnbull...abc.../ff6ad001ced93bb9c40eee1f4c839...

Dec 2, 2013 - THE minister in charge of the ABC, Malcolm Turnbull, rang the broadcasters boss Mark Scott last week to tell him he had made an “error of judgment” in teaming with the Guardian to run revelations that the Indonesian presidents phone was bugged.

Watch: Turnbull implies he complained to ABC about "failed" NBN ...

https://delimiter.com.au/.../watch-turnbull-implies-complained-abc-failed-nbn-coverag...

Feb 4, 2016 - Prime Minister Malcolm Turnbull appears to have implied that he made the samecomplaint to ABC management that he has previously made in public before the 2013 Federal Election, stating that the broadcaster had "failed" to provide balanced coverage of the competing National Broadband Network ...

Australian Tax Office, 2015-16 Report of Entity Tax Information

URL: https://data.gov.au/dataset/c2524c87-cea4-4636-acac-599a82048a26/resource/b84c2b8d-c595-4219-987d-fc1add7f00f0/download/2015-16-corporate-report-of-entity-tax-information.xlsx

This report contains the total income, taxable income and tax payable of over 2000 corporate tax entities for the 2015-16 year. This report also includes separate lists of entities whose information was not available by the cut-off date to produce the Report of Entity Tax Information for 2013-14 and 2014-15.

So what does Australia's public debt look like in January 2018?

As of 5 January 2018 Australian Government public debt stood at an est. $515.6 billion at face value. Six months earlier this debt had stood at est. $500.9 billion. So government debt continues to grow.

This early January 2018 public debt breaks down as:

Treasury Bonds	$477,278m
Treasury Indexed Bonds	$34,897m
Treasury Notes	$3,500m
Other Securities	$6m

Australian Office of Financial Management, 5 January 2018:

Treasury Bonds are medium to long-term debt securities that carry an annual rate of interest fixed over the life of the security, payable semi-annually.

All Treasury Bonds are exempt from non-resident interest withholding tax (IWT).

These treasury bonds were first issued between January 2006 and September 2017, with interest repayments ranging from 1.75% to 5.75% per annum due throughout 2018 and, in all but two instances the years beyond up to 2047. It is likely that at least 50% of these bonds are held by foreign investors.

The Turnbull Government appears to be using reduced government spending by way of funding cuts to essential government services and ‘reformed’ welfare payments in order to manage a portion of this debt – the remainder possibly being serviced by further bond issuance.

Given the potential to retain a higher dollar amount of cash transfers for longer periods in government coffers if the Cashless Debit Card is universally introduced for welfare recipients under retirement age, then I rather suspect that future welfare recipients may be disproportionately servicing this debt if Turnbull & Co have their way.

And while considering that growing public debt, the sustained federal government assault on safety-net welfare since 2013 and the attack on penalty rates in 2017, readers miight like to consider this……

The Australian Parliament consists of 226 elected members sitting as MPs or senators.

Between them they are reported to own 524 properties and, in addition to their salaries and any additional remuneration for ministerial position or committee membership, they also receive generous parliamentary entitlements of which they freely avail themselves:

Federal politicians claimed more than $55 million in expenses over the second half of 2015, new documents have revealed.

Federal politicians claimed almost $49 million in expenses over the first half of 2016, new documents have revealed.

The Australian, 5 January 2018:

Australians have endured their longest period of falling living standards in more than a quarter of a century as growth in costs outstripped earnings for the fifth consecutive quarter, leaving households worse off than they were six years ago.

After allowing for inflation, taxes and interest costs, average household incomes dropped 1.6 per cent in the year to September, capping a sustained fall in ­living standards that has not been seen since the 1990-91 recession.

Economists say more than half the cost increases for households are being driven by electricity, rent, health, new housing and tobacco, while modest wage rises are being partially absorbed by workers being pushed into higher tax brackets……

After adjusting for living costs, interest and taxes, average earnings in the three months to September were 0.7 per cent lower than in the same period of 2011, which marked the peak of the ­resources boom.

Over the previous six years from 2005, households had seen an average improvement in their living standards of 17 per cent.

AMP chief economist Shane Oliver said the mid-year budget update delivered before Christmas provided only limited scope for tax cuts.

“To be anything more than ‘sandwich and milkshake’ tax cuts and still maintain a trajectory ­towards a budget surplus by 2020-21, they would have to be offset by spending savings elsewhere. That is where the politics kicks in and the government has had difficulty getting things through the Senate,” he said.

Dr Oliver said if the government was successful in getting the 0.5 per cent increase in the Medicare Levy through the Senate, it would offset the benefit of any tax cut. The Medicare Levy increase is scheduled to start on July 1 next year and increase personal taxes by $3.6 billion in its first year and $4.3bn in the second.

Although living standards stopped rising after 2011, the ­decline since the middle of 2016 is new and reflects both the fall in wage growth and an increase in tax payments.

The ABS Wage Price Index shows a 1.9 per cent rise last year, but this is measured before tax and records the average increase for each job. National accounts show that personal income tax collections are rising much faster than pre-tax wages, partly ­because more wage income is being pushed into higher tax brackets. They show a 4 per cent lift in taxes per capita over the year to September, absorbing 60 per cent of the increase in wage income per person, which rose only 1 per cent.

Much of the very strong ­employment growth in the past year has been in lower paying jobs in the services sector, which has reduced average incomes overall.

Welcome to the dog whistle season in Australia

Determined to keep the pot on the boil during their extended holiday break government ministers and humble backbenchers tend to release selected dog whistles to the media .

It appears we might have Liberal Senator for Tasmania Eric Abetz to thank for this one elicited by Treasury Budget Policy Division's answer to one of his Questions on Notice on or about 11 December 2017.

SBS News, 29 December 2017:

Working Australians are forking out roughly $83 per week to fund the nation's welfare bill.

Average taxpayers are handing over $35 every week to prop up aged pensioners, $20 per week to pay for family benefits and $17 to support Australians with disabilities.

Just over $6 per week goes to the unemployed, while $9 goes towards repaying interest on government debt, according to figures released to a Senate committee.

Going to the source it appears that based on a fictional, average "someone who owes $11,424 in tax" in 2014-15, the extended estimates breakdown works out at a notional: 

$42.25 per week for health care; 
$35.03 for aged pensions;* 
$20.42 for family payments (includes child care & paid parental leave);*
$19.65 for defence of the country; 
$18.50 as the contribution to education funding; 
$17.34 to cover disability payments (includes NDIS);* 
$9.11 for interest payments on federal government debt; 
$6.26 towards unemployment benefits;* 
$4.11 other;*
$3.32 for industry assistance;
$2.94 for public order & safety; 
$2.61 for housing & community; and 
$38.11 cents per week for the remaining seven listed categories.
* Classified in the media as "Welfare" with a rounded down total of $83 a week 

Both Senator Abetz and the media remain silent on the actual cost to the average taxpayer of the full range of business/company tax concessions. They also remain silent on how individuals can structure tax offsets and investment properties in order to reduce taxable income to zero or how personal income tax rebates at the end of each financial year may affect those weekly notional figures cited as a drain on taxpayers. However, Treasury does not keep quiet on the subject of revenue foregone and helpfully releases a Tax Expenditure Statement at the beginning of each year. 

In fact if Senator Abetz wanted to be honest he would have included a question concerning financial benefits from taxation revenue going to all Australian households for 2016-17. In 2015-16 that came to $105.8 billion in federal monetary transfers derived from taxation revenue in that financial year or notionally around est. $94 a week per person based on the number and average size of all households in 2016. In addition each person would receive the equivalent of est. $40 per week as 'in kind' government goods & services.

Which means a great many working Australians receive more from the collective income tax revenue pool than they actually pay out in individual income tax. 

Indeed Treasury's 2017-18 microsimulation model of Personal Income Tax and Transfers clearly shows that, based on equivalised disposable income quintiles, an est. 60 per cent of all Australian families pay no tax or less than est. $2,000 in annual income tax once government transfers received are deducted. Included in this percentage are working families with equivalised disposable incomes below $67,000pa.

It should be noted that the aforementioned fictional person owing an estimated "$11,424 in tax" is likely to have an equivalised disposable income well in excess of $67,000pa.

Both the microsimulation model and the fictional person make nonsense of the bald assertion that; "Working Australians are forking out roughly $83 per week to fund the nation's welfare bill".

In Australia every citizen of workforce age and over pays tax - even if its just the Goods and Services Tax (GST). And every citizen of any age receives a benefit from one or more forms of tax revenue redistribution in cash and/or kind, so it is the height of hypocrisy to argue that this benefit only goes to people receiving Centrelink/Veterans Affairs payments from the state and that the entire cost of any welfare 'bill' falls squarely on the shoulders of those with other incomes. 

Whoever authorised this particular media swipe at welfare recipients has forgotten that the Turnbull Government had been putting out versions of this story all last year and, not only has it grown whiskers but the electorate has become somewhat resistant to such tired political rhetoric.

No matter how hard political commentators try to classify receiving a government cash transfer as a form of social deviance, Australian society cannot be neatly divided into "lifters and leaners", "workers and bludgers" or "us and THEM".

Over the course of a lifetime everyone of us could be considered some or all of those things at some point, as we travel from childhood dependency through to adulthood and onto the grave.

NOTE:

Australian Parliamentary Library, What counts as welfare spending?, extract, 21 December 2015:

At its broadest welfare can be used to refer to all of the programs and services that make up the welfare state. This can include health and education, as well as income support payments such as the Age Pension, Carer Payment, Disability Support Pension and Newstart Allowance.

Welfare can also refer to the administrative category of ‘social security and welfare’. This category is used in budget papers and includes spending on aged care, child care, the National Disability Insurance Scheme (NDIS), family assistance payments and income support payments.

Welfare can also refer to a much narrower (and less clearly defined) category of spending on income support payments to people of working age. These welfare payments are means-tested benefits provided in cash. They go to people of working age who are not participating in paid employment or other activities such as education or vocational training. The term welfare can be applied loosely to spending that meets some or all of these criteria. It is a moral or political category rather than a legal or administrative one. It is often associated with the idea that recipients have not earned an entitlement to payments through contributions to the community.

Use of this political category of welfare has become increasingly common in Australian political debate. The category tends to include unemployment payments, such as Newstart Allowance, and payments to people of working age claiming support on the grounds of disability or single parenthood.

Statistics on welfare spending play a central role in debates over government policy. However, in public debate it is not always clear which category these statistics refer to. Sometimes statistics that refer to the broad category of social security and welfare are presented as if they referred to the narrower political category of welfare.

If public debate is to be informed by facts, commentators need to pay close attention to the way categories such as welfare are defined. When categories remain vague and ambiguous, the statistics can conceal as much as they reveal.

Senate Inquiry into Corporate Tax Avoidance continues to sit in 2018

"Exxon’s primary Australian company is directly owned by a shell company in the Netherlands and the Dutch company is owned by another subsidiary in the Bahamas." [Tax Justice Network submission to Senate Economics References Committee Inquiry into Corporate Tax Avoidance]

ExxonMobil Australia Pty Ltd operates under the brands ExxonMobil Australia, Esso and Mobil. It declared no taxable income in 2013-14, 2014-15 and 2015-16 despite having generated a total income during these years of 24.7 billion within this country.  [Based on Australian Taxation Office Report of Entity Tax Information data]

The Senate Economics References Committee Inquiry into Corporate Tax Avoidance commenced on 2 October 2014 and continues to sit until 30 May 2018.

The Inquiry’s 154 submissions to date make for interesting reading and can be accessed here (1 to 127 ) and here (128 to 154).

Effect of proposed company tax cuts according to Australian Prime Minister Malcom Bligh Turnbull - "All boats will rise"

As households across the country began the count down to the holiday season, Australian Prime Minister Malcolm Bligh Turnbull smugly informed an ABC interviewer that as a result of a proposed cut in the company tax rate* everyone’s income will increase – “All boats will rise”.

This is another way of referring to that now legendary faux economic theory popular with right-wing politicians – the Trickle Down Effect.

This assertion is tested in an Australian Treasury working paper ANALYSIS OF THE LONG TERM EFFECTS OF A COMPANY TAX CUT (May 2016) which modelled a tax cut reducing company tax from 30 per cent to 25 per cent – presumably implemented over the 10 years to 2026-27 proposed by government.

Yes, this working paper estimates that for “a static representative household” “calibrated to match the expenditure, income patterns, and taxes faced by aggregate Australian households” real wages will rise if all other factors in the economy remain unchanged.

So it seems that Turnbull's claim is genuine - or is it?

What Turnbull fails to say is that this “real” wage rise will probably be a paltry est. 1.0-1.1% in total, will take at least 20 years to achieve and will only come about if the average individual also works longer hours.

Based on ABS May 2017 All Employees Average Weekly Total Earnings and an optimistically estimated average annual wages growth of 1.9 per cent; at the end of those 20 years an average worker will have received a total wage increase of est. $851 to $929. Spread out over those 20 years that works out to between 81-89 cents a week extra in his/her pay packet as a direct result of the Turnbull Government’s company tax cut.

Because in real life these company tax cuts are staged and, each stage would have a lag time, no-one is going to see 81-89 cents in their pay packets anytime soon. Indeed a great many people will probably never see this meagre increase at all as the real wages of many low-skilled workers haven't increased alongside higher-skilled workers for the last seven years and there is no indication as to if or when this trend will end.

Over this same twenty-year time period any increase in company income as a result of a 5 per cent cut in the company tax rate would result in millions to one billion plus being added to the bottom lines of a significant number of medium to large corporations. With such savings being just as likely to be diverted into bonuses paid to senior management or paid as dividends to shareholders as they are to being reinvested in a business.

Once more proving that tax cuts for industry, business and those individuals wealthy enough to incorporate their landholdings/investments, have what is essentially a neutral outcome for rest of the population.

Company tax cuts will hardly stir the water beneath those metaphorical boats belonging to ordinary workers.

Therefore this classic illustrative meme still stands under the Turnbull Coalition Government:

Image from Perry Street Palace

Something to remember when it comes time to vote in the next federal election.

* A company tax rate very few companies actually pay. A tax rate that an estimated 36% of more than 2,000 of the biggest corporations doing business in Australia ignore entirely given they unilaterally decided that under current taxation law and for accounting purposes they should pay no tax at all.

Senate Estimates delivers a wicket to Australian Labor Party

News Corp joins Turnbull Government in bashing welfare recipients yet again

A report released by the Federal Government's Australian Institute of Health and Welfare [AIHW] on 19 October 2017 states that welfare spending in 2016 reached 9.5 per cent of Australia's Gross Domestic Product (GDP) having been increasing on average by 0.09 per cent or est. $4 billion annually over the last ten financial years.

Some of this increase is inevitably due to population growth over the same period - between 2006 and 2016 the national population grew by 3.18 million people to reach a population total of 24.20 million.

However, the media suitably primed began to discuss welfare costs principally in terms of cash transfers to Centrelink clients.

But does such discussion take in the whole picture of welfare costs in this country? 

According to the Australian Taxation Office (ATO) there are a large number of concessions, offsets and rebates available to working and retired individuals, active businesses, family trusts and superannuation funds.

These can reduce the annual tax payable by an individual, business, trust or fund – sometimes as low as zero dollars.

Along with universal education and health services, Centrelink and Veterans’ Affairs pensions, benefits, and concessions; these ATO concessions, offsets and rebates are a form of government welfare.

So when the Murdoch media trumpet statistics like “Last year, more than 733,000 people received unemployment benefits, costing $10 billion” with est. 68 per cent of recipients moving off this payment within a year - remember that Australian Government tariff, budgetary assistance and tax concessions to primary, mining, manufacturing and services industries totalled $15.1 billion in 2015-16 and, based on past performance, an estimated 33 per cent of all businesses would probably have paid zero tax in that year.

Put simply, Australian Government welfare directed at industry cost taxpayers est. $41.3 million per day in 2015-16.

And when these same News Corp megaphones go on to state that “more than 100,000 jobseekers who were on the dole for at least five years had cost taxpayers $15 billion over the past decade” – readers might like to recall that the Australian Government spent in the vicinity of est. $96 billion on industry assistance in the six years commencing 2010-11 and ending 2015-16.

[Australian Government, Productivity Commission Annual Report Series, Trade & Assistance Review 2015-16]

If a similar level of government assistance were to continue for another four financial years then government welfare received by industry would reach est. $156 billion over ten years.

That's over ten times the quoted amount in welfare payments outlaid on the long term unemployed in a decade.

However, when the likes of Liberal Minister for Human Services Alan Tudge, Liberal Minister for Social Services Christian Porter, Liberal Senator Eric Abetz or One Nation Leader Pauline Hanson talk about the cost of government welfare programs they rather strangely neglect to look at the full range of federal government financial assistance across all sectors of the economy – preferring instead to target vulnerable groups of people with little ability to fight back against their distorted, punitive and highly politicised world views.