Australia quite rightly boasts that it was there at the genesis of the United Nations , but it is not a member in good standing

Australia quite rightly boasts that it was there at the genesis of the United Nations.

However, Australian government and society never quite evolved apace with this peak international intergovernmental body and our relationship has been strained for some time. Most notably during the years Australia was led by the Howard, Abbott, Turnbull and Morrison federal governments. 

The strain probably reached its zenith when Australian Prime Minister & Liberal MP for Cook, Scott John Morrison, blinded by his bromance with then US President Donald John Trump, decided to follow Trump's lead and characterise the United Nations as dysfunctional, in need of reform and further, referred to it as a body which "allowed anti-Semitism to seep into its deliberations – all under the language of human rights".

Since 2017 Australia has been the subject of numerous UN agency reports concerning its treatment of asylum seekers and refugees, the over-incarceration of Aboriginal and Torres Strait Islander people by the judicial system, failure to meet its obligations under the Convention of the Rights of the Child including those towards children in crisis or in detention and, its failure to meet its obligations under the Convention of the Rights of People With Disabilities including lack of full access to the justice system, lack of access to housing, forced institutionalisation and forced medical medical treatment.

This is not an exhaustive list of matters that have concerned the United Nations when it comes to Australian society.

These are the opening paragraphs of what Australia’s hard-right federal government told the latest United Nations General Assembly, Human Rights Council, Working Group on the Universal Periodic Review, Thirty-seventh session, held on 18–29 January 2021 :

1. Australia’s enduring commitment to protecting and promoting human rights is reflected in our strong domestic laws, policies and institutions and in our active international engagement and advocacy. Australia is proud of its contribution to the founding of the United Nations (UN) and the international human rights framework. Australia’s inaugural membership of the UN Human Rights Council (HRC) in 2018–20 reflects its continued commitment to this framework. Australia’s laws and institutions function to protect human rights and support robust public debate of human rights issues.

2. Since our second cycle Universal Periodic Review (UPR) in 2015, Australia has made significant achievements in the realisation of human rights. These include significant investments addressing family and domestic violence, human trafficking and modern slavery and the legalisation of same-sex marriage.

3. COVID-19 is presenting new challenges in the protection of human rights across Australia. However, our strong democratic institutions have ensured that our response carefully balances the right of everyone to the enjoyment of the highest attainable standard of physical and mental health with other rights, such as liberty of movement, which may need to be temporarily curtailed. Particular regard has been paid to the rights of people with unique vulnerabilities……

The Report of the Office of the United Nations High Commissioner for Human Rights, Summary of Stakeholders’ submissions on Australia told a rather different story. 

Of special interest are the following observations and recommendations:

4. AHRC [Australian Human Rights Commission] recommended ensuring that Australia’s international human rights obligations are comprehensively incorporated into law.

5. AHRC stated that the Government should reform federal anti-discrimination laws to ensure comprehensive protection and improve effectiveness. The Government should also set a timetable for achieving reform of the Constitution to remove capacity for racial discrimination.

6. Racial discrimination was present in society, particularly for Aboriginal and Torres Strait Islander peoples. AHRC was concerned about the increase in severe Islamophobic attacks, far-right extremism, and increased racism experienced by people of Asian background during the COVID-19 pandemic and cyber racism.

7. Age discrimination was a major barrier to the participation of old persons in the labour force. Older women were the fastest growing cohort of homeless in 2011–2016.

8. AHRC was concerned about involuntary surgery on people born with variations in sex characteristics, especially infants.

9. The Governments should abolish mandatory sentencing laws and expand the use of non-custodial measures where appropriate.

10. The Governments should raise the minimum age of criminal responsibility to at least 14 years, and prohibit the use of isolation and force as punishment in juvenile justice facilities.

11. National security laws and law enforcement powers on metadata retention and encryption, unjustifiably limited freedom of expression and privacy, especially for journalists and whistleblowers. Government should amend national security laws so that they do not unduly limit human rights, particularly freedom of expression and the right to privacy.

12. Some state and territory laws unduly restricted the right of peaceful assembly. Governments should ensure that all laws that regulate protest activity are consistent with the right of peaceful assembly.

13. AHRC recommended ensuring that restrictions enacted to combat the COVID-19 pandemic are proportionate and are removed as soon as the public emergency is over.

14. The main income support payment for unemployed Australians ‘JobSeeker Allowance’ was inadequate. AHRC expressed concerns at punitive welfare programs, notably the ‘ParentsNext’ ‘pre-employment’ program and compulsory income management schemes that disproportionately affected indigenous peoples. Government should ensure that JobSeeker Allowance payments provide recipients with an adequate standard of living, that Welfare support programs be reformed so they are not punitive, and that current models of income management be discontinued or redesigned as voluntary, opt-in schemes that are used as a ‘last resort’.

15. The Government should expand human rights education in all areas of the public sector, particularly for those working with children and in the administration of justice and places of detention, and incorporate human rights more fully in the national school curriculum.

16. The gender pay gap was 14 percent, contributing to the significant gap in retirement savings for women. Government should implement targeted strategies to close the gender pay gap and ensure women’s economic security later in life.

17. AHCR noted that domestic and family violence against women remained endemic. The Government should increase prevention and early intervention initiatives on domestic and family violence.

18. Rates of children in out-of-home care increased, with Indigenous children significantly over-represented. Governments should prioritise early intervention programs to prevent children entering child protection systems.

19. The National Disability Strategy 2010–2020 remained underfunded, with key commitments not achieved. There was limited progress in addressing the sterilisation of persons with disabilities without consent, and implementing a nationally consistent supported decision-making framework. Rates of labour force participation of persons with disabilities had not improved. Little progress were made in addressing the indefinite detention of persons with disabilities who were assessed as unfit to stand trial or not guilty by reason of mental impairment.

20. The Closing the Gap strategy aimed to ‘close the gap’ between Indigenous and nonIndigenous Australians across a range of life outcomes. In 2020, two of the seven targets-early childhood education and Year 12 attainment - were on track to be met by 2031. Other areas such as employment and school attendance had not seen improvements, and the life expectancy gap persisted.

21. AHRC recommended ensuring that immigration detention is justified, time limited, and subject to prompt and regular judicial oversight. Government should reduce numbers of people held in immigration detention to maintain safety during COVID-19 pandemic. Government should amend the Migration Act 1958 to prohibit placing children in immigration detention.

22. AHCR recommended conducting refugee status determination consistently with international obligations, and providing permanent protection for refugees and family sponsorship. Government should provide sufficient support to asylum seekers to ensure an adequate standard of living.

The Summary of Stakeholders' Submissions on Australia also noted:

63. JS1 explained that cashless debit and income management schemes expanded in recent years despite their discriminatory impact on indigenous peoples and single mothers, their restriction on individual decision making, and weak evidence of effectiveness. SHRL explained that the Community Development Program required welfare recipients in remote communities to undertake work or training in order to access social security payments, with indigenous peoples heavily overrepresented in the program and in financial penalties resulting from non-compliance, further plunging them into poverty. JS1 stated that Australia must replace compulsory cashless debit and income management schemes with voluntary models which are non-discriminatory in design and implementation.

The final United Nations Human Rights Council review report is yet to be published. Its findings are unlikely to overly complimentary, given on 20 January 2021 so many other member nations voiced their concerns about Australia's human rights record.

The truth about dividend imputation/franking credits that Morrison and Co are not telling you

“Example – low taxable income A self-funded retiree couple has a $3.2 million super balance, plus their own home, and $200,000 in Australian shares held outside super. Even after drawing $130,000 a year in superannuation income, and $15,000 a year in dividend income, they would report a combined taxable income of $15,000, and pay no income tax at all.” [Australian Labor Party, Fact Sheet, 2018]

In 1987 the Hawke Labor Government introduced legislation which changed taxation law regarding dividend imputation/franking dividends.

In order for tax on dividends not to be paid twice – once by the company issuing the dividends via underlying company tax on profits and once by the shareholding receiving those dividends – it introduced franking credits. Whereby the tax on dividends for which the shareholder has previously been liable was credited to them for use in a given financial year to offset all or part of their tax liability for that year*.

Any excess franking credits could not be used as there was no shareholder tax liability remaining to which these credits could be applied and, therefore no chance that any dividends were being taxed twice.

In 1997, 1999 and 2000 the Howard Coalition Government changed the rules on franked dividends until by July 2000 excess franking credits became fully refundable and a great many shareholders began to receive cash tax rebates from the Australian Taxation Office (ATO) for taxation that they had never personally paid.

Based on ATO 2014-15 figures people earning more than a million dollars a year received 17 per cent of franking credits and about half of all franking credits went to those who earn more than $180,000 a year. 

According to a study by the Australian Institute reported in 2015; the wealthiest 10 per cent of households – those earning disposable income of more than $207,000 – gain almost 75 per cent of the $10 billion in franking credits siphoned directly to them.

CommSec explains the franking credit system this way (retrieved 4 February 2019):

Dividends are paid out of profits which have already been subject to Australian company tax which is currently 30%. This means that shareholders receive a rebate for the tax paid by the company on profits distributed as dividends.

These dividends are described as being 'franked'. Franked dividends have a franking credit attached to them which represents the amount of tax the company has already paid. Franking credits are also known as imputation credits.

You are entitled to receive a credit for any tax the company has paid. If your top tax rate is less than the company's tax rate, the Australian Tax Office (ATO) will refund you the difference.

Case study: James receives a tax refund

James owns shares in a company. The company pays him a fully franked dividend of $700. His dividend statement says there is a franking credit of $300. This represents the tax the company has already paid. This means the dividend, before company tax was deducted, would have been $1,000 ($700 + $300).

Come tax time, James must declare $1,000 (the $700 dividend plus the $300 franking credit) in his taxable income. If his marginal tax rate was 15%, he would have paid $150 tax on the dividend. Because the company has already paid $300 in tax, James will receive a refund of the difference, which is $150.

If James was in a higher tax bracket he may not have been entitled to a refund of any of the franking credit, he may even have to pay additional tax. However, if he is a low [taxable] income earner, it is possible to be refunded the full amount of the franking credit…..

Refunding of excess imputation credits

The refund applies when your total imputation credits that are attached to your franked dividends paid exceeds your basic income tax liability for the year.

A cash amount can be refunded to you reflecting the amount of excess imputation credits, after applying them and any other tax offsets to which you are entitled to. This will in turn reduce your basic income tax liability to zero.

If you are required to lodge an income tax return, you can use it to claim a refund of excess imputation credits. If you are not required to lodge a tax return, the refund is available on application.

In other words, if “James” after deducting all other tax concessions available to him finds himself with zero tax liability then since July 2000 he has been able to claim a cash tax rebate from the ATO on tax he has never personally paid.

There are an estimated 1.1 million shareholders receiving this type of rebate on a tax they haven’t paid and they are currently costing the Australian Government well in excess of $5.9 billion each year. 

That’s billions of dollars that should rightly remain in Treasury to help cover the costs of things like national infrastructure, defence, health, education, aged care, pensions and other social services.

In 2017 the Labor Opposition announced that if it won government in 2019 it would return the franking credit rules to their original intent and no longer allow excess franking credits to be realised as ATO cash tax rebates – with the exception that shareholders who also receive a Veterans Affairs or Centrelink full or part age pension or an allowance would still receive a full cash tax rebate for their excess franking credits commencing July 2019.

Whenever Prime Minister Scott Morrison, Treasurer Josh Frydenberg or one of his other cabinet ministers and backbenchers like the MP for Goldstein Tim Wilson open their mouths on the subject of excess franking credits they are very careful not to let truth escape their lips - until such time as they get found out.

A case in point is Tim Wilson's financial interests. A subject which became sensitive once his irregular behaviour as Chairman of the Standing Committee on Economics'  
Inquiry into the implications of removing refundable franking credits became public knowledge.

This is a snapshot of a part of his financial interests. As a 50 per cent holder of equity in at least two investment/superannuation funds which may benefit from excess franking credits:

Register of Members Interests- 45th Parliament - Tim Wilson, excerpt February 2019

Tim Wilson is also an investor in funds run by Wilson Asset Management, a firm founded and chaired by Geoff Wilson with $3 billion in funds under management… Under an entry listed as a 'shareholding', Mr Wilson's register of parliamentary interests shows he and husband Ryan Bolger invested in a Wilson Asset-managed fund in May 2017 through the couple's self-managed superannuation fund. They invested in another Wilson Asset fund, WAM leaders, in December 2017.

It has been further reported in mainstream media that Chairman & Chief Investment Officer of Wilson Asset Management, Geoff Wilson, is in fact a relative of Tim Wilson and, that during one public hearing Geoff Wilson gave evidence before Tim Wilson as inquiry chairman and neither declared their personal or financial relationship. 

Indeed, Tim Wilson could now be considered ethically compromised  in his role as Chairman of the Standing Committee.

Australian Parliament, House of Representatives Practice 6th Edition

Wilson is a politician whose statements and opinions on excess franking credits cannot be trusted, heading a a parliamentary inquiry whose formal report and findings cannot be trusted.

So it is up to every voter to acquaint themselves with the facts. Make Internet search engines your friends between now and the May 2019 federal election if you want the facts on legislation and policy which is being debated in the media.

* Currently an individual's personal tax liability is calculated only on income above the first $18,200 which is exempt from taxation.