Why has Australian Treasurer & Liberal MP for Kooyong Josh Frydenberg morphed into a frenzied Trump?

“Ultimately, a dollar of tax avoided by high income Australians is an extra dollar of tax paid by all other Australians.” [Australian Labor Party (ALP) policy document Positive plan to help housing affordability]

The Australian Labor Party has put forward a number of policies which limit the degree to which affluent groups in our society can manipulate the tax system.

These tax reform policies will:

* limit negative gearing to investment properties already negatively geared and newly built residential housing. However net income losses on existing negatively geared properties will not be able to be used to offset salary & wage income;

* cease cash refunds for excess dividend imputation credits on which the investor personally paid no tax originally and who has no current tax liability to offset with these credits;

* reduce the discount on capital gains tax from 50 per cent to 25 per cent after the deduction for any capital losses. Some assets and events are exempt from capital gains tax. These include selling your principle home, personal car, personal use assets or selling an asset acquired before capital gains tax was introduced on 20 September 1985. 
According to the Australian Taxation Office if you are an individual rather than a corporation then the Capital Gains Tax Rate is the same as your Income Tax Rate in the applicable year.

These same policies have caused former Deutsche Bank director, current Australian Treasurer and Liberal MP for Kooyong Josh Frydenberg (left) to morph into a frenzied Trump. Pumping out slogans, misrepresentations and sometimes downright political lies on every media platform he can access.

The Australian, 5 December 2018, p.2:

Josh Frydenberg has launched a pre-election assault on Labor’s plan to halve the capital gains tax discount, warning that hundreds of thousands of Australians will be taxed at the “highest rates” in the Western world.

Shifting his focus from Bill Shorten’s proposal to limit negative gearing to new dwellings and the “retiree tax”, the Treasurer yesterday cited government analysis that showed Australians would be taxed up to 36.75 per cent on their capital gains under Labor’s policy, up from 23.5 per cent now….¹

Labor’s 50% increase to capital gains tax will cost jobs, punish those who work hard and save, and give Australia a CGT rate much higher than other advanced economies. pic.twitter.com/W4c3pgcgCt

— Josh Frydenberg (@JoshFrydenberg) January 4, 2019

.@JoshFrydenberg on Labor’s negative gearing: Everybody who owns equity in their home will be worse off under Labor’s policy.

This is a major tax grab by the Labor Party.

MORE: https://t.co/9fyClHfMTo #FirstEdition pic.twitter.com/H0H0WTtFV5

— Sky News Australia (@SkyNewsAust) November 6, 2018

So why is Frydenberg screaming misrepresentations at the top of his lungs, urged on by the Housing Industry Association?²

Could it be because 56.2 per cent of the tax benefits from Negative Gearing go to individuals whose incomes are in the top 20 per cent of Australian incomes and only 5.2 per cent of the tax benefits go to individuals in the lowest 20 per cent of incomes?

Or because est. 75 per cent of tax savings from Capital GainsTax discounts go to the top 10 per cent of high income families?

Perhaps it’s because Self-Managed Super Funds are a major beneficiary of cash refunds for excess dividend imputation credits, with 50 per cent of the benefit to SMSFs accruing to the top 10 per cent of SMSF balances and some funds receiving cash refunds of more than $2.5 million a year?

Likely he’s screaming because all three instances represent how successfully the affluent have gamed the tax system to date and he like most right-wing politicians see such tax manipulation as a right belonging to them and their mates and, therefore have no interest in supporting a fairer distribution of the tax burden.

He also appears to be ignoring the fact that Treasury modelling of these Labor policies shows an increase in federal government revenue by $2 billion over time and, that these same policies have the potential to put downward pressure on property prices in the short-term so that genuine first home buyers might get a foot in the door with more affordable residential housing.

Bottom line is that Labor’s tax reform policies are primarily targeted at investors with a marginal tax rate (including Medicare Levy) of over 45 per cent - which roughly equates with the top 20 per cent of Australian residents with private wealth.

That is, the 'professional' investors/tax avoiders amongst the 1.16 million Australians who according to Credit Suisse in 2017 are millionaires, some many, many times over.

Footnotes

1. KPMG, Demark- Taxation of investment income and capital gains: “Interest and rental income are taxable as investment (or capital) income with a marginal tax of 42 percent (2018).” Denmark's Capital Gains Tax Rate is higher than the worse case scenario of up to 36.75 per cent under Labor which Frydenberg postulates in Para 5 of this post. Therefore Labor would not be imposing "the highest" rates in the Western world'.

2. Australian Government, Treasury, Tax- Negative Gearing/Capital Gains, FOI, 5 January 2018.

    Shadow Treasurer Chris Bowen, A FAIRER TAX SYSTEM: DIVIDEND IMPUTATION REFORM, 13        

                      March 2018.

    Australian Taxation Office,  Individual Income Tax Rates 2018-2019 and CGT assets and exemptions
    National Australia Bank, Calculating and Paying Capital Gains Tax, 
     Domain.com.au, The ‘little known’ tax strategy some millennials use to amass large property portfolios,           23 May 2016.

* Photograph of Josh Frydenberg from msn.com

Australia In Decline: hearing nature's death rattle

The Guardian, 26 December 2018:

More than 50 Australian plant species are under threat of extinction within the next decade, according to a major study of the country’s threatened flora.

Just 12 of the most at-risk species were found to be listed as critically endangered under national environment laws – the Environment Protection and Biodiversity Conservation Act – and 13 had no national threatened listing at all.

The scientists behind the research, published in the Australian Journal of Botany this month, say the results point to a need for re-evaluation of Australia’s national lists for threatened plants.

It is the first major assessment of the status of Australia’s threatened flora in more than two decades.

Plants account for about 70% of Australia’s national threatened species list, with 1,318 varieties listed as either critically endangered, endangered or vulnerable. 

Among those on the list are acacia pharangites (wongan gully wattle), banksia vincentia, caladenia amoena (charming spider-orchid), caladenia busselliana (Bussell’s spider orchid), calochilus richiae (bald-tip beard orchid) and eremophila pinnatifida (dalwallinu eremophila).

The research team assessed species that met criteria for either a critical or endangered listing at national or state levels to track their rate of decline.

They did this by reviewing all available literature on the plants – including recovery plans, conservation advice and peer-reviewed research – and conducting interviews with 125 botanists, ecologists and land managers with expertise on particular geographic regions or species.

The study examined 1,135 species, including 81 that were unearthed through the interview process as being eligible for a critically endangered or endangered listing but did not have one.

It found 418 plants had continued declines in their population and a further 265 species had insufficient monitoring information available to determine their status.

The scientists concluded that 55 species were at high risk of extinction within the next 10 years, with fewer than 250 individual plants or only a single population remaining. They found just 12 of the most imperilled species were listed under the EPBC Act as critically endangered and 13 had no listing at all.

They said there were also 56 species of plants currently on the critically endangered list that they assessed as having no documented declines or that were stable or even increasing.

“This points to a clear need for re-evaluation and standardisation of current lists, and consistent application of IUCN listing guidelines,” the study states.

“There is also a need to collect systematic, repeatable field data for most of [the] species, to back up suspected and projected declines and provide a stronger basis for investment in recovery actions.”…..

USA 2019: crazy continues to be the order of the day

SPIN, 2 January 2019:

CREDIT: Chip Somodevilla/Getty Images

 President Trump delivered a harsh post-holiday awakening at his first cabinet meeting of 2019, holding forth for a nearly two-hour freestyle press conference in the presence of reporters.

In what amounted to a barely coherent filibuster, Trump dragged his former secretary of defense, chalked recent stock market turbulence up to a “glitch,”gave a shoutout to Kanye West, and mused that he might have made a good general himself. Most of the time, he sounded like a guy at a bus station arguing with pigeons. Behind him, ex-Fox News exec turned head of the White House press shop Bill Shine shifted uncomfortably in his chair.

In spite of his best efforts, Trump was nearly upstaged by a parody poster of himself as a Game of Thrones character with the text “Sanctions are coming.” The president initially shared the parody image on his Twitter feed in November, apparently signaling his intention to impose sanctions on Iran. On Wednesday afternoon, an actual, physical, movie-theater-sized version of the poster was laid out on the table in front of the president facing the press pool.

When the image first appeared in November, HBO issued a statement that they would “prefer our trademark not be misappropriated for political purposes.” An HBO rep told Spin the network has no additional comment.

Trump didn’t address why the poster was so prominently positioned, but he did extol the virtues of a Southern border wall while posing with appropriated imagery from a dragon soap opera that vehemently undermines that premise. “Walls work,” he told reporters. Trump is currently holding out for wall funding amid an ongoing government shutdown, leaving some 800,000 federal employees currently without pay.

TRUMP: "I had a meeting at the Pentagon with lots of generals. They were like from a movie. Better looking than Tom Cruise, & stronger. And I had more generals than I've ever seen, & we were at the bottom of this incredible room. I said, 'this is greatest room I've ever seen.'" pic.twitter.com/fTpgDXVso8

— Aaron Rupar (@atrupar) January 2, 2019

Australian Federal Election Campaign 2018-2019: And so the lying begins......

First cab off the rank with a monumental political lie is the Institute of Public Affairs, a Melbourne-based privately-funded, hard right, elitist and racist lobby group with close ties to the Liberal Party of Australia, dedicated to the denial of climate change, suppression of wage growth, abolition of unions and the dismantling of the universal welfare system along with around 71 other divisive policies.

Recruiting John Lloyd will be a boon for @TheIPA. There are more than 680,000 unemployed Australians and the IPA is their effective union. No one else in the public debate is prepared to stand up for people who are locked out of work. https://t.co/GzxqSd2PoK

— Simon Breheny (@Simon_Breheny) December 17, 2018

Anything less like a union for the unemployed it would be hard to imagine. 

Political Cartoon of the Week

Cathy Wilcox

Tweet of the Week

“I am the only person my child has,” the single mother of a five-year-old daughter said, “and she’s looking to me on Christmas morning to take the lead and I’m just sitting there with tears streaming down my face.” https://t.co/imnIYg9eBW #auspol #centrelink

— Luke Henriques-Gomes (@lukehgomes) December 28, 2018

Australian Home Affairs Minister Peter Dutton demonstrates his incompetence yet again

During the less than one term he served as Australian prime minister Liberal MP for Warringah Tony Abbott rushed through amendments to the Australian Citizenship Act 2007 in 2015.

Given that the Minister for Home Affairs and Liberal MP for Dickson Peter Dutton has used these amendments to strip Australian citizenship from twelve individuals, the most recent being the revocation of citizenship of a Melbourne-born man currently gaoled in Turkey which now leaves him stateless1 and, as the minister has referenced the Citizenship Loss Board in his decision making perhaps it is time to recall the sketchy details known about this board.

The Guardian, 22 July 2018:

The identity of officials on one of the most powerful government boards in Australia – which has the effective power to strip Australians of citizenship – has been revealed for the first time.

A freedom of information request by Guardian Australia for minutes of the Citizenship Loss Board’s first meeting in February shows the panel is made up of senior departmental secretaries from across government. The secretariat of the committee is Hamish Hansford, an assistant secretary of the immigration department. 

He previously served as the national manager of the intelligence branch of the Australian Crime Commission.

The department of the prime minister’s counter-terrorism co-ordinator, Greg Moriarty, is also on the board, as are Gary Quinlan, from the Department of Foreign Affairs and Trade, Katherine Jones, from the Attorney-General’s Department, and Christopher Dawson from the Australian Crime Commission.

The immigration department has by far has the largest number of representatives with five officers: Rachel Noble, Michael Manthorpe, Maria Fernandez, Michael Outram and Pip De Veau.

The Australian federal police and defence department’s members are unknown. Both declined to participate in the February meeting for undisclosed reasons.

The Australian Security Intelligence Service (Asis) and Australian Security Intelligence Organisation (Asio) each have a member. Neither officer is named, listed only as a “representative”.

The Citizenship Loss Board has the de facto power to strip dual nationals of their citizenship under the federal government’s legislation introduced last year.

Although the law was touted as an anti-terrorism tool, it left open the possibility that people who damaged commonwealth property or even national security whistleblowers could have their citizenship revoked. Legal experts have argued it could create a tier of second-class citizenship.

Although the Citizenship Loss Board appears to be the effective arbiter of this exceptional power, there is no reference to it in the legislation. None of its members are parliamentarians or members of the judiciary. It operates in a legal vacuum. Its recommendations go to the immigration minister with no clear legal mandate.

In theory the board does not have the express power to revoke citizenship. The laws were built to withstand judicial scrutiny, describing the key mechanism to remove citizenship as one of “revocation by conduct” – the argument is that if the law is “self-executing” this could head off judicial review.

The board’s official role is to consider cases where an individual’s behaviour meets the criteria to have citizenship revoked under the law.

This mechanism has been described by University of New South Wales dean of law George Williams as a “legal fiction”. He has previously outlined concerns about the board and the basis for its power. [my yellow highlighting]

Footnote

1. Eligibility requirements for Fijian citizenship which this individual does not currently meet.

http://www.immigration.gov.fj/travel-requirements/fiji-citizenship, retrieved 3 January 2018:

Citizenship by registration covers six categories of individuals:

The first category covers children born outside the Fiji islands on or after 10th April 2009 if at the date of the child’s birth either of the child's parents was a citizen – section 8(1) of the Citizenship of Fiji Decree 2009.

The second category covers children under 18 years of age of a foreign nationality that are adopted by Fiji Citizens – section 8 (2) of the Citizenship of Fiji Decree 2009.

The third category covers children who were under the age of 18 when either parent became a Fiji citizen – Section 8(3) of the Citizenship Decree 2009.

The fourth category covers persons who would have qualified under the previous three categories but they have reached the age of 18 years. These applicants cannot be granted citizenship unless they have been lawfully present in Fiji for a total of three (3) of the five (5) years immediately before the application – Section 8(5) of the Citizenship of Fiji Decree 2009.

The fifth category provides for former adult Fiji citizens who wish to regain their Fiji citizenship. With the introduction of the multiple citizenship policy former citizens wishing to regain their Fiji citizenship need NOT renounce their other citizenship – Section 8(6) of the Citizenship of Fiji Decree 2009.

The sixth category provides for spouses of Fiji citizens. Applicants must have been lawfully present in Fiji for a total period of three of the five years immediately before the application – Section 8(7) of the Citizenship of Fiji Decree 2009. (refer to below checklist for fees and other requirement).

Fijian Government position:

"Neil Prakash has not been or is a Fijian citizen. For a child of a Fiji citizen born overseas, the parent has to apply for citizenship for the child to become a Fiji citizen. The department has searched the immigration system and confirms that he has not entered the country nor applied for citizenship since birth." [Head of Fiji's Immigration Department, Nemani Vuniwaqa, quoted in ABC News, 2 January 2018]