I don’t write much here anymore basically because I feel that my voice is just another of the many whispers lost in the rabble of overtly right-wing conservative shouting about neo-liberalistic idealism. What’s the point, right?
However, once in a while I get a bee under my bonnet. The current bee has been disturbed & set a-buzz by coverage on the ABC – that’s the AUSTRALIAN Broadcasting Corporation, myABC if you will – about this piece of legislation currently in the Senate. The Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018.
This legislation seeks, according to government propaganda, to create a fairer tax system for low to middle income wage earners. Lets be clearer. The changes are aimed at creating a more beneficial system for middle to high income tax payers. I’m not going to go into chapter and verse here about the complexities of the proposal. If you’re interested, and you should be, whether you fall into the category of “Wage Earner” or “Tax Payer” – yes, the difference is stark – then click on the link above, download and read through the explanatory memoranda and also, if you’re of a mind, the proposed amendment by Opposition Treasury Shadow, Chris Bowen.
Study both documents carefully, and you’ll soon come to realise that the rhetoric coming from Senator Cormann about addressing ‘Bracket Creep’, is nothing more than neo-liberal fiddling with taxation margins which will only serve to benefit upper-middle and high level ‘wage earners’ and especially the same category of ‘tax payers’. This is what every government within my memory, and doubtless every government since Federation, has done with our personal income tax system. Fiddle around with the edges of the tax margins. There are zero real benefits in this legislation for low-to-middle-income earners, or rather low-to-middle-income ‘wage earners’ specifically. The margins for those categories do not change, either immediately, or over the forward estimates period out to 2022. If you earn a taxable income of $37,000 now, you will pay the same level of taxation by 2022. If you earn a taxable income of $60,000 now, your taxation impost will reduce very, very slightly by 2022. If you earn $200,000 now, you will benefit greatly by 2022 and especially so if your income is derived via the auspices of distributions from trust vehicles administered by corporate entities.
Why am I making a pointed differential between those who earn via their labour and those who earn via trust distributions? Because only those – in my experience – who earn at the high end of the taxable income scale can afford the infrastructure and administration of trust vehicles. Of course, government rhetoric centres on these fiddling changes being beneficial as a means of combating ‘bracket creep’ which is inevitable as a result of wage growth. It should be noted that the vast majority of Australian wage earners – as opposed to ‘tax payers’ – have not seen any wage growth for more than 5 years. There is plenty of evidence to support this position as revealed recently by the Australian Bureau of Statistics. Wage growth is currently at an all-time low in this country. Unemployment, and under-employment, continues to increase leading to lower than anticipated consumer confidence, which in itself, feeds back into lower wage growth due to lower than expected consumer demand. Basic demand-supply market economics.
So, why am I bothering to point out the bleeding obvious? Because fiddling with tax margins is a typical government strategy aimed deliberately at the lower, less understanding echelons of society who don’t/can’t/won’t be interested in big picture socio-political manoeuvrings by governments in the lead-up to a general election. The legislation I’m pointing to is aimed at convincing what I might somewhat unkindly refer to as the “gullible” in the electorate, to believe that government is actually doing something about easing their taxation burden, when in fact only those who should be paying the most, will be those who benefit the most, and they already vote conservative. The business owners, not the businesses employees. This is just a part of government shoring up it’s voter base, and hopefully drawing in a few who will swallow the bait. Budgetary announcements of tax cuts are only ever designed as vote winners, nothing more. A jaundiced point of view? Probably, but then I’ve been around long enough to have seen these games played many, many times previously. The current government WILL go to an early election before the end of 2018. The signs are evident. Don’t be a “gullible”. Educate yourself. All the resources you could ever need already exist. Don’t place any faith in the neo-liberal ethos if you want to see this country move forward. This government is fiddling. Stop them before we all burn.