Unions have committed to fighting tax policies that benefit corporations but ignore around 11 million low and middle income workers who face a significant increase to their cost of living under a GST increase.
The ACTU Executive yesterday passed a resolution to campaign strongly as part of the Build a Better Future campaign for a tax and revenue system that ensures everyone pays their share.
Current tax reform measures being pushed by business groups and the Federal Government focus on increasing the GST – under the guise of funding health, education and other critical social services – but are more likely to fund cuts to corporate tax rates and personal income tax rates which disproportionately benefit the wealthy.
While the Government has promised welfare recipients won’t be worse off there are around 11 million workers – some on wages as low as $35,000pa – who will see their cost of living skyrocket.
If the Government is as genuine about tackling the tax system as it says it is then the reform must include current corporate tax minimization methods.
By removing loopholes we could see Chevron’s proposed Gorgon project potentially deliver $35b to government revenue which is enough to cover the entire education budget.
Instead the Turnbull Government recently passed transparency measures allowing more than 700 private corporations to remain secretive about the amount of tax they pay despite one in five private companies with annual revenues of $100 million paying no tax.
Focusing on the GST only serves to tip the scales further, increasing inequality, raising living costs for the lowest paid and letting wealthy corporations and individuals pay much less than they should.
Examples of inequities in the tax system:
Chevron’s tax loophole: removing loopholes could see Chevron’s proposed Gorgon project potentially deliver $35b to government revenue.
ASX200 companies not paying enough company tax: If all the ASX200 companies paid the full rate of company tax, the Federal Budget could have more than $8.4 billion extra each year.
PRRT Tax revenue loss of $5B per year: If Petroleum Resource Rent Tax (PRRT) credits were collected now at the same rate as in 2003/04, the Government would have approximately $5 billion more in revenue each year.
High income earners not paying their fair share:
- In 2011/12, there were 75 Australians who earned more than $1 million and yet declared an average taxable income of only $1.09;
- Half of all negative gearing tax breaks go to the top 20% of income earners;
- Almost 75% of Capital Gains Tax breaks go to the top 10% of income earners;
- A third of Superannuation tax breaks go to the top 10% of income earners.
