Failure to curb tax concessions will put increasing burden on ordinary workers: Bowen


Michelle Grattan, University of Canberra

Shadow Treasurer Chris Bowen will target tax loopholes and concessions in a speech on Monday, arguing that the economic case for budget repair has never been stronger.

Countering government criticism of Labor’s proposed crackdown on concessions, Bowen will say an important part of sensible fiscal strategy is to identify tax concessions that “eat away at the revenue base” and reform or abolish them, so as “to underpin both budget repair and the funding of new initiatives”.

The opposition has announced moves that would hit negative gearing, capital gains discounts, and trusts.

Bowen says in his speech to the Per Capita think tank – released ahead of delivery – that failure to reform negative gearing and family trusts will put increasing tax pressure on low- and middle-income earners.

He says analysis by the Parliamentary Budget Office shows that for the middle income quintile, with people earning A$46,000, average tax rates are set to rise more strongly than for any other group.

“Every dollar not recouped through winding back these loopholes and concessions is another dollar that Australian workers will have to shoulder.”

Bowen says that instead of closing loopholes and strengthening the tax base, the government would prefer to increase income taxes by $44 billion, hitting all workers earning more than $21,000.

“At a time when wages are growing at record low rates this is a tax hit that will see someone earning $70,000 with $350 less in their pocket from next year.

“Meanwhile the tax base remains full of holes and tax concessions and other loopholes go unreformed,” he says.

“Using an infamous metaphor of the treasurer’s, the government has barely even taken a scalpel to tax concessions which largely accrue to wealthier Australians”.

Half of all the benefits of negative gearing accrue to the top 10% of income earners, as do 80% of the benefits of capital gains, and trusts are used as income-splitting tools by high-income earners, Bowen says.

Labor’s planned negative gearing reform would be good for the budget as well as for first home buyers, he says. By the end of decade Labor’s negative gearing and capital gains tax reforms would together be adding $8 billion annually to the budget.

Bowen attacks Treasurer Scott Morrison over the “ridiculous argument” that the company tax cuts are funded because they are in the budget.

“Simply ensuring that the budget bottom line reflects the cost of the tax cuts does not mean they are funded. The fact is that the budget would be $65 billion better off over the decade if the [company] tax cuts weren’t proceeded with.”

Bowen says Morrison undermines his own argument that Labor did not fund the NDIS. “Of course NDIS and the Gonski schools funded model were both reflected in Labor’s budgets. Putting aside the fact that Labor in government made other cuts and revenue decisions to fund both initiatives, even if we hadn’t, by the treasurer’s logic, they were funded because the budget bottom line reflected them.

“The treasurer has killed his own scare campaign on NDIS funding.”

This $65 billion tax cut “puts the medium term budget at risk”, Bowen says. At the end of the plan’s proposed ten years, the tax cut would be costing an annual $15 billion. “It is a fiscal ram-raid.”

So far the government has only been able to legislate the cut for firms with annual turnovers up to $50 million. The Senate has not agreed to the reduction for big companies. Labor has said it accepts the cut for firms with turnovers up to $2 million but has not announced yet what it would do about the legislated cut for firms with turnovers between $2 million and $50 million.

“Labor believes in strong fiscal policy and return to surplus and we are prepared to make the tough decisions to do it,” Bowen says.

“I believe in the return to surplus when conditions allow because locking in the AAA rating reduces borrowing costs and gives more room to fund important social initiatives.

“The progressive case for return to surplus also recognises that this would give me and future treasurers more room to move if we face another global downturn.

“The economic case for budget repair has simply never been stronger.”

Bowen says Labor’s policy work has been thorough and he promises “more detailed policy announcements” to come.

“We’ll continue to outline our plans from opposition, seeking a mandate and the moral authority in government to do big and important things.”

UPDATE

Malcolm Turnbull’s lead over Bill Shorten as better prime minister has narrowed to two points in Monday’s Newspoll in The Australian.

In mid-February Turnbull led 40-33% on this measure; now he is ahead by just 37-35%. In face of continuing bad polls, the Liberals have always taken heart that Turnbull does better than his opponent in the head-to-head comparison, so the tighter margin will inevitably be of concern to them.

The ConversationLabor’s 53-47% two-party lead is unchanged.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

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Unprecedented Christmas Gathering Held in Vietnam


With permission little and late, organizers work by faith to accommodate crowds.

HO CHI MINH CITY, December 14 (CDN) — On Friday evening (Dec. 11), history was made in communist Vietnam.

Christian sources reported that some 40,000 people gathered in a hastily constructed venue in Ho Chi Minh City to worship God, celebrate Christmas, and hear a gospel message – an event of unprecedented magnitude in Vietnam.

A popular Vietnamese Christian website and other reports indicated up to 8,000 people responded to the gospel message indicating a desire to follow Christ.

For the last two years, authorities surprisingly granted permission to unregistered house churches in Ho Chi Minh City to hold public Christmas rallies, and last year more than 10,000 people participated in one in Tao Dan Stadium.

This year visionary house church leaders approached the government in October and asked for a sports stadium seating 30,000; they were refused. Authorities offered a sports venue holding only 3,000, located 13 kilometers (eight miles) out of the city. This was unacceptable to the organizers. They pressed for another stadium in the city holding about 15,000, and officials gave them a verbal promise that they could have it.

The verbal promise did not translate into the written permission that is critical in the country – church leaders say such promises are empty until “we have the permission paper in our hand.” Christian leaders believed event planning had to proceed without permission and sent out invitations far and wide – only to have authorities deny the stadium they had promised.

Led by Pastor Ho Tan Khoa, chairman of a large fellowship of house church organizations, organizers were forced to look for alternatives. They found a large open field in the Go Vap district of the city. When permission was still not granted five days before the planned event, several church leaders literally camped for three days outside city hall, pressing for an answer.

Authorities, who often work to sabotage united action among Christians, tried urgently to find ways to talk the leaders out of going ahead, promising future concessions if they would cancel the event. Organizers stood firm. Ultimately they told the deputy mayor that refusal to grant permission at that point would have far-ranging, negative ramifications in Vietnam as well as internationally.

Finally, at the close of business on Dec. 9, just 48 hours before the scheduled event, officials granted permission that required clearance all the way to Hanoi. But the permission was only for 3,000 people, and many more had been invited.

Organizers had less than two days to turn a vacant field into something that would accommodate a stadium-size crowd. They had to bring in ample electricity, construct a giant stage, rent 20,000 chairs, and set up the sound and lighting. The extremely short time frame caused contractors to double the prices they would have charged with ample time.

Organizers also rented hundreds of busses to bring Christians and their non-Christian friends from provinces near the city. Thousands of students sacrificed classes to help with last-minute preparations and to join the celebration.

Just after noon on Friday (Dec. 11), word came that police had stopped busses carrying 300 Steing minority people from the west to the event scheduled for that day. Organizers, fearing all busses would be stopped, put out an emergency worldwide prayer request.

Christian sources said that authorities either did not or could not stop busses from other directions, and that by evening the venue became the biggest “bus station” in all of Vietnam. By 6 p.m. the venue was full to capacity, and at least 2,000 had to be turned away.

Christians described the event, entitled, “With Our Whole Hearts,” in superlative terms. For house churches, large gatherings are both very rare and very special, and for many this was their first glimpse of the strength of Vietnam’s growing Christian movement. Thousands of Christians joined a choir of more 1,000 singers in loud and joyful praise.

Sources said that the main speaker, the Rev. Duong Thanh Lam, head of the Assemblies of God house churches “preached with anointing” and people responding to his gospel invitation poured to the front of the stage “like a waterfall.” With space in front of the stage insufficient, the sources said, many others in their seats also indicated their desire to receive Christ.

Organizers along with many participants were overwhelmed with emotion and gratitude as the event closed. People spontaneously hugged each other and cried, “Lord, bring revival to all of Vietnam!” Other comments included, “Beyond our fondest imagination,” and, “Nothing could stop the hand of the Lord.”

The event raised more than 60 million dong (US$3,280) for a charity helping needy children. People were quite surprised to read a positive article on the event in the state-controlled press, which often vilifies Christians.

House churches in the north were hopeful that they could hold a similar event. Organizers in Hanoi have heard encouraging reports that they will get permission to use the national My Dinh sports stadium for a Christmas celebration, though they do not have it in hand. Sources said they have sent out invitations across a broad area to an event scheduled for Dec. 20.

Friday’s event also made history in that it was streamed live on the Vietnamese website www.hoithanh.com and viewed by thousands more in Vietnam and by Vietnamese people around the world.

Report from Compass Direct News