MYEFO reveals billions more in revenue, $9 billion in fresh election tax cuts


Peter Martin, The Conversation

Higher-than-expected company tax revenue and lower-than-expected spending have boosted the budget’s bottom line by A$15 billion over next four years, allowing it to forecast cumulative surpluses of A$30.4 billion, double what the budget predicted in May.

Modestly improved surpluses

The midyear budget update cuts the projected deficit for 2018-19 from a May estimate of A$14.5 billion to A$5.2 billion.

The surplus forecast for 2019-20 climbs from A$2.2 billion to A$4.1 billion. By 2021-22 the surplus is forecast to be A$19 billion, up from A$16.6 billion.



The surplus won’t reach the government’s long-term target of 1% of gross domestic product until 2025-26. And in projections out to 2028-29 it is not forecast to climb much above this target as the budget hits the Coalition’s self-imposed tax “speed limit” of 23.9% of GDP.



$9 billion in unannounced tax cuts

The budget boost would have been much bigger were it not for more than A$9 billion in “decisions taken but not announced”. Almost all of these are revenue decisions, presumably extra election tax cuts, worth A$2.5 billion to A$3.7 billion per year.

The budget papers say these are decisions taken since the May budget, and are either not for publication or haven’t yet been made public.




Read more:
More mirage than good management, MYEFO fails to hit its own targets


Treasurer Josh Frydenberg confirmed the government had taken decisions to do with tax, but said it would announce them at a time of its choosing rather than in the budget update.

It reserved the right to take other tax and spending decisions in the lead-up to the election. Some would be revealed in the 2019-20 budget, to be delivered in April rather than in May to allow an election in May.

Downgraded wage growth

Although the Treasury has revised up its estimates for revenue and revised down its estimates of unemployment, expecting the rate to fall to 5% by June 2019 and stay there, it has shaved 0.25 percentage points off its estimates for wage growth.

It now expects wages to grow by 2.5% in the year to June 2019 (down from 2.75%) and 3% in 2019-20 (down from 3.25%). In future years, it expects wage growth of 3.5%.



Addressing the downgrade, Mr Frydenberg said weaker-than-expected wage growth appeared to be part of a worldwide phenomenon, “not unique to us”.

Wage growth for the year to September was 2.3%, the highest since 2015. The statement said anecdotal evidence from Treasury’s business liaison program pointed to “skills shortages and wage pressures in some sectors of the economy, consistent with a tightening labour market”.

Weaker consumer spending, economic growth

Growth in consumer spending has also been revised down, from 2.75% in 2018-19 to 2.5%. It is expected to climb back to 3% in 2019-20.

The statement revises down the government’s forecast of economic growth in 2018-19 from 3% to 2.75%, in part because of the Queensland drought, but predicts growth of 3% in 2019-20, 2020-21 and 2021-22, a touch higher than the Treasury’s estimate of long-term sustainable growth.

The Treasury is expecting economic growth to weaken in China and the United States, slipping from 6.5% in China to 6% in 2019 and 2020, and from 2.75% in the US to 2.25 and then 2%.

But debt has peaked and is headed down

The update shows that net debt has already peaked as a proportion of GDP and will fall faster than previously expected, in line with higher surpluses, sliding from 18.2% of GDP to 1.5% over the decade to 2028-29.



Government receipts are expected to climb from 24.9% of GDP to 25.5% by 2021-22. Payments are expected to fall from 24.9% of GDP to 24.6%.

Mr Frydenberg said the Coalition had kept average real spending growth at 1.9% per year, well below Labor’s 4% over six years which included the global financial crisis.



Finance Minister Mathias Cormann said recurrent spending had fallen below recurrent revenue for the first time in more than a decade.

Recurrent spending excludes spending on long-term investments in things such as road and rail infrastructure.

He said all new spending since the May budget had been offset by spending cuts elsewhere.

No firm commitment on fiscal discipline

Asked whether he felt bound by a commitment in the budget papers to bank rather than spend improvements to the budget’s bottom line due to changes in the economy, Cormann said it was “a matter of balancing priorities”.

The imperative to cut tax to keep it below the government’s self-imposed speed limit might conflict with the commitment to devote extra tax takings to improving the bottom line.




Read more:
Monday’s MYEFO will look good, but it will set the budget up for awful trouble down the track


The Conversation


Peter Martin, Editor, Business and Economy, The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

States want the GST guarantee set in legislative stone


Michelle Grattan, University of Canberra

The government hoped to have the pressure on Labor over planned legislation for a new GST carve up but instead it has found itself on the back foot.

At a meeting of state and territory treasurers on Wednesday, there was a general demand across the political spectrum for the legislation to include a guarantee that no jurisdiction will be worse off.

NSW Liberal Treasurer Dominic Perrottet said after the meeting that “all states and territories put forward the strong view” the bill must include this.

“Unfortunately the Commonwealth indicated it would proceed with legislation without that guarantee,” he said.

He said that under the federal government proposal “there are a number of scenarios where NSW would lose substantial funding.

“That is not an acceptable outcome,” Perrottet said.

“In the weeks ahead I will be making every effort to ensure any Commonwealth legislation includes the guarantee the Prime Minister and the Treasurer have previously given – that our state will not be worse off.”

Federal Treasurer Josh Frydenberg said the legislation would be introduced in the next parliamentary sitting week. He reaffirmed that, “based on the Productivity Commission’s data”, the deal “will make every state and territory better off. This will guarantee an extra $9 billion in funding over the next 10 years”.

Frydenberg said the government was not including the guarantee in the legislation because “we don’t want to run two sets of books … the old system and the new system.”

If the government does not give way beforehand, the issue of the guarantee will likely become one for the Senate.

The new distribution for GST revenue is driven by the need to give Western Australia a fairer share. To win the support of the other jurisdictions the government announced the $9 billion in extra funding, to make for winners all round. But the states are concerned that if the guarantee is not in the legislation, unforeseen circumstances could arise that might disadvantage them.

Anxious to bed down the new GST arrangement without the need to get agreement from all jurisdictions, the government resorted to the unusual course of legislation – only to then run into Wednesday’s problems.

Victorian Labor Treasurer, Tim Pallas said the lobbying would continue to have the guarantee “enshrined in legislation”.

Queensland Labor Treasurer, Jackie Trad said that without the legal guarantee there was a “real risk” some jurisdictions could be worse off in certain circumstances. “We cannot prepare or forecast or model every single scenario.”

The South Australian and Tasmanian Liberal treasurers also declared they wanted legislated protection.

Shadow treasurer Chris Bowen said: “It’s a particularly special day when Josh Frydenberg offers an additional $9 billion in GST top up payments and still manages to get every state and territory Treasurer united against him.”

Bowen said Morrison promised when treasurer that no state would be worse off under the changes. “But he’s been called out this week for the government’s legislation failing to match this guarantee”.

Labor’s position is that it supports legislating the new distribution but wants the guarantee included. Morrison has been challenging Bill Shorten to back the legislation.

While there was a fight over the GST distribution legislation, there was unity over removing the GST on tampons from the start of 2019, ending a battle that began when the tax was introduced.The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why the government will be sending more GST funding to Western Australia


John Freebairn, University of Melbourne

If the Commonwealth government’s proposed reforms for the distribution of the GST revenue between the States and Territories is implemented, about a billion dollars a year of additional commonwealth funds will be spent to ensure “no state will be worse off”. But where the extra funds will come from is left to the imagination.

A key aim of the reform is to reduce the wild swings in how much states receive from GST collected. The Productivity Commission had recommended GST be apportioned using an average of the states ability to provide services (known as “fiscal capacity”), but the government has decided to use Victoria and New South Wales as the benchmark.

Given both the current allocation and the proposed reform are instruments for meeting equity and efficiency objectives, the unknown loser is who pays for the additional commonwealth funding.




Read more:
Explainer: COAG and the ‘GST carve-up’


GST is collected by the Commonwealth and then redistributed. The share of the GST given to each state is designed to meet the objective that “each of Australia’s States has the same fiscal capacity, under average policies, to provide general government infrastructure and services.”

The government’s proposed reform claims not to reduce the revenue provided to each state. However, it will change the relative shares of the larger sum to be allocated to the different states.

Vital state revenue

State and Territory governments depend on transfers from the Commonwealth government for about half of their revenue.

About half of this is special payments for things such as education, health, housing and infrastructure. The other half is the GST, and these funds are free for the states to spend as they desire.

How much each state receives is determined so that if each state applied similar state-based taxes, the revenue from state taxes plus their GST share would fund similar levels of state government services to its citizens – fiscal capacity.

Those states that have a greater ability to raise taxes (say they have a large mining industry) or can provide services more cheaply (due to a smaller remote and elderly population) receive less than an “equal” per capita share of the GST.

Currently, NSW, Victoria and Western Australia receive less than an equal per capita share of GST.

By contrast, states who can raise less revenue, or have a higher cost of providing services, receive more than an equal per capita share.

South Australia, Tasmania and the Northern Territory are all currently net recipients of GST – they receive more than they pay in.

Changing the distribution

Giving some states more and others less than an equal per person share of GST is done for both equity and economic efficiency. For equity, the idea is that citizens in similar incomes, demographic and other circumstances should enjoy similar levels of state government services regardless of where they live.

For efficiency, the distribution aims to neutralise the need for different state tax rates; if the states are to fund similar levels of services, particularly on mobile labour and capital.




Read more:
FactCheck: is the GST as efficient but less equitable than income tax?


Up until the mining boom the current distribution of GST revenue among the states was generally accepted.

But the large increase in mineral royalties, and especially iron ore in WA, resulted in WA shifting from being a net recipient to receiving only a third of a per capita share in 2017-18, many years after the end of the mining boom.

The data used to determine the allocation of GST lags, meaning the 2017-18 allocation is based on average 2012-13 through 2015-16 data.

Western Australia, and more recently the Northern Territory, have been vigorous critics of their smaller share, and at the same time South Australia has vigorously argued they retain at least their current share. After all, resolving these conflicting political claims is a zero-sum game!

Introducing a benchmark

In order to deal with wild swings, such as that introduced by the mining boom, the Productivity Commission (PC) considered several reform options.

A key proposal was to replace the current model of bringing all states up to the fiscally strongest state with a more stable benchmark.

The preferred benchmark proposed in the draft report was the second highest state. The final report recommended an average across the states. The commission assumed a larger share for one state would mean a smaller share for other states.

But the federal government’s proposal includes additional funds to top up the GST.

The federal government’s interim response to the PC final report has a few more differences to the PC’s recommendation.

The benchmark for allocation will be the fiscal capacity of NSW or VIC, whichever is the largest. This will provide stability for major structural and cyclical economic shocks, and a high level of fiscal capacity for state government services.

A “floor” will also be established at 0.7 to 0.75 of the benchmark, creating a safety net.




Read more:
WA’s economic mismanagement is not a reason to review how the GST is carved up


The recommended reforms for distribution of the GST revenue between the states by both the PC and the commonwealth government seek to reduce volatility of the shares while roughly maintaining previously accepted principles of equity and efficiency.

The ConversationFor the additional revenue cost, the commonwealth government argues no state will be worse off.

John Freebairn, Professor, Department of Economics, University of Melbourne

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

Turnbull government says no losers in its new GST carve-up plan


Michelle Grattan, University of Canberra

The federal government promises to subsidise the transition to a new formula for carving up the GST revenue, after rejecting an alternative proposed by the Productivity Commission inquiry it ordered.

The government’s plan, to be released by Treasurer Scott Morrison on Thursday, would ensure the fiscal capacity of all states and territories was “at least the equal of NSW or Victoria, whichever is higher”.

“Benchmarking all states and territories to the economies of the two largest states will remove the effects of extreme circumstances, like the mining boom, from Australia’s GST distribution system,” Morrison said.

A “floor” would also be set, below which no state could fall. From 2022-23, this would be 70 cents per person per dollar of the GST, rising to 75 cents from 2024-25.

The changes follow years of complaint by Western Australia, after its share of the GST revenue fell drastically. The GST has threatened to be a federal election issue in WA, where the Liberals have several vulnerable seats.

In its report, commissioned by Morrison last year, the PC recommended distribution being equalised on an average of all states and territories. But Morrison said the PC’s model would move too far from the “fair go” principle – it would risk leaving behind the smaller states.

As well, it would cause “unnecessary disruption and transition costs that most states, and the Commonwealth, would not be able to reasonably accept or absorb”, he said in a statement.

The PC report was sent to the states and territories on Wednesday. When details started leaking late Wednesday Malcolm Turnbull quickly declared its proposed model had been rejected. He told a news conference that under the government’s plan “no state will be worse off and indeed every state will be better off”.

The transition to the new system would be over eight years from 2019-20, eased by funds from the federal government.

Short term untied funding would be given over three years from 2019-20 to ensure no state received less than 70 cents per person per GST dollar.

Also, Morrison said, “a fair and sustainable transition to a new equalisation standard will be ensured through an additional, direct, and permanent Commonwealth boost to the pool of funds to be distributed among the states”.

The Commonwealth would put in $600 million in 2021-22, with a second injection of $250 million in 2024-25. The additional Commonwealth funding would be indexed.

Morrison will go on a road show to sell the plan to the states, with a special meeting of the Council on Federal Financial Relations to be held in September.

The government is aiming for agreement on transition arrangements being reached by the end of the year.

Morrison said: “This will be the first time real changes have been made to fix problems in how the GST is shared since the GST was introduced almost 20 years ago”.

In its report, the PC said the current approach to horizontal fiscal equalisation (HFE), though having strengths, “also has significant weaknesses. Reform and development opportunities are likely being missed at the expense of community wellbeing over time”.

While equity should remain at the system’s heart, “there is a need for a better balance between equity and efficiency”. The Commonwealth should set a revised objective for HFE “to provide states with the fiscal capacity to deliver a reasonable standard of services,” the PC said.

The present system “seeks to give all states the same fiscal capacity to deliver public services. To do this, all states are brought up to the fiscal capacity of the fiscally strongest state”.

Correction

The ConversationThe original story has been corrected – it wrongly said that state consent was needed for the change. Morrison told a news conference on Thursday he wanted state and territory agreement, but it is not formally required.

Michelle Grattan, Professorial Fellow, University of Canberra

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

Chevron is just the start: modelling shows how many billions in revenue the government is missing out on


Roman Lanis, University of Technology Sydney; Brett Govendir, University of Technology Sydney, and Ross McClure, University of Technology Sydney

The federal government could collect billions more in royalties and tax revenue if it changed the rules on debt loading and adopted alternative royalty schemes in dealing with oil and gas giants, new modelling shows. The Conversation

Our modelling, funded by lobby group GetUp, found that over the four-year period from 2012 to 2015, Chevron’s average effective interest rate was 6.4%. However, it has been steadily reducing from 7.8% in 2012 to 5.7% in 2015.

We estimated that if Australia adopted a similar approach to Hong Kong to eliminate debt loading abuse, United States oil and gas giant Chevron would have been denied A$6.27 billion in interest deductions, potentially increasing tax revenues by A$1.89 billion over the four-year period (2012-2015).

The issue of debt loading abuse was highlighted last week when the full bench of the Federal Court dismissed unanimously Chevron’s appeal against the Australian Taxation Office (ATO), ordering the company to pay more than A$300 million.

Chevron Australia was using debt loading, where, compared its equity, it borrowed a large amount of debt at a high interest rate from its US subsidiary (which borrows at much lower rates). It did this in order to shift profits from high to low tax jurisdictions.

Based on Australia’s existing “thin capitalisation” rules, there is a maximum allowable debt that interest deductions can be claimed on, in a company’s tax return. Companies can exceed this debt but the interest charges must be at “arm’s length” – at commercial rates.

Chevron’s size and financial strength allow it to negotiate very competitive (low) rates on its external borrowings and this was the main issue in the Federal Court case. As the court has now ruled on what constitutes a reasonable interest rate for inter-company loans, this benchmark will likely be adopted by the ATO.

It can now approach and enforce this benchmark in similar disputes with confidence that companies engaged in debt loading will want to settle rather than engage in a costly court battle.

What the government could save from addressing debt loading

Chevron’s tax avoidance measures meant the interest rate, adjusted for maximum allowable debt, varied only slightly from their effective rate. Our modelling showed that if the ATO had applied the thin capitalisation rules to Chevron’s accounts each year over the four-year period, it would’ve reduced Chevron’s interest deduction by A$461 million and potentially generate an additional tax liability of A$138 million.

We modelled a scenario where Chevron Australia’s interest deductions were limited to the group’s external interest rate, applied to its level of debt. This would have reduced in the interest deduction by A$4.8 billion over the four year period, potentially generating A$1.4 billion in additional tax revenue.

We also worked out what would happen if Australia applied the debt loading rules Hong Kong does currently. Hong Kong disallows all deductions for related-party interest payments, making abuse of the system difficult. According to the latest ATO submission to the Senate tax inquiry, investment in the extraction of Australian oil and gas is almost entirely in the form of related-party loans.

Chevron Australia’s debt is entirely made up of related-party loans. If the Hong Kong solution was operating in Australia, we found that Chevron would have been denied A$6.275 billion in interest deductions, potentially increasing tax revenues by A$1.89 billion over the four-year period.

We also looked at ExxonMobil Australia, which also has high amounts of related-party debt (98.5%), and the Hong Kong solution would have denied ExxonMobil A$2.7 billion in interest deductions, potentially increasing tax revenue by more than A$800 million for the same period.

Changing the PRRT for more revenue

Our report also includes an analysis of the potential for additional revenue from replacing the Petroleum Resource Rent Tax (PRRT) with resource rent systems used in the US and Canada. Oil and gas sales have increased from an average of A$5.96 billion per year between 1988 and 1991, to an annual average of A$33.3 billion between 2012 and 2015, indicating the huge growth in this sector.

We modelled what would happen if the US and the Alberta, Canada, royalty schemes were applied to Australian production volumes and realised prices, to compare returns to those achieved by the PRRT.

The US royalty scheme charges a flat percentage royalty on production volumes, priced at the well-head. The royalty rate was progressively increased in the US from 12.5% to 18.75% between 2006 and 2008.

Based on the data from Australian production volumes and realised sales prices, the US royalty scheme could have potentially raised an additional A$5.9 billion in revenue for Australia since 1988, or A$212 million per year.

However, over the period from 2010 to 2015, the additional revenues would have been almost A$2.5 billion per year. This is because of both the decline in the PRRT revenues, relative to price and volumes, and the increase in the royalty rate in the US.

However, while the US scheme would raise more than the PRRT, the Alberta royalty scheme would raise substantially more revenue than both of these schemes. The Alberta scheme is progressive in nature, meaning the royalty rate increases with the realised price, similar to income levels and personal income tax rates.

The Alberta scheme has been amended many times and the current scheme only started in January 2017, so the full effects of this scheme will not be evident for some time. However, based on the data from Australian production volumes and realised sales prices, we calculate the Alberta royalty scheme would have raised an additional A$103 billion in revenue since 1988, or an additional A$3.7 billion per year.

As the scheme was only implemented this year, these results may be unrealistic, but are indicative of the level of revenue that could be raised. Over the period from 2010 to 2015, the additional revenue would have been A$11.3 billion per year.

The modelling done for our report considers just two multinational corporations, their use of debt loading and the PRRT. Now we can can hope for more revenue collection from many of the multinationals operating in Australia, as a result of the recent Federal Court ruling.

Critically, too often corporations are able to work within Australia’s tax rules to avoid paying for operating here, by constantly arguing they can’t develop business in Australia unless there are tax breaks. Our modelling demonstrates governments need to ensure corporations benefiting from the use of Australia’s resources are contributing the same as they do in other jurisdictions.

Roman Lanis, Associate Professor, Accounting, University of Technology Sydney; Brett Govendir, Lecturer, University of Technology Sydney, and Ross McClure, PhD Candidate, casual academic, University of Technology Sydney

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

Australian Politics: 16 July 2013


Today in Australian politics there was a stoush over butlers and pillows between the Queensland Premier Campbell Newman and Kevin Rudd. It all seems a bit too much Campbell (he started it), trying to deflect attention from his own pay rise issues I’d suggest.

For more visit:
http://www.dailytelegraph.com.au/news/breaking-news/rudd-has-a-cushion-carrier-qld-premier/story-fni0xqi3-1226680183388

Kevin Rudd also announced the end of the carbon tax and a move towards an emissions trading scheme from July 1, 2014. Measures to cover the lost revenue were also announced.


Suspected Drug Traffickers Kidnap Pastor


Michoacan state church leader abducted during Sunday service.

MEXICO CITY, April 15 (CDN) — Some 500 worshippers were gathered for last Sunday’s (April 10) worship service at the Christian Center El Shaddai in the Mexican city of Lázaro Cárdenas, Michoacan at about 8:15 a.m. when four masked men burst in firing machine guns into the air.

Before the frightened believers realized what was happening, their pastor, Josué Ramírez Santiago, had been whisked away. Divergent press reports indicated the kidnappers, suspected drug traffickers active in the state, were about 10 in number.

The following day, the pastor’s family received news that the criminals wanted a ransom of 20 million pesos (US$1.7 million). Even if the family could raise such an immense sum – considered doubtful – payment would not guarantee that the victim would be returned alive.

Arturo Farela, director of the National Fraternity of Evangelical Churches, has asserted that organized crime syndicates and drug cartels have targeted Christians because they view churches as revenue centers and because churches support programs for the rehabilitation of drug addicts and alcoholics.

“The majority of rehabilitation centers that have been attacked by organized crime in Ciudad Juarez, Tijuana, Tepic and other places belong to the evangelical community,” Farela said in a declaration regarding the kidnapping of Ramirez. “Furthermore, some 100 Mexican or foreign pastors who lived in Ciudad Juarez have had to abandon the city because of the threats and demands for money. And of course many pastors and their families have been victims of extortion, threats, kidnapping and homicide.”

Farela has stated that 100 Mexican clergymen have been kidnapped in recent years, with 15 of them losing their lives to organized crime. Asked if Compass could review his records of these crimes, Farela said he was not authorized to permit it.

In numerous other cases, children of pastors have been kidnapped, including one from Matehuala, San Luis Potosi, who has not been heard from for some six months. The college-age daughter of a prominent pastor in Mexico City was held by kidnappers for a week but was released when the criminals grew tired of the father’s prayers every time they telephoned him; the family has not revealed whether money was given for her return.

Michoacan, the state where the most recent abduction took place, has been a center of much criminal activity and also of severe reprisals by elements of the Mexican army. The state where President Felipe Calderon was born, Michoacan was the first to implement an anti-drug military operation that expanded to northern and eastern states.

In spite of the operation, more than 34,600 people nationwide have reportedly been assassinated since it was implemented in December 2006, with most of those crimes tied to drug traffickers “settling accounts.”

Report from Compass Direct News
http://www.compassdirect.org

Two Churches Come under Attack from Islamists


One community in Punjab Province faces threat from grenade, another from bulldozer.

SARGODHA, Pakistan, July 13 (CDN) — Christian communities in two areas came under attack in Punjab Province earlier this month.

In Sargodha, an unidentified motorcyclist on July 1 tossed a grenade in front of the gates of St. Filian’s Church of Pakistan, next to a small Christian-owned amusement park where children were playing, Christian sources said.

One of the owners of the playground, Shehzad Masih, said the hand-made grenade was thrown just before 9 p.m., when hot summer weather had cooled and the park was crammed with parents and their children. It did not explode.

Masih said children told him that after throwing the grenade, the motorcyclist sped away, disappearing into the traffic of University Road in Sargodha, a major street where government offices are located. Masih said police confirmed that it was an explosive device that did not go off.

The Rev. Pervez Iqbal of St. Filian’s said the Bomb Disposal Squad and New Satellite Town police took the grenade away. High-ranking police officials cordoned off the area, declaring a “High Red Alert” in Sargodha, he added. He and Masih said the whole area was evacuated.

“By the grace of God, that hand grenade did not go off, and there was no loss of life or property despite the fact that the alleged militant made his best efforts to throw it close to the entrance of the church, possibly inside the church,” Iqbal said.

A retired member of the army who now serves as a clergyman told Compass that a standard hand grenade normally has eight ounces of explosive material capable of killing within 30 to 50 yards.

“Nowadays Muslim militants are able to make their own hand-made grenades,” he said on condition of anonymity, adding that the explosive content in the undetonated grenade has not been revealed.

Area Christians said the attempted attack comes after many Christian clergymen and heads of Christian organizations received threatening letters from Islamic militants.

In spite of the incident, the following Sunday service took place at its usual time.

Iqbal told Compass that police have taken no special measures to protect the church building since the attempted attack, though a police patrol vehicle is stationed outside the church gate.

“This is the only measure taken by the police to beef up security at the church,” he said.

 

Bulldozer

At a small village near Sheikhupura, Punjab Province, a church building and Christian homes came under threat of demolition on July 5. Islamic extremists issued threats as, accompanied by local police, they intended to demolish the Apostolic Church Pakistan structure in Lahorianwali, Narang Mandi, with a bulldozer, area Christians said.

Assistant Sub-Inspector Rana Rauf led Narang Mandi police and the extremists in an attempted demolition that was averted with the intervention of Christian leaders who called in district police.

The attempted assault followed the arrest on July 1 of local influential Muslim Muhammad Zulfiqar, who had forcibly stopped renovation of a church wall on that day; he was released the same day.

“Rana Rauf disdainfully used derogatory remarks against Christians, calling them ‘Gadha [donkey],’ and said they go astray unless a whip is used to beat them and show them the straight path,” said Yousaf Masih, a Christian who also had been arrested and released on July 1, when Rauf, Zulfiqar and the extremists stopped the renovation work.

Another area Christian, Zulfiqar Gill, told Compass that the Islamic extremists threatened the Christians in the July 5 incident.

“They said that if we ever tried to rebuild the walls or renovate the frail Apostolic Church building, they would create a scene here like Gojra,” said Gill. On Aug. 1, 2009, Islamic assailants acting on a false rumor of blaspheming the Quran and whipped into frenzy by local imams attacked a Christian colony in Gojra, burning at least seven Christians to death, injuring 19 others, looting more than 100 houses and setting fire to 50 of them. The dead included women and children.

Khalid Gill of the Christian Lawyers’ Foundation said Zulfiqar has tried to illegally obtain the church property and attacked the structure twice previously in the past two years. Younas Masih said Zulfiqar demolished one of the church walls on Oct. 8, 2008, and local Christian Akber Masih said Zulfiqar set aflame the tents and decorations of a Christmas Service at the Apostolic Church Pakistan in 2009.

In each case, Christians filed charges against Zulfiqar, but because of his wealth and influence he was never arrested, area Christians said.

A Deputy District Officer Revenue report states that Zulfiqar has illegally occupied land and wishes to seize the church property and the house of an assistant pastor. Zulfiqar has already demolished the house of the assistant pastor, Waris Masih, according to the report.

Lahorianwali is a predominantly Islamic village of more than 350 Muslim families and only 36 Christian families, sources said.

Report from Compass Direct News

Recent Incidents of Persecution


Punjab, India, March 1 (CDN) — Hindu extremists from the Bajrang Dal and Shiv Sena on Feb. 20 beat Christians and vandalized two churches in Batala after a protest against an objectionable picture of Christ. Christians had noticed the picture posted as part of a composite poster for an upcoming Hindu festival, Ram Naumi. The poster contained pictures of other religious deities as they normally appear, while Jesus was portrayed with a cigarette and a beer, reported the Evangelical Fellowship of India. In response to the Christian protest, the Hindu extremists went on a rampage, beating the pastor of the Church of North India and a Salvation Army officer and burning and looting the two churches. With church leaders’ pressure, police registered a case against Hindu extremists Pratap Singh and Raj Kumar, who were said to have put up the picture of Jesus, for a “malicious act intended to outrage religious feelings of others” and “punishment of criminal conspiracy.”

Orissa – Police on Feb. 20 arrested the Rev. Anant Prasad Samantray after Hindu extremists filed a complaint against him of making derogatory remarks against Hinduism in Bhabanipatna, Kalahandi district. Having obtained written permission from local police, Samantray, a former Hindu priest, spoke at a revival meeting of his journey to becoming a Christian pastor, remarking that “Jesus is the only way, the truth and the life,” a local source told Compass. After hearing his speech, some Hindu hardliners dragged him to a police station and filed a complaint against him of speaking ill against Hinduism. Officers arrested the Christian for “malicious acts to outrage religious feelings of others” and “uttering words to wounds religious feelings.”

Karnataka – Hindu extremists from the Bajrang Dal and the Rashtriya Swayamsevak Sangh on Feb. 15 attacked Christians in Gokalam, Mysore. A source told Compass that Hindu extremists attacked church members of Shekinah Assembly of God Church because of their faith. Running from one house to another, the extremists beat the Christians in their homes, took Bibles and Christian literature and burned them. A Christian identified only as Shivmurthy sustained serious head injuries, lost four teeth and underwent an operation on his right ear. Jaylaxmi Puram police refused to register a complaint filed by the Christians, who left the area out of fear of further attacks; at press time 22 families had taken refuge among Christians in a neighboring area. 

Karnataka – Hindu extremists on Feb. 14 stopped the inaugural service of Native Village Vision Church’s new building and accused Christians of forceful conversion in Mysore. The Global Council of Indian Christians (GCIC) reported that at about 5 p.m. a mob of intolerant Hindu radicals barged into the inaugural service of the new church building, verbally abused the Christians and accused them of forceful conversion. The extremists filed a complaint against the Christians of forceful conversion at the Beechanahalli police station. Officers told the Christians to cease future worship, though GCIC reported that Pastor N.S. Suresh had obtained permission from the village head to construct a church building and had produced required legal documents. Nevertheless, revenue officials locked up the church building on Feb. 15. At press time area Christian leaders were meeting with authorities to resolve the matter. 

Karnataka – Hindu extremists from the Rakshana Vedike, affiliated with the Rashtriya Swayamsevak Sangh, on Feb. 8 attacked a pastor identified only as Timothy G. and two Bible students in Bangalore. An Evangelical Fellowship of India representative reported that the extremists attacked the Christians, who belong to Lord Living Hope Church, as they made their way home after visiting a sick Christian in the area. The extremists verbally insulted them and manhandled them, shoving them and threatening to do more harm if they continued Christian activity in the area. The Christians reported the matter to the police and continued to conduct worship meetings in the area. 

Orissa – Hindu extremists on Feb. 7 attempted to rape a refugee at Mondakai Camp and threatened to harm Christians there if they filed a police complaint against them in Phulbani, Raikia P.S. area. A Christian Legal Association (CLA) representative reported that one unidentified man from the Hindu extremist community followed Afasari Nayak, who had fled her home during 2008 anti-Christian violence, as she went to take bath in a river near the camp after work. Nayak shouted for help as the man started attacking her, and people rushed to rescue her. At about 7 p.m. the suspect along with four other extremists went to the camp and threatened to hurt the Christians if they filed a complaint, saying also that the refugee Christians should not return to the village unless they convert to Hinduism, the CLA source said. 

Orissa – Police arrested 11 Christians after Hindu extremists filed a complaint against them of assault on Feb. 3 in Badimunda, Kandhamal. The Evangelical Fellowship of India (EFI) reported that Hindu extremists verbally abused two Christians and threatened harm unless they stopped worshipping Jesus; when the two Christians asserted their right to worship Christ, the extremists began beating them. People of both faiths amassed, and the two Christians managed to escape further attack. At about 7:30 p.m. the next day, five extremists showed up at the same place searching for the two Christians. Forcefully entering the house of Dibyakand Nayak, a Christian, one of the extremists hurt his own forehead, according to EFI. Upon seeing this, the extremists started beating Nayak. They damaged household goods and dragged him to the police station. Police arrested 11 Christians for allegedly causing hurt, causing hurt by dangerous weapons and obscene acts and songs. All except Nayak were released on bail.

Orissa – Two Fast-Track Courts on Jan. 30 convicted 15 people and acquitted 39 others in cases related to anti-Christian violence in August 2008. Judge Sobhan Kumar Das sentenced 13 people to five years imprisonment and fined them 2,500 rupees (US$54) each for torching houses in the Sarangarh area, Kandhamal district, between August 2008 and October 2008. The court, however, acquitted 17 people for “lack of evidence” in the same case. In a separate case related to arson at Ranjabadi village of Kandhamal district, the court sentenced two persons to five years of prison and imposed a fine of 2,000 rupees (US$43) on each of them. Judge C.R. Das of Fast-Track Court II acquitted four people who were accused of violence in Baliguda block, while 18 people were acquitted in another case of arson that took place in Phiringia block, Kandhamal. The district was rocked by anti-Christian violence that lasted more than three months after the Aug. 23, 2008 death of Swami Laxmanananda Saraswati, who was assassinated allegedly by Maoists.

Andhra Pradesh – About 50 Hindu extremists on Jan. 29 accused a pastor of forceful conversion and forced him to eat food offered to Hindu idols in Secunderabad. The All India Christian Council reported that the extremists stopped Pastor Satyam Yellasiri of Good Shepherd Community Church at about 9:30 p.m. as he was returning from a birthday celebration and accused him of forceful conversion. The extremists forced him to eat the food offered to Hindu idols and threatened to beat him when he refused. Police, alerted by the extremists, arrived and took the pastor to the police station, where they detained him for two hours. Officers initially refused to register his complaint against his assailants. The next day, though, with area Christian leaders intervening, police accepted the complaint. Officers claimed they detained the pastor as a safety measure and assured the Christians that immediate action would be taken against the attackers. 

Karnataka – On Jan. 24 in Bidarikere, Chitradurga, Hindu extremists from the Rashtriya Swayamsavak Sangh broke into the worship meeting of Indian Evangelical Mission and assaulted a Christian worker. The Evangelical Fellowship of India (EFI) reported that at about 10:30 a.m. the extremists barged into the meeting shouting slogans and started beating H. Raju, who was leading the meeting, and accused him of forceful conversion. They also burned Bibles and Christian literature and dragged him out to the streets, forcing him to identify Christians’ homes in the area, according to EFI. Entering three Christian houses, the Hindu hardliners threatened to harm Christians if they did not stop worshipping Jesus. Local Christian leaders on Jan. 27 filed a police complaint with Jagalur police, and the next day police arrested three extremists. 

Karnataka – Hindu extremists accompanied by local police stopped the worship service of Calvary Gospel Church (CGC) on Jan. 24 in Dudda, Hassan. Two local police stopped the Sunday worship in the rented house of Sekhar Chandra and his wife, Kala Chandra, and chased the Christian worshippers out of the house. Hindu extremists had filed a complaint against the couple, whose rented home was being used for the worship service. After the Jan. 24 disruption, Hindu extremists announced to all villagers they were not to allow any house be used for Christian worship. Subsequently, the landlord along with an agitated mob threw the couple out of their rented house, along with their household goods. The Christian workers are now renting the house of another Christian in the same area and are continuing their ministry. 

Madhya Pradesh – Hindu extremists from the Bajrang Dal accompanied by Madhya Pradesh police stopped the worship meeting of Central India Christian Mission’s (CICM) Shahdol Christian church on Jan. 23 and forced church members to falsely testify against Pastor S.K. Ashawan in Shahdol. A source reported that the extremists barged into the prayer meeting attended by about 35 Christians, verbally abused them and dragged them to Shahdol police station. Amassing at the police station, the angry extremists beat, punched and kicked the Christians, forcing them to testify falsely against the pastor by saying he offered each of them 5,000 rupees (US$108) to convert them to Christianity and also forced them to eat beef. Under pressure, the Christians gave a written statement with these accusations. Police summoned the pastor, detaining and questioning him for two hours. The town inspector told Pastor Ashawan that 35 Christians had testified against him, and he threatened to beat and arrest the pastor if he did not give him 100,000 rupees (US$2,168). “It was midnight, and I was under pressure with the police threatening to beat and put me in jail if I did not submit the money,” Pastor Ashawan told Compass. The pastor started calling area Christians for help. That night, a source said, 100,000 rupees arrived into the inspector’s hands. Ajay Lal, Director of the CICM, took the matter to administrative authorities, but state Chief Minister Shivraj C. Chauhan advised the area district collector to close the case immediately. Christian leaders planned take the matter to a higher court.

Andhra Pradesh – Hindu extremists on Jan. 10 stormed a house church, disrupting worship and beating a pastor in Jillelguda L.B. Nagar, Hyderabad. The Global Council of Indian Christians (GCIC) reported that at 9 a.m. nearly 50 area extremists belonging to the Rashtriya Swayamsevak Sangh barged into Heavens Glory Church, shouting Hindu devotional chants. Repeatedly slapping Pastor Benhur Johnson, they falsely accused him of forcible conversion and warned him against conducting Christian services in the area. The extremists also beat some who came forward to help the pastor. A GCIC regional coordinator told Compass that Christians telephoned police, who rushed to the church and stopped the attack. Pastor Johnson along with other Christians went to police to register a complaint, but an official mediated an agreement between them and the extremists. The pastor told Compass that no worship was held on Jan. 17 or 24 out of fear of another attack.

Report from Compass Direct News 

INDIA: NEWS BRIEFS


Recent Incidents of Persecution

Kerala, October 31 (Compass Direct News) – Suspected Hindu extremists burned down a school building run by a church on Oct. 16 in Kuravilangad. The Global Council of Indian Christians reported that the main building of St. Mary Higher Secondary School was destroyed in the fire, and authorities found materials used to set the school ablaze on the premises. Church authorities demanded an investigation, and government officials have visited the site. The school has a reputation for holding seats open for poor Dalit Christians in spite of strong opposition from the upper-caste Hindus. A police investigation was ongoing at press time.

Karnataka – Mangalore police on Oct. 14 assaulted a Christian for participating in a recent protest rally against attacks on churches. The Global Council of Indian Christians reported that local police targeted Herald D’Souza for taking part in the rally, dragged him to a police station and severely thrashed him, then charged him with rioting. The head constable, identified only as Gopalakrishna, assaulted him without initiating any inquiry. D’Souza sustained serious injuries on his backbone, chest, face and hands. A complaint has been registered against the head constable, but senior police officials are pressuring the Christian for a settlement.

Andhra Pradesh – Police on Oct. 14 arrested Christians in Kamareddygudem village of Nalgonda district. The Evangelical Fellowship of India reported that at about 8 p.m., as the five-member Operation Mobilization (OM) Christian media team led by Kummari Rajesh was screening a film on Jesus, a group of extremists arrived on motorbikes. They assaulted the OM team and destroyed equipment worth more than 200,000 rupees (US$3,950). Rajasekhar Sarella, legal counsel for the Christians, told Compass that Rajesh filed a First Information Report against the extremists at Thripuraram police station, and the extremists filed a counter complaint. The Christians were charged with “unlawful assembly” and “hurting religious sentiments.” They were released on bail on Oct. 20. Police also arrested Hindu extremists Gundeboina Lingaiah, Srinivas Reddy and Narshingh Venkatreddy for damaging property and voluntarily causing hurt with dangerous weapons. The extremists were also released on bail.

Karnataka – Unknown assailants set a church building on fire on Oct. 13 in Yadavanahalli, Bangalore, burning it down at 1 a.m. According to the Global Council of Indian Christians, a pulpit, tables, sound system, fans, music instruments, lights and other furniture of St. Anthony church were reduced to ashes, with damages estimated at around 100,000 rupees (US$1,975). Police claimed that it was an accident, while the Electrical Inspectorate of Karnataka ruled out an electrical short circuit. Church authorities have filed a complaint, and at press time a police investigation was underway.

Andhra Pradesh – Hindu extremists belonging to the Vishwa Hindu Parishad (World Hindu Council) disrupted worship and threatened Christians on Oct. 12 in Madanapally, Chitoor. The Global Council of Indian Christians (GCIC) reported that about 20 extremists barged into Krupa Prayer House shouting the Hindu devotional slogan “Jai Sri Ram [praise lord Ram]” and told the Christians not to conduct future worship meetings. The Hindu extremists planted a stone in front of the church and told the Christians that they were planning to build a Hindu temple there. A GCIC representative told Compass that the matter was settled, with a police official promising to give the Hindu extremists land for a temple elsewhere.

Uttar PradeshHindutva (Hindu nationalist) extremists allegedly belonging to the Rashtriya Swayam Sevak and Bajrang Dal on Oct. 12 disrupted worship, desecrated Bibles and vandalized furniture at a church in Anola. The Evangelical Fellowship of India reported that at about 10 a.m. some 15 to 20 extremists led by Sanjeev Saxena stormed into an Assemblies of God Church, denouncing Christ and cursing. They warned pastor Jallal Masih and the nearly 35 believers not to worship in the church building again. A representative of the Christian Legal Association told Compass that no Sunday worship has been held there since then.

Tamil Nadu – Hindu extremists attacked a church and damaged a statue of Mary on Oct. 9 in Ganapathy, Coimbatore. The Global Council of Indian Christians (GCIC) reported that the assailants entered the church premises, broke the glass cabin and damaged the six-foot tall statue. The incident sparked protest among Christians, resulting in about 100 church members gathering on the road demanding protection and the immediate arrest of the Hindu extremists. Police have arrested three extremists, said the GCIC, and at press time calm had returned to the area.

Karnataka – Hindu extremists on Oct. 5 burned Immanuel Full Gospel church, and police forced its pastor to give a false statement in Kanaji Pura, Chamarajanagar. The Global Council of Indian Christians (GCIC) reported that extremists set fire to the church, damaging the pulpit, Bibles and hymn books. The extremists along with police officials had threatened pastor C.J. Patrick two weeks prior, telling him to cease worship and shut down his church. A police complaint has been filed, but police have pressured the pastor to falsely state that it was an accident and not an attack. A GCIC representative told Compass that the case was closed, as the pastor gave the false statement in writing.

Uttar Pradesh – Police raided a church based on a complaint filed by Hindu extremists belonging to the Vishwa Hindu Parishad (World Hindu Council, or VHP) for forceful conversion on Oct. 2 in Baradabari. The Global Council of Indian Christians reported that police investigated The Alliance Ministry’s Life Church, taking away a church register and other documents. After the enquiry police returned the register and allowed pastor Rajender Gautham to continue his ministry, but on Oct. 4 summoned him again. They told him to halt future worship meetings in the church building, as the VHP had threatened to attack Christian meetings in the area.

Chhattisgarh – Violent attacks rattled the Christian community in Dantewada district in the past month, with Hindu extremists seriously injuring a Christian woman attending a funeral with an axe blow to the head. As Christians gathered for a memorial service for Somli Bai of Narli village on Sept. 29, an angry mob attacked them, injuring about 35 Christians, six of them seriously. A woman identified only as Bode was admitted to a hospital with a serious head injury from an axe, as was Raju Karma, who was critically wounded and his motorcycle burned. Some of the Christians took shelter in a nearby jungle, with three persons missing. On Oct. 5, a mob demonstrated in front of Indian Pentecostal Church in Kirandul, 10 kilometers (six miles) from Narli, accusing the pastor of forcible conversions. He has reportedly gone into hiding following death threats to his family and him. In Bacheli (three kilometers from Narli), pastor Sudarshan Pani told Compass that Hindu extremists tried to kidnap Satish Basra, pastor of the late Bai’s church. Local residents foiled the kidnapping attempt. Police have been informed of all the incidents, but a First Information Report has not been filed, according to local sources. “These troubles have been started by outsiders who have come into the Kirandul-Bacheli area and are inciting local people against Christians,” Pastor Pani said. “A few high-caste families have voluntarily accepted Christianity in the past few days and this has added more fuel to the fire. The convert families are firm, but the pressure is being felt by the entire community.”

Karnataka – Police on Sept. 28 disrupted a worship service and detained a pastor in Hubli. The Global Council of Indian Christians reported that police took the pastor for questioning based on Hindu extremists’ allegations of forceful conversion. Worship came to a halt as police ordered members to stop the meeting. Saying that that he had not caused any disturbances and was conducting the worship service in a Christian’s building, pastor Daniel Kote was released after questioning. Recently Hindu extremists had attacked another worship meeting led by Pastor Kote in Hotel Chalukya, resulting in services moving to the church member’s building.

New Delhi – Hindu extremists belonging to Bajrang Dal and Rashtriya Swayamsevak Sangh vandalized a church, accused the pastor of forcible conversion and brought down the roof and a wall of Rehma Faith Church on Sept. 17 in Peeragarhi, west Delhi. The same mob on Sept. 18 arrived at the church with saffron flags, vandalized the remains of the church and pelted Christians with stones, while police stood by as mere spectators, reported the Christian Legal Association of India. A child and three church members were injured in the attack. A complaint has been registered and police protection has been provided on the church premises.

Andhra Pradesh – A revenue inspector and his workers demolished a church building on Sept. 3 in Hyderabad. According to the All India Christian Council (AICC), the revenue inspector identified only as Srihari said that he had carried out the demolition according to orders from another revenue inspector identified only as Sudhakar. The pastor, identified only as Jairaj, had all pertinent documents for legal ownership of the land, but the inspector refused to listen to him and went ahead with the demolition work. Hindu extremists reportedly had earlier pressured the pastor to vacate the building. Pastor Jairaj has sought help from the National Minority Commission. Moses Vattipalli told Compass that AICC has decided to file a case against the revenue officers.

Report from Compass Direct News