UPDATE – MARCH – PART TWO

ON FRIDAY FEBRUARY 18, 2005 RESERVE BANK GOVENOR IAN MACFARLANE DECLARED “CUT TAXES OR THE ECONOMY WILL SUFFER!” HE URGED THE FEDERAL GOVERNMENT TO REFORM HIGH MARGINAL RATES AHEAD OF LOOMING INTEREST RATE RISES. HE WARNED INTEREST RATES WOULD RISE “ SOONER RATHER THAN LATER.” MR MACFARLANE TOLD THE HOUSE OF REPS ECONOMIC COMMITTEE IN SYDNEY OF THE HOUSING MARKET. HE SAID, “THE BOOM PART OF THE HOUSING CYCLE SEEMS TO HAVE STOPPED.

THERE HAVE BEEN 3 SMALL FALLS IN 3 QUARTERS LAST YEAR AND 1 SMALL RISE IN THE LAST QUARTER OF LAST YEAR. ITS NOT A BUST”. WHAT MR MACFARLANE HAS FAILED TO MENTION OR CORRECT, IS THE THAT THE BOOM CYCLE HAS STOPPED BECAUSE OF THE EXORBITANT UNFAIR LAND TAX AND STAMP DUTY IMPOSED BY THE STATE GOVERNMENTS.

TREASURER COSTELLO AND HIS PREDESSOR PAUL KEATING AND THEIR TREASURY BREAUCREATS ABLY SUPPORTED BY SUCCESSIVE RESERVE BANK GOVENORS HAVE FAILED MISERABLY IN THEIR PURSUIT OF A FAIRER TAX FOR ALL AUSTRALIANS. THESE SO CALLED EXPERTS ON THE ECONOMY APPEAR TO BE PRESERVING THE POLITICAL PARTY SYSTEM, BY PROTECTING THE BIG END OF TOWN, MORE SO THE FOREIGN MULTI-NATIONALS WHO WERE GRANTED A “DUAL RECIPRACTION TAX AGREEMENT” BY THE MENZIES GOVERNMENT IN 1953 THUS ALLOWING THEM TO PAY LITTLE OR NO TAX. IN REALITY THE AUSTRALIAN TAX-PAYERS HAVE BEEN SUBSIDISING THESE MULTI-NATIONALS FOR MORE THAN 50 YEARS. MANY OF THESE COMPANIES ARE REGULAR DONORS TO THE PARTY SLUSH FUNDS.

I WOULD LIKE TO PUT TO YOU AN ALTERNATIVE A FAIRER TAX SYSTEM WHICH WAS PASSED ON TO ME BY JOHN MACRAE AND WAS EXPECTED TO BE SUBMITTED TO THE FLOOR OF PARLIAMENT BY PAULINE HANSON BUT WAS CIRCUMVENTED BY GOVERNMENT AND OPPOSITION PARTY MEMBERS, WHO BRANDED HER A RACIST AND WERE ABLY SUPPORTED BY AUSTRALIA’S CROSS MULTI-MEDIA. THIS TAX SYSTEM HAS MANY NAMES BUT FOR SIMPLIFICATION WE WILL CALL IT A “TRANSACTION TAX.” TO BEGIN WITH ALL FEDERAL – STATE – AND LOCAL GOVERNMENT TAXES, LEVIES AND EXCISES WILL BE ABOLISHED, INCLUDING THE GST ( GOODS AND SERVICES TAX) AND REPLACE THEM WITH A 1 ½% TRANSACTION TAX. IN REAL TERMS, THIS PROPOSAL WILL LEAVE YOUR WAGES UNTAXED BY YOUR EMPLOYER WHO WILL DEPOSIT YOUR WAGES WITH YOUR FINANCIAL INSTITUTION. ON DEPOSIT, THE BANK WILL AUTOMATICALLY DEDUCT THE “TRANSACTION TAX” OWED, AND IMMEDIATELY TRANSFER IT INTO THE GOVERNMENT ACCOUNT, WHILST IT CREDITS YOUR ACCOUNT WITH YOUR WAGES LESS 1 ½% TAX. THE BENEFITS FOR EACH WAGE EARNER IS BEST EXEMPLIFIED BY USING A WAGE BEFORE TAX OF $500. WITH NO INCOME OR ADDED TAX DEDUCTIONS YOUR EMPLOYER DEPOSITS THE $500 INTO YOUR ACCOUNT ( BANK, CREDIT UNION ETC) IN THE NORMAL WAY. THIS WOULD INCREASE YOUR NORMAL TAKE HOME PAY BY APPROXIMATELY $115. YOUR FINANCIAL INSTITUTION WILL IMMEDIATELY DEDUCT 1 ½% WHICH EQUALS $7.50 OF THE $500, AND THAT IS ALL YOU PAY TAX WISE. YOUR INCREASE IN PAY IS MASSIVE BUT THINGS GET BETTER, THE GST HAS BEEN ABOLISHED MEANING THE PRICE OF GOODS AND SERVICES WOULD BE REDUCED BY 10% WITH AN ADDED BONUS OF ANYTHING UP TO 15% BEING SAVED DUE TO THE ENORMOUS COST OF COLLECTING THE GST.

BUSINESS OWNERS WOULD PAY 1 ½% ON ALL THEIR PROFITS WHICH WILL BE PAYABLE TO THEIR FINANCIAL INSTITUTION AND THIS PROVIDES THE MANNER IN WHICH THE MAJOR PART OF THE TAX IS COLLECTED. THE BIG WINNERS WILL BE BUSINESS OWNERS, FARMERS, TRUCKIES AND THE TAXI INDUSTRY – IN FACT ALL AUSTRALIANS WITH THE ABOLISHING OF FUEL EXCISE. THE MAXIMUM PRICE OF FUEL, INCLUDING DIESEL, WOULD BE 50 CENTS A LITRE.

EVERY DEPOSIT BY ALL AUSTRALIANS WILL ATTRACT A 1 ½% TRANSACTION TAX. THERE IS NO ESCAPING THIS TAX. THE BIG END OF TOWN INCLUDING THE FOREIGN MULTI-NATIONALS WILL BE LEFT WITH NO OPTION BUT TO PAY THEIR FAIR SHARE OF TAX FOR THE FIRST TIME SINCE 1953.

THIS WINDFALL WILL GENERATE DOUBLE THE ANNUAL BUDGET FOR THE GOVERNMENT AND WITHIN 3 YEAR OF INTRODUCING A “TRANSACTION TAX,” THEY WILL BE IN A POSITION TO IMPLEMENT OVERDUE INFRASTRUCTURE RE HEALTH, EDUCATION,ROADS AND WATER AND STILL HAVE SPARE MONEY AS A BACK UP.

WHETHER YOU RUN YOUR OWN BUSINESS, OR ARE A FARMER, A NURSE, A TRADESMAN, DRIVER, SHOP ASSISTANT, RETIREE, DISABLED OR A LABOURER, UNDER A TRASACTION TAX YOU WONT HAVE TO SUBSIDISE THE BIG END OF TOWN AND BETTER STILL THE GOVERNMENT WILL HAVE NO EXCUSE TO SELL TELSTRA