Joe Hockey and tax transparency
Opposition Treasury spokesperson Joe Hockey has proposed a ‘tax receipt’ to let us know what the Government is spending our money on. It will contain a break up of where the tax we paid actually went.
This is going to be a little hard for the 40 percent of big business which pay no income tax. Maybe instead of getting a break up of where their non-taxes didn’t go, these businesses could send us an invoice for our generosity, perhaps with words like ‘so long, and thanks for all the fish.’ But I digress.
Hockey’s idea has some merit. For example it would show the amount we spend on defence – $21 billion. This is a waste of human resources if ever there was one. Maybe we should ask for our taxes not to go the disgusting barbarity that is war and which has become an art form under capitalism and its highest stage, the battle between super powers.
Ah, but that is not what Hockey is about. He is trying to paint a picture of Government ‘overspending’. It is no accident that the big expenditure items are welfare ($115 billion), health ($57 billion) and education ($33 billion). The Liberals’ aim is to link spending on these essentials to their nonsense concept of ‘overspending’.
This they hope will prepare the way for savage cuts to social welfare and public hospitals and schools when they form the next Government, much as the Tories are doing in the UK at the moment.
There are other forms of spending Hockey doesn’t mention. Tax expenditures are disguised spending, and of the $100 billion in tax preferences much of it goes to business or the rich.
This disguised expenditure is between one third and one quarter of current budget expenditure yet gets no scrutiny at all, and won’t under Hockey’s proposals. That’s because in the main it benefits the well off.
So for example, according to The Treasury Tax Expenditures Statement 2009, we spend the equivalent of $32 billion in not taxing the family home. We have the intelligence to devise just such a tax that doesn’t catch ordinary home owners but does tax those whose multimillion dollar homes are tax avoidance devices.
Then there’s superannuation. Workers are forced to contribute to their superannuation through the compulsory Superannuation Guarantee (SG), notionally levied on employers but borne by employees. Paul Keating boasts that when he introduced SG and then, a few years later, increased it, real unit labor costs actually fell.
The superannuation tax exemption costs around $31 billion per year – about the same that we currently spend on the age pension.
Much of this superannuation tax largesse is welfare for the rich and comes with little or no safeguards and policing. By contrast we have strict rules to stop people with modest pension incomes earning any extra money to make their lives bearable.
Tax transparency should be more than just smoke and mirrors to prepare the way for attacks on social services like pensions, health and education.
Apart from highlighting the real cost of tax subsidies to the rich and business, we could also publish the tax returns of all big businesses.
Now that would be real tax transparency, wouldn’t it Joe?