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John Passant

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May 2011



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
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Make Gina Rinehart work for her dole

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Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

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Taxing solar panel income

I sent this letter, on the taxation of solar panel income, to the Sydney Morning Herald recently.



​Two recent letters (Barry Moore May 27 and Paul Gittings May 28) raise the issue of taxing solar panel electricity payments. As a simple tax lecturer let me add my tuppence’s worth. In my view such payments, and I would add credits of such payments against consumption, are assessable income.

Until recently the Commissioner of Taxation in private rulings has said such payments are not income because the taxpayer does not have a profit making intention or is not carrying on a business so the payments are not assessable income. This in my view is wrong because the payments clearly seem to me to be income from property and so should be included in assessable income. 

In two more recent private rulings the ATO has said that the payments are income. It is not clear if this shift is based on differences in the factual situations or reflects a re-think on the part of the Commissioner that these amounts are ordinary income. Reading the private rulings, it is my view it could well be the latter.
But that is not the end of the matter. In these most recent rulings the Commissioner has also decided that Renewable Energy Certificates sold to installers to reduce the price of the solar panels are assessable recoupments and so their value should be included in the taxpayer’s assessable income.

Finally, if these amounts are assessable income, as I believe and much more importantly the Commissioner apparently believes they are, then any expenditure in gaining or producing them, such as interest on a loan, or depreciation on the capital costs of the panels, will be deductible. I can imagine a spate of negatively geared solar panel claims arising in the future.

One further point. There could well be implications for the family home Capital Gains Tax exemption if these amounts are assessable income.

I suggest that to clear up the confusion the Commissioner issue a public ruling on the question. The Federal Government might also like to consider the policy and political implications of including such payments in assessable income under the current law.



Comment from Calligula
Time May 28, 2011 at 7:47 pm

John –
I’m a commie without a cause.
You are an ironbound socialist with capitalist (dare I say it) punitive inclinations.

You want to tax solar now?

Consider, Bucko.
The useless stuff at the present stage of development will crock up before it produces much at all (except funding credits for chosen pals of government).

You want to tax?

The gullible might want their money back after having been taxed for a nett loss.

Will the ‘masters’ return wasted money after the fiasco?
I think not.
Politicians are driving these dreams without resort to qualified advice.

The show leads absolutely nowhere for the citizen.

Cheers – Django Reinhardt.

Comment from John
Time May 28, 2011 at 8:27 pm

I am merely pointing out how the tax law currently works or arguably does work. Not taxing it of course is a disguised grant and if we want to give grants to well off people then let’s have the discussion.

Comment from Arthur
Time May 28, 2011 at 9:01 pm

Watch that Django.
He’s a bit of a Nazi.

And he believes that solar/electric is more polluting than chemical fuels.
In the manufacture thereof, that is.

Don’t ignore him though.
He can out-elephant-in-the-room all the experts ‘cos his and that Calligula’s collective engineering experience approaches the century.
You should have seen them the other day after that news report that electricians couldn’t work out direct current polarity when installing solar plant.
Talk about chewing the carpet!
“Forget the bloody rapture” – they were screeching – “Bring back Nikola Tesla and Thomas Edison and have ‘em fight a duel.”

Comment from Ben Courtice
Time May 29, 2011 at 8:48 pm

Possibly a better system than encouraging people to buy panels (with deductability, or with grants, or loans, or whatever) would be if electricity utilities could lease the panels out, or alternatively lease a bit of roof space, and put the electricity into the grid overall.

Comment from Arthur
Time May 29, 2011 at 10:54 pm

Dear Ben Courtice –
Your editor (Seen when I clicked on your pages)
To paraphrase the famous words of Inspector Gadget “I’ve seen that editor somewhere before.” (Click on and check out the character flying my page, left, top.)

Regarding yours above –
Your contribution has great merit.
I like it.

Trouble is you have submitted a ‘commie’ scenario.
What the punters would want to do is rent out their roof-space if they held ‘fee simple’ and (forgive me) before much longer the exploiters of society would demand a ‘miners right’ over our rooftops in the same way they expect under our soil.

Any idea as to how to avoid that?

Comment from Tony
Time May 30, 2011 at 2:12 am

Arthur: In Germany, people do acquire the rights to roof space from others. I can’t recall the exact details of its operation. As I understand it, the “exploiters” already have a techical “miner’s right” on the water that falls on our roof, should they choose to do so…

Ben: I see the gross feed in tariffs in a number of jurisdictions, while popular, are the main cause of the lack of effectiveness in the outcome. I think we’d find that the costs of systems inflated with these programs (in spite of falling component costs), as was the case with the notorious LPG rebate (where I recall installation prices went up markedly overnight, eating up the grant). The LPG programme under Howard should have been a warning for the difficulties delivering these programmes.

As we see, when being paid a “dividend” on all the power used, there is no reason to change behaviour to reduce personal consumption by efficiency improvements.

If they’d gone for a ‘net’ export proposal, with a higher level of compensation for the net surplus power, the speculation wouldn’t have got out of control AND people would have had at least a financial reason to try and reduce their personal usage of power. It would have been a two pronged approach to the issue. If uptake was poor, at least it wouldn’t have cost a lot to undertake the experiment.

As it stands, the broad base of electricity users is paying for the free money crowd (commercial bank interest subsidized loans, feed in tariffs, massive rebates, etc) to use their airconditioners more.

It should be noted, this current system works perfectly for corporate power companies as the assets are off their books. I think we’d find they would resist owning the panel installations. They also like the system because it outsources the commercial risk to the purchaser.

At this stage, it may be worth the governments putting it’s money into making all public agencies powered by new clean energy capacity, taking advantage of bulk purchasing from major manufacturers. It would seem reasonable to share the burden most broadly with a benefit for all, the same broad base who ultimately carry the recurrent costs of public agencies.

Comment from Arthur
Time May 30, 2011 at 3:57 pm

Thanks Tony.
You put that well indeed.

The ratchet effect at work risks always putting the silent majority at a disadvantage at every turn.
Meanwhile the big end of town squanders energy and resources at an ever increasing rate.
Yes. My lady wife informed me this morning that an elderly friend of ours has to pay for the water that ‘might’ fall on her roof.
She doesn’t have town water because her council ‘can’t afford’ to lay it in.
So they hit her in the pocket for having her own tank.
Pretty stuffed, that.

If she put up a solar array?
No. I wouldn’t dare phone them and ask. That’d just put the idea in the bastards heads.

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