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Australian News

Seniors could be asked to sell family home under death tax


Baby Boomers could be asked to sell the family home when they die to pay for aged care costs under a new plan to slap an effective death tax on seniors to fund care.

Former Treasurer Peter Costello has urged the Morrison Government to consider an expanded pensioner loans scheme during his appearance today at the Royal Commission into Aged Care.

Under the proposal, seniors would be given the option of taking out a loan secured against the family home, that would then be sold when they died or other assets liquidated.

While some banks already offer reverse home loans, Mr Costello has called for debate on expanding a pensions loans scheme to use the family home as an asset that could be sold when a retiree dies to recover costs.

“I mean, financial products that can allow people to raise accommodation bonds against the family home, which is generally their greatest asset, I think there’s a much more scope for them and I think the Government could assist there,” Mr Costello said.

“The Government has a thing called the Pension Loan Scheme which it says is available. The private sector has what is called a reversible mortgage or equity drawdown mortgages.

“But I do think, you know, this is a classic area where those people that do use residential care and do have assets should be asked to make a contribution and guaranteed a return of their deaths.”

RELATED: Woman screwed by new tax plan

But Mr Costello stressed that informed consent was the key to the proposal so that family members understood the cost would ultimately come out of the estate.

“Even today, if you’re asked to put up an accommodation bond, you can raise that bond with your own house as security,” he said.

“I mean, the point I’d make is that I think people should do it knowingly and in advance and there should be products that allow them to do that during their lifetime. If you come around and try to take their assets after they’ve died, I think you can expect to run into a lot of opposition there.”

Mr Costello urged debate on the option as an extension of reforms he introduced during the Howard Government.

“I felt you were never going to be able to run residential aged care with the ageing of the population off the taxpayer alone and you had to get private money and we introduced what we then called accommodation bonds,” Mr Costello said.

But Australia’s longest serving Treasurer also raised the alarm that the red tape and forms to enter aged care were so complex that even he struggled with them.

“Now, the members of my family I have attempted to fill in these income and assets tests. You all ought to do them,” he said.

“I’m reasonably financially literate. I had a lot of trouble filling it in. I don’t know how a person going into a nursing home would ever be able to fill it in.

“We’re talking about people who might be 80 or 90 years of age. How do they do this? My suspicion is that a lot of them just don’t.”

RELATED: $20k mistake under-35s are making

Former Treasury secretary Ken Henry told the inquiry he still believed that a compulsory tax levy to fund aged care was necessary.

But he echoed Mr Costello’s concern about the complexity of the system.

“My principal source of discomfort is that the system overall is horribly complex and it contains a very high level of uncertainty for people,” Dr Henry said.

“People who are elderly, people who are vulnerable, people who are suffering emotional and psychological stress, many, of course, unfortunately are mentally impaired to some extent, too many have little or inadequate family support and they confront the aged care system knowing nothing about it, knowing that they have no real option but to throw themselves into the system because it’s quite simply impossible for them to continue to look after themselves.

“And they’re bewildered. This system is unsustainable. It’s underfunded, it’s under resourced and it will not be tolerated. In particular, it will not be tolerated by the Baby Boomers themselves when they find themselves in this system.”



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Australian News

Blokes big winners under tax cut plan but women get screwed


Men will secure double the tax cut cash that female workers secure under a budget plan to bring forward tax relief in the wake of the COVID-19 pandemic.

A new analysis of the proposal to bring forward tax cuts early to help stimulate the economy has warned blokes will be the biggest winners but women will miss out.

The reason is based on the simple arithmetic that men tend to earn more than women and are more likely to be high income earners.

But that‘s raised fresh concerns the tax cut plan is unfair to women who have already been hit the hardest by the COVID-19 pandemic.

The Australia Institute has urged the Morrison Government to reconsider the tax cuts on the basis that many female workers will secure little or no relief from the billions of dollars in cuts that the Treasurer Josh Frydenberg is considering bringing forward to stimulate the economy.

“Bringing forward the tax cuts will mainly benefit high income earning men, with men getting more than twice the benefit of women. This will lead to more gender inequality,” Matt Grudnoff, Senior Economist at The Australia Institute said.

“Our research has shown that bringing forward these income tax cuts will mainly benefit high income earners which, in Australia, are overwhelmingly male. Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country.

“Rather than spending billions of dollars bringing forward tax cuts that mainly go to men on high incomes, the Government could better target that stimulus.“

The Australia Institute analysis confirms that for every dollar of tax cut that women get, men get $2.28.

In other words, men get more than twice the tax cut that women get.

RELATED: Follow our live coronavirus coverage

RELATED: How much you’ll save from tax cuts

If the tax cuts were divided between men and women, blokes get 70 per cent of the tax cut cash and women secure only 30 per cent of the tax cut.

The Australia Institute‘s analysis argues that well targeted stimulus should focus on those most disadvantaged by the pandemic recession.

Unemployment figures have previously confirmed that women were more likely to lose their jobs this year with employment falling in March and April by 3.9 per cent for men and 5.3 per cent for women.

Women were also more likely to lose shifts and working hours than men, in some cases due to the pressure of homeschooling children.

Speculation over the Morrison Government bringing forward benefits has centred on bringing forward the ‘Stage 2’ tax cuts from 2022 to 2021.

But it’s the Stage 3 tax cuts that could prove a hard sell for the Prime Minister because the lion’s share of the tax cut cash goes to high income earners.

For example, part-time workers will score a measly $255 per year under the Stage 3 tax cuts the Morrison Government is considering bringing forward, but the wealthy, including Prime Minister Scott Morrison, will ultimately secure a stunning $11,640-a-year windfall.

ANU Associate Professor Ben Phillips has previously told news.com.au that the rich are more likely to stash tax cuts into savings accounts and pay off personal debts including credit cards and big mortgages, rather than spending the money and stimulating the economy.

“We know that people are saving at higher rates than ever. It will have some small impact. But most people would say you get a bigger bang for your buck with tax cuts at the lower income end or welfare,’’ he said.

As the Australia Institute analysis notes, despite the discussion about bringing forward the tax cuts, there are no firm proposals for when and how each stage should be used.

Previous Australia Institute modelling has confirmed high income taxpayers are the big winners of Stage 3.

For example, the top 10 per cent of taxpayers would get 52 per cent of the benefit of the tax cuts while the top 20 per cent would get 91 per cent of the benefit.

Those on low incomes get little to no benefit.

The budget will be handed down on October 6 in Canberra.



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Australian News

Blokes big winners under tax cut plan but women get screwed


Men will secure double the tax cut cash that female workers secure under a budget plan to bring forward tax relief in the wake of the COVID-19 pandemic.

A new analysis of the proposal to bring forward tax cuts early to help stimulate the economy has warned blokes will be the biggest winners but women will miss out.

The reason is based on the simple arithmetic that men tend to earn more than women and are more likely to be high income earners.

But that‘s raised fresh concerns the tax cut plan is unfair to women who have already been hit the hardest by the COVID-19 pandemic.

The Australia Institute has urged the Morrison Government to reconsider the tax cuts on the basis that many female workers will secure little or no relief from the billions of dollars in cuts that the Treasurer Josh Frydenberg is considering bringing forward to stimulate the economy.

“Bringing forward the tax cuts will mainly benefit high income earning men, with men getting more than twice the benefit of women. This will lead to more gender inequality,” Matt Grudnoff, Senior Economist at The Australia Institute said.

“Our research has shown that bringing forward these income tax cuts will mainly benefit high income earners which, in Australia, are overwhelmingly male. Giving tax cuts to the wealthy will have a very limited stimulatory effect on the broader economy, but it will significantly widen the economic divide that already exists between men and women in this country.

“Rather than spending billions of dollars bringing forward tax cuts that mainly go to men on high incomes, the Government could better target that stimulus.“

The Australia Institute analysis confirms that for every dollar of tax cut that women get, men get $2.28.

In other words, men get more than twice the tax cut that women get.

RELATED: Follow our live coronavirus coverage

RELATED: How much you’ll save from tax cuts

If the tax cuts were divided between men and women, blokes get 70 per cent of the tax cut cash and women secure only 30 per cent of the tax cut.

The Australia Institute‘s analysis argues that well targeted stimulus should focus on those most disadvantaged by the pandemic recession.

Unemployment figures have previously confirmed that women were more likely to lose their jobs this year with employment falling in March and April by 3.9 per cent for men and 5.3 per cent for women.

Women were also more likely to lose shifts and working hours than men, in some cases due to the pressure of homeschooling children.

Speculation over the Morrison Government bringing forward benefits has centred on bringing forward the ‘Stage 2’ tax cuts from 2022 to 2021.

But it’s the Stage 3 tax cuts that could prove a hard sell for the Prime Minister because the lion’s share of the tax cut cash goes to high income earners.

For example, part-time workers will score a measly $255 per year under the Stage 3 tax cuts the Morrison Government is considering bringing forward, but the wealthy, including Prime Minister Scott Morrison, will ultimately secure a stunning $11,640-a-year windfall.

ANU Associate Professor Ben Phillips has previously told news.com.au that the rich are more likely to stash tax cuts into savings accounts and pay off personal debts including credit cards and big mortgages, rather than spending the money and stimulating the economy.

“We know that people are saving at higher rates than ever. It will have some small impact. But most people would say you get a bigger bang for your buck with tax cuts at the lower income end or welfare,’’ he said.

As the Australia Institute analysis notes, despite the discussion about bringing forward the tax cuts, there are no firm proposals for when and how each stage should be used.

Previous Australia Institute modelling has confirmed high income taxpayers are the big winners of Stage 3.

For example, the top 10 per cent of taxpayers would get 52 per cent of the benefit of the tax cuts while the top 20 per cent would get 91 per cent of the benefit.

Those on low incomes get little to no benefit.

The budget will be handed down on October 6 in Canberra.



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Business

Biotechs push for IP tax incentives post-pandemic


The comments come as the nation’s biotech sector lobby group, AusBiotech, argued in its pre-budget submission published last week that the government should consider a manufacturing tax regime that rewards businesses who make profits from patented products that were created onshore.

Vaccine developers across Australia are in the race for a COVID-19 vaccine.

Vaccine developers across Australia are in the race for a COVID-19 vaccine. Credit:University of Queensland

“While research and development incentives are designed to encourage activities that will result in innovation, this incentive is aimed at commercial activities, by providing tax relief on profit derived from qualifying patents,” the group said.

AusBiotech chief executive Lorraine Chiroiu said as other developed nations aim to “supercharge” recoveries post-pandemic, competition for research and development expenditure is becoming more fierce. Australia must consider end-to-end tax incentives that make the country and attractive place to both research and commercialise products, she said.

“As IP is highly-mobile, its flow-on benefits can easily be separated from the jurisdiction where it was developed, and its management, capitalisation and manufacturing migrated to low-tax jurisdictions that offer on-going incentives. Supportive policy is critical to retaining the benefits of R&D and its manufacturing in Australia for longer.”

Other ASX-listed biotechs including ResMed and Starpharma have also recently cited the importance of boosting the country’s medtech ecosystem in the wake of the coronavirus pandemic.

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The sector has fought hard against proposed government caps on the research and development tax incentive scheme, arguing now is the time for greater expenditure on new ideas.

The next steps for those changes may not be known before the October 6, budget. A senate committee reviewing possible changes for the scheme will now not report back to government until October 12.

In its 2021 budget submission, AusBiotech argued targeted research support would be key to propelling smaller startups into the success that has been seen by CSL, Cochlear and ResMed.

Mr Howitt said a rethink of incentives “could improve Australia’s competitiveness as a place to nurture and build medical innovation companies like Cochlear”.

The Australian government has signalled a number of policies in recent months to encourage local research in the medtech space, most notably in terms of funding for COVID-19 vaccine projects. 

Earlier this month, health minister Greg Hunt committed $25 million from the Medical Research Future Fund to fund local clinical trials for projects about the prevention or treatment of coronavirus.

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Local News - Victoria

Business leaders shirk their tax responsibility


Also, as has been seen in the past, tax cuts don’t flow 100 per cent into the community. Some reality and soul-searching from the ‘‘business chiefs’’ would be more beneficial to the community. They would need to have some useful, concrete plans for the money, in line with community needs, before any tax cuts are considered, and that includes those set for 2022.
John Pinniger, Fairfield

Business lobby attitude unsurprising
Why am I not surprised when business leaders, in a time of record public debt and unemployment, call on a Liberal government for lower taxes?
John W. Byrne, Campbells Creek

Stark policy choices facing our community
The contradictory demands by business lobbyists for bringing forward tax cuts and the calls by aged care interest groups saying billions more are needed to improve the standards of care, whether in the home or in residential settings, advocate for an increase in the Medicare levy.

Meanwhile, Richard Colbeck, the Aged Care Minister, accuses Labor of wanting to increase taxes. And meanwhile our progressive tax system is being dismantled by the government, and essential social, welfare and public services are being cut. These are the stark policy choices confronting us. Heather D’Cruz, Geelong West

Tax cuts are certainly not necessary
We do not need tax cuts. We do need public housing, public health, public education, public aged care, public broadcasting and the public service.
Colin Patterson, Nuggetty

Budgeting lunacy will not help debt situation
It is significant that while the business lobby and some conservative backbenchers are demanding tax cuts, the British government has indicated that it will impose tax hikes, especially for better-off Britons.

On a domestic level, tax cuts in this dangerous economic period would be equivalent to my dealing with an impossible credit card debt by asking my employer to cut my wages so that I can pay down the debt.
Michael R. Nolan, Capel Sound

Incentives for businesses that keep workers
Tax cuts should only apply to businesses who guarantee they won’t downsize their workforce.
Phil Alexander, Eltham

THE FORUM

Heritage destroyed
The Rio Tinto chief executive, Jean-Sebastien Jacques, will need not only to make a face to face apology meeting with the traditional owners of the Juukan Gorge caves (‘‘Rio Tinto chief to apologise to land owners’’, 1/9) but should be making an apology to the Australian people and the world as a whole for this catastrophic destruction of world and human heritage. We have lost so much, worldwide of human heritage sites through ignorant destruction in recent years. We cannot fathom what else has been lost in Australia. We could, however, understand that Monsieur Jacques would not contemplate the destruction of the ancient Lascaux Cave in France. Of course not. Loucille McGinley, Brighton East

Workers need the rise
I agree wholeheartedly with the statements made by our former PMs Keating and Rudd. Workers have already endured a six-year delay in rises to superannuation brought on by the Coalition to encourage wage rises. How has that worked out for them? Lowest wage growth in their time at the helm. Their rhetoric has proven to be false and to continue down the same path will not change the result. Workers have learnt their lesson.
Alan Inchley, Frankston

Rudd’s miserly increase
The joining of former prime minister Kevin Rudd, in the chorus of concern over the federal government considering cancelling proposed future increases in superannuation contributions, is disingenuous to say the least (‘‘Keating, Rudd warn over super changes’’, 1/9). Between 1996-2007 the Howard government froze the Superannuation Guarantee Contribution at 9 per cent. For more than a decade, the required incremental increases to keep superannuation accounts at a level that would substantially ease pressure on the national pension obligation, were not met.

During Labor’s tenure in government (2007-13) he had the chance to redress this shortfall. However his government allowed only a miserly 0.25 per cent increase for the entire six-year period. Both sides of politics have over the years not honoured this worthwhile, universal superannuation initiative for working people.
Brian Boyd, Carlton

Fantasyland prevails
Bruce Wolpe’s excellent analysis of the present state of US politics (‘‘It’s now midnight in America’’, 1/9) shows, in my view the risible rhetoric American voters hear from Trump and Biden. The President wants ‘‘to save the American Dream’’ and Joe Biden goes further with the call of there being ‘‘one nation, under God, united in our love for America’’. I would expect if the Democrats had chosen the other septuagenarian, Bernie Sanders, to be their presidential candidate voters would have heard policy facts and figures, not fairytales being projected about the US. Rather than it being midnight in America the clock has stopped on reality and fantasyland seems to prevail.
Des Files, Brunswick

Protect Australian citizens
We need to be doing more to protect Australian citizens – the detaining of Cheng Lei (‘‘Australian TV anchor Cheng Lei detained in China’’, 1/9) and the Julian Assange case. For far too long, our governments have put foreign interests, whether they be the US, UK or now China ahead of the safety of our own citizens. We need to bring Lei and Assange home and if they have committed any crimes, prosecute them in Australia where we know they can be protected and treated humanely. Chenny Chen, Werribee

Move no real surprise
It came as no real surprise to read about Australian TV anchor Cheng Lei being detained in China, considering fellow Chinese-Australian, Yang Henguin, a pro-democracy activist, has spent 18 months in jail after being arrested by the Beijing State Security Bureau on suspicion of endangering Chinese national security. That is the modus operandi of the totalitarian state: arbitrary arrest and secrecy.

Is it any wonder the Hong Kong protesters are so concerned about the ramifications of the national security law Beijing has imposed on the people of Hong Kong?
Rajend Naidu, Glenfield, NSW

A search for certainty
Perhaps we could make an exception on international travel restrictions so the federal Treasurer can take a trip to Sweden to check how a near absence of restrictions has helped the Swedish economy. He would find that far from boosting the economy and providing the certainty that he and numerous business groups crave, the Swedish economy contracted in the April-June quarter. The evidence is that with the virus raging, people impose restrictions on themselves and that spending fell by nearly as much in Sweden as in Denmark. Denmark’s impositions and its low death rate is similar to Australia.

Of course, we would all like certainty. But most people would continue to focus primarily on keeping casualties down. They will stay at home regardless of the needs of business. Josh Frydenberg’s latest harangue will only enforce the various premiers’ determination to act according to health officers’ advice.
Geoff Payne, Mornington

Time to mend fences
It was refreshing to read Shaun Carney’s piece on China (‘‘China veto is clothed in doubt’’, 31/8), compared to the numerous China hawks relentlessly promoting the same old biased views. It appears that China-bashing is a popular pastime of federal politicians and local pundits. China has contributed much to Australia’s economic growth in the past 20-30 years. We need to accept China for what it is, rather than trying to change it. History shows these tactics do not work. Unless we mend our fences, our post-COVID economic recovery will be bleak. By blindly following the US, our leverage as a middle power will also be compromised.

What’s needed now is to use diplomacy rather than bellicose China-bashing. We desperately need to send a respected emissary across to start a meaningful dialogue.
Siraj Perera, Camberwell

Staffing ratios the key
All the talk about the need to reform aged care is still cleverly ignoring the main issues. This is because there is a financial cost to effective aged care and the government is not prepared to back its rhetoric with a realistically funded model. No one is talking about one of the key aspects of aged care, i.e. staffing ratios. We have ratios in other sectors – childcare, schools and hospitals, but not in aged care.

All levels of staffing need regular, compulsory training. Aged care bodies that investigate complaints need to be proactive and have strong regulations that have immediate effect when facilities transgress. Facilities need a star rating, similar to hotels and other businesses. Then when families are choosing a facility for a loved one, they would have a better idea of what they are getting. And everyone moving into an aged care facility needs an advocate.

Until the federal government mandates the return of staffing levels tied to funding and monitors food and care standards, we cannot believe the rhetoric.
Ruth Hargrave, Mont Albert

Bring back nurses
The adequacy of aged care needs to be looked at through a different template (‘‘Billions needed to make aged care ‘adequate’’’, 31/8.) I am a registered nurse and former aged care facility manager. The one critical decision which would change aged care for the better is to put nurses back into aged care. This would mean infection control principles integral to good nursing practice would be in place, and the coronavirus death toll in aged care would never occur again.

Staff patient ratios would ensure that understaffing would not occur and if Division 2 qualifications were offered to employees who then sign up for three years this would mean better pay and no need to work across facilities.
Mary Keating, Flemington

Reimagining urban life
When developing Melbourne’s strategy to reopen hospitality venues this summer, we must look to exemplars based on health safety, economic viability and reimagining urban streetscapes. In Paris, mayor Anne Hidalgo extended outdoor dining areas and patron capacity limits on pavement terraces, within social-distancing guidelines. This strategic council decision supported health advice and resulted in a burgeoning of the celebrated Parisian terrace culture. How can urban life be reimagined in Melbourne?
Emilia Fabris, Fitzroy North

Foolproof birth control
I feel for all those new communities faced with inaccurate translations of important instructions during these difficult times. When I arrived in Australia from Italy in 1970 there were no interpreting facilities. This job was often left to volunteers such as myself. However, I could not help the southern Italians. The Australians found it difficult to understand that being from the same country did not mean understanding or speaking the same language/dialect. Often in those days a worker from the factory floor was asked to translate in his native language the written instructions of a product. I still giggle when I think of the Directions for Use in Italian included in a packet of Ansell condoms, concluding with ‘‘Carefully remove and bin the penis’’. Birth control at its best.
Laura Mecca, Windsor

Frydenberg vindicated
Your article (‘‘High-risk Victorians denied hotel quarantine’’, 1/9) about 37 vulnerable people who tested positive for COVID-19 being turned away from quarantine vindicates Josh Frydenberg’s comments that ‘‘What has transpired in Victoria is like a slow motion car crash’’.

Here we are in stage four lockdown and you have this diabolical situation where people who should be isolating can’t. You better get on to this one Dan before your credibility gets shot to pieces further.
Ian Anderson, Surrey Hills

AND ANOTHER THING …

<p>

Credit:

Coronavirus
Case numbers in Victoria still in double figures and the state on the precipice, and we’re subjected to shrill screams from the federal government to open up. Deja vu?
Eben Rojter, Coburg

I must have missed the announcement, but when did Josh Frydenberg gain his medical qualification?
Tony Colson, Mentone

The Liberals clearly can’t decide which is the greater enemy – COVID-19 or Daniel Andrews’ popularity.
Steve Melzer, Hughesdale

Instead of crushing the economy with closures, the government should let industries develop COVID-safe work practices that can keep them operating, as the AFL did.
Merryn Boan, Brighton

We must show patience to avoid becoming patients.
Nicholas Melaluka, Fairfield

Politics
Playing ‘‘Poke the Panda’’ is starting to get really dangerous. Scott Morrison please stop before anyone else gets hurt.
Barbara Lynch, South Yarra

Can we please have some real policy on branch stacking, aged care, climate change and the plastics deluge? Much better than silly buzzwords like roadmaps.
Mark Freeman, Macleod

It is telling that when Frydenberg referred to Monday’s ‘‘devastating numbers’’, he wasn’t referring to the 41 COVID-19 deaths in his home state but to Treasury figures.
Denny Meadows, Hawthorn

Where’s the Morrison government’s positive, new, post-COVID national vision that unifies us? Barbara Fraser, Burwood

F(r)ydo – woof woof.
John R. Powell, Melbourne

Was there a ceremonial cutting of red tape when China signed the Port of Darwin lease? Or was the sovereign risk negated by a fistful of dollars?
Greg Curtin, Blackburn South

Josh Frydenberg must have picked up one of those dog whistles ‘‘on special’’ in Canberra this week.
Max Nankervis, Middle Park

To submit a letter to The Age, email letters@theage.com.au. Please include your home address and telephone number.

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Local News - Victoria

The tax cut will increase income inequality


The Prime Minister did the right thing in boosting JobSeeker and he certainly cannot let it lapse to the old $40 per day. In any case, most of those on higher incomes do not pay the top tax rate because of income splitting, negative gearing and cash payments for excess franking credits. This tax cut largesse for high rollers will be saved and not spent. They will not add to private consumption and cushion the effects of coming off reduced JobKeeper and JobSeeker payments in September. The tax cut will increase income inequality.
Robert Blakeley, Horsham

Paying the price for a casualised workforce

Throughout the past century, advocates and organisations ensured that workers gained payment and conditions commensurate with the contribution they made to the economy and society. However, successive governments – federal, state and local – have promoted the casualisation of the workforce over a significant period.

These societal guarantees have now been eroded to the point where a crisis such as the pandemic exposes the weaknesses created by a large casual workforce. People whose day-to-day existence depends on an ability to be at work (often in multiple low-paid and uncertain jobs) do not have any capacity to choose between this or staying at home. Politicians who are calling for low-paid, casual workers to bear the brunt of protecting the community from virus spread are the same ideologically driven class that stripped conditions from these workers.
Mark Bennett, Manifold Heights

An opportunity to do better for all Australians

The Premier has highlighted the role of insecure work as a driver for coronavirus-affected people continuing to go to work. Similarly, frustration at delays in receiving test results may have been worsened by the privatisation and centralisation of pathology services.

The way our economy has worked until now is not working in a pandemic. When we come out of this, we will need a serious review of how we employ people, where they work and and serious decentralisation, especially for the development of onshore manufacturing to make Australia self-sufficient in essential supplies. We need a future of secure local jobs, drawing on some of our good, old-fashioned ways of doing business as well as more socially and environmentally thoughtful emerging industries.
Jo McCubbin, Sale

Allowing more people to be tested and to isolate

Daniel Andrews needs to extend pandemic leave and hardship payments to people who are waiting for their test results. It is not reasonable to ask someone to isolate for up to 10 days while they wait for a lab result and to only give them help if they test positive. All this does is discourage people from getting tested.
Bryce Nichol, Ringwood North

We all need to eat and have a roof over our heads

So Victorians are going to work sick when they should be in isolation. This should come as no surprise. The infection rates have been higher in those areas where incomes are lower. Overseas this nasty disease is also affecting the poor disproportionately. It is time for a universal basic income to allow workers to stay at home while this pandemic rages. A change to the tax rates to pick up tax from those at the higher ends of the income scale should go a long way towards paying for it. Over to you, Josh Frydenberg.
Eileen Ray, Ascot Vale

THE FORUM

Helping small businesses

In 2007, the government realised that the then $50,000 GST threshold on businesses put a stranglehold on many small ones and raised it to $75,000. There has been no increase in the threshold since then, although house prices and the cost of living have soared. If the government wants small businesses to survive this recession, the GST threshold must be raised to $100,000.
Small businesses like mine operate on a shoestring and sustain their owners modestly, while providing valued services to their customers. The GST may soon be raised to 15per cent to provide the funds to support the economy. I hope the turnover threshold will also be raised. Many small businesses will survive or fail based on this decision.
Marianne Sherry, Northcote

Defining true hardship

Being treated as a ‘‘second-class parent’’ (The Age, 24/7) is when you do not have the money to put fresh food on the family table or buy new school shoes. It is not about your dissatisfaction with hospital visiting rules.
Heather Sheard, Elwood

NZ did the right thing

Behrouz Boochani, who was detained for six years on Manus Island, has now been granted refugee status by New Zealand. Why was our country not capable of this act of simple decency?
Danny Neumann, Port Melbourne

Protect our wildlife

As with Darebin Council, I would like to see all Victorian municipalities implement a ‘‘dusk to dawn’’ curfew on cats. They can still have a good life, unlike the native animals and birds that are disappearing.
Margaret King, Glen Iris

When masks don’t work

A number of correspondents have criticised the exemption for runners and cyclists from the wearing of masks. On Thursday I wore a mask when I went for my bike ride. While I had no problem with breathing through it even when exerting myself, it was not long before the condensation built up in it, wetting it thoroughly and rendering it ineffective. Sorry, walkers, I will not be wearing a mask again when riding as it is pointless.
Stuart Gregory, Brunswick

Keep spit to yourself

If joggers and cyclists must exercise without a mask, maybe they should buy a running machine or an exercise bike so that their spittle remains in their own garage.
Jim Bitcon, Balwyn

We all must wear masks

I met a bloke, not wearing a mask, on a golf course who proudly announced he had asthma. I think I was supposed to say, ‘‘Of course you shouldn’t be wearing a mask’’. But a mask offers (less than perfect) protection in two directions.

It protects the wearer from others and we others from the wearer. The last thing anyone, especially someone with compromised lung function wants, is COVID-19.

Asthma is a disease of small airways, not a disease of the upper airways of the nose and mouth. If there is a perception from an asthmatic person that their breathing is compromised by wearing a mask, the last thing they need is a ticket to avoid wearing one. They need an improved asthma management plan. So put on a mask and go to the GP. There needs to be one simple, universal rule. Wear a mask. It just might save lives.
Dr Chris Hughes, Rye

The huge job of testing

As a scientist in pathology, I find it offensive that anyone would suggest we are in any way not working at full capacity to get results out quickly. Remember that since February, we have developed tests to detect this new virus, installed extra equipment and trained staff.

We also work 24/7 on thousands and thousands of samples to get you your results quickly, in extremely trying conditions, on ‘‘the frontline’’, as you are asked to isolate in the comfort of your home for a few days. Pathology scientists and technicians are working hard for you and I am proud of each and every one of them.
Name withheld, Mornington

Try ‘pooling’ method

A quicker method of COVID-19 testing is being used by Israeli researchers. ‘‘Pooling’’ tests a combined sample taken from 32 or 64 patients. If the result from the combined batch is positive, then individual tests are conducted for each specific sample. This has greatly accelerated the rate of testing and detection. Another way to speed up testing could be to send ‘‘spit testing’’ kits to each household. This could save on queuing at testing centres and prevent incidental shopping expeditions.
Helen Kamil, Caulfield South

The carers’ dedication

Not everyone is suited to nursing our old folk. It takes a really special kind of person. I hope these workers are now being more highly valued and better compensated for their heroic work.
Gail Greatorex, Ormond

Chilblains and COVID-19

Re your article about doctors and nurses in hospitals seeing rashes and swollen fingers and toes among COVID-19 symptoms. Many general practitioners are reporting higher than usual numbers of patients presenting with chilblains on the hands and/or feet. The rash appears identical to that associated with COVID-19, yet none I have seen give a history of symptomatic COVID-19 infection or flu-like illness.
Dr Sue-Ann Steer, Glen Iris

So easy in hindsight

Could Michael O’Brien please give us the benefit of his insight into managing the COVID-19 crisis, at the time of the implementation of strategies instead of when the unanticipated consequences make it apparent to everyone. It is easy to be right about what to do then when you now know what happened.
Kris Sloane, Fitzroy North

The wrong time to rally

It is disheartening that organisers of the Black Lives Matter protests intend to go ahead with a march in Sydney. Since the movement started in the US, many Australians have felt more empathy, awareness and understanding for those who suffer prejudice because of the colour of their skin. The unwise actions of a few will result in a significant shift in support for the movement because it is extremely irresponsible to hold a public protest at this time. In the current circumstances, all lives matter.
Creighton Parker, Blackburn North

The ongoing prejudice

Sussan Ley’s approval of the Shenhua Watermark Coal Mine, against the wishes of the local indigenous community , shows how little has changed in centuries of European occupation. When push comes to shove, First Nations Australians will always lose out to powerful sectional interests. In 100 years, people will be asking: ‘‘How could they let this happen?’’
Colin Smith, Mount Waverley

Save our environment

People are rightly concerned about the federal government’s fast tracking of environmental approvals. In Victoria, our government seems to be streamlining the process by other means.
Chris Atmore, Somers

Two approaches to trees

I was flabbergasted by Melbourne City Council’s statement that it wishes to protect the grand sentinel trees. Right now it is in full swing, destroying the heritage elms in the Botanic Gardens precinct. At least 20 so far and the number is growing daily. The sight of their trunks lying waiting for the pulping machine is very haunting.
Susie Holt, South Yarra

A tonic for bleak lives

Is there any chance you could include a good news story on your website? And I do not mean one about how people love remote learning or making their own bread. A nice story about a kitten being rescued from a well, a massive plastic clean-up in Timor Liste or even the number of people who have recovered from COVID-19 since June would go a long way to stop us from tuning out the news entirely.
Sarah Craze, Ashburton

Illustration: Matt Golding

Illustration: Matt GoldingCredit:

AND ANOTHER THING

Economy

Elvis was right, again. It’s gonna be a blue Christmas.
Tim Durbridge, Brunswick

How will a personal tax cut help those who are unemployed?
Arthur Pritchard, Ascot Vale

Is it too early to call it the Coalition’s Debt and Deficit Disaster?
Rob Smith, Rye

It beggars belief the government is considering tax cuts while unemployment grows and JobSeeker/JobKeeper is cut back.
Linelle Gibson, Williamstown

Coronavirus

The only thing bothering me about masks is that we can’t use smiles to signal friendly intentions.
Ralph Bohmer, St Kilda West

Students are calling those not wearing masks ‘‘Donalds’’.
Michael Carroll, Kensington

We’ve foiled Big Brother’s facial recognition software and I have an excuse for not remembering names.
Kevan Porter, Alphington

Where can I buy a spacesuit?
Doug Shapiro, Doncaster East

Dennis Walker (23/7), Moe, Larry and Curly would still have to rely on Melburnians doing the right thing.
Les Ewbank, Blackburn

If you can’t jog without a mask, how’s this for an idea? Don’t jog.
David Hamilton, Hampton

I’m a cyclist and a mask is no problem. Joggers, cyclists, all blowing clouds of airborne particles. One rule for all, Dan.
Ed Farbrother, Hughesdale

Furthermore

I finished the quick crossword (23/7). Quite a feat as three clues were missing.
Linda Fisher, Malvern East

Agreed, Josh Bornstein. If you want to reduce gender inequality, fewer middle-aged men in government would be a start.
Paul Cook, Coburg

Cormann: ‘‘I do not publicly comment on constituent inquiries’’ – i.e., ‘‘I won’t fess up to pulling strings to exempt Kerry Stokes from hotel quarantine’’.
Peter Randles, Pascoe Vale South

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Nearly a million Australians rush to file their tax returns and claim tax offset of up to $2160


Nearly a million Australians have rushed to file their tax returns early and claim a tax offset worth up to $1,080 for singles and $2,160 for couples.

As thousands of workers are forced to rely on welfare and raid their super accounts as the economy is battered by a COVID-19 recession, new figures reveal they have also moved swiftly to claim tax refunds that should start hitting bank accounts this week.

The cash splash is set to provide a much-needed boost to the economy with hopes that workers will spend the money and help support jobs as the economy reopens outside of Victoria.

Ten million Australians on low and middle incomes are set to secure a tax cut under the changes, but only when they file a return this year.

Nearly half of those workers – around 4.5 million Australians – will secure the maximum $1,080.

RELATED: How to get your tax refund faster

RELATED: More tax benefits for small business

Treasurer Josh Frydenberg said the early bird refunds will hit bank accounts over the course of this week.

“A record number of Australians have already lodged their tax return with refunds to land in bank accounts over the course of the week,” he said.

“As part of last year’s budget we increased the low and middle income tax offset to $1,080 for individuals and $2,160 for couples.

“It means people can keep more of what they earn providing a much-needed boost to the household budgets.

“Millions of Australians across the country are set to benefit again this tax time from the Government’s tax cuts,” he said.

Nearly 991,000 year-to-date 2020 individual lodgements have been received, an 11 per cent increase compared with the same time last year.

The tax cuts, worth $8 billion this year alone, include a change in the top threshold of the 32.5 cent tax rate and the Low and Middle Income Tax Offset (LMITO) worth up to $1,080 for workers earning less than $126,000 a year.

But not all workers secure the maximum of LMITO amount. Workers with a taxable income of up to $37,000 only secure $255.

The maximum offset of $1,080 will apply to anyone earning between $48,000 and $90,000.

Workers earning over $90,000 but less than $126,000 start securing less from the offset until it gradually reduces to zero to ensure high income earners don’t secure the benefits.

The top five electorates to benefit from the LMITO include Wright in Queensland, Bob Katter’s electorate of Kennedy in Queensland, Stirling and Cowan in Western Australia and Tanya Plibersek’s electorate of Sydney in NSW.

Former Prime Minister Julia Gillard’s electorate of Lalor in Victoria is also in the Top 10 as is Melbourne and Capricornia in Queensland.

Last week, Mr Frydenberg flagged the prospect of bringing forward legislated tax cuts to help stimulate the economy in the October budget.

Personal income tax cuts for middle income earners worth up to $2,565-a-year are likely to be brought forward to help boost spending.

Mr Frydenberg confirmed that the fast-tracking of the tax cuts was a live option in the wake of the COVID-19 pandemic.

“There are three stages to those legislated income tax cuts and, you know, the benefit was very clear. We’re creating one big tax bracket between $45,000 and $200,000 where people pay a marginal rate of no more than 30 cents in the dollar,” Mr Frydenberg said.

“So we are looking at that issue and the timing of those tax cuts because we want to boost aggregate demand, boost consumption, put more money into people’s pockets and that is one way to do it.”



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Business

What Ken Henry really thinks about tax reform


OK, I decide we should play the game. But Henry obliges. He seems in a convivial mood. He only warns he must be a bit careful, because he is yet to provide his formal feedback to the review.

In the meantime, here it is:

1. Lift the rate of base of the goods and services tax

HENRY: YES (if not pursuing an alternative form of a consumption tax, like a business cash flow tax)

“I think that over time we’re going to have to place more reliance on consumption taxes and that means both a higher rate and a broader base. Whether it’s the GST we use, or an alternative like a cash flow tax or something of that sort, we are going to have to have a broader base and higher rates on consumption over time. If we don’t find an alternative consumption tax, then it does mean a higher GST rate and broader base.”

“I do think there’s an opportunity to simplify the administration of the GST. Rather than have our invoice and credit method, I think we could have a direct subtraction method tax, which is effectively what a cash flow tax would deliver. I think there’s an opportunity to do that. I think there would be benefits in doing that because it would be simpler, lower compliance costs and would give us an opportunity to rethink the appropriate base for the tax.”

2. Abolish stamp duty and introduce a broad based land tax

HENRY: Yes

“Absolutely. Long overdue. Gotta happen. And that’s the one that surely has the best chance of happening because everybody seems to understand the case for it.”

3. Share federal income tax revenue with the states and abolish tied grants

HENRY: MAYBE to the first part, and YES to the second part

On the idea of the federal government giving some portion of income tax revenue to the states: “I think it’s worth exploring, so it’s a maybe.” However, adds Henry: “It’s been tried in the past and the states have shown little enthusiasm.”

NSW Treasurer Dominic Perrottet with review panel members Jane Halton and David Thodey at the launch of the plan at the National Press Club in Canberra on Wednesday.

NSW Treasurer Dominic Perrottet with review panel members Jane Halton and David Thodey at the launch of the plan at the National Press Club in Canberra on Wednesday.Credit:Alex Ellinghausen

On abolishing grants to state governments tied to particular purposes: “We did this in 2008,” he notes, with some frustration. “We had a huge reform of federal financial relations. We got rid of all this garbage. And things are even worse now than before we started in 2008. The problem that we’ve got in the Federation is that we’re capable of occasionally having these big grand bargains that deliver massive reform and then, within a decade, we’re back to where we were, or in a worse position. I think the story is that ministers with portfolio responsibility for various things cannot help themselves. If they see a problem that needs addressing, they’ll just put a bandaid on it [a grant to the states].”

It is at this point that Henry somewhat casually drops the bombshell into our conversation that he would like to see the federal government stripped of all responsibility for education and health and states stripped of their ability to approve big mining projects.

“The big problem here – which the review points to – is that there is no clearly settled allocation of roles and responsibilities between the Commonwealth and the states. So, both states and the Commonwealth see every problem as their political problem, that they have to fix. And so they’re always bending over backwards to come up with a new bright idea to fix a problem that is probably not really their responsibility at all, you know, constitutionally, but politically of course it is.”

But how to divvy things up?

“You just take a portfolio and say: ‘That’s yours. That’s not ours’,” Henry explains. “Defence is pretty obvious. But that’s the only easy one. Education I think yep, give it to the states completely. Health I think it has to be states. It has to be. Because it’s too hard for a centralised – even for a country as small as Australia in terms of population – it’s pretty hard to run a health system from Canberra. I would leave it to the states.”

“The big one, the really tough one, is environment. There I can see the sense in leaving it to the states. But their record has been so bad, I would not. It’s just terrible. And I think there has to be a national discipline when it comes to environmental matters. And I’m not just talking about climate change – obvious climate change – but the preservation of the continent has to be thought of in those terms: it has to be thought of as the continent of Australia. And that should be a national responsibility. Bizarrely, under the constitution, the Commonwealth doesn’t actually have power, except in unusual circumstances.”

So, would Henry strip state governments of the ability to approve mining projects?

“Yep.”

Bombs away!

But getting back to Thodey’s recommendations…

4. Harmonise state payroll taxes and remove exemptions

HENRY: YES

“But that’s a second best. I would replace it with an alternative, like a cash flow tax. But if there’s not going to be a cash flow tax, then yes, harmonisation and getting rid of the exemptions as much as possible makes sense.”

5. Introduce road user charging to replace fuel excise, starting with electric vehicles

HENRY: YES

“I think it’s all very sensible what they’ve recommended.”

So, that’s a ‘thumbs up’ from Henry for Thodey’s recommendations, then. Which should come as no surprise, given most were also recommendations of Henry’s 2010 review.

Henry says he remains committed to these and other ideas from that review, including cutting company and income taxes.

So what else would Henry do on tax reform?

On the need to cut company taxes, Henry says: “We have to. We don’t have a tax system that’s capable of generating sufficient business investment and that’s doing enormous economic damage.”

And the only option is to cut the company tax rate?

“Or, a redesign, and this is where the other case for cash flow taxation comes in. But it gets really complicated. But the company tax – even with accelerated depreciation – does not provide as generous a treatment of business investment as cash flow taxation does. So…if you’re going to stick with our company tax system, then we are going to have to cut the company tax rate over time.”

“Of course, Jess,” Henry continues, “I don’t know how many of your readers would have figured this one out, but the principle reason the company tax rate has not been cut in Australia to date is because of the defeat of the resources super profits tax.”

Because we still just need the revenue?

“Correct,” replies Henry, “because the biggest payers of company tax are the miners and the banks. And if the miners were paying the alternative resources super profits tax, the company tax rate would have been cut by now.”

So, where to now for tax reform?

Does coronavirus provide politicians with the “burning platform” needed to embark on major reforms?

“We had a burning platform before the coronavirus hit, and it was that we had a tax system that was not capable of funding the goods and services that governments are committed to funding without doing enormous economic damage – without hampering productivity and growth… With the coronavirus, that means that now everybody should be able to see that it’s a burning platform because we have got governments needing to do more, with tax bases that have been damaged horrendously by the interventions that governments have had to take. So we had a burning platform and now the thing is shattered.”

What exactly should be done, though?

Should the Treasurer simply lift the GST to 15 per cent, as some commentators (ahem) have suggested?

“He’s not going to do that,” says Henry. “He would regard that as political suicide – and it may well be, if that’s all you did. But that would be a missed opportunity. There’s an opportunity here for national leadership in a national reform agenda that has tax at the top, but is not all about tax.”

And the last thing we need is another review, Henry concludes.

“We all know…huh.” Henry pauses. “Well,” he corrects himself, “we’ve all been told for long enough what needs to be done. We don’t need another review. We need agreement and political commitment. That’s all we need. And the national cabinet – that’s an appropriate body to be able to take those decisions. The question is whether there is a political will?

“But, as I said, it needs to go well beyond tax. We need to fix the climate policy mess. We need to fix the energy policy mess. We need a national approach to population. There’s a huge number of policy issue that have been there, unresolved, for a very long time, and now’s the opportunity to address them. Let’s do it.”

He’s only been arguing for tax reform since he first took the helm of Treasury’s tax policy division in 1984. But Henry’s passion for the subject seems undiminished nearly four decades on – unshackled, even, by some time on the farm.

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Business

Send alcohol tax hikes to the deep freeze, say brewers and winemakers


Brett Heffernan, chief executive of the Brewers Association, said total beer sales in Australia were down a massive 44 per cent in May compared to May last year.

“Right now consumers don’t need higher taxes. We’re in an environment now where politicians of every persuasion are encouraging people to get down to their local to support local jobs. It seems contradictory to, at the same time, be jacking up a tax on having a beer with your mates,” he said.

I think the critical issue is that for Australia to recover, we need the pubs, clubs and restaurants sector to recover as well.

Tony Battaglene, CEO of Australian Grape and Wine

“It’s been going up every six months for the last 37 years. It just creeps up that little bit every six months, and it’s now to the point where we’re the fourth-highest beer taxed nation on Earth,” he said.

Mr Heffernan estimated that the amount of revenue forgone by a 12 month freeze on automatic inflation-linked rises would be about $70 million. “We would strongly argue at this time that that $70 million is much better off in punters’ pockets than in Treasury coffers.”

The alcohol excise raised about $4 billion for federal coffers in 2018-19, according to the Brewers Association, which represents major brewers CUB, Lion and Coopers.

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Wine is taxed differently and does not face the same excise regime but Australian Grape and Wine, which represents wine grape and wine producers, supports the push.

“I think the critical issue is that for Australia to recover, we need the pubs, clubs and restaurants sector to recover as well, because that’s a major contributor to Australia’s economy,” said Tony Battaglene, the group’s chief executive.

Mr Battaglene said the proposal was “a relatively cheap option for the government…but a really effective way at getting money back into the sectors that need it for recovery”.

While their attitude to the beer excise proposal is not known, key government leaders have been photographed and filmed showing their enthusiasm for beer a number of times in recent years, with Prime Minister Scott Morrison photographed as far afield as Cloncurry downing a beer last year.

Treasurer Josh Frydenberg was filmed pulling beers for members of the Auburn Bowls Club in Melbourne on the day after the Coalition’s 2019 election victory, and was photographed just three weeks ago serving beers at a Glenferrie pub.

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Local News - Victoria

Calls for tax and parking restrictions on polluting cars and trucks


Electric vehicles are an important way to curb emissions but the uptake is too slow, the report warned, with electric vehicles only making up 0.6 per cent of Australia’s vehicle fleet compared with 3.8 per cent in Europe and 2.3 per cent in New Zealand.

Other key changes are needed to decarbonise transport, such as creating a road pricing scheme that charges vehicles for kilometres travelled and high emissions, Austroad’s program manager for transport network operations Richard Delpace said.

“A pricing scheme can be put in place that has the criteria of charging more or less for vehicles depending on their emissions, their age and location and where they travel to,” Mr Delpace said. “Road pricing can be a key lever in influencing transport demand.”

This is similar to New Zealand, which is imposing a fee on new high polluting car sales, with the revenues used to fund subsidises of new lower-emissions vehicles.

Austroads also called on planning authorities and local governments to consider parking restrictions for inefficient vehicles in order to support the take-up of electric vehicles and encourage more pedestrian spaces.

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polluting cars “As well as penalties, incentives could also be considered such as reduced parking costs which also potentially [limits] additional kilometres travelled,” the report stated.

Other options include tweaking traffic light signals to give more priority to public transport, increasing on-demand public transport options and boosting cycling and walking infrastructure.

The Department of Transport offers reduced registration fees and stamp duty rates for purchases of green vehicles and is building an extra 250 kilometres of cycling and walking paths.

A Transport Department spokesman said the government had “no plans to add a new tax on heavy vehicles or restrict access to car parking across Victoria”.

“By encouraging more freight onto our rail network, new electric and hybrid buses, and solar powered trams – we’re making our transport network more sustainable than ever before.”

The Victorian Transport Association’s chief executive Peter Anderson said he supported measures to phase out older polluting trucks, including progressively raising registration fees for vehicles that are more than five years old.

“There’s an easy process to do it that would increase revenue for the state and improve emissions, while ensuring the industry keeps upgrading its vehicles by putting commercial leverage on those operators.”

Mr Anderson said he wanted operators to replace their fleets with newer trucks that were safer and less polluting but restricting parking was not the way to do it.

Larger trucks are already restricted from parking in the city for more than an hour and despite fatigue laws requiring trucks to stop and rest, there was a lack of available rest stops, he said.

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