Joe Hockey said “We are going to give economic reform a red hot go in 2015.”
He went on to say “The taxation discussion with the Australian people
next year will not be about increasing the revenue take for the
Commonwealth, it needs to be how we can have a taxation system that
makes us a more efficient and productive nation, and is fairer for all
If we want to make revenue collection fairer, and we want to cut
wasteful spending, then I have a few suggestions of where to start.
Corporate tax avoidance
Tackling corporate tax avoidance is an urgent priority; Australia
does not have a spending problem, it has a revenue problem and it must
Up to $80 billion was foregone by the taxman between 2004 and 2013.
Superannuation tax concessions
Superannuation tax concessions will cost the budget around $35
billion in 2013-14 projected to rise at a staggering 12 per cent
annually to be $50.7 billion in 2016-17.
Capital Gains Tax and Negative gearing
Generous government tax breaks for property investors see them
benefit from a 50% discount on capital gains tax (at a cost to the
government’s budget of $4.4 billion per year) and negative gearing
(costing $2.4 billion a year).
Fossil fuel subsidies
The Government will spend almost $14 billion in the next four years on fossil fuel subsidies to the big mining corporations.
Tony Abbott said Australia will acquire another 58 Joint Strike
Fighters at a cost of around $90 million per plane; $24 billion has been
budgeted to purchase and operate the aircraft until 2024.
A decision to spend more than $20 billion on up to 10 Japanese submarines will be announced before the end of the year (maybe?)
The Commission of Audit’s report shows that in the past four years,
the Australian government has increased spending on the detention and
processing of asylum seekers who arrive by boat by 129 per cent each
year. Costs have skyrocketed from $118.4 million in 2009–10 to $3.3
billion in 2013–14.
This is the fastest growing government program and projected costs over the forward estimates amount to more than $10 billion.
(It costs $400,000 a year to hold an asylum seeker in offshore
detention, $239,000 to hold them in detention in Australia, and less
than $100,000 for an asylum seeker to live in community detention. In
contrast, it is around $40,000 for an asylum seeker to live in the
community on a bridging visa while their claim is processed.)
The Abbott government has given Transfield Services a $1.22 billion
government contract to run immigration detention centres on Nauru and
(Tony Shepherd, who was the chairman of Transfield until he resigned
in October to Head the Commission of Audit, left with more than 200,000
Transfield shares, allocated to his family superannuation fund, on top
of his final salary of $380,000. Shares in Transfield soared 20.8 per
cent on the news, lifting the company’s market capitalisation by about
$80 million. He now heads the WestConnex Delivery Authority where money
from the East-West link may be redirected)
Employment Service Providers
The Coalition Government has released its exposure draft of the
purchasing arrangements for a new employment services model – a $5.1
billion investment over three years from July 1, 2015 – which includes
the new Work for the Dole scheme.
Emissions Reduction Fund
Under the ERF the government will spend $2.55 billion to purchase emissions reductions through auctions.
Public Service redundancies
The federal government is on track to fork out $1 billion in
redundancy payouts to public servants even before entitlements such as
leave are paid.
School chaplaincy will be continued for another five years at a cost
of $245.3 million. Under the program, 3700 schools are eligible for up
to $72,000 funding to employ chaplains.
Marriage guidance vouchers
NEWLYWEDS across Australia will be given a $200 voucher for marriage
counselling from July 1, as part of a $20 million trial to strengthen
relationships and avoid family breakdowns.
TONY Abbott’s hand-picked human rights adviser has been given a $56,000 expenses package to top up his six-figure salary. Human
Rights Commissioner Tim Wilson now has a total salary of $389,000 plus
vehicle and telephone expenses following a recent decision by the
Hope that gets you started Joe, or whoever is now doing the budget. (Cormann? Frydenberg? Thawley? Credlin? Rinehart?)
PS In light of the above potential savings, you may want to read my plan to get half a million people employed at a cost of $8.8 billion
PPS In South Africa, Boxing Day was renamed Day of Goodwill in 1994. May you use it to contemplate wisely.