Our Electorate Office is now back
in Bondi Junction. My new office is located at Level 1, 5A Bronte Road in
Bondi Junction, next door to Easts Leagues Club and opposite the Myer
entrance to Westfield.
About 60 volunteers joined us to
clean up Rose Bay on Sunday. It was a dirty job, but someone had to do
it....and it was us. Thank you to all our supporters.
See photos here.
Black
Spot funding
Wentworth
will receive $140,000 next financial year under the Howard Government's National
Black Spot Programme.
A $90,000 roundabout will be installed at the
intersection of Blair Street, Plowman Street, Glenayr Avenue and Warners Avenue
in North Bondi and a $50,000 route traffic calming scheme
will be installed on Glenayr Avenue from Roscoe Street to Blair Street in
Bondi
Beach.
The Black Spot
Programme, now in its ninth year, continues to ensure work is carried out at
some of the high casualty accident areas across
Australia.
In recognition of its success
the Federal Government has extended the Programme for a further two years from
2006-07 to 2007-08 at a cost of $90 million.
School
funding
St
Clare's College in
Waverley will receive $100,000 under
the Federal Government's Capital Grants Programme.
The grant will be used to
purchase a small parcel of land adjoining the school site currently occupied by
an electrical sub-station and for the relocation of the sub-station. This will give the school much needed
room to grow.
The President spoke well at the
United Israel Appeal gala community event on Tuesday night and I was honoured to
meet him at a luncheon at the Lodge in
Canberra on Wednesday hosted by the
Prime Minister, John
Howard.
Israeli Airforce General Amos
Yadlin is
the military attaché in
Washington in
Israel's
Embassy. He spoke at the UIA event referred to above. He noted that
Arafat had possessed three powerful cards in his war
against Israel.
One was demographic: the Palestinian population was growing much more rapidly
than the Jewish population. Another was terror. The third was a veto: the
ability to say no.
General
Yadlin said that
Israel's policy
was simply designed to deprive its opponents of the first two cards. The
demographic card was taken by
Israel
withdrawing from areas where Jews were in a minority, such as
Gaza. The terror card was taken by
building a security barrier and thereby reducing the ability of terrorists to
enter
Israel.
Tax
Reform
In my last newsletter I wrote a little about the tax
reform and further comments of mine have been the subject of press coverage
recently.
It is generally (although not universally) accepted that,
by international standards, Australia's income tax system has a top marginal rate which is too
high and a threshold for that marginal rate which is too low.
However, advocates of lower rates of income tax need to
focus on how those cuts can be achieved without a massive loss of Government
revenue.
A major problem in tax policy is the way in which the tax
base (the amount of income which is subject to tax) is eroded by deductions,
avoidance, non-compliance (the black economy) and so on.
In an ideal world the tax base would be broad and the
rate low. That is fairer to taxpayers generally because it means that the rate
of tax is not dependent on a taxpayer's preparedness, for example, to engage in
tax avoidance schemes. Moreover, the lower the tax rate the less incentive there
is to avoid, and probably to evade, income
tax.
There are many ways to broaden the tax base. The most
obvious, but most difficult, approach is to roll back the black economy. GST has
certainly reduced the cash economy but the amount of undeclared income remains
immense.
The Australian Tax Office's Cash Economy Taskforce in 1998
valued the cash economy at between 3.5% and 13.4% of GDP. Using the 2004 GDP
figure of $813 billion, that would represent between $28.4 and $106.8 billion.
Using an average tax rate of 31.5% (30% average tax rate and 1.5% medicare
levy), the revenue foregone through evasion ranged from $9 billion and $34
billion in 2004. This is fairly close to the estimates made by
Professor
Neil
Warren of lost revenue between $7.6 and $29.1 billion in
2001-2002 and between $8.4 and $32.3 billion in 2003-2004.
Given that the entire personal income tax "take" is $100
billion, the loss from the black economy represents a very significant
percentage of current income tax receipts and its recapture, even if only in
part, would make it possible for all of us to pay less tax overall.
Another activity which not only costs reduces Government
revenues by eroding the tax base and often gets taxpayers in very hot water are
mass marketed tax avoidance schemes. Tax planning is a very obscure "black" art
for most people and few people are in a position to question their tax advisers
when they are told a particular scheme will be
effective.
The Government has been concerned about these mass
marketed schemes for some time; for both revenue and consumer protection
reasons. I have suggested that we should consider requiring promoters to give a
warranty that the deductions forecast will be forthcoming and that this warranty
be absolute. In practice, that would mean that the only schemes which would be
promoted would be ones with a very unequivocal ruling from the ATO.
Some people have claimed my suggestion is too draconian;
after all, they say, taxpayers know they are taking a risk when they invest in a
scheme. Any advice on taxation is but an opinion and opinions can differ. That
point is fairly made, in my view, when dealing with conventional advice. However
a mass marketed scheme is, by definition, more in the nature of the sale of a
product; the fine print filled with disclaimers is rarely, if ever, read. The
investors are entitled therefore to a higher level of protection. If it results
in less tax avoidance, as I believe it would, so much the better.
Light Rail
The push for light rail in the
Eastern Suburbs continues and as promised in my last newsletter I have made Gary
Glazebrook's paper available here
as a download.