35. SUGGESTED TAX REFORM IN AUSTRALIA

The Constitution of the Commonwealth of Australia does not define to any great extent the respective powers of Federal and State governments to impose taxes, though when there is a dispute the High Court usually rules in favour of Federal government.  It appears to believe that strength and equity lie in centralization.

The outcries over the fiasco of border closures during the pandemic have shown that it is the politicians, not the people, who are insistent on the maintaining of State governments.  The people, I am thinking, are ready to see an end to state borders.  We are ONE.  State borders divide us.

If Federal government were to hold a successful referendum to change the Constitution and abolish State governments we could divide the nation into regions.  Our population is approximately 27 million at present.  Say each region contained ten thousand people.  That would give us 270 regions.  Members of Federal Parliament could be elected from pairings of two regions.  That would give us a total of approximately 130 members of Federal Parliament, several fewer than we have now. The numbers would grow as the population increases, naturally.  We would lose our State parliamentarians and their cohorts of public servants, lessening the budget consdierably.

The regions would have their own Councils, comprising say, 20 Councilors.  Each would represent 500 voters.   We need closer representation of the people in local government.  The councilors need to be in close touch with the needs of the people of their particular regions.

Most taxation would be levied by Federal government which would subsidise the regions as per their needs and special requests.  Subsidising would be on the basis of needs rather than equal shares.  Councils would be able to raise revenue by levying for garbage disposal, sewerage and water, and charging rates for land and property ownership. They could impose fines for traffic and parking offences, and for such things as littering.  They could charge for ambulance and fire brigade use.  They could apply to Federal government for grants for infrastructure and maintenance.  Law and order – the police force – could be a joint Federal-regional concern.

Federal government could obtain revenue to run its own affairs and the affairs of the regions by various forms of taxation.  It is probably human nature for Prime Ministers and Treasurers to plot to inveigle taxpayers out of money without their noticing it, by sleight of inventing a huge assortment of taxes.  That leads to a confusing mélange of taxes.  We need to simplify the tax system, not only to avoid confusion but because people DO notice sneaky taxes and pass them on, and those on lowest incomes fare worst from this trickle-down of taxes. In Australia at present the major taxes are Income tax, payroll tax, corporate tax and GST.  All but Income Tax are passed on and become a burden to those least able to afford them.

The trickle-down effect when it comes to taxation on goods and services is a proven fact.  Trickle-down of tax relief is probably a myth.  I would abolish all but Income Tax, while making Income Tax far heavier on the incomes of the wealthy.  Meanwhile I would give the wealthy incentives for philanthropy by way of public recognition and honour, free access to art shows and sports events, or travel, or invitations to special functions.    I would consider Inheritance Tax above a certain threshold, and perhaps a gift tax.  It would strengthen the moral character of the children of the wealthy not to be handed wealth on a silver platter.

I would budget more wisely in other ways than taxation to maintain credit.  I would cease to shelter the wealthy with trust funds. I would also abolish negative gearing.  It is a lazy way for our laissez-faire government to encourage private investment in rental housing instead of itself investing in public housing.  While I am on the subject of public housing I would allow public renters to rent-and-buy.  Nothing encourages a home-dweller to take care of his/her home like home ownership.

With the abolition of States, Federal government would obtain revenue by charging for such services as Health (see previous chapter) and Transport.  It would take over the building of national roads and the administering of vehicle registration and the revenue gained therewith.

Cutting costs by reforming the bureaucracy would give us much needed money.  At present too many folk in Australia are in totally unnecessary and uncalled for jobs, while much necessary work goes begging.  The government excuses itself on the grounds that it is employing people, but the majority would be better employed elsewhere.  Let me give an illustration:

As a student of tutoring in English-as-a-second-language at a Queensland State College several years back, I was being taught at the beginning of the semester free of charge.  I and all the other students were intending to tutor as volunteers.  Half-way through the semester, some bureaucrat(s) decided it was appropriate for us to pay a fee as all the other students at the college did, but made it a nominal fee of $10 a semester.  Personnel and required paperwork were set up to accept our $10 fee.   Then it was decided that those who intended to be volunteers, which was all of us, could apply to have the $10 refunded , and more personnel were engaged to undertake the refund, and a special application form was drawn up for the purpose.

This kind of mindless wasting of resources reaches its zenith with purchases such as the Jackson Pollock painting “Blue Poles” by government for one million dollars for snob value.  The common people should be consulted before such huge purchases are made.  Such decisions should not be left to pretentious egg-heads.  It is our tax, the money out of our pockets, which pays for such monstrosities.  I hope and believe that a government of Independents would have the conscience to refer big spending on things which are supposed to benefit the people at large, to the people at large.

The above measures should help to put us back in the black sooner than the status quo hopes to do.

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