Pressure from the community as a result of access to basic services becoming more and more difficult has forced both the Turnbull led government and the Shorten led Opposition to consider policies that will rein in the opportunities people with disposable income have to legally minimise their taxes to almost nothing. One measure that has been introduced and spruiked by the Federal government is the extra tax that will be paid by transnational corporations operating in Australia that have made a mockery of the taxation system. At best these measures are expected to rise an extra 4 billion dollars per year. In a taxation system that raises over 440 billion dollars per year in taxes – over 340 billion per year from pay as you earn taxpayers, these new laws will at the very best raise less than 1% of extra taxation revenue per year.
The Opposition’s plans to tighten taxation laws around family trust arrangements will raise about 3 billion dollars per year. Again, a drop in the ocean when you look at the total taxation revenue that will be raised this financial year by the Federal government. Tinkering at the edges of Australia’s taxation laws is a game that’s been played by both governments and oppositions for decades. It’s time to look at introducing new taxes that directly impact on investors who use Australia's investment friendly taxation laws to legally minimise their tax to almost nothing.
One way of raising significant revenue for public hospitals, public schools and badly needed public infrastructure is by introducing a 1% stock market turnover tax on every share that is bought and sold on the Australian Stock Exchange. This tax would raise over 25 billion dollars per year and would be automatically collected at the point of sale. It could be done tomorrow, it could be done at the flick of a button as all transactions on the Australian Stock Exchange are fully automated.
In Australia over 40 cents in every dollar that is invested in the Australian stock market is invested by Australian superannuation funds. The slight decrease that may occur in a member’s retirement balance at the end of their working life as a result of the imposition of a 1% stock market turnover tax would be offset by the improvement in the public health and public education sector, the building of public infrastructure and the maintenance of a social security net that does not allow people in need to fall through the legislative holes that are being created as more and more cuts are made to the social security budget to balance the overall budget.
The big losers would be multinational corporations and hedge funds that buy and sell hundreds of millions of shares within a few seconds to make paper profits that are directly related to manipulating the system, not adding value to a company. The automation of the world’s stock exchanges has seen an expediential growth in the number of computer trades that are made in a fraction of a second to gain a financial edge. These traders manipulate the system they do not add real value to a company’s stocks. It’s time we looked at new ways of raising much needed taxation revenue that targets those sections of society that use its services but refuse to pay their way.
Dr. Joseph Toscano, August 6
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