Budget time is always a revelation. Not the Treasurer’s theatrical performance but where’s the money coming from? Things have changed a little bit over the past decade. Projected revenue for 2017-2018 is estimated to be 444.4 billion dollars (a lovely round figure). It is estimated about 209.6 billion will be squeezed out of individual income tax (that’s approximately 45% of total revenue). Fringe benefits tax will raise about 4.4 billion (1%). Superannuation taxes about 8.5 billion (2%). Customs duty 14.7 billion (3.5% approx.). Fuel excise 18.78 billion (4.5% approx.). Sales tax 67.3 billion (approx. 16%). Other excise 3.5 billion (approx. 1%). Non tax revenue 29 billion (approx 5%). Resource Rent tax is about 30 billion (7% approx.), that leaves 50 billion dollars of company tax (approx. 12%). Of this 50 billion dollars, approximately 30 billion is paid by medium and small business.
Out of a total estimated revenue of 444.4 billion dollars, only approximately 20 billion (approx. 5% - 11 billion paid by the five big banks) is paid by this country’s 1,500 corporations. Over half do not pay any tax whatsoever. Not because they don’t make a buck but because Australia’s corporate tax laws are so lax, most corporations pay voluntary taxation. Australia does not have an expenditure problem, it has a revenue problem. Even the government’s proposed 0.06% banking tax on the Big Five – Commonwealth, Westpac, NAB, ANZ and Macquarie Bank seems to have ruffled the corporate sector’s feathers and rattled their cage.
The audacity of the banks threatening to pass on any new taxes to consumers! Considering the wages bank executives are paid and the plethora of banking fees and charges (which make up to 25% of a bank’s income), banking shareholders and banking executives need to take a haircut.
This is one time when it pays to transfer your business to a smaller bank. These propose changes should give them a little bit of a competitive edge against the Big Five. I shudder when I write down the words the “Big Five”. The Big Five is the Holy Grail of big game hunters – elephant, rhinoceros, lion and two other magnificent animals whose names escape me, constitute the Big Five – but that’s another story.
Maybe it’s time to put a little bit of political pressure on the Big Five and hold a referendum to nationalise the banks (without compensation, of course) what failed in 1949 may succeed in 2017. Stranger things have happened in the past.
Dr. Joseph Toscano