Taxing politics of political bankruptcy
John Hewson, Paul Keating, WA Liberal leader Richard Court ... politicians around the country, and in both main parties, are insisting they haven't done anything illegal to get their taxes well below those of most Australians, even though they earn a great deal more.
In most cases it's probably true that they haven't done anything illegal. It seems John Hewson acted legally in 1983 when he sold a house at a loss to a company owned by himself and his then wife. The paper loss involved in this transaction proved very useful in reducing tax payable on around $600,000 he was paid as a consultant that year. Useful to the extent that he paid around 15% tax while most Australians were paying at least 20-30% on $50,000 or less, and the tax on Hewson's income that year would have been at least 46% if not for matters such as his unfortunate loss on the house.
When the media, encouraged by careful hints from the Labor Party, picked up this matter, the Liberals responded in kind, taking a couple of new jabs at the already messy sores of Leo McLeay's $65,000 compensation payment for a bicycle accident and Paul Keating's apparently crisis-ridden piggery business. In a chain reaction, Richard Court then got caught up in allegations over a tax minimisation scheme involving two boating companies, ruled out of order by the Australian Tax Office in the early '80s.
No doubt this spate of revelations about the state of our parliamentary representatives' business interests will prove short-lived, as both sides realise how vulnerable they are. Nevertheless, the episode has been illuminating for a number of reasons.
To begin with, it airs once again the fact that those who can pay for clever lawyers and accountants usually pay less tax than the rest of us. While the "bottom of the harbour" rorts of a few years ago have been closed off, new dodges have opened up. This is in no small measure due to the fact that most parliamentarians live a great deal better than those they claim to represent, and make law — especially tax law — accordingly.
Perhaps more importantly, the whole exchange reflects the inability of both Labor and Liberal parties to offer solutions to the real problems confronting most Australians. Neither has any solution to the economic crisis and resulting unemployment, brought on by policies advocated by both parties, with minor variations, for the past decade.
Today, while Labor scrambles hopelessly to limit the worst damage resulting from its past deeds, the Liberals claim the solution is to press on further with policies that have already proven disastrous both here and internationally. This lack of solutions explains the present tendency of parliamentary politics to lapse more frequently than usually into apolitical gutter fighting and character assassination.
The worst aspect of this whole situation is that it looks set to continue indefinitely. Until there is a genuine alternative to the Labor and Liberal parties, we will continue to be ruled by incompetent politicians for sale to the highest bidder and for whom political thought consists of waiting for the latest trends from equally bankrupt political currents internationally.