Small business basks in BAS relief

Arrogant software manufacturers have a habit of releasing new products to the market with operating glitches that they leave the consumers to sort out.

Peter Costello did the same, when he waved through the criminally-complex Australian Tax Office quarterly reporting requirements for BAS statements and the equally annoying IAS bumph. This government is often accused of not listening. It listens alright. But it does not hear.

Among others, Peter Macdonald, national director of the Australian Taxpayer newsletter warned last year “This new tax system was supposed to simplify things, instead it has created a monster. The two-page BAS form requires a 140-page information booklet.” That struck no chord in Canberra. Nor, apparently did the blizzard of new tax registrations that descended on the ATO. There are only supposed to be 800,000 “businesses” in this country, yet well over 3 million people believed they were caught by the ludicrously low $50,000 turnover rule for GST, or needed an ABN number because they sometimes sold services to others.

Silliest of all were the ranks of small self-funded retirees swept up in the quarterly filing net. The government now says that, with a stroke of the pen, it can remove 500,000 such people from the nuisance of filing five (not four) tax returns a year. Why on earth were they there in the first place? Does not John Howard endlessly boast of our shareholder democracy? Might they not have ordinarily been induced to vote for the Coalition? Millions of hours have been wasted by both the taxer and the taxed.

This fiasco need never have happened. The introduction of the GST, and the attendant cuts in personal and corporate taxes is an important reform that has been a success — although it would have been much simpler if the Democrats had not stuck their oar in to exempt fresh food. They would have been better occupied ensuring that compliance was workable.

The rollback of the quarterly quagmire will be a huge and costly exercise.

But at least recently redundant Bruce from Balcatta, who supplements his savings income by mowing lawns, can get on with his life.

The leaping leprechaun

Some of our Irish readers may have been regretting they ever left the Emerald Isle. Near double digit growth for five years, and a high-tech investment boom, made the Celtic Tiger the envy of Europe.

Microsoft, Dell, Cisco, and Oracle are among the hundreds of companies enticed in by the virtual elimination of corporation tax on foreign firms. Company tax will soon be slashed to 12.5 per cent.

US companies employ 85,000 locals. Exports account for nearly 100 per cent of GDP. Recently there has been net migration into the country for the first time in more than 150 years. This week an Economic Intelligence Unit survey ranked Ireland the sixth best place in the world to do business. Australia was placed 15th, behind Finland and Sweden, and just ahead of New Zealand.

The jokes about the Irish are being reversed. Why can’t we take a clover leaf out of their book and live in an IT industrial paradise? Well, first we need more money. Foreign investment flows into Australia peaked in 1995 at US$12.4 billion and fell to $5.7 billion in 1999. We flogged a couple of mining houses off to UK-controlled Rio Tinto last year, but there was not much else.

While John Howard frets about us being turned into a branch office economy, the editor of the EIU Report, Laza Kekic, remarked that any government which succumbed to the “wrong headed” argument that national sovereignty demanded restrictions on foreign investment would “pay a high economic price.” Hello Woodside.

The Irish have paid a different sort of price for their unprece-dented prosperity. Real estate prices in the cities have been climbing at 25 per cent a year.

That is fine, if you own a house in Dublin, or you are waiting in Duncraig to inherit one. But the average Patrick cannot afford a roof over his head. Homeless rates have trebled as foreign stockbrokers and fund managers crowd into the fair city.

More money is spent on cocaine than Guinness on the banks of the River Liffey. If you happen to live in Ballykissangel, often the only work available is in answering the phone in call centres. That has lead to complaints that US firms are simply shipping low-class jobs across the Atlantic.

The good times have passed large chunks of the country by. Nurses, teachers and civil servants are calling for general strikes.

If the economy in the US gets any worse, it will throw a grenade into the Irish IT industry.

Perhaps the lesson for those who would like to see Irish and Taiwanese blueprints adopted here is “be careful what you pray for, you might get it.”

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