06/04/2004 - 22:00

Tax reform in a local context

06/04/2004 - 22:00

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I’VE noticed there’s a lot of talk about marginal tax rates suddenly.

I’VE noticed there’s a lot of talk about marginal tax rates suddenly.

I have been carping on about this subject in this column for years, so I’d like to take full responsibility for putting it on the agenda.

Perhaps not.

However, it is heartening to see ever-increasing rumblings for tax cuts by people much smarter than I am.

The Centre for Independent Studies is one of a number of voices demanding tax reform and this think tank has cleverly started putting the debate into the Australian context – especially the concept of a ‘fair go’.

Late last month the CIS published a piece by Geoffrey de Q Walker, emeritus professor at the University of Queensland, who pointed out that our complex tax laws are unfair and unjust.

Prof Walker believes our top marginal tax rate should be 30 per cent, with the tax-free threshold pulled up to $14,000.

He says this need not result in a lower tax take – as the incentive to earn money is raised (and tax avoidance lowered).

CIS social policy director Peter Saunders also chimed in with a piece about what Australians really think is fair, which was very good reading and is done no justice by my selective synopsis following.

Mr Saunders suggests that the egalitarian view of the ‘fair go’, which demands that wealth be constantly redistributed to ensure everyone is equal, is not what Australians really believe.

He reckons that view belongs to social academics.

Instead, Mr Saunders interprets the Australian ideal of the ‘fair go’ as a mix between meritocratic (where fairness is being rewarded for hard work and skill) and classical liberal (a notion of fairness that the rules are the same for everyone but rewards can result from luck or birthright as much as skill or effort).

And he backs this up with surveys done in conjunction with highly regarded group, AC Nielsen.

In the results the egalitarian view was the least favoured by a significant margin, while the meritocratic had a comfortable lead on the classical liberal.

When respondents were asked which combination of these notions they would prefer, 36 per cent preferred liberal/meritocratic, 24 per cent meritocratic only and 19 per cent wanted all three.

The survey, involving 467 people, which Mr Saunders said was representative despite its relatively small size, also shows that almost half the respondents believed a person on $120,000 a year paying $46,780 in tax was paying too much tax.

Less than 10 per cent thought this was too little tax.

Similarly, more than 40 per cent think that paying $5,830 on $30,000 is too much.

This evidence simply adds to the growing call for real tax reform, not the nonsense we have in the past decade where a GST has been thrown on top of income tax without any lasting corresponding relief.

Stars of the legal profession

THE Legal Elite is on again this year and we have given the legal community more than a month to send in their nominations for this year’s feature.

Last year was a biggie, so we are expecting a strong result this year to help us highlight WA’s top legal practitioners. Of course, we didn’t help ourselves by launching it last week and forgetting to put the nomination form on our webpage www.wabusinessnews.com.au

This week, the downloadable PDF is right there to hand on the homepage – so we’d love to see qualified lawyers nominating their colleagues and peers in as many fields as possible.

Cream rises

LEGAL Elite is not the only thing we are revisiting this year.

Another immensely successful project last year was Rising Stars, a search for the top high-growth private companies in WA.

This year’s top 10 are another superb bunch, with a smattering of familiar names mixed in with the new.

Perhaps the most surprising, to my mind, was the inclusion of Messages on Hold.

Kym Illman’s company has been around for ages, so it is very impressive to see him hitting big numbers in revenue growth.

It was also heartening to see Justin Miller and Gavin Burnett take out the top honours with their Empired business. These guys have had so many wins, they seem like permanent features in our paper at the moment.

 

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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