JLN supports the establishment of a Financial Transactions Tax (FTT) to guarantee extra government revenue for the protection of pensions and entitlements of retired Australians and defence veterans.

A) Financial Transactions Tax (FTT)

Strangely, a tax reform debate in Australia is being carried out by many high-profile media and politicians – without the inclusion of a Financial Transactions Tax as part of a range of credible fiscal measures to solve our looming tax revenue/spending crisis.

  • Why is a significant portion of Australia’s media and political representatives deliberately avoiding even talking about or mention a FTT?
  • Are vested interests using their commercial, political and media influence to limit a community debate on the introduction of a FTT in Australia?

Many advanced countries, including most of the European Union, from 2016 will raise revenue from a range of FTTs. The tax is flexible and can be as little as 0.001% to 0.1% – and as the name suggests, is levied on a variety of financial transactions.

Publicly available reports indicate that, An official study by the European Commission suggests a flat 0.01% tax would raise between €16.4bn and €43.4bn per year, or 0.13% to 0.35% of GDP. If the tax rate is increased to 0.1%, total estimated revenues were between €73.3bn and €433.9bn, or 0.60% to 3.54% of GDP.

European Commission (28 September 2011). “Executive summary of the impact assessment

JLN will not support a FTT designed to have an adverse impact on Australia’s real economy.

JLN, like most European Union countries, will oppose a FTT on day-to-day financial activities of

average Australian citizens and businesses (e.g. loans, payments, insurance, deposits etc.).

JLN notes an FTT could be designed to target large national and multinational corporations that have been proven to minimise or avoid tax by shifting profits to overseas tax havens – and create a fairer, simpler and more efficient Australian tax system.

High Speed Share Traders

JLN also notes that with the advance of computer technology and software, financial companies who use super computers to high-speed share trade have an unfair and significant advantage over mum-and-dad investors and even other large institutional investors.

Independent studies have shown that on the Australian Financial Markets, High Speed Share Traders skim more than $3B each year in profits from our mum-and-dad investors. Both the Liberal and Labor parties have turned a blind eye to what amounts to insider trading aided by advanced computers and software.

High-speed share traders account for about 70% of American financial market trades. The Australian Security Investment Commission (ASIC) admitted in 2015 Estimate Committee hearings they don’t know the identity of any (about six) high speed share trading companies that are responsible for almost 30% of Australia’s stock market trades.

JLN calls on the government to make the name of these companies public and also supports a small FTT levied on these HFST companies, which at 0.01% to 0.001% could raise up to $1.4B in revenue each year for the Australian government.

JLN advocates that this new revenue is tied to and invested in the pensions and entitlements of retired Australians and defence veterans, so their incomes are protected against loss of purchasing power.

B) Negative Gearing

JLN notes that in a balanced and complete debate on tax reform the option to reform provisions relating to negative gearing must be considered.

JLN also notes that parliamentary research reports that in 2012-13, 1,260,470 individuals reported a ‘net rent – loss’ on their tax return, that is, they have negatively geared property.

And the majority or 72% of the 1.2M Australian people with interests in a rental property or approximately 900,000 tax-payers have at least one property negatively geared.

JLN considers that most fair-minded Australians would consider one or two negatively geared properties, is a reasonable number of investment properties and is prepared to closely listen to a community debate and feedback about whether Australia should allow people with three or more investment properties to negatively gear.

            Parliamentary Library Research on

           Negatively Geared Properties.

State No of individuals with negative geared Properties % of all individuals with negatively geared properties
ACT 31,740 2.5
NSW 373,560 29.6%
NT 16,730 1.3
QLD 262965 20.9
SA 88,160 7.0
TAS 18,640 1.5
VIC 298,050 23.6
WA 164,630 13.1
NA 5,995 0.5
Grand Total 1,260,470 100

(Source: ATO, Taxation Statistics, 2012-13,   Individuals, Detailed Tables, Table 2)

C) GST Amendments  

JLN opposes any move to change or increases the GST rate of 10%.

JLN agrees that there are much better and fairer ways of repairing the Australian budget and tax reform, than increasing the rate of the GST above 10%.

As noted in previous policies, JLN accepts that increasing revenue for the Australian government through the introduction of an FTT and cutting the foreign aid budget of $20B to $25B over the forward estimates, are much better and fairer methods of budget repair and tax reform.

JLN once again notes the establishment of an FTT of .01 to .001%, which targets half a dozen of Australia’s corporate High Flyers who gain an unfair advantage while using super computers to trade shares, is a far better policy than increasing GST.

JLN also notes that $750M would be saved each year or $2.3B over the forward estimates – and made available for Budget repair if our troops were brought back home from Iraq – a conflict that America has made a token contribution of approximately only 3000 ground troops.

JLN supports the removal of GST from women’s sanitary products.

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