Australian Business News and Times

Business News ,Reports and Times of Australia

Tax Reform

Are the wealthy taking over Australia ?

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Australia is losing its “fair go” culture  and is under threat  from a elite and rich group of wealthy business people – including Andrew forest, Gina Rinehart and Clive Palmer – who are using their riches  to undermine good Policy and threaten our democracy –says Treasurer Wayne Swan . Mr swan has steered most businesses in Australia through the GFC with much less impact  than has been felt throughout other economies.

wealthy oppose tax Mr wayne swan speech

Image Reference: The Monthly – Full Article 

Mr Swan said Australians should be concerned  about the excessive and increasing power of vested interests  with power and wealth to back up their agenda to their own benefit.

This was evident  when major Mining companies said they were cutting down expansions and staff due to the Mining tax  and GFC and other factors, but soon as the Rudd led cabinet was shafted in favour of  Julia Gillard  they went ahead with their million dollar project expansions.

There was bitterness after the mineral  resource rent tax  and carbon price was introduced  with the purses of  the wealthy being hit. The big miners Invested millions of dollars in opposing  these taxes and policies by advertising in TV and print media  , saying it would hit the common man in Australia. It is unusual that this direct method was used by the wealthy corporations rather than politicians being influenced and lobbying being done which is often the case at times.

Mr swan has urged Politicians to cater to and look after the common mans benefit , and supporting the workers rather than succumbing to the lobbying of the wealthy  and  to give Australia  the sense of fairness and decency it deserves.

The government is said to be in the midst of considering a report on media law reform. This could be the result of Gina Rinehart  taking a large shareholding in The seven news media network , making her even more powerful which could be a cause for concern for many only not only  within the media industry but also outside  the media industry.

Radio , TV and Newspapers due to the power they wield have often have been claimed to support and make and break governments in other countries , deciding on who they decide to favour.

Mr swan goes on to write that  the mining campaigns brought out by the wealthy people against the tax damaged  the government , brought on instability and resulted in prime minister Mr Rudd being toppled. With this proposed Mining tax not going through, the government will be short of $110 Billion to use towards taxpayers benefit.

Mr swan said "It is the tiny 1 precent, or even 0.1 per cent (you know who they are) who are trying to drown out the others, who are blind to the national interest and pour their considerable personal fortune into advertising ,armies of lobbyist, dodgy modelling,and corporate and commercial manoeuvring designed to influence editorial decisions.

The Eventual split in fosters.

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Foster’s Group said Wednesday that it would split its beer and wine businesses,  and sending the company’s stocks leaping. Fosters is popular for its local beer business and international wine operations

Splitting Foster’s Wine and Beer Business

The  Alcohol and spirit  company, which is the largest alcoholic beverage maker in Australia, said in its “demerger proposal” filed to the ASX that it aimed to list the units separately.

“Potential benefits of a demerger include increased transparency allowing investors to more appropriately value each business over time,” the company said, citing the freedom the units’ boards would have to “develop their own corporate strategies.”

The timing of the deal  and structure  was  to be determined, the company said  but its completion is unlikely before the first half of next year. Foster’s shares were up 0.38 Australian cents, or 7.379 percent, at 5.53 dollars, or $4.59, at the close in Sydney.

Beer and Wine brands of fosters group

Foster’s stable of Australian premium beer brands includes key brands Victoria Bitter, Crown Lager, Foster’s LightIce, Carlton Cold, Carlton Draught and of course, Foster’s Lager. Fosters wine rag=nge includes names like high-end brands such as Penfolds Grange, Beringer, Chateau St Jean and St Clement.

Beer

Fosters australia Beer brands VB crowne lager carlton mid

Foster’s American business unit, Foster’s Wine Estates, sells a range of premium wines including Beringer and St Clement from California’s Napa, Chateau St Jean from nearby Sonoma and Foster’s range of Australian imported wines.

Foster’s, which produces the beer of the same name, has not done as well with the wine unit, which the company has tried to sell before. “Foster’s wine business is showing signs of growth, but continues to be impacted by oversupply in Australia, subdued consumer demand in key international markets and a strong Australian dollar during the 2010 financial year,” said Ian Johnston, chief executive of Foster’s Group.

Marco Gulpers, beverage analyst at ING, said that while he saw little interest for the wine unit coming from European companies like Pernod and Diageo, there were several possibilities for the beer business.

The brand’s strong Australian heritage and sense of ‘fun’ continues to appeal to consumers seeking to savour the unique taste of Australia’s most famous beer

$94 billion has been wiped from the stock market

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$94 billion has still been wiped from  the stock market value over the past week duue to various factors like the greece  problems , australian internal new reform issues and  the wall street market performances.

Billions wiped from Australian  stockmarket

It fell 6.6 per cent for the week on fears that Europe’s debt crisis will hit global markets and affect growth of the world economy. It has been the market’s worst week since the height of the financial crisis in 2008.

 

However, the booming Australian resources industry has come under attack from politicians who are threatening to impose huge new taxes. Prime Minister Kevin Rudd has proposed a ’super tax’ on resource profits in order to pay for rising health care costs for an aging population.

Billion stockmarket billionaire

The tax which, would be equal to 40% of resource gathering firms’ profits, is proposed to begin in July 2012 and would raise an estimated $8 billion a year from 2013-14, which is about 0.7 per cent of national income.

The tax has not become law yet and is strongly opposed by many conservative politicians. The new tax would “eventually choke the goose that’s laid the golden egg for Australia,” said conservative Tony Abbott. “Australia’s future depends on the bulk carriers traveling to Asia.”

ref: http://etfdb.com/2010/will-resource-tax-sink-australia-etf/

Abbott announced that after rescinding the resource rent tax, a future Liberal government would not be able to match Labor’s planned reduction of the corporate tax rate from 30 to 28 percent. The decision indicated the opposition’s determination to win the backing of the mining companies, even at the expense of other sections of big business, which have long demanded corporate tax rate cuts to bolster Australian capitalism’s international competitiveness. The Australian resource sector is currently booming, driven by record commodity prices caused by China’s industrial expansion. Much of the rest of the “two track” economy, however, especially manufacturing, is in recession or near-recession.

Get the Henry Tax review Original document files downloads here

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Henry tax review reform papers was released  2 may 2010

Document download for Henry  tax review Document

The Henry tax review is finally  out  and  everyone can have a look at it in detail. The tax review out on 2nd May 2010 was not  much of a surprise as not many of the recommendations got implemented , but then not many of the henry recommendations also did get rejected, so we can see a slow implementation of many recommendations through the next coming years.

Here are the Henry tax reform Documents ( .doc . pdf ) for download 

Date Released – 2 May 2010  – PDF

Final Report: Part 1 – Overview – 1.0MB

Final Report: Part 2 – Detailed Analysis – Volume 1 –1.9MB

Final Report: Part 2 – Detailed Analysis – Volume 2 – 2.2MB

Treasury Secretary Ken Henry has spent 18-months reviewing Australia’s tax system and  finally the 1000 page report is released.

The Henry review tax reforms at a glance

    1. 40% Rent resource tax of the mining sector companies
    2. Superannuation reform taxes to help lower income workers(superannuation to go up to 12% from 9%)(The increase in the superannuation guarantee will occur from July 1, 2013, with the first of two 0.25% raises to come on that date, with the second to occur on July 1, 2014. From July 1, 2015-19, the guarantee will be lifted by increments of 0.5%, resulting in the target 12% guarantee by the end of the decade)
    3. Company tax rate cut from 30 % to 25 %
    4. All family tax benefits to be a  single means tested payment
    5. Small businesses will be able to write-off assets worth up to $5,000 in the year of purchase under changes announced by the Federal Government today.