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Let’s be frank.

25/08/2013


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Just a small post to remind people that the coalition lied to everyone.

According to the coalition, their paid parental leave is a levy not a tax. Sure it acts like a tax, Tony finally admitted in a radio interview. The coalition had insisted that a carbon tax is awful because it flowed through the community. They claimed it raised prices of supermarket goods.

Having failed to see a rise in leg roasts, the coalition continued to lie about prices anyway. They called it the biggest carbon tax in the world.

Just as rightly, you can now say that if the coalition are elected, Australia will have the biggest baby tax in the world. Okay. Baby levy.

And its important to call it a levy because we finally found out the difference between a tax and a levy very recently when it was discovered that by not franking credits, the coalition’s levy does not allow business to apply for tax credits.

Yeah thats right. The carbon TAX was fully franked. Business can apply for a tax credit where they can show they are due one. The PPL levy is NOT frankable. That means business will not be able to frank 1 billion dollars a year and no doubt this will flow on to the community.

So we are going from a carbon tax on ONE cost input to a company (energy) which was fully frankable that was applied to 500 businesses and replacing this with a levy on 3000 businesses that will applied to the overall profit (after cost) of 1.5% and none of it can be franked and so MUST be passed on to consumers. The coalition are basically removing a 22bn tax over forward estimate and replacing it with a ??bn levy  over the forward estimates that business will have no choice but pass on as they can not frank it.

And lets really LOOK at these policies.The carbon tax resulted in emissions reductions. 7% nationally. Why? Well we had 25% extra investment in renewable energy. Energy that does not accrue the carbon tax. That’s right! Companies opted to go to renewable to help them REDUCE their tax burden and coincidentally reduce emissions. If you continue this way, the govt coffers will get smaller as more and more renewable energy sources come online.

Conversely, you have a policy designed around childbirth. Companies can not ‘reduce’ their baby levy burden. Or frank it. And as population rises, this does not mean the levy rises. The levy is based on profit. And in 2011-2012, BHP for example, filed a loss. No parental levy from them. So as the levy take from companies is not in any way linked to the policy, as a business has lean times, the levy they pay reduces, but babies continue to be born. That means dipping into general revenue to pay the difference.

Now we all know the difference between creating a policy that has an outcome or creating a policy that, quite frankly, will become a burden on tax payers.

The carbon tax was linked to a policy outcome; emission reductions. It is fully frankable. Gives business the option of reducing that burden by CHOOSING cleaner energy sources.

The coalition PPL can not be offset by business. They can not frank it from its investors. And as business has its dips and troughs, the business burden lessens based on profit. But this loss in profit does not mean less babies. So the tax payer; you and me; need to pick up the slack. Thats why it will come out of our super.

While the coalition was lying about the cost of shopping and economy wide burden of pricing carbon, they had a levy that actually WILL increase the cost of living and the economy wide burden as companies will not be able to frank it in their taxes.

Wow. This sure has taken a lot of talk to get to this story punchline but we are almost there! So the differences between the two polices are the carbon tax actually allowed business to reduce their tax burden by moving to renewable energy and it also provided franking credits. The coalition proposed PPL is unfranked and does not in any way allow a company to reduce its tax (sorry levy) burden other than try and cook their books Sydney Airport style to never pay income tax at all. And if they dont pay the tax, then what they should of paid comes out of our super.

(Oh I am so exited! The punchline is almost upon us)

This franking thing must really annoy business and their investors. In fact, it must be a major frank burn.
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A. Ghebranious (August 2013)<

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2 Comments
  1. Awesome work Ash! THIS should be front page of every newspaper – yet we know it never will be.
    RIP, journalism… 😦

  2. rich permalink

    Fantastic explanation of the difference between a tax as a way to drive desirable market change and a cash-grab levy.

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