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Replacing stamp duty with a land tax could save home buyers big money. Here’s how

<div class="theconversation-article-body"> Infrastructure Victoria has released a <a href="https://assets.infrastructurevictoria.com.au/assets/Victorias-draft-30-year-infrastructure-strategy.pdf">draft 30-year plan </a> outlining how the state can grow sustainably. It focuses on key areas like transport, housing, energy, and public services to support a growing population and improve liveability. The plan also suggests ways to make the state’s infrastructure and tax system fairer, more efficient and more sustainable. The plan’s recommendations are expected to cost between A$60 billion and $75 billion, mostly spent before 2035. This is around 10% of <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-state-accounts/2023-24-financial-year#data-downloads">Victoria’s yearly economic output</a> in 2023-24, spread over the next decade. With Victoria already spending record amounts on infrastructure, and <a href="https://pbo.vic.gov.au/document/BudgetUpdateSnapshot2024-25">budget deficits forecast</a> until 2025-26, finding the money to fund social housing, transport and other projects is a key challenge. We estimate the Infrastructure Victoria proposals would add between $4 billion and $5 billion to Victorian government expenditure each year. Yet one of its proposals — replacing stamp duty with an annual land tax — would only cost between $1 million and $5 million to implement, but generate substantial gains for Victorian households. <h2>Why replace stamp duty with land tax?</h2> Stamp duty is one of the biggest barriers to moving house in Victoria and other Australian states. This tax, which people pay when they buy property, adds thousands of dollars to the cost of moving. In 2022-23, Victorians paid about <a href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-national-accounts-state-accounts/2023-24-financial-year#data-downloads">$12 billion</a> to move house. Of this, $3 billion went to actual moving costs (like real estate services, and removalists) and $9 billion was <a href="https://www.abs.gov.au/statistics/economy/government/taxation-revenue-australia/latest-release#data-downloads">stamp duty</a>. That’s an effective tax rate of 300% on the true cost of moving, and in 2023 <a href="https://www.e-business.sro.vic.gov.au/calculators/land-transfer-duty">added about</a> $40,000, or 5.3%, to the cost of purchasing the average Victorian home. High stamp duty discourages people from relocating, even when their needs change — whether that’s moving for a new job, finding a bigger home for a growing family or downsizing after retirement. This leads to longer commutes, traffic congestion and a less efficient housing market. Switching from stamp duty to an annual land tax would make moving easier and spread the tax burden more fairly. Instead of a large, one-time tax when buying a home, all landowners would pay a smaller tax each year. This would help fund schools, hospitals, and other infrastructure more sustainably. <h2>What can we learn from Canberra?</h2> Victoria University’s Centre of Policy Studies <a href="https://www.treasury.act.gov.au/__data/assets/pdf_file/0009/1618407/cops-final-report.pdf">studied a similar reform</a> in the Australian Capital Territory, where stamp duty has been gradually phased out since 2012 and replaced with higher general rates (a type of land tax). Each year, the ACT government sets a target for how much money it needs to raise. Landowners then pay a share of that total, based on the value of their land. One of the biggest benefits of this approach is that it raises money more efficiently. Unlike other taxes, land taxes don’t discourage investment or economic activity. The study found removing stamp duty had a big positive impact on the ACT’s economy. Around 80% of the economic boost came from removing stamp duty, while introducing land tax also had benefits. By studying transaction data from the ACT, we showed each 10% reduction stamp duty rates drove a 6% rise in property transactions. <h2>Would it help housing affordability?</h2> One of the main arguments for replacing stamp duty with land tax is its effect on housing prices. Economists widely agree land taxes reduce land values, which makes housing more affordable. However, the impact of removing stamp duty is less predictable. Our previous research found <a href="https://theconversation.com/swapping-stamp-duty-for-land-tax-would-push-down-house-prices-but-push-up-apartment-prices-new-modelling-finds-184381">the effect on house prices</a> depends on how often properties are bought and sold. Apartments, for example, tend to change hands more frequently than houses. Because of this, removing stamp duty tends to push up apartment prices more than house prices. Even so, the overall effect of the reform is a drop in property prices. The challenge is ensuring this price reduction is evenly spread across different types of housing. <h2>A fairer tax system</h2> To make the system fairer, policymakers could adjust how land tax is applied. One option is to introduce a fixed-rate component, as <a href="https://www.revenue.nsw.gov.au/grants-schemes/previous-schemes/first-home-buyer-choice">proposed </a> in New South Wales. Another idea, suggested 15 years ago in the <a href="https://treasury.gov.au/sites/default/files/2019-10/afts_final_report_part_1_consolidated.pdf">Henry Tax Review</a>, is to base the tax on the per-square-metre value of land. Another key factor is housing supply. If planning laws allow more high-density housing in inner suburbs, price changes could be better managed. <h2>We also need short-term solutions</h2> Replacing stamp duty with land tax is a long-term reform that would take years to fully implement. The ACT, for example, planned a 20-year transition. If all state governments implemented this reform, we estimate Australian households would ultimately be <a href="https://www.copsmodels.com/ftp/workpapr/g-337.pdf">better off by about</a> $,1600 per household per year. In the short term, <a href="https://theconversation.com/whats-the-best-way-to-ease-rents-and-improve-housing-affordability-we-modelled-4-of-the-governments-biggest-programs-225446">other policies </a> could help improve housing affordability. These include increasing Commonwealth Rent Assistance and rethinking first-home buyer support. These steps could complement broader tax, infrastructure and housing supply reforms. The Victorian government is <a href="https://engage.vic.gov.au/victorias30yearinfrastructurestrategy">seeking feedback</a> on the draft plan before releasing the final version later this year. This is an opportunity for Victorians to contribute ideas on how to shape the state’s future and ensure its infrastructure and tax system work for everyone.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/251472/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/jason-nassios-318488">Jason Nassios</a>, Associate Professor, Centre of Policy Studies, <a href="https://theconversation.com/institutions/victoria-university-1175">Victoria University</a> and <a href="https://theconversation.com/profiles/james-giesecke-9853">James Giesecke</a>, Professor, Centre of Policy Studies and the Impact Project, <a href="https://theconversation.com/institutions/victoria-university-1175">Victoria University</a> This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/replacing-stamp-duty-with-a-land-tax-could-save-home-buyers-big-money-heres-how-251472">original article</a>. Image: 7news.com.au </div>

Money & Banking

Cricket great takes aim at Albo's beer tax freeze

Cricket great David Warner has slammed Prime Minister Anthony Albanese's move to combat soaring beer prices. On Monday, Albanese promised to pause the government's tax hike on beers poured at pubs for the next two years. Albanese announced the policy while enjoying his "first beer of the year" at the Bob Hawke Beer and Leisure Centre in Marrickville. "This will make a difference. It is a positive announcement. As I said, good for beer drinkers, good for pubs and clubs, good for cost of living pressures," he said. Australia's inflation-indexed alcohol tax - which increases twice annually - has long been an issue for breweries, pub owners and customers. This month, there was a 3.5 per cent rise on the price of beer, an additional cost that usually gets passed onto the customer. The Prime Minister said if he is re-elected, the Labor government would freeze the indexation on draught beer excise for 24 months from the next indexation date this coming August. However, Warner believes this move is a "few years too late," slamming the Prime Minister's pledge on social media. Warner, who is an investor and director of Victoria's St Andrews Beach Brewery, has been affected by the rising prices. Shortly after Albanese's announcement, Coalition treasury spokesman Angus Taylor said Peter Dutton, if elected, would also freeze tax. "The government has chosen the eve of an election to promise voters a freeze on a tax that has skyrocketed due to its failure to address inflation at its core," Taylor said. Image: LUKAS COCH/EPA-EFE/ Shutterstock Editorial/ Instagram

Money & Banking

Use it or lose it as historic super cap prepares to expire

Jordan Kennedy is a Partner at accounting and advisory firm Pitcher Partners Sydney. Australians could be sitting on a golden opportunity to spur their super savings this year — but if they don’t act fast, they will miss out. That’s because in July they will lose the entitlement to claim any unused superannuation tax concessions from 2019-20, known as the concessional cap. The concessional cap is the total annual amount that can be contributed into super by a person’s employer, through salary sacrifice or claimed as a tax deduction, before the person is charged at the ordinary taxable rate. In other words, for most Australians there is a gap between what they or their employer contribute each year and the total amount they could contribute, taking advantage of tax concessions. In 2019-20, that capped amount was $25,000, and unless people were making or receiving contributions above the superannuation guarantee, they would have needed to earn about $260,000 to hit the cap. If they didn’t, there may still be ‘available’ cap that has built up over the last five years and can be used to access the 15% tax rate on earnings — until July 1, when the cap expires. While this sounds technical, reviewing past superannuation contributions and checking to see that caps have been maxed out is one of the easiest ways to achieve a tax deduction. Of course, there are a few aspects to this strategy that bear consideration. The concession cap system is a use it or lose it play. Any gap between contributions and cap will expire after five years, so this is the last chance to retrospectively boost your superannuation using the 2019-20 cap. That said, as this is the first year we have seen the cap expire, it might have slipped the minds of many. Even if you have maxed out the cap for that year, you should take the opportunity to look at more recent years as well to see if you have been carrying forward an available pool of tax concessions. The second thing to note is that the vast majority of Australians will have a tax cap opportunity available. For anyone on an average salary, the cap gap can grow by $10,000 or more each year, unless additional contributions are made through salary sacrifice or as a tax deduction. The concession is also available for those who might have stopped work to have children or who are reducing their workload approaching retirement. Check with your accountant or your super fund — you might have tens of thousands of dollars in tax concessions available for use. Thirdly, consider your timing. If you know you will have tax capacity in coming years, try to time your use for those years where you have a significant tax event, such as realising capital gains. This can reduce your tax liability without disrupting your other plans. In this case, seeking strategic advice is extremely important to determine the optimal outcome for your circumstances. And finally, recognise there are exceptions. People whose superannuation balance is already over $500,000 are excluded from taking advantage of the cap rollover, but could still benefit from advice on how they should balance their tax liabilities while maximising their superannuation. Whatever your circumstance, speaking to a qualified, independent advisor is the first step to ensure you are working within the complex rules that govern super and taking best advantage of the tax concessions available. But if there is an opportunity to reduce your tax liability for limited effort, you would be mad not to explore your options. Image credits: Shutterstock

Retirement Income

Man slapped with $76,000 bill on free cruise

A couple from the US have been slapped with a five-figure bill after embarking on a cruise that they won. Mark and Tami were onboard the Norwegian Cruise Line ship Encore, after winning their trip for free, to celebrate Tami given a clean bill of health after the successful removal of a “mass from her lungs” in October 2024 following a cancer diagnosis. Just four days after setting off on their five-week journey, Mark fell ill and was taken to the ship's dedicated ICU with flu symptoms and reduced oxygen levels. He received oxygen, a catheter, IV medications, and X-rays, and when he felt better the next morning, asked to quarantine in his cabin room for the remainder of the trip. However, he was not allowed to leave the medical ward, and so the costs of his stay there continued to climb. “Mike spent a total of four days in the medical ward and asked to be released each day,” his daughter Krystal Cameron wrote in a <a href="https://www.gofundme.com/f/relieve-mike-and-tamis-medical-burden?attribution_id=sl:5f4f89c5-bda8-4947-8f2b-5c9203b2cf8f&lang=en_US&utm_campaign=man_ss_icons&utm_medium=customer&utm_source=copy_link" target="_blank" rel="noopener" data-link-type="article-inline">GoFundMe</a> to help pay the $75,800 ($47,638 USD) medical bill. During that time, she said staff would not remove his IV line, or the catheter which Tamra claims had been incorrectly fitted and was “leaking”. “Not on your life would I put my life in these people’s hands,” Tamra added in a social media post. “Should have demanded to get off at (the) port (on the) British Virgin Islands, where I was lied to that they had no good hospital.” Norwegian Cruise Line confirmed to <a href="https://7news.com.au/news/mark-won-a-free-holiday-with-norwegian-cruise-line-then-he-was-slapped-with-a-75800-bill-onboard-c-17618959" target="_blank" rel="noopener">7News</a> that Mike’s medical procedures and resulting expenses have been reviewed internally by the company, writing in a statement, “Mr Cameron was admitted to the onboard medical centre and received appropriate treatment for his condition, followed by 62 hours of critical care." “We are committed to providing quality medical services and each of our ships is equipped with a state-of-the-art onboard medical centre, staffed with highly qualified physicians and nurses, to provide care for both guests and crew while at sea." The couple had purchased travel insurance and said the Norwegian Cruise Line medical secretary reassured them they were covered for $20,000 USD ($31,987 AUD) and told “not to worry” when they raised concerns. However, Norwegian Cruise Line maxed out both credit cards they had on file for the couple when charging them with the final bill, adding, “Medical insurance is not accepted onboard.” “We strongly encouraged the guest to file a claim with their health insurance provider post-cruise," Norwegian Cruise Line told 7News. “As the guest did purchase travel insurance for their vacation, we have recommended they follow up on their claim with the insurance provider, after they have filed the claim with their health insurance provider.” But Krystal said “neither their travel insurance nor their personal health insurance will cover the medical treatments received”. The travel insurance company requires the couple’s health insurance company to initially pay the bill, but their health insurance company states because the incident happened abroad it is not covered by the policy, Krystal said. “Between Tami’s recent cancer diagnosis and surgery ... and my father’s illness ... their medical debt is quickly adding up,” Krystal said. Image credits: GoFundMe / Facebook

Legal

Historic Aged Care Bill passes Parliament

Older Australians will now receive greater support to live at home for longer among other reforms to aged care. On Monday, the Albanese Labor Government's Aged Care Bill passed Parliament, meaning that older Australians and their loved ones will have access to a better quality system. The bill will provide in-home help and improve conditions and protections for those living in aged-care facilities from July, with older people and their loved ones having a greater say about the care and services they receive. These include protections to speak up when they're not satisfied with a service, and better equipping providers to handle complaints more effectively. Around 1.4 million Aussies will receive support for nursing, occupational therapy and day-to-day tasks to help them live independently in their homes by 2035. The new $4.3 billion Support At Home system has been put in place with the hopes of improving home care wait times and will provide for home modifications and assistive technology to help older Australians maintain their independence for longer. The $5.6 billion package will be one of the largest improvements to the sector in 30 years, according to Aged Care Minister Anika Wells. “This act means that people will be the beating heart of a strengthened aged-care sector that replaces fear with trust,” she said. To help fund the cost of care, those not already in aged or home care will have to make contributions for non-clinical care costs, but the amount they pay would depend on their income and assets. The most anyone would pay for these independence and everyday living costs would be e $130,000 after the the lifetime contribution cap was raised from $76,000. The Commonwealth will remain the main funder of aged care. While the government will spend $930 million over the next four years, the new structure will save the budget $12.6 billion over the next 11 years. Image: Shutterstock

Retirement Income

5 ways to reduce everyday bills

It’s not uncommon to get to the end of the month and be surprised by a figure in your bills. But this surprise needn’t be unpleasant. There is wide a range of simple measures you can employ to reduce your monthly bills without too much effort. Follow these five simple tips and save money. 1. Food and groceries Food can be a problem area in the average Australian’s budget, either because we’re physically eating too much, eating out too much or spending too much money on groceries. But that doesn’t mean you have to transition to a Spartan diet. Here’s how you can save on your grocery bill: <ul> <li>Reduce the amount of times you’re eating out or getting takeout a week</li> <li>Use a shopping list and coupons, pay for groceries (this means you’re less likely to splurge on items that you don’t need) and buy more non-perishable foods to store and save</li> <li>Consider starting a garden and grow your own fruit and veggies</li> </ul> 2. Energy Many people have found their energy bills have been increasingly steady over the past through years, but this doesn’t mean you have to be part of that trend. With a little bit of ingenuity and not a lot of fuss you can make your house energy efficient and enjoy huge power bill savings: <ul> <li>Switch to energy-efficient light bulbs. In many cases these bulbs do cost more than traditional bulbs, but they use much less energy and can last up to 10 times longer</li> <li>Unplug unused electrical devices that are draining electricity</li> <li>Make sure you home is airtight to prevent cold drafts in winter and the loss of cool air in summer. This will also reduce your heating/cooling bills accordingly</li> </ul> 3. Cars As fuel, registration and maintenance costs start to pile up, a car can seem less like a convenience and more like a money pit rolling around on four wheels. That being said, there is a range of ways you can enjoy the access vehicle ownerships provides, without having to pay through your nose: <ul> <li>Underinflated tyres reduces the value of your cars fuel economy significantly, so make sure you take a couple of minutes to check the air pressure and reinflate once a month</li> <li>Consider selling a vehicle if you’re not using it often. Without taking the cost of parking and toll roads into account driving vehicles costs thousands of dollars a year</li> <li>Use more public transport and consider setting up car pools with friends/colleagues</li> </ul> 4. Grooming and beauty Looking and feeling great is important, but it doesn’t necessarily have to be a hugely expensive ordeal. With a little bit of ingenuity, creativity and willingness to not spend $10,000 on that jewel encrusted headdress you can still be the belle/male-belle of the ball without breaking the bank: <ul> <li>Reduce the amount of money you spend on clothing by keeping your eye on sales</li> <li>Consider lower cost alternatives to your favourite beauty products</li> <li>Cut back on the amount of times you have your hair cut and styled</li> </ul> 5. Additional entertainment expenses Your deluxe gym membership might give you access to the power lifting body attack class, but are you really getting the full value for it and the other regular entertainment expenses you’ve signed up for? There are still ways to stay entertained without having to break the bank every week. <ul> <li>Consider cancelling club memberships for places you don’t visit often</li> <li>Investigate free events and inexpensive entertainment ideas like cheap movies Tuesdays</li> <li>Magazine and newspaper subscriptions can also become expensive if you’re not actually reading the papers, as well as pay television services that can be easily eliminated</li> </ul> Image credits: Shutterstock

Money & Banking

Vandals wreck roadside CCTV leaving locals with $300k replacement bill

Two mobile roadside cameras have been targeted and damaged by a group of young men, leaving a local Aussie council with a large replacement bill. Video of the incident was shared on social media over the weekend and shows about a dozen men, most of them covering their faces , pushing over a camera trailer before swinging on the boom and hitting the camera. The "night time shenanigans" drew a mixed reaction, with some praising their antics saying: "Not all heroes wear capes." Others described them as "legends" and said "good job fellas." However many slammed their acts of vandalism, with one person saying: "Total of 49 braincells combined." According to Yahoo News, the cameras were not monitoring drivers and are not managed by Queensland's Department of Transport and Main Roads. The cameras belonged to local government area intended to tackle anti-social behaviour and crime. <blockquote class="instagram-media" style="background: #FFF; border: 0; border-radius: 3px; box-shadow: 0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width: 540px; min-width: 326px; padding: 0; width: calc(100% - 2px);" data-instgrm-captioned="" data-instgrm-permalink="https://www.instagram.com/reel/DAfgtmOPqxk/?utm_source=ig_embed&utm_campaign=loading" data-instgrm-version="14"> <div style="padding: 16px;"> <div style="display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"> </div> </div> </div> <div style="padding: 19% 0;"> </div> <div style="display: block; height: 50px; margin: 0 auto 12px; width: 50px;"> </div> <div style="padding-top: 8px;"> <div style="color: #3897f0; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: 550; line-height: 18px;">View this post on Instagram</div> </div> <div style="padding: 12.5% 0;"> </div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"> <div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"> </div> <div style="background-color: #f4f4f4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"> </div> <div style="background-color: #f4f4f4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"> </div> </div> <div style="margin-left: 8px;"> <div style="background-color: #f4f4f4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"> </div> <div style="width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg);"> </div> </div> <div style="margin-left: auto;"> <div style="width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"> </div> <div style="background-color: #f4f4f4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"> </div> <div style="width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"> </div> </div> </div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"> </div> <div style="background-color: #f4f4f4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"> </div> </div> <p style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; line-height: 17px; margin-bottom: 0; margin-top: 8px; overflow: hidden; padding: 8px 0 7px; text-align: center; text-overflow: ellipsis; white-space: nowrap;"><a style="color: #c9c8cd; font-family: Arial,sans-serif; font-size: 14px; font-style: normal; font-weight: normal; line-height: 17px; text-decoration: none;" href="https://www.instagram.com/reel/DAfgtmOPqxk/?utm_source=ig_embed&utm_campaign=loading" target="_blank" rel="noopener">A post shared by Its Called Straya 🇦🇺 (@its_called_straya)</a> </div> </blockquote> "Over the last week two of Council’s mobile CCTV camera trailers have been destroyed by vandals," a spokesperson for the council told the Townsville Bulletin. "The total replacement cost of both trailers is estimated to be more than $300,000 to ratepayers." According to council officials, the cameras were damaged in the suburbs of Woodstock and Bohle. "Townsville City Council has an extensive CCTV camera network of more than 600 fixed cameras and six mobile trailer cameras that can be deployed across the city to reinforce Council’s commitment to community safety," the spokesperson said. Police are investigating the incidents, urging anyone with information to come forward. Images: Instagram

Legal

Bill Shorten quits politics and reveals his next move in heartfelt speech

Bill Shorten has announced his shock departure from politics after an almost two-decade-long career in parliament. The former Labor leader will remain in cabinet until his retirement from politics in February next year, when he will start a new career as vice chancellor of the University of Canberra. In a media conference in the Prime Minister’s courtyard on Thursday, Shorten made the shocking announcement alongside Anthony Albanese, reflecting on his career. “Over 30 years ago, when I joined the Australian Workers Union, I was driven by the belief that everyone, regardless of circumstance, deserves an equal opportunity,” Mr Shorten said. “The opportunity to fulfil their potential. Fair wages, safe workplaces, decent conditions, that is what they are all about. It’s about recognising the merit and worth of every individual. As the same principle that brought me here in 2007.” "Every day in this job, and I'm sure every member of parliament agrees, is a privileged day." He also shared his motivation behind moving into the education sector, highlighting his love of education. “Education is the modern means of taking someone from disadvantage to advantage in a way that no other method can,” Mr Shorten told a media conference in the Prime Minister’s court yard. <div> <div id="sda-INARTICLE"></div> </div> “Universities have a critical role to play. The hopes and dreams of Australians are lifted when they are able to fulfil their own potential and the hopes and dreams of our nation are lifted as well.” Albanese also praised his colleague and his extraordinary career, saying, "Through his years as leader, no-one worked harder than Bill." "No-one brought more energy, enthusiasm, ideas and ambition to advocating the need for a Labor government." Image credits: ABC

News

It’s tax time and scammers are targeting your myGov account. Here’s how to stay safe

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/cassandra-cross-122865">Cassandra Cross</a>, <a href="https://theconversation.com/institutions/queensland-university-of-technology-847">Queensland University of Technology</a> For many, tax time is an exciting part of the year – there’s the potential for a refund. However, it’s also an attractive time for fraudsters looking for ways to get money and deceive unsuspecting victims. Each year Australians lose large amounts of money to scams. In 2023, Australians reported <a href="https://www.accc.gov.au/media-release/scam-losses-decline-but-more-work-to-do-as-australians-lose-27-billion">losses of more than A$2.7 billion</a>. While this is a slight reduction from the $3.1 billion in 2022, there are still millions of victims who’ve suffered at the hands of scammers. Impersonation scams are one common approach. Scamwatch reports that in 2023, <a href="https://www.scamwatch.gov.au/news-alerts/shopping-for-online-bargains-this-black-friday-weekend-make-sure-its-the-real-deal">70% of reports to them</a> involved impersonation. A large number of these were linked to the Australian Taxation Office (ATO) and myGov. <h2>What is an impersonation scam?</h2> Impersonation scams are what they sound like: when an offender pretends to be someone or something they are not. Offenders may pretend to be family members or friends in our contact lists. In many cases, they will say they’re from an organisation such as a bank or a well-known retailer, or a government department – like the ATO. Offenders take on the identity of a known and trusted organisation to increase the chances of success. While we may ignore communications from unknown entities and strangers, we’re more likely to engage with what’s familiar. Additionally, the ATO has a powerful status as a government agency, and we are unlikely to ignore its messages – especially at tax time. <h2>What are they trying to get out of my myGov account?</h2> myGov is the gateway to a range of government services, including Medicare, Centrelink, My Health Record, the National Disability Insurance Scheme, and of course, the ATO. Being able to log in to myGov gives offenders access to a wide range of your personal details. This can help them build a fuller profile of you to potentially commit identity theft (such as opening new accounts in your name). There’s also the potential for direct fraud. With access to myGov, offenders can change your bank account details and redirect any refunds into their accounts, whether from the ATO or other linked services. They can even submit false tax returns, medical claims or other forms to obtain fraudulent funds. As the legitimate owner of the account, you may not immediately notice this. <h2>What does a myGov scam look like?</h2> In most instances, a myGov scam will look like one of the many phishing attempts we all receive on a daily basis. While each approach can be worded differently, their desired outcome is the same: to acquire your personal information. Fraudsters are sending text messages and emails pretending to be from the ATO, advising you there’s a refund available if you click the provided link. Another approach is to flag a “problem” with your tax return or bank account, and direct you to take immediate action via a link. Creating a sense of urgency can trick users into acting in the moment, without thinking through the request. The text or email may also be very neutral, simply stating there’s a new message waiting – with a link to where you can read it. Regardless of what the message says, the goal is to direct you to a website that looks genuine, but is fake. If you enter your myGov details into such a fake site, the offender can capture your login details and use them to log into your actual myGov account. <h2>What to do if you’ve been a victim?</h2> If you have clicked on a scam link and provided your personal details, there are steps you can take. Change your password and review your account settings if you still have access to your myGov account. Check your bank accounts, to see what, if anything, has been lost. Contact your bank or financial institution immediately if you notice any withdrawals or suspicious transactions. Contact any other organisation linked to your myGov account to see if any unauthorised actions have been taken. For anyone who has lost personal information and experienced identity crime, <a href="https://www.idcare.org/">IDCARE is the national support centre</a> for identity crime victims. They will be able to assist with a personalised response plan to your specific situation. <h2>How do I keep my account safe?</h2> Never click on links in text messages or emails that direct you to log in to your accounts. Always access your accounts independently, through details you have found independently of any text or email. Review your security settings. There have been recent reports of people’s myGov accounts being targeted <a href="https://www.theguardian.com/australia-news/article/2024/aug/01/ato-mygov-tax-return-refund-scam">with repeated login attempts</a>. Using your unique eight-digit myGov username for logging in can be safer than <a href="https://my.gov.au/en/about/help/mygov-website/help-using-your-account/manage-sign-in-details#updatingyourusername">using your email address</a>. Enable <a href="https://theconversation.com/what-is-multi-factor-authentication-and-how-should-i-be-using-it-191591">multi-factor authentication</a> where possible. myGov uses two-factor authentication in the form of a text message in addition to an online login. While this is not foolproof, it offers an additional layer of protection and can stop offenders accessing your account with only partial pieces of your information. Be vigilant on all communications. Always keep in mind that all may not be what it seems and the person you are communicating with may not be who they say they are. It is okay to be sceptical and do your own checks to verify details of what is presented to you. Remember, fraudsters thrive on the silence and shame of those who respond or fall victim to their scams. We need to communicate openly about these schemes and talk to family and friends, to increase everyone’s knowledge and awareness.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/235785/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/cassandra-cross-122865">Cassandra Cross</a>, Associate Dean (Learning & Teaching) Faculty of Creative Industries, Education and Social Justice, <a href="https://theconversation.com/institutions/queensland-university-of-technology-847">Queensland University of Technology</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/its-tax-time-and-scammers-are-targeting-your-mygov-account-heres-how-to-stay-safe-235785">original article</a>. </div>

Money & Banking

"We should give back": Bill Gates' ex-wife on giving away her $16bn fortune

Melinda French Gates has opened up on her decision to give away her fortune after leaving the Bill & Melinda Gates Foundation in June. Melinda, who is reportedly worth $16.8 billion, said that she will stick with her decision to give away her fortune on The Late Show with Stephen Colbert, as it's "the right thing to do for society". "If we grew up in the United States, anybody who has grown up in this country has been really lucky and I don't care who you are," she explained. "To be able to go to a decent school, grow up and pursue your career, and if so you are a billionaire, my gosh, you have benefited from this country, right? "So we should give back." She also feels there is "a responsibility and to do it in a way that's incredibly thoughtful". Melinda, who divorced the Microsoft founder Bill Gates back in 2021, has announced her plans to focus on her organisation Pivotal Ventures, which she founded in 2015. The organisation's aim is to "advance social progress by removing barriers that hold people back." She said that she is determined to ensure that "women's rights are not only on the agenda, but that women are setting the agenda" – especially after watching women's rights be rolled back internationally over the last few years." "What I saw, part of why our women's rights got rolled back in the United States is that those organisations were starved for funding, and they were playing defense," she explained. Melinda has pledged to donate $1 billion to this end over the next two years. Image: Julien De Rosa/EPA/ Shutterstock Editorial

Money & Banking

7 health investments that are tax deductible

When someone says “investment”, we tend to think of money and wealth creation: property, shares, superannuation, savings accounts and so on. However, an investment is the contribution of something you value towards the anticipation of growing that value. That contribution could be money or it could be in the form of time, skills, knowledge, or labour. Similarly, the anticipated growth in value could be in monetary terms or towards growth in business, education, research, or even health – both your own and others’. Just like money matters and tax affairs require a wholistic view, so too does health. Which is why when it comes to getting the most out of health investments, it’s crucial to consider physical, mental and financial health. Many, such as those listed below, happen to be tax deductible too: <ol> <li>Safety equipment and education</li> </ol> Workplace safety is perhaps the most crucial of all health investments. What form that takes can differ enormously between professions. Yet if it is important for doing your job safely, then generally it will be tax deductible. This may be protective clothing for tradespeople, medical workers, and industrial machinists, or advanced driving/road safety training courses for taxi drivers and couriers. Sun protection for jobs that take place largely or exclusively outdoors is also generally deductible – but use those sunglasses or sunscreen at home as well, and you’ll only be able to claim the work-related portion of the cost. <ol start="2"> <li>Insurances</li> </ol> Certain insurance premiums are typically tax deductible. Professional indemnity insurance is a legitimate (and often essential) business expense in many jobs, such as for doctors and journalists. Income protection insurance against severe illness or injury may also be deductible. Plus, having private health insurance also delivers a tax benefit when lodging your tax return. <ol start="3"> <li>Professional coaching</li> </ol> Professional coaching can be useful for mental health and clarity, both over existing work situations and career progression or transition planning. Provided this coaching is strictly professional and relates to your ability to earn an income, it may be tax deductible. <ol start="4"> <li>Accounting and financial advice </li> </ol> Good financial health goes hand in hand with good advice about money matters. Most Aussies know that the cost of managing their tax affairs is deductible. Less well known, though, is that financial advice expenses are also generally deductible. Busy accountants can forget to ask if you incurred these costs when going through your expenses at tax time, so be sure to flag it with them. <ol start="5"> <li>Industry-specific deductions</li> </ol> In some instances, health-related expenses may be tax deductible because they are required within a particular job. For instance, models, athletes and fitness instructors may be able to claim gym memberships and nutritionist visits; dieticians and chefs may be able to claim healthy eating books and subscriptions. Check the <a href="https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/deductions-you-can-claim/occupation-and-industry-specific-guides">ATO’s Occupation and industry-specific guides</a> to see relevant deductions in your line of work. <ol start="6"> <li>Medical checks</li> </ol> If you require compulsory medical assessments and check-ups as part of your job, these may be tax deductible. Examples include health screenings for pilots, miners, and emergency workers. COVID-19 tests to determine whether you can attend your workplace may also be deductible. Vaccinations, however, are deemed by the ATO to be private expenses. <ol start="7"> <li>Donations</li> </ol> Many health organisations are registered charities and not-for-profits, making donations to them deductible. Often, people donate to health charities because of personal experience, either as a patient/survivor themselves or having known someone who was. So not only are you investing in critical research and future patient support as a means of giving back, but you can also claim a tax deduction as a reward for donations over $2. Proof of purchase is key For any expense to be tax deductible, it must be necessary for work purposes and have come out of your own pocket, not been paid for or reimbursed by your employer. Don’t forget to claim depreciation of work-related equipment over subsequent years. These are extra dollars in your pocket to offset the cost of their eventual replacement. And be sure to keep copies of receipts for your purchases to prove your expenses – both now and in the future. Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

10 ways to make those stage 3 tax cuts count

You’re already used to living without these extra dollars. So, you won’t miss them by continuing to do so. Consider the various options available and which best suits your circumstances, then devise a plan of action to put that money to work. <ol> <li>Check tax brackets</li> </ol> Not only are some income tax rates falling, but the thresholds for others are increasing - potentially pushing you into a lower tax bracket. For example, Alice currently earns $130,000 and this tips her into marginal tax rate of 37 per cent. The Stage 3 changes will increase the 37 per cent tax threshold to $135,001. As such, Alice drops to a lower tax bracket. Not only this, her new tax bracket will have its marginal tax rate reduced from 32.5 per cent to 30 per cent. It’s a double win for Alice! This shouldn’t change your money habits but is still good to know. <ol start="2"> <li>Update your plan</li> </ol> Check <a href="https://www.ato.gov.au/about-ato/new-legislation/in-detail/individuals/individual-income-tax-rates-and-threshold-changes">what your new tax rate will be</a> to calculate your new take-home pay (or simply look at your first full pay cycle in the new financial year). Plot your new income into your household spending and investment plan. Now you know what you have to play with. <ol start="3"> <li>Check your pay</li> </ol> Most employers use digital payroll systems which automatically update tax rates. But not all do. And even then, mistakes can happen. From July, double check that your pay is adjusted correctly. If you notice a mistake, speak up – not only will you and your colleagues benefit, but you could save your employer from costly penalties for an innocent mistake. <ol start="4"> <li>Monitor expenses</li> </ol> Don’t let ballooning expenses wipe out any tax cut gains. Avoid pre-spending those gains too. The additional income is spaced out over each pay; it’s not a lump sum you can blow on a spending spree. <ol start="5"> <li>Automatic redirects</li> </ol> Consider setting up an automated redirect of the difference in your pay as soon as it hits your account. The money could be diverted into a high-interest savings account or used to top up your emergency fund. <ol start="6"> <li>Super contributions</li> </ol> Tax cut cash can be used in combination with super contribution rules to supercharge retirement earnings. Low income earners may be eligible for <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/super-co-contribution">government co-contributions</a> while <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/spouse-super-contributions">spouse contributions</a> can offer further tax benefits. This may be particularly useful for anyone <a href="https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/concessional-contributions-cap#ato-Carryforwardunusedcontributioncapamounts">trying to catch-up</a> after time out of the workforce (e.g., raising kids or caring for relatives) or repaying <a href="https://www.ato.gov.au/about-ato/research-and-statistics/in-detail/super-statistics/early-release/covid-19-early-release-of-super">early withdrawals during COVID</a>. <ol start="7"> <li>Pay down debt</li> </ol> Every extra dollar spent paying off debt will save on future interest and clear it faster. Prioritise higher interest debts (like credit cards). Consider consolidating multiple debts into one with a lower rate (e.g., your mortgage) to reduce total interest and simplify repayments. <ol start="8"> <li>Invest in yourself</li> </ol> The old saying goes “you’ve got to spend money to make money”. Nowhere are the returns typically better than from self improvement. That could be undertaking new qualifications or additional training, enabling you to secure pay rises or transition to a higher-paying industry. Or it may be investing in your health and wellbeing, to reduce medical expenses, improve job prospects and productivity, and enhance your decision-making abilities (including about money matters). <ol start="9"> <li>Lodge returns promptly</li> </ol> This applies to every tax year: the sooner you lodge your tax return, the sooner you access your tax refund. Even if you’re facing a tax bill, getting it done sooner means less interest accruing and no late payment penalties. <ol start="10"> <li>Revisit strategies</li> </ol> While making changes to incorporate these tax cuts, take the opportunity to re-evaluate your overall finances. Revisit investment strategies to ensure they are delivering optimal returns. Check superannuation thresholds and performance. Scrutinise total tax liabilities (for instance, lower tax rates may mean you won’t qualify for the same level of tax deductions). Make updates where necessary. Keeping on top of your finances will mean better bang for your buck now while streamlining your affairs in future years. Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at <a href="http://www.onyourowntwofeet.com.au/">www.onyourowntwofeet.com.au</a> Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754. Image credits: Shutterstock

Money & Banking

"Tax the boomers": Outrage over elderly couple's complaint after $1m Lotto win

A "greedy" elderly couple have been rinsed online after complaining about losing their age pension payments after they won the Lotto. The couple, aged 73 and 67, wrote into <a href="https://www.smh.com.au/money/super-and-retirement/we-won-the-lottery-but-lost-our-pension-could-we-have-prevented-this-20240702-p5jqga.html" target="_blank" rel="noopener">Sydney Morning Herald</a>'s financial advice column with Noel Whittaker to ask how they could've prevented losing the government funds and still kept hold of their million-dollar winnings. The couple's submission read, "We are a couple... both retired and receiving the full aged pension. We recently won $1,000,000 in the lottery and have placed that money in a basic interest-bearing savings account with our bank." "We intend to use that money to buy a new house and sell our existing one but may just renovate. The windfall has stopped our pension completely until we spend the money, which is all good and well. But could we have prevented the pension loss in any way?" Whittaker responded that the couple should consider themselves extremely fortunate and enjoy the money, saying they "could have a far better lifestyle living off capital instead of relying on welfare". He also urged the couple not "spend to get a pension". The boomers' questions quickly drew attention online, with many flocking to Facebook comments to slam the couple for their "greed". One person wrote, "If you won the lotto, why would you want the pension?", while another added, "Ah yes, the call of the boomers everywhere, 'I have millions but where's my pension money?'" Others said the Lotto winners should consider themselves lucky they are now able to provide for themselves, with one person writing, "Pension is a support system to allow you to survive without/reduced work in retirement. If you are a multimillionaire then you don't need it." Another person echoed the sentiment, saying, "Wow, what entitlement. The pension is a safety net, if you don’t qualify for it think yourself lucky." Other social media users simply shared their outrage towards the boomer generation, as one frustrated person wrote, "Won a million and whinging they can't scam the taxpayers, what self-centered arrogance", while another added, "Tax the boomers! No more handouts." Image credits: Shutterstock <div class="x6s0dn4 x3nfvp2" style="font-family: inherit; align-items: center; display: inline-flex; min-width: 604px;"> <ul class="html-ul xe8uvvx xdj266r x4uap5 x18d9i69 xkhd6sd x1n0m28w x78zum5 x1wfe3co xat24cr xsgj6o6 x1o1nzlu xyqdw3p" style="list-style: none; margin: 0px -8px 0px 4px; padding: 3px 0px 0px; display: flex; min-height: 15px; line-height: 12px; caret-color: #1c1e21; color: #1c1e21; font-family: system-ui, -apple-system, BlinkMacSystemFont, '.SFNSText-Regular', sans-serif; font-size: 12.000001px;" aria-hidden="false"> <li class="html-li xe8uvvx xdj266r xat24cr xexx8yu x4uap5 x18d9i69 xkhd6sd x1rg5ohu x1emribx x1i64zmx" style="list-style: none; display: inline-block; padding: 0px; margin: 0px 8px;"> </li> </ul> </div>

Retirement Income

Why you should expect to pay more tourist taxes – even though the evidence for them is unclear

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/rhys-ap-gwilym-1531623">Rhys ap Gwilym</a>, <a href="https://theconversation.com/institutions/bangor-university-1221">Bangor University</a> and <a href="https://theconversation.com/profiles/linda-osti-1431286">Linda Osti</a>, <a href="https://theconversation.com/institutions/bangor-university-1221">Bangor University</a> In April 2024, Venice began its controversial experiment to <a href="https://www.timeout.com/news/venice-will-charge-tourists-5-to-enter-the-city-from-next-year-090823">charge day trippers</a> €5 (£4.30) to visit the city on some of the busiest days of the year. But it’s not just the lagoon city, with its <a href="https://www.bbc.co.uk/travel/article/20230928-venices-new-5-entry-fee-explained#:%7E:text=Over%20the%20past%20three%20decades%2C%20Venice%20has%20become,thirds%20of%20visitors%20come%20just%20for%20the%20day.">30 million visitors</a> a year which is interested in trying out new tourism taxes. In the UK, a council in the county of Kent <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Ftheconversationuk.cmail20.com%2Ft%2Fr-l-tiuhhult-iukktlluuk-o%2F&data=05%7C02%7Cr.a.gwilym%40bangor.ac.uk%7C39ac5db833674c1a026508dc63a24fa7%7Cc6474c55a9234d2a9bd4ece37148dbb2%7C0%7C0%7C638494795990617858%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=D6oVizx3pFoiwRaTcKaakQ079%2FIQx86jcbFpj2%2FS0RQ%3D&reserved=0">has recommended</a> introducing a tourism tax on overnight stays in the county. In Scotland, it seems likely that <a href="https://edinburgh.org/planning/local-information/visitor-levy-for-edinburgh/#:%7E:text=The%20Edinburgh%20Visitor%20Levy%2C%20otherwise%20referred%20to%20as,would%20then%20be%20invested%20back%20into%20the%20city.">visitors to Edinburgh</a> will be paying a fee by 2026, and the Welsh government <a href="https://www.walesonline.co.uk/news/wales-news/welsh-government-announces-tourists-pay-26591498">plans to introduce</a> similar legislation later this year. Such taxes may seem new to the UK, but there are more than 60 destinations around the world where this type of tax is already in place. These vary from a nationwide tax in Iceland to various towns across the US. Some have been in place for a long time (France was the <a href="https://www.impots.gouv.fr/taxe-de-sejour">first in 1910</a>), but most were introduced during the last decade or two. Before the pandemic really struck (and tourism was put on hold), 2020 was described by one newspaper as the <a href="https://www.telegraph.co.uk/travel/news/tourist-tax-amsterdam-venice/">“year of the tourist tax”</a>, as Amsterdam joined an ever-growing list of destinations, which includes Paris, Malta and Cancun, to charge visitors for simply visiting. Introducing these tourist taxes has often been controversial, with industry bodies <a href="https://www.bbc.co.uk/news/uk-wales-62707152">voicing concerns</a> about the potential impacts on the tourist trade. And it appears that the link between such levies and visitor numbers is not simple, with several studies reaching different conclusions. For example, some have suggested that tourism levies have hindered <a href="https://www-sciencedirect-com.bangor.idm.oclc.org/science/article/pii/S0261517704000238">international tourism in the Balearics</a> and <a href="https://journals-sagepub-com.bangor.idm.oclc.org/doi/pdf/10.1177/00472875211053658">the Maldives</a>, and that they may dissuade people from participating in <a href="https://eprints.bournemouth.ac.uk/35087/1/ADEDOYIN%2C%20Festus%20Fatai_Ph.D._2020.pdf">domestic tourism</a>. Yet in one of the world’s most popular tourism spots with a levy, Barcelona, visitor numbers have <a href="https://groupnao.com/wp-content/uploads/2020/11/TOURISM-TAXES-BY-DESIGN-NOV12-2020_rettet-compressed-2.pdf">consistently risen</a>, with hotel guests increasing from 7.1 million in 2013 to 9.5 million in 2019. In fact, the relationship between a visitor levy and tourist flow is so complex that there is no unified view, even within the same country. Italy has been one of the most studied, and results <a href="https://crenos.unica.it/crenosterritorio/sites/default/files/allegati-pubblicazioni-tes/Indagine_Villasimius_Quaderno_Crenos_ISBN.pdf">are inconsistent</a> <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/jtr.2123">there too</a>. Another study, looking at three neighbouring Italian seaside spots finds that only in one destination has the visitor levy <a href="https://www.rivisteweb.it/doi/10.1429/77318">reduced tourist flow</a>. And a study on the Italian cities of Rome, Florence and Padua shows that these cities <a href="https://link-springer-com.bangor.idm.oclc.org/chapter/10.1007/978-3-030-61274-0_23">have not experienced any negative effects</a> either in terms of domestic or international demand. So the impact of tourism taxes on visitor numbers is inconclusive. But what about other effects, such as the potential benefits of spending the revenues raised? As part of an ongoing research project, we looked at seven different destinations in which tourist taxes are levied to look at how the money raised is then spent. For most places, tourism tax revenues were being used to fund marketing and branding – so invested directly into promoting more tourism. The income was also commonly used to fund tourism infrastructure, from public toilets and walking or cycling paths to a multi-billion dollar <a href="https://www.occc.net/About-Us-Media-Relations-Press-Releases/ArticleID/569/Orange%20County%20Board%20Votes%20to%20Approve%20Convention%20Center%20Completion%20with%20Tourist%20Development%20Tax%20Revenues">convention centre</a> in Orange County, Florida. In <a href="https://www.caib.es/sites/impostturisme/en/l/projects/?mcont=95762">the Balearics</a>, revenues tend to go to projects that mitigate the negative impacts of tourism on the environment, culture and society of the islands. These include waste management, conserving natural habitats and historical monuments, and social housing. But in general, tourism taxes have been implemented successfully across the destinations we looked at, and there is little evidence of tourists being put off from visiting. Research also suggests that when tourists are told what the levy is used for – and when it relates directly to <a href="https://www.mdpi.com/2227-7099/5/2/21">improving their experience</a> or <a href="https://ejtr.vumk.eu/index.php/about/article/view/2813/605">enhancing sustainable tourism</a> – <a href="https://www-sciencedirect-com.bangor.idm.oclc.org/science/article/pii/S2212571X20301621?casa_token=HcD-yQh65XcAAAAA:GhVRo4vX9JY1E3Lcx5ZPaTr5ZHArMGNrmK_2ASJCtMPjVpdCQLdun25BmFEYquGgz8-1riOWdg">tourists are willing to accept and pay</a> the levy. <h2>Day trippers</h2> For many tourism destinations, the major problem is not overnight tourists, but rather <a href="https://www.mirror.co.uk/news/uk-news/fuming-snowdonia-visitors-demand-self-30203642">day visitors</a> who use local resources while making little in the way of a financial contribution. For these reasons, taxes might also be used to deter day visits and instead encourage longer stays. <a href="https://www.economist.com/why-venice-is-starting-to-charge-tourists-to-enter?utm_medium=cpc.adword.pd&utm_source=google&ppccampaignID=18156330227&ppcadID=&utm_campaign=a.22brand_pmax&utm_content=conversion.direct-response.anonymous&gad_source=1&gclid=Cj0KCQjw_qexBhCoARIsAFgBleshST3IQMYR8hONLSLnA_loj9dukAqxURhdVCn1RmGeD5iOQzw_r2caAsqrEALw_wcB&gclsrc=aw.ds">Venice is at the forefront</a> of this shift. And in April 2024, after long discussions between the local authority, residents and business owners, Venice started a <a href="https://cdamedia.veneziaunica.it/en/video/it-is-difficult-to-book-a-visit-to-venice/">trial</a> of a day visitor tax (a so-called <a href="https://cda.veneziaunica.it/en">“access fee”</a>). Back in Kent, it may take longer for any such radical plans to come to fruition. In contrast to Scotland and Wales, there are currently no national plans to <a href="http://www.parliament.uk/written-questions-answers-statements/written-question/commons/2023-09-13/199425">introduce tourist taxes</a> in England. This might be considered shortsighted, given the dire need of many destinations in England to improve local infrastructure that tourists rely on, including <a href="https://www.reading.ac.uk/news/2024/Research-News/Swimming-in-sewage-Bathing-forecasts-not-keeping-people-safe">clean bathing water</a> and <a href="https://www.lancs.live/news/cumbria-news/lake-district-warning-parking-issues-27173650">public transport</a>. In <a href="https://www.accountingweb.co.uk/business/finance-strategy/manchester-acts-as-trailblazer-for-tourist-tax">Manchester</a> and <a href="https://www.ft.com/content/0e0385e6-29ec-4302-9903-6fbf63d8854a">Liverpool</a>, businesses have implemented voluntary overnight charges on visitors, in the absence of the statutory basis to implement compulsory levies. Many other English towns and cities will probably follow their lead. Tourism taxes are something we might all have to consider budgeting for in our future travel plans, wherever we choose to visit.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/229134/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/rhys-ap-gwilym-1531623">Rhys ap Gwilym</a>, Senior Lecturer in Economics, <a href="https://theconversation.com/institutions/bangor-university-1221">Bangor University</a> and <a href="https://theconversation.com/profiles/linda-osti-1431286">Linda Osti</a>, Senior Lecturer in Tourism Management, <a href="https://theconversation.com/institutions/bangor-university-1221">Bangor University</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-you-should-expect-to-pay-more-tourist-taxes-even-though-the-evidence-for-them-is-unclear-229134">original article</a>. </div>

Travel Trouble

Australia’s tax system is being weaponised against victims of domestic abuse. Here’s how

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/ann-kayis-kumar-466422">Ann Kayis-Kumar</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> When women seeking financial help from the government-funded UNSW <a href="https://www.unsw.edu.au/business/our-schools/accounting-auditing-taxation/about-us/unsw-clinic">Tax and Business Advisory Clinic</a> are asked whether they have ever been affected by family or domestic violence, most say they have. In the past year this number has grown from <a href="https://cdn.theconversation.com/static_files/files/3339/sub009.pdf?1718777706">65%</a> to over 80%. And about <a href="https://ssrn.com/abstract=4746954">14%</a> of the clinic’s clients say their tax debts are a result of intimate partner violence. These debts often arise from business debts, bankruptcy, corporate directorships and director penalty notices. We know that economic abuse is a red flag for other forms of domestic violence. Economic abuse occurs in nearly all Australian domestic and family violence cases, affecting more than <a href="https://www.abs.gov.au/statistics/people/crime-and-justice/personal-safety-australia/latest-release">2.4 million Australians</a> and costing the economy an estimated <a href="https://www.commbank.com.au/content/dam/caas/newsroom/docs/Cost%20of%20financial%20abuse%20in%20Australia.pdf">A$10.9 billion</a> a year. Unfortunately, existing laws fall well short of protecting abuse victim-survivors from financial loss. <h2>How violent partners weaponise tax</h2> The perpetrators of violence can effectively weaponise the tax system by placing tax debts solely in the names of former partners, often because they have made them directors of companies or through family businesses operating through partnerships or trusts. There is a policy assumption that family members benefit from family partnerships. But this does not always hold in practice and can be problematic when there is economic abuse because Australian tax law requires victims report and pay tax on their “share” of the family partnership’s income. The average tax debt at the tax clinic is about $90,000. This can result in debilitating financial burdens, exhausted savings, insecure housing and prolonged economic instability, well after abusive relationships end. <h2>Change is needed</h2> Australia has no specific strategy for relief of tax debts caused by financial abuse. There are “serious hardship” provisions in Australian taxation law, but these are outdated and in need of <a href="https://theconversation.com/sometimes-people-can-do-with-a-break-3-ways-tax-debt-relief-rules-are-too-tough-156948">reform</a>. Usually people do not have the funds up front so the only way the Australian Taxation Office can collect debts from the abused partner is through (generally two-year) payment plans, offsetting future tax refunds, engaging external debt collectors and initiating bankruptcy proceedings. To that end, the decision announced in this year’s budget to give the Tax Commissioner discretion <a href="https://www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/changes-to-offsetting-debts-on-hold">not to offset</a> against tax returns debts previously placed “on hold” is welcome. It will provide short-term relief by enabling abuse victims to get their refunds instead of having it used by the Tax Office to reduce their debt. Colleagues Christine Speidel, Leslie Book and I want this power extended to all <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4746954">forms of tax debts</a> not just for tax debts that have been placed “on hold” especially where the taxpayer is known to have experienced financial abuse. But this wouldn’t go far enough – the victim-survivors would still have the perpetrator’s tax debt hanging over them. Where this happens, financial instability can <a href="https://www.commbank.com.au/content/dam/commbank-assets/support/2021-01/unsw-report-key-findings.pdf">drive women back</a> into abusive relationships. <h2>The US shows what can be done</h2> Legislative reform to shift tax liability from abuse survivors to perpetrators is the key to helping solve the problem. <figure class="align-right zoomable"></figure> The United States has offered some form of “<a href="https://www.irs.gov/individuals/innocent-spouse-relief">innocent spouse relief</a>” since 1971. In 2011 it widened eligibility and <a href="https://www.irs.gov/pub/irs-news/ir-11-080.pdf">removed a two-year time limit</a> for requesting relief. It is important to understand the US provisions apply because the country offers jointly filed “married” tax returns. In Australia tax returns are filed by individuals. Australia’s laws would need to change to ensure abused women do not find themselves jointly liable. Any changes should also include debts incurred in the name of partnerships and company directors. The US is the first and only country to do this, largely because of the advocacy of US low-income tax clinics over decades. Australia now has such clinics, funded as part of the Tax Office <a href="https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/support-to-lodge-and-pay/national-tax-clinic-program">National Tax Clinic Program</a>. Australia’s adoption of US-style rules could provide a model for other jurisdictions, increase tax debt collection (as perpetrators are likely to have better capacity to pay than victims) and foster greater confidence in the Tax Office. Most importantly, it would acknowledge that victim-survivors with tax debts should not bear responsibility for debts incurred by perpetrators. <hr /> For information and advice about family and intimate partner violence contact 1800 RESPECT (<a href="https://www.1800respect.org.au/">1800 737 732</a>). If you or someone you know is in immediate danger, contact 000. The Men’s Referral Service (<a href="https://ntv.org.au/get-help/">1300 766 491)</a> offers advice and counselling to men looking to change their behaviour.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/232609/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/ann-kayis-kumar-466422">Ann Kayis-Kumar</a>, Founding Director of UNSW Tax and Business Advisory Clinic, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australias-tax-system-is-being-weaponised-against-victims-of-domestic-abuse-heres-how-232609">original article</a>. </div>

Money & Banking

How to sign up for energy bill relief

In the face of rising living costs, thousands of Australians have turned to their energy providers for financial assistance, highlighting the community spirit and support available during these challenging times. Energy companies like AGL Australia and Energy Australia are stepping up to help their customers manage their bills and find relief. AGL Australia has seen a significant increase in its financial hardship program, with 10,000 customers joining in the past year. Energy Australia receives 1,000 calls every weekday from customers seeking bill relief. These numbers reflect the proactive measures Australians are taking to manage their expenses and the readiness of energy providers to offer support. Crystal Noronha, who has worked at the AGL call centre for 11 years, has witnessed firsthand the growing need for assistance. "There's a lot of distress in their voice, there's anxiety," Noronha <a href="https://www.9news.com.au/national/thousands-of-customers-signing-up-for-energy-bill-relief-with-millions-more-eligible/9dc9535b-f94b-42f4-aeaf-6534dc898df2" target="_blank" rel="noopener">shared with 9NEWS</a>. "Some hide away from sharing their difficulties, but we're here to help them." Customers need not face extreme financial hardship to seek help, as everyone is eligible for some form of assistance. Gavin Dufty, from the charity St Vincent De Paul, underscores the commitment of energy companies to support their customers. "Every energy company has a legal obligation to provide support for all households regardless," Dufty explains. The assistance offered varies based on the provider and individual circumstances, ranging from bill extensions and more manageable payment plans to, in some cases, complete debt waivers. Adding to this support, the federal government is taking significant steps to ease the burden on households. Starting July 1, every household will receive a $300 credit into their energy account, providing substantial relief. Additionally, a free government website is available for customers to compare energy plan prices and find the most cost-effective options. These measures reflect a collaborative effort between energy providers and the government to ensure Australians can navigate the financial challenges of today's world. By offering practical solutions and financial relief, they are making a positive impact on the lives of many, ensuring that no one is left to face these difficulties alone. Image: Getty

Money & Banking

Beware of ‘tax hacks’ to maximise your return this year. The tax office is taking a close look at incorrect claims

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/ann-kayis-kumar-466422">Ann Kayis-Kumar</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> For many people a tax refund is a much-anticipated lump sum of money. So, it is understandable Australians will be looking for ways to maximise their returns – particularly we are in a cost-of-living crisis. But, whether you do your own return or use a tax agent, taking risks is not advised. <h2>Be wary of tax hacks</h2> But be wary of “tax hacks” you might hear about from online sources (I’m looking at you, <a href="https://www.afr.com/companies/professional-services/tiktok-gst-fraud-hit-on-tax-office-blows-out-to-4-6b-20230813-p5dw2y">TikTok</a>). Two truisms spring to mind: 1. Don’t let the tax tail wag the dog Many tax hacks suggest you spend considerable money on purchases up front to claim tax deductions. But a tax deduction isn’t actually worth the value amount of your spend. For example: let’s say you’re on a taxable income of A$60,000 per year, which puts you roughly in the <a href="https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8">50th percentile</a> of income earners and means your <a href="https://www.ato.gov.au/tax-rates-and-codes/tax-rates-australian-residents#ato-Australianresidenttaxrates2020to2025">marginal tax rate is 32.5 cents</a>. You might spend $1,000 on a purchase in the hope of getting a sweet $1,000 tax deduction. However, you’re going to be $675 out of pocket. This is because that $1,000 deduction is only worth $325 (because tax is calculated on your taxable income, which is assessable income less allowable deductions). It will be worth even less next year because of the introduction of the <a href="https://www.abc.net.au/news/2024-02-27/stage-three-tax-cut-changes-pass-senate/103519338">revised Stage 3 tax cuts</a> and that’s a good thing because you’ll be paying less tax overall. 2. If it’s too good to be true, it probably is Even if you use a registered tax agent (and it’s important to check they are registered by checking <a href="https://www.tpb.gov.au/public-register">the Tax Practitioners’ Board</a>), it’s a common pitfall to think any aggressive deductions they might suggest are their responsibility if the Australian Taxation Office (ATO) comes knocking. That’s not the case. Taxpayers are responsible for errors in returns made by their tax agents, so the ATO will hold you responsible. Indeed, the <a href="https://www.ato.gov.au/media-centre/ato-flags-3-key-focus-areas-for-this-tax-time">ATO has announced</a> it will be taking a close look at three common errors being made by taxpayers: <ul> <li> incorrectly claiming work-related expenses </li> <li> inflating claims for rental properties </li> <li> failing to include all income when lodging. </li> </ul> It might be tempting to think you’ve got away with over claiming deductions or under reporting income but the ATO has sophisticated systems to <a href="https://www.ato.gov.au/About-ATO/Commitments-and-reporting/Information-and-privacy/How-we-use-data-and-analytics">analyse your data</a>) and track your claims. You’ll need to substantiate your claims, so keep records. If the tax office finds mistakes, you could face <a href="https://www.ato.gov.au/individuals-and-families/paying-the-ato/interest-and-penalties/penalties/penalties-for-making-false-or-misleading-statements">financial penalties</a>, even jail time. Two months ago, a woman was sentenced to two years and six months jail and ordered to repay $39,600 after she lodged three fraudulent Business Activity Statements and received a GST refund to which she wasn’t entitled. While under investigation, she then sent eight false statements to the ATO and tried to claim more money. This is one on many individuals named on the <a href="https://www.ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/our-focus/refund-fraud/gst-refund-fraud-attempts/operation-protego">ATO’s website</a> highlighting the results of regular crackdowns. <h2>So, should I use a tax agent?</h2> There are nearly 20.5 million active tax file numbers registered to individuals in Australia and last tax year the ATO received 13.7 million individual tax return lodgements. This was a 3% increase on the previous year. Of these lodgements more than 5.6 million were lodged by self-preparers and more than 8 million were lodged by tax agents. It <a href="https://theconversation.com/does-paying-for-tax-advice-save-money-only-if-youre-wealthy-184641">makes sense</a> most Australians use agents to prepare and lodge their tax returns. It’s easier, less stressful, gives you confidence the job is being done right and saves time. Having said that, it does come at a price (see above on the value of deductions), and previous research which finds that <a href="https://theconversation.com/does-paying-for-tax-advice-save-money-only-if-youre-wealthy-184641">every extra dollar spent on a tax agent</a> only yields an estimated tax savings of 20 cents), and if you have simple tax affairs then it’s relatively easy and quick to do it yourself. <h2>How do I prepare my tax return?</h2> Generally, everyone should be lodging an income tax return each year (or, if you don’t need to lodge a tax return, lodging a non-lodgement advice). The ATO has a “Do I need to lodge a tax return?” tool <a href="https://www.ato.gov.au/individuals-and-families/your-tax-return/before-you-prepare-your-tax-return/work-out-if-you-need-to-lodge-a-tax-return">if you’re unsure</a>. It also has a useful <a href="https://www.ato.gov.au/individuals-and-families/your-tax-return/how-to-lodge-your-tax-return/lodge-your-tax-return-online-with-mytax">two minute video</a> which steps you through the process for lodging with their online system myTax. For those of us with simple tax affairs, you just need to follow these steps: <ol> <li> gather and prepare all your information regarding income from work, interest, dividends and any other income such as capital gains from crypto assets or sale of shares </li> <li> then gather and prepare all your information on deductions and work expenses to be claimed making sure you have the evidence to back up your claims. This can be in the form receipts, invoices, log books and diary entries </li> <li> if you are a self-preparer you can log onto your myGov or the ATO’s app to prepare and lodge your return. If you wait until late-July you’ll have the benefit of the ATO’s pre-filled data, too. This gives you plenty of time to make the October 31 deadline. </li> </ol> There’s also the option to use the ATO’s free, volunteer-run TaxHelp program (provided you meet the <a href="https://www.ato.gov.au/individuals-and-families/your-tax-return/help-and-support-to-lodge-your-tax-return/tax-help-program">eligibility criteria</a>), your local Tax Clinic (<a href="https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/support-to-lodge-and-pay/national-tax-clinic-program">details here</a>), or by seeking help from a registered tax agent. Just make sure you engage them before the October 31 deadline. <h2>Where it might get tricky</h2> But for others, for example if you have an ABN, it gets a bit more complicated. If you operate your business as a sole trader, you must lodge a tax return, even if your income is below the tax-free threshold. And if you have registered for GST – which you must do when your business or enterprise has a GST turnover of $75,000 or more, or if you are a taxi driver or Uber driver – then you will also need to submit quarterly BAS. It gets even more complicated for partnerships, trusts and companies, so it is best to seek the guidance and professional expertise of a registered tax agent, if you aren’t already. <h2>What if I can’t afford a tax agent?</h2> This year, many Australians are doing it tough. Indeed, research by the ASIC’s Moneysmart program estimates <a href="https://www.abc.net.au/news/2024-06-04/asic-survey-millions-of-australians-facing-financial-difficulty/103926704">more than five million Australians</a> are in financial strife. Many people will find it hard to prioritise paying a registered tax agent when they cannot afford basic necessities like food. If you’re in this situation, you might find it useful to get in touch with a free financial counsellor via the <a href="https://ndh.org.au/">National Debt Helpline</a> or the <a href="https://sbdh.org.au/">Small Business Debt Helpline</a>. <h2>Don’t procrastinate</h2> Don’t put off doing your tax. If you’re behind, it might seem daunting to get back on track, especially if you think you’ll have to pay extra tax this year instead of getting a refund. But not lodging your returns will backfire. Like avoiding a trip to the doctor to get a skin check, the longer you wait, the more the problem will grow. Reaching out to the ATO is the key because they have tools to support you, including payment plans. It also shows the ATO that you are willing to comply. Ultimately, being up to date will save you fines, interest and penalties. If you are one of the <a href="https://theconversation.com/worried-youll-lodge-a-late-tax-return-at-least-80-000-australians-cant-afford-tax-advice-211267">80,000 Australians in serious hardship</a> who need but can’t afford professional help to complete and lodge overdue returns, the government-funded <a href="https://www.ato.gov.au/General/Gen/National-Tax-Clinic-program/">National Tax Clinics Program</a> can help with free tax advice.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/231693/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/ann-kayis-kumar-466422">Ann Kayis-Kumar</a>, Associate Professor Ann Kayis-Kumar is the Founding Director of UNSW Tax and Business Advisory Clinic, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/beware-of-tax-hacks-to-maximise-your-return-this-year-the-tax-office-is-taking-a-close-look-at-incorrect-claims-231693">original article</a>. </div>

Money & Banking

Australia can afford to bulk bill all GP visits. So why don’t we?

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/yuting-zhang-1144393">Yuting Zhang</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> and <a href="https://theconversation.com/profiles/karinna-saxby-1045932">Karinna Saxby</a>, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> Being able to afford health care is a <a href="https://www.abs.gov.au/media-centre/media-releases/more-people-putting-seeing-health-professionals-due-cost">pressing issue</a> for many Australians. And encouraging GPs to bulk bill is <a href="https://theconversation.com/cheaper-medicines-and-a-new-approach-for-mental-health-care-will-the-budget-make-us-healthier-229612">one measure</a> the government is taking to ease the strain. So what would it take for GPs to bulk bill everyone? In our <a href="https://onlinelibrary.wiley.com/doi/10.1111/1467-8462.12553">recent paper</a>, we calculated this is possible and affordable, given the current health budget. But we show recent incentives for GPs to bulk bill aren’t enough to get us there. Instead, we need to adjust health policies to increase bulk-billing rates and to make our health system more sustainable. <h2>How do the incentives work?</h2> In recent years, the government has introduced various incentives to try and encourage GPs to bulk bill (so patients pay nothing out-of-pocket). The most recent has been the “<a href="https://www.health.gov.au/our-work/increases-to-bulk-billing-incentive-payments#1-november-2023-changes">triple bulk-billing incentives</a>” or “triple bonus” for short. These have been in place since November 2023. Under these incentives, GPs in metropolitan areas are paid a A$20.65 bonus if they bulk bill concession card holders or children under 16 years. GPs in rural and remote areas are paid $31.35-$39.65 extra. These bonus payments are in addition to regular Medicare rebates GPs receive. But when we looked at whether these latest incentives are likely to work to boost bulk billing, we found a city-country divide. <h2>City GPs may not be convinced</h2> We worked out the triple bonus will not help most people in metropolitan areas. That’s because in these areas the bonus is much lower than what patients currently pay out-of-pocket. In other words, if GPs did bulk bill these groups, their income would be lower than what they could have charged. So the bonus wouldn’t be enough incentive for them to bulk bill. For example, we found in greater Melbourne, the average out-of-pocket costs for a non-bulk billed GP visit <a href="https://melbourneinstitute.unimelb.edu.au/research/HALE-Hub/data">is about</a> $30-$56 depending on the suburb. This is much higher than the $20.65 triple bonus amount in metropolitan regions. We see similar patterns across all metropolitan areas. <h2>But country GPs may be swayed</h2> The picture is different in rural and remote areas. Here, the average out-of-pocket cost for a non-bulk billed GP visit <a href="https://melbourneinstitute.unimelb.edu.au/research/HALE-Hub/data">varies substantially</a> – around $28-52 in rural regions and $32-123 in remote areas. The highest cost on the mainland was $79 but GP visits on Lord Howe Island were the most expensive overall, at $123. For patients living in areas where their actual payment is less than the bonus amount, the incentive does help. In other words, it would be financially advantageous for GPs to bulk bill these patients, but not where the out-of-pocket costs are higher than the bonus. Our <a href="https://melbourneinstitute.unimelb.edu.au/research/HALE-Hub/data">online map</a> shows where GPs are most likely to bulk bill. The map below shows how out-of-pocket costs vary around Australia. <iframe id="SPzgj" class="tc-infographic-datawrapper" style="border: none;" src="https://datawrapper.dwcdn.net/SPzgj/" width="100%" height="400px" frameborder="0"></iframe> <h2>How about bulk billing for all?</h2> The picture is a little more complex when we start talking about bulk billing all GP visits – regardless of location or patients’ concession card status. We worked out this would cost about $950 million a year for all GP services, or $700 million a year for face-to-face GP consultations. This is within reach under the current budget, especially for face-to-face GP consultations. The government has earmarked <a href="https://www.health.gov.au/ministers/the-hon-mark-butler-mp/media/budget-2023-24-building-a-stronger-medicare#:%7E:text=%243.5%20billion%20in%20bulk%20billing,40%2Dyear%20history%20of%20Medicare">$3.5 billion</a> over <a href="https://archive.budget.gov.au/2023-24/bp2/download/bp2_2023-24.pdf">five years</a> for the “triple bonus” incentives. That’s $700 million a year. <h2>We can afford to, but should we?</h2> Introducing free GP visits for all would require careful consideration, as it would encourage more GP visits. This might be a good thing, particularly if people had previously skipped beneficial care <a href="https://www.abs.gov.au/media-centre/media-releases/more-people-putting-seeing-health-professionals-due-cost">due to high costs</a>. However, it may encourage more people to see their <a href="https://www.sciencedirect.com/science/article/abs/pii/S1574006400801675">GP unnecessarily</a>, taking away limited resources from those who really need them. This could ultimately increase wait times for everyone. So providing free GP visits for all may not be efficient or sustainable, even if it’s within the budget. But paying more than $50 for a GP visit, as many do, seems too expensive and also makes the health-care system less efficient. That’s because primary care is <a href="https://www.sciencedirect.com/topics/medicine-and-dentistry/primary-health-care">often considered</a> high-value and preventive care. So if people can’t afford to go to the GP, it can lead to more expensive hospital and emergency room costs down the track. So we need to strike a balance to make primary care more affordable and sustainable. <h2>How do we strike a balance?</h2> One, concession card holders and children should get free primary care regardless of where they live. This would allow more equitable care to populations who need health care the most. Bulk bulling children is a <a href="https://www.sciencedirect.com/science/article/abs/pii/S016726812200292X#:%7E:text=Beside%20the%20benefits%20for%20the,and%20Kuh%2C%202002%3B%20Centers%20for">long-term investment</a>, which may delay onset of diseases, and prevent intergenerational poverty and poor health. Two, the government could also provide free primary care to all people in rural and remote areas. It can do this by lowering the triple bonus to match what GPs currently charge. Over time, GPs and the government can evaluate and <a href="https://www.auspublaw.org/blog/2023/4/the-civil-conscription-sub-clause-in-section-51xxiiia-of-the-australian-constitution-no-impediment-to-reform-of-medicare">negotiate</a> fair prices for GPs to charge. This can be adjusted in line with inflation and other measures. Three, the government can increase Medicare rebates (the amount Medicare pays a doctor for a GP visit) so patients not covered above only pay about $20-30 a visit. We consider this an affordable amount that will not result in more use of primary care than necessary. Four, the government can design a policy to reduce unnecessary GP visits that take away limited GP time from high-need patients. For example, patients currently need to see GPs to get <a href="https://theconversation.com/specialist-referral-rules-havent-changed-much-since-the-70s-but-australias-health-needs-sure-have-144506">referral letters</a> although they already have an established specialist for their ongoing chronic conditions. Five, the government can provide GPs funding needed to improve patient outcomes and reward GPs who provide <a href="https://bmjopenquality.bmj.com/content/10/1/e001127.abstract">high-quality preventive care</a>. The current fee-for-service funding model hurts good doctors who keep their patients healthy because doctors are not paid if their patients do not come back.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/230204/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/yuting-zhang-1144393">Yuting Zhang</a>, Professor of Health Economics, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> and <a href="https://theconversation.com/profiles/karinna-saxby-1045932">Karinna Saxby</a>, Research Fellow, Melbourne Institute of Applied Economic and Social Research, <a href="https://theconversation.com/institutions/the-university-of-melbourne-722">The University of Melbourne</a> Image credits: Shutterstock This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australia-can-afford-to-bulk-bill-all-gp-visits-so-why-dont-we-230204">original article</a>. </div>

Money & Banking

A tax on sugary drinks can make us healthier. It’s time for Australia to introduce one

<div class="theconversation-article-body"><a href="https://theconversation.com/profiles/peter-breadon-1348098">Peter Breadon</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/jessica-geraghty-1530733">Jessica Geraghty</a>, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> Sugary drinks cause weight gain and <a href="https://www.nature.com/articles/s41574-021-00627-6">increase the risk</a> of a range of diseases, including diabetes. The <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2792842">evidence shows</a> that well-designed taxes can reduce sugary drink sales, cause people to choose healthier options and get manufacturers to reduce the sugar in their drinks. And although these taxes haven’t been around long, there are already signs that they are making people healthier. It’s time for Australia to catch up to the rest of the world and introduce a tax on sugary drinks. As our new Grattan Institute <a href="https://grattan.edu.au/report/sickly-sweet/">report</a> shows, doing so could mean the average Australian drinks almost 700 grams less sugar each year. <h2>Sugary drinks are making us sick</h2> The share of adults in Australia who are obese has tripled since 1980, from <a href="https://theconversation.com/mapping-australias-collective-weight-gain-7816">10%</a> to more than <a href="https://www.abs.gov.au/statistics/health/health-conditions-and-risks/waist-circumference-and-bmi/latest-release">30%</a>, and diabetes is our <a href="https://www.diabetesaustralia.com.au/about-diabetes/diabetes-in-australia/">fastest-growing</a> chronic condition. The costs for the health system and economy are measured in the billions of dollars each year. But the biggest costs are borne by individuals and their families in the form of illness, suffering and early death. Sugary drinks are a big part of the problem. The more of them we drink, the greater our risk of <a href="https://www.nature.com/articles/s41574-021-00627-6">gaining weight</a>, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2963518/">developing type 2 diabetes</a>, and suffering <a href="https://academic.oup.com/eurpub/article/31/1/122/5896049?login=false">poor oral health</a>. These drinks have no real nutrients, but they do have a lot of sugar. The average Australian consumes <a href="https://www.abs.gov.au/statistics/health/health-conditions-and-risks/apparent-consumption-selected-foodstuffs-australia/latest-release">1.3</a> times the maximum recommended amount of sugar each day. Sugary drinks are responsible for more than one-quarter of our daily sugar intake, more than any other major type of food. You might be shocked by how much sugar you’re drinking. Many 375ml cans of soft drink contain eight to 12 teaspoons of sugar, nearly the entire daily recommended limit for an adult. Many 600ml bottles blow our entire daily sugar budget, and then some. The picture is even worse for disadvantaged Australians, who are more likely to have <a href="https://www.abs.gov.au/statistics/health/health-conditions-and-risks/diabetes/latest-release">diabetes</a> and <a href="https://www.abs.gov.au/statistics/health/health-conditions-and-risks/waist-circumference-and-bmi/latest-release">obesity</a>, and who also consume the most sugary drinks. <h2>Sugary drink taxes work</h2> Fortunately, there’s a proven way to reduce the damage sugary drinks cause. More than <a href="https://ssbtax.worldbank.org/">100 countries</a> have a sugary drinks tax, covering most of the world’s population. <a href="https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2792842">Research</a> shows these taxes lead to higher prices and fewer purchases. Some taxes are specifically designed to encourage manufacturers to change their recipes and cut the sugar in their drinks. Under these “tiered taxes”, there is no tax on drinks with a small amount of sugar, but the tax steps up two or three times as the amount of sugar rises. That gives manufacturers a strong incentive to add less sugar, so they reduce their exposure to the tax or avoid paying it altogether. This is the best result from a sugary drinks tax. It means drinks get healthier, while the tax is kept to a minimum. In countries with tiered taxes, manufacturers have slashed the sugar in their drinks. In the United Kingdom, the share of products above the tax threshold <a href="https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003025">decreased dramatically</a>. In 2015, more than half (52%) of products in the UK were above the tax threshold of 5 grams of sugar per 100ml. Four years later, when the tax was in place, that share had plunged to 15%. The number of products with the most sugar – more than 8 grams per 100ml – declined the most, falling from 38% to just 7%. The Australian drinks market today looks similar to the UK’s before the tax was introduced. Health benefits take longer to appear, but there are already promising signs that the taxes are working. Obesity among primary school-age girls has fallen in <a href="https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1004160">the UK</a> and <a href="https://jamanetwork.com/journals/jamapediatrics/fullarticle/2786784">Mexico</a>. Oral health has also improved, with studies reporting fewer children going to hospital to get their teeth removed in <a href="https://nutrition.bmj.com/content/6/2/243">the UK</a>, and reduced dental decay <a href="https://pubmed.ncbi.nlm.nih.gov/33853058/">in Mexico</a> and <a href="https://www.ajpmonline.org/article/S0749-3797(23)00069-7/abstract">Philadelphia</a>. One <a href="https://www.ajpmonline.org/article/S0749-3797(23)00158-7/fulltext">study from the United States</a> found big reductions in gestational diabetes in cities with a sugary drinks tax. <h2>The tax Australia should introduce</h2> Like successful taxes overseas, Australia should introduce a sugary drink tax that targets drinks with the most sugar: <ul> <li>drinks with 8 grams or more of sugar per 100ml should face a $0.60 per litre tax</li> <li>drinks with 5–8 grams should be taxed at $0.40 per litre</li> <li>drinks with less than 5 grams of sugar should be tax-free.</li> </ul> This means a 250ml Coke, which has nearly 11 grams of sugar per 100ml, would cost $0.15 more. But of course consumers could avoid the tax by choosing a sugar-free soft drink, or a bottle of water. Grattan Institute <a href="https://grattan.edu.au/report/sickly-sweet/">modelling</a> shows that under this tiered tax, Australians would drink about 275 million litres fewer sugary drinks each year, or the volume of 110 Olympic swimming pools. The tax is about health, but government budgets also benefit. If it was introduced today, it would raise about half a billion dollars in the first year. Vested interests such as the beverages industry have fiercely resisted sugary drink taxes around the world, issuing disingenuous warnings about the risks to poor people, the sugar industry and drinks manufacturers. But our new report shows sugary drink taxes have been introduced smoothly overseas, and none of these concerns should hold Australia back. We certainly can’t rely on industry pledges to voluntarily reduce sugar. They have been <a href="https://www.cambridge.org/core/journals/public-health-nutrition/article/trends-in-sugar-content-of-nonalcoholic-beverages-in-australia-between-2015-and-2019-during-the-operation-of-a-voluntary-industry-pledge-to-reduce-sugar-content/EE662DE7552670ED532F6650C9D56939">weak</a> and misleading, and <a href="https://www.theguardian.com/australia-news/2024/apr/10/sugar-increase-in-fanta-and-sprite-prompts-calls-for-new-tax-on-australia-food-and-drinks-industry">failed to stick</a>. It will take many policies and interventions to turn back the tide of obesity and chronic disease in Australia, but a sugary drinks tax should be part of the solution. It’s a policy that works, it’s easy to implement, and most Australians <a href="https://bmjopen.bmj.com/content/9/6/e027962">support it</a>. The federal government should show it’s serious about tackling Australia’s biggest health problems and take this small step towards a healthier future.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/228906/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/peter-breadon-1348098">Peter Breadon</a>, Program Director, Health and Aged Care, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> and <a href="https://theconversation.com/profiles/jessica-geraghty-1530733">Jessica Geraghty</a>, Senior Associate, <a href="https://theconversation.com/institutions/grattan-institute-1168">Grattan Institute</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/a-tax-on-sugary-drinks-can-make-us-healthier-its-time-for-australia-to-introduce-one-228906">original article</a>. </div>

Food & Wine

Australian churches collectively raise billions of dollars a year – why aren’t they taxed?

<div class="theconversation-article-body"> <a href="https://theconversation.com/profiles/dale-boccabella-15706">Dale Boccabella</a>, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/ranjana-gupta-1207482">Ranjana Gupta</a>, <a href="https://theconversation.com/institutions/auckland-university-of-technology-1137">Auckland University of Technology</a> There’s a good reason your local volunteer-run netball club doesn’t pay tax. In Australia, various nonprofit organisations are exempt from paying income tax, including those that do charitable work, such as churches. These exemptions or concessions can also extend to other taxes, including fringe benefits tax, state and local government property taxes and payroll taxes. The traditional justification for granting these concessions is that charitable activities benefit society. They contribute to the wellbeing of the community in a variety of non-religious ways. For example, charities offer welfare, health care and education services that the government would generally otherwise provide due to their obvious public benefits. The tax exemption, which allows a charity to retain all the funds it raises, provides the financial support required to relieve the government of this burden. The nonprofit sector is often called the third sector of society, the other two being government and for-profit businesses. But in Australia, this third sector is quite large. Some grassroots organisations have only a tiny footprint, but other nonprofits are very large. And many of these bigger entities – including some “megachurches” – run huge commercial enterprises. These are often indistinguishable from comparable business activities in the for-profit sector. So why doesn’t this revenue get taxed? And should we really give all nonprofits the same tax exemptions? <h2>Why don’t churches pay tax?</h2> The primary aim of a church is to advance or promote its religion. This itself counts as a charitable purpose under the <a href="https://www.legislation.gov.au/C2013A00100/asmade/text">2013 Charities Act</a>. However, section five of that act requires a church to have only charitable purposes – any other purposes must be incidental to or in aid of these. Viewed alone, the conduct of a church with an extensive commercial enterprise – which could include selling merchandise, or holding concerts and conferences – is not a charitable purpose. But Australian case law and <a href="https://www.acnc.gov.au/for-charities/start-charity/role-acnc-deciding-charity-status/legal-meaning-charity#:%7E:text=Taxation%20Ruling%20(TR)%202011%2F,set%20out%20in%20taxation%20rulings.">an ATO ruling</a> both support the idea that carrying on business-like activities can be incidental to or in aid of a charitable purpose. This could be the case, for example, if a large church’s commercial activities were to help give effect to its charitable purposes. Because of this, under Australia’s current income tax law, a church that is running a large commercial enterprise is able to retain its exemption from income tax on the profits from these activities. There are various public policy concerns with this. First, the lost tax revenue is likely to be significant, although the government’s annual tax expenditure statement does not currently provide an estimate of the amount of tax revenue lost. And second, the tax exemption may give rise to unfairness. A for-profit business competing with a church in a relevant industry may be at a competitive disadvantage – despite similar business activities, the for-profit entity pays income tax but the church does not. This competitive disadvantage may be reflected in lower prices for customers of the church business. <h2>What about taxing their employees?</h2> Churches that run extensive enterprises are likely to have many employees. Generally, all the normal Australian tax rules apply to the way these employees are paid – for example, employees pay income tax on these wages. Distributing profits to members would go against the usual rules of the church, and this prohibition is <a href="https://www.legislation.gov.au/C2013A00100/asmade/text">required</a> anyway for an organisation to qualify as a charity. Some churches may be criticised for paying their founders or leaders “excessive” wages, but these are still taxed in the same way as normal salaries. It’s important to consider fringe benefit tax – which employers have to pay on certain benefits they provide to employees. Aside from some qualifications, all the usual <a href="https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/how-fringe-benefits-tax-works">fringe benefit tax rules</a> apply to non-wage benefits provided to employees of a church. Just like their commercial (and taxable) counterparts, the payment for “luxury” travel and accommodation for church leaders and employees when on church business will not generate a fringe benefits taxable amount for the church. One qualification, though, is that a church is likely to be a <a href="https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/fbt-concessions-for-not-for-profit-organisations/fbt-rebatable-employers">rebatable employer</a> under the fringe benefit tax regime. This means it can obtain some tax relief on benefits provided to each employee, up to a cap. <h2>We may need to rethink blanket tax exemptions for charities</h2> Back in an age where nonprofits were mainly small and focused on addressing the needs of people failed by the market, the income tax exemption for such charities appeared appropriate. But in the modern era, some charities – including some churches – operate huge business enterprises and collect rent on extensive property holdings. Many are now questioning whether we should continue offering them an uncapped exemption from income tax, especially where there are questions surrounding how appropriately these profits are used. Debates about solutions to the problem have focused on various arguments. However, more data may be needed on the way charities apply their profits to a charitable purpose, particularly those involved in substantial commercial activities. An all-or-nothing rule exempting the whole charitable sector may no longer be fit for purpose if it fails to take into account the very different circumstances of different nonprofits.<img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/228901/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /> <a href="https://theconversation.com/profiles/dale-boccabella-15706">Dale Boccabella</a>, Associate Professor of Taxation Law, <a href="https://theconversation.com/institutions/unsw-sydney-1414">UNSW Sydney</a> and <a href="https://theconversation.com/profiles/ranjana-gupta-1207482">Ranjana Gupta</a>, Senior Lecturer Taxation, <a href="https://theconversation.com/institutions/auckland-university-of-technology-1137">Auckland University of Technology</a> Image credits: Getty Images This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australian-churches-collectively-raise-billions-of-dollars-a-year-why-arent-they-taxed-228901">original article</a>. </div>

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Australian churches collectively raise billions of dollars a year – why aren’t they taxed?

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