From Choppergate to Lara Bingle, spending is the taxing issue
It was Kerry Packer who famously told the nation’s politicians “if anybody in this country doesn’t minimise their tax they want their head read” because “as a government I can tell you you’re not spending it that well that we should be paying extra”.
The words have gone down in Australian folklore, but were largely forgotten this week amid the political frenzy over the release of a Tax Office shame file. According to the ATO, 579 of the country’s largest companies paid no tax in 2014. Qantas, Exxon Mobil, Lend Lease, Virgin Australia, General Motors and Vodafone topped the list of tax bludgers, if you ignore the fact it’s reasonable to pay no tax if you make no money, which was case for the majority of the above mentioned companies.
Of course, you are probably wondering what a column quoting Kerry Packer and defending big business is doing in the pages of The Sunday Age. Especially as profit shifting, the use of tax havens, dodgy intra-company loans and transfer pricing have all been used to curb the tax-take of nations around the world.
Just last week accounting firm BDO advertised for staff to join its “boutique transfer pricing practice“, based out of Sydney. Let’s hope the Tax Office has a nice little look at at their client list.
But all the evidence of the past year suggests that Kerry Packer, almost 25 years down the track, was on the money about how governments spend our money. From Peter Slipper‘s taxpayer-funded taxi drives through Canberra wine country to Bronwyn Bishop‘s penchant for short haul helicopter flights, our elected representatives have hardly been the poster boys and girls for fiscal austerity in recent times.
In Victoria, the Andrews government marked winning power by tearing up the East West contract and hiring Lara Bingle‘s acting coach to help make things appear better. On the taxpayer’s dime, of course.
But even the alleged travel rorts and ministerial acting classes can’t compare with some of the sheer ineptitude on display.
The best story of the year was passed on by one of Melbourne’s leading legal minds. To protect the innocent, we will call his firm Right Leaning Lawyers & Partners.
Right Leaning Lawyers were hired to review the probity of a number of contracts entered into by the state and federal governments. To prevent leaks, a team of 20 lawyers had to undergo strict security checks and were then relocated to a different office, away from their shiny CBD tower.
Right Leaning Lawyers began work trawling though thousands of pages of documents and contracts.
Then the federal security people turned up for an inspection. Citing security risks, the lawyers were broken up into smaller groups, the documents divided among them, and they are told not to swap notes.
“Then they told us they were worried we might be able to lip read each other, so we had to cover the glass windows in all our offices,” reported our legal insider. “They asked us to mask the windows.”
Work came to a halt and an associate was sent to Officeworks to buy black plastic sheeting, which our highly paid legal team duly sticky taped to all the glass windows in the office. Back to work went the team from Right Leaning Lawyers. Until the state government inspectors turned up.
“You have 20 staff here,” said one inspector.
“Yes,” replied our lead lawyer, in awe of the mathematical genius on display.
“So where are your fire officer and your medical officer?” All work came to a halt.
Inspired, our brave lead lawyer sent for a fire officer and medical officer from his own head office. They arrived and work began.
“Have they had a security check?” queried the Feds. Work came to a halt.
In the end, Right Leaning Lawyers ascertained it would be faster to send two lawyers from the assembled team away for fire and medical training than to get security checks done for two additional staff.
So off went two bright young associates for their training, while being charged to taxpayers at a cost of $350 an hour. And our bureaucrats wonder why our businesses don’t like paying taxes.
If there’s a trap for beginners, it’s the office Christmas party. We have all seen the pre-party missives warning that a convergence of booze and bravado at the end of year bash can lead to bad decisions being made. But the pitfalls usually entrap younger staff, not the chief executive. The word getting around the real estate industry is that one high-profile CEO failed to heed his own advice and became a bit too friendly with a female colleague. Look out for job changes in the new year.