i had a hectic weekend away, but a very rewarding one. the iwcnz conference is always a nice spiritual retreat; time out to focus on what really is important. i only wish i'd managed to get some decent sleep! as i didn't have access to email, apologies to those who had commented on previous posts. i'm not sure that i'm quite ready to stop moderating comments yet, so please bear with me. i'll publish your comments as soon as i can.
last friday morning, i received an e-newsletter at work from one mr gilchrist who had analysed the new tax rates announced in the budget. he put these on to a table, then calculated marginal tax rates and put these on a table as well. that was all very good. but the next bit of the newsletter had a table of the federal tax rates in australia. mr gilchrist made some comparison of these rates with our new rates, then wrote a couple of paragraphs of commentary. i paraphrase (as the newsletter is on my work email which i can't access from home) but he said something to the effect that dr cullen must have found it very difficult to move up the top tax rate to $80,000. he then went on to question why there had been no discussion in the budget about a tax-free threshhold.
i wrote back to mr gilchrist. i pointed out to him that the australian tax system is structured very differently to ours. his table of aussie tax rates was misleading, as it failed to take into account state tax rates (6% NSW, WA 5.5%, QLD 4.75%, Tas 5.25%), compulsory medicare levy (1.5%), and compulsory superannuation (9%). he also failed to mention that australia has a capital gains tax and a payroll tax. so the comparison he was making was extremely misleading.
i also pointed out to him that his remark about dr cullen having difficulty in raising the tax threshhold were rather snide. given that both dr cullen and the prime minister had been making statements for several months that this budget would have tax cuts for everyone, i can't see why he would have found it difficult.
as for the tax-free threshhold, why would it have been discussed in the budget when it was never on the table? making comparisons with aussie in this regard was again misleading. besides the points made above, it also fails to take into account the fact that australia has a much higher population and therefore economies of scale. in order to have the same threshholds here, there would have to be large-scale privatisation of core public services. for those on lower incomes, the costs of purchasing such essential services would be much higher than the tax relief provided.
when i got back to work this morning, i saw that mr gilchrist had replied to my email. he thanked me for my comments and said that my points had been duly noted.
i'm sorry, but that's just not good enough. his newsletter would have gone out to many accountants and perhaps other businesspeople. having pointed out to him that his approach was clearly misleading, i would expecte that he email the same group of people and point out to them the weakness in his analysis. that he has failed to do so totally pisses me off. unfortunately there's nowhere i can lodge a complaint - one of the downsides of the internet.
i'll just have to rely on the intelligence of my fellow accountants to see through this kind of stuff. hmmm.
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