Menzies House

The Deceit at Durban

Senator Cory Bernardi on the Durban Climate Alarmist Conference:

The Green Labor left and the profiteers of climate change catastrophe have been hailing their most recent international junket as an outstanding success.

In reality, the Durban gathering of the carbon dioxide fear mongers was a spectacular failure but that won’t stop the true believers from trying to justify their futile crusade against climate change.

Our own Climate Change Minister Greg Combet said the result was a “massively historic step that has not been achieved before”.

I seem to recall the previous government mouthpiece Senator Penny Wong said a very similar thing after the failed fiasco of the Copenhagen conference – and look what came of that. Nothing, except the scheduling of more conferences to debate the need to have even more conferences to... I am sure you get the picture.

And a gloomy picture it is for Australians who have been lumbered with Labor’s carbon tax.

The ‘success’ of Durban is an agreement to negotiate by 2015 whether to reach an agreement by 2020 about emissions reduction. This is a sure sign that there will be no international action on carbon dioxide emissions under a government led by Julia Gillard.

But that hasn’t stopped her team from signing up to an international ‘Carbon Fund’ run by unelected bureaucrats allocating taxpayers’ money to those it determines are the climate change oppressed. At a time when our government continues to borrow in excess of $100 million every single day, we will now be mortgaging the future of the next generation so we can send billions of dollars to some contrived overseas organisation. Given the track record of rorts and waste in the climate change space, one can hardly be optimistic about how this money will be utilised.

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Senator Cory Bernardi is the Shadow Parliamentary Secretary Assisting the Leader of the Opposition and a Senator for South Australia.

Closing the vehicle FBT loophole opens another

Steve Blizard sets out the benefits of proposed changes to Fringe Benefit Tax:

The new Fringe Benefit Tax [FBT] rules for salary-packaged employee motor vehicles look certain to pass a Greens-controlled Senate, if not ratified by Federal Parliament before 1 July.

Fringe benefits are non-cash benefits provided to employees in addition to their salary, which include cars, meal costs, children's education expenses, computers and mobile phones.

One of the most popular tax perks available allows employees to reduce their tax on personal use “novated lease” motor vehicle expenses.

FBT is payable on the proportion of expenses related to the personal use of your work vehicle.

Any business-related use is not considered a fringe benefit, so remains exempt.

Over 550,000 vehicles Australia-wide are currently at the disposal of employees, who enjoy more than $1 billion in FBT tax breaks annually.

In a deal with the Greens, the Gillard-Brown Government has scrapped the FBT rule favouring those who clocked up extra personal use travel in company cars.

Under the old rules, four varying levels of FBT applied to cars purchased on salary sacrifice; ranging from 26 percent of the car's purchase price for those driving fewer than 15,000km annually, down to only 7 percent tax when exceeding 40,000km.

Australian Tax Office figures revealed that vehicle users had an incentive to deliberately exceed the thresholds to save on tax.

For new contracts signed after 10 May, all taxpayers now receive the same level tax break regardless of distance travelled annually, thereby eliminating the need to travel further so as to pay a lower FBT.

Under budget changes, a single 20 percent FBT rate will operate, so that the same level of concession is received, regardless of distance travelled.

Drivers travelling less than 15,000km annually will now be better off, receiving a larger tax break than before.

Those driving between 15,000km and 25,000km annually will receive the same tax break.

And those driving in excess of 25,000km annually will see their tax break reduced.

Clearly rural and outer suburban vehicle owners who must travel further are thus losers.

A claim by deputy Greens leader, Christine Milne, that the new rules will deliver an additional $1 billion in revenue and reduce pollution, may be proved wrong.

When calculating the new rules, yet another tax loop-hole opens for employees not packaging a vehicle, but who drive under 15,000km annually. 

The previous 26 percent FBT rate precluded employees from any worthwhile tax savings but the reduced 20 percent rate now tips the balance in favour. 

Since the average car travels under 15,000km annually it is likely that a significant number of employees will consider salary-packaging of vehicles for the first time. 

Perversely, thanks to the Greens, inner city residents now receive a tax perk when using their vehicle for short-run purposes, compared to travelling on more environmentally friendly public transport.

Unfortunately the Greens hand in introducing a flat tax rate for fringe benefits on vehicles has not been extended to similar reforms in income tax thresholds.

Steve Blizard is a senior Investment Adviser and Salary Packaging specialist at Roxburgh Securities.

 

Stamp Duty Traps Lurk for Unwitting Homebuyers

Steve Blizard discusses the burden of Stamp Duty on homebuyers, and some good news from Western Australia

One snare that property investors often overlook is Stamp Duty, a hefty government tax imposed on home buyers.

However positive tinkering by the WA Coalition means homebuyers will no longer have to pay stamp duty before property settlement.

From March 1, Minister for Finance Simon O’Brien, said investors would benefit from simplified duty arrangements, delaying payment until after the property is settled.

A welcome initiative, as buyers have had to stump up stamp duty first, incurring borrowing costs well before settlement.

Duty for property purchased off-the-plan or where settlement is awaiting issue of a new title will also receive a maximum time extension of up to three years.

Settlement agents should register with the Office of State Revenue online duty system for their clients to take full advantage of the new ‘payment at settlement’ arrangements.  This is essential.

While good news for some, innocent first home owners are one group of investors who may be hit.

Economies thrive on certainty

The Rudd/Gillard government's policies have severely damaged consumer confidence, writes Steve Blizard.

Federal election 2010 is shaping up to be as important as the 1949 bank nationalization and the 1975 Whitlam dismissal contests.

This month’s poll outcome will deliver major impacts on family budgets over at least the coming decade. 

A key indicator that investment analysts closely monitor is consumer confidence.

Think twice before investing in your pink slip

Let's have a look at how super funds are spending your money, writes Steve Blizard.

One of the crucial centrepieces of superannuation in Australia is the Sole Purpose Test.

The tax man has defined this as the requirement of trustees to maintain their funds at all times for the sole purpose of providing retirement benefits for their members, or their dependants if a member should die.