Introduction: It is widely agreed that a free and independent press is an essential part of a democratic order. This submission addresses itself to the implications of the words free and independent. Government intervention in the market for journalism risks undermining the reason we value publicly interested journalism in the first place – its role in providing a check on government and as a third-party watchdog on possible abuses of political, regulatory and fiscal power. When it comes to the profession of journalism and the industrial structure of the media, government is not a disinterested player. Even granting this parliament’s best intentions, government intervention in the media opens up the risk of government interference with the media from future parliaments.
With Sinclair Davidson
Executive Summary: The elimination of the low-value threshold for the Goods and Services Tax constitutes a new tax on inbound internet trade – that is, it will function as a tariff imposed on Australian consumers.
- The tax will raise very little revenue and will be expensive and complex to administer.
- The tax deviates substantially from the existing GST design.
- The tax is less a tax on consumption but on the reputation of foreign internet businesses.
- The tax is inconsistent with the government’s commitment to deregulation, the promotion of international trade, and its innovation agenda.
- The tax rejects principles that the Howard government established in terms of deregulation and the promotion of international trade.
- The tax will do nothing to address the issue of high retail prices in Australia.
- While masqueraded as a tax integrity measure, this tax is clearly intended to operate as a form of protectionism.
- The tax will reduce competitive pressure within the domestic Australian economy, and (as a consequence) expose Australian consumers to government sanctioned higher retail prices.
- The tax will lead to Australian consumers substituting away from large reputable electronic distribution platforms to more disreputable platforms leading to higher rates of internet fraud and possibility criminality. Product safety and consumer protection rights are likely to be compromised.
- The tax has few safeguards to ensure compliance and remittance of revenue to the Australian government.
- The tax contributes to increased levels of regime uncertainty within the Australian policy environment.
Parliament should reject the Treasury Laws Amendment (GST Low Value Goods) Bill 2017.
Red Tape Committee
Department of the Senate
PO Box 6100
Canberra ACT 2600
At the Sydney public hearings on the Select Committee on Red Tape on 24 February 2017, Senator Dastyari asked me to take on notice a “large ideological question”:
Do we want socialism in one country or perpetual revolution?
I am glad to supply an answer to this question.
Senator Dastyari’s question recalls a debate between Leon Trotsky and Joseph Stalin regarding the future direction of the socialist movement. I doubt a debate between two totalitarian mass murderers remains a major bone of contention within the Australian Labor Party in 2017. As the Senator would know, Lenin dismissed Labor as a “liberal-bourgeois party”.
But as Karl Marx and Friedrich Engels so compellingly pointed out in their Communist Manifesto, the bourgeois “has played a most revolutionary
role in history”. They observed that “by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, [the bourgeoisie] draws all nations, even the most
barbarian, into civilization”.
Marx and Engels are spot on. The competitive marketplace, with the innovation and change brought about by free entrepreneurial activity, is itself a permanent revolution. The Labor Party, having presided over much of the economic reform of the last few decades, can rightly take credit for allowing the permanent revolution to be unleashed in Australia.
Contrast this revolution of the free market with socialism in one country. Countries that have experimented with the socialist model of economic control have stagnated. They have been forced to copy and counterfeit living standard-enhancing technologies rather than contribute towards that technological development. Central planning has historically been deeply inefficient and corrupt. The economic problems of planning do not seem likely to be resolved any time soon. The necessity of centralised power in order for planning to function also creates serious problems of political authoritarianism. It could be said that socialism in one country is also a “permanent revolution”, but unlike the market revolution (which grows wealth, living standards, and the ability for individuals to live
the lives they choose) the socialist revolution is a revolution against its own citizens.
It should be clear that I favour the permanent revolution of the market to a permanent revolution of socialist control. However, as recent political events have emphasised, the market revolution also entails disruption, as industries shift across borders and technological change undermines established business models. Furthermore, in our actually existing political-economic system, the heavy burden of regulation, red tape and taxation can make it hard to establish new firms to replaced obsolete ones, prevent successful firms from expanding, and encourage rent-seeking and other prosperity-reducing behaviour.
I advise that the growth of the administrative state, with its network of unaccountable and antidemocratic independent regulatory agencies, and quasi-independent watchdogs and standards bodies, has failed to suppress the market’s permanent revolution, but has placed many obstacles for citizens and workers who have to try to adjust to those changes. If parliament wants to help workers adjust to the permanent revolution, it should be looking to repeal regulatory and red tape burdens that make it harder to find a job and grow a business.
Please do not hesitate to contact me further for more details
Postdoctoral Fellow, RMIT University
Senior Fellow, Institute of Public Affairs
With Simon Breheny, Morgan Begg, Andrew Bushnell, and Sebastian Reinehr
Executive Summary: Research conducted by the Institute of Public Affairs demonstrates that section 18C of the Racial Discrimination Act 1975 must be repealed to protect freedom of speech in Australia. Part A of this report comprehensively outlines the case for the full repeal of section 18C, and the reasons why alternative proposals for reform fail to stand up to scrutiny. The key arguments of this report are that section 18C:
- Is a restriction on the human right to freedom of speech and an attack on human dignity;
- Undermines democracy
- Is inconsistent with a peaceful and cohesive society
- Punishes defendants through an unfair process
- Is partially redundant
- Undermines attempts to combat racism
- Is unconstitutional.
The report rejects the following proposed compromises as inadequate:
- Removing ‘offend’ and ‘insult’ from section 18C;
- Replacing ‘offend’ and insult’ with functionally similar language;
- Reforming the process for hearing section 18C or the Australian Human Rights Commission.
None of these reforms will address all of the problems created by section 18C. We conclude that section 18C must be repealed in full, along with the associated provisions in Part IIA of the Racial Discrimination Act 1975. Part B of this report outlines the history of section 18C and how it has been interpreted. This information forms the basis for the argumentation in Part A.
With Sinclair Davidson
Introduction: The parliament should unequivocally reject any reduction in the level of scrutiny applied to the Australian Taxation Office (ATO).
The ATO lists five separate bodies which it considers as external scrutineers: the Australian National Audit Office, the Commonwealth Ombudsman, the Inspector-General of Taxation, Office of the Australian Information Commissioner, and the Productivity Commission. However, with the transfer of responsibility for individual complaints about taxation from the Commonwealth Ombudsman to the Inspector-General of Taxation, four of these five oversight agencies have oversight of the ATO only insofar as the ATO is a statutory agency, rather than unique oversight of the ATO.
This system of a single dedicated inspector of the Commonwealth revenue collecting agency is the bare minimum one would require for a liberal democratic tax system. There is a strong case for increased monitoring and scrutiny of the ATO. We believe that this inquiry has been established under a dangerous assumption that the most important independent statutory authority in the Australian government should be freed from the current level of external monitoring. However, the inquiry presents parliament with an opportunity to tighten that monitoring. From both a liberal perspective and a democratic perspective, the ATO needs more scrutiny.
With Stephanie Forrest and Hannah Pandel
Executive Summary: Undergraduate history degrees in Australia fail to teach fundamental aspects of Australia’s history and how Australian liberal democracy came to be. Instead, they offer a range of disconnected subjects on narrow themes and issues—focusing on imperialism, popular culture, film studies, and ethnic/race history.
This report contains the results of a systematic review of the 739 history subjects offered across 34 Australian tertiary institutions in 2014, including 34 history programs and 10 separate ancient history programs.
Only 15 subjects out of 739 subjects surveyed covered British history, and of these, 6 were principally concerned with twentieth century British history—that is, the history of Britain after the colonisation of Australia.
Only 10 of the 34 universities surveyed offered subjects on the history of Britain as part of their history programs, even though Australian society is founded on British institutions. By contrast, 13 offered film studies subjects as part of their history programs More universities offered subjects on the history of popular culture (8) than offered subjects on intellectual history (6).
The report also ranks universities depending on how closely they adhere to the Oxbridge model of historical comprehensiveness. Only the University of Sydney, Macquarie University and Monash University come close to the Oxbridge model. Some very small and new institutions — such as Campion College — rank as well on this measure as large and well-established universities like the University of Melbourne.
There is also a tendency for many smaller universities to offer subjects exclusively on Australian and twentieth century history, thus promoting a narrow and short-sighted view of history. Undergraduate history informs the next generation of historians, the next generation of history teachers, and their future students. This report raises concerns that a new generation of Australians will have a narrow and fragmented grasp of our heritage, and lack an understanding of the institutions that have made Australia free and prosperous.
With Sinclair Davidson
Introduction: The Tax Laws Amendment (Tax Integrity Multinational Anti-avoidance Law) Bill 2015 exposure draft represents an important and concerning watershed in the practice of Australian corporate tax governance.
The draft bill would base the assessment of Australian tax liabilities on an assessment of tax rules in other countries. It undermines global tax agreements to which Australia is a part that have developed to prevent double taxation, risking the phenomenon that those agreements were designed to avoid. It offers a disincentive for the world’s biggest firms from establishing operations in Australia. It mischaracterises readily understandable business decisions as tax avoidance and penalises firms for normal corporate structural practices.
The scope of this legislation amounts to a substantial, yet entirely unpredictable, increase in corporate tax, and an attendant increase in the regulatory burden faced by large firms operating in Australia. We dispute the claim that this is a “tax integrity” measure. It is very much a tax increase.
Executive Summary: The Copyright Amendment (Online Infringement) Bill 2005 is an internet censorship bill. It creates a new and potentially dangerous power for courts to censor websites. This power is not proportional to the harm it is intended to ameliorate.
The bill enables copyright holders to apply for court orders against internet service providers to block access to websites whose “primary purpose” is to facilitate the infringement of copyright. This amounts to a form of judicial censorship of the internet in the private interests of copyright holders. It is inappropriate in a free society.
In a submission to the September 2014 Discussion Paper into Online Copyright Infringement, the IPA argued that proposed copyright reforms will “do nothing to tackle the underlying dynamics” that have enabled a shift in social attitudes as to the desirability of copyright enforcement. This submission is substantially drawn from the arguments made in that previous submission. The previous submission, which outlines many of the arguments below in greater detail, is attached.
Copyright is not an unlimited right. Copyright enforcement needs to be carefully counterweighed against the rights that such enforcement might limit. Intellectual property enforcement is not a sufficient justification for the abrogation of a more central right: the right to freedom of expression. The Australian government does not censor websites that can encourage much more serious harm than copyright infringement. Internet censorship for the purposes of copyright enforcement constitutes a serious and disproportionate overreach of government power and a consequent threat to freedom of speech.
With Simon Breheny
Introduction: This submission has been drafted in response to an invitation to the Institute of Public Affairs to make a submission to the Acting Independent National Security Legislation Monitor’s Inquiry into section 35P of the ASIO Act.
Our submission recommends the repeal of section 35P. We contend that there are three key problems with section 35P:
- Individuals can engage in illegal conduct without being aware they are breaking the law
- Restrictions on disclosure about special intelligence operations last forever
- Any exemption will provide only limited protection for journalists but journalism is an ambiguous term, and the exemption will not protect freedom of speech
With Sinclair Davidson
Introduction: In October 2014 the Australian Senate agreed to an inquiry into corporate tax avoidance. This comes after a wave of media comment about apparent tax “minimisation” strategies practiced by large multinational firms, particularly firms operating in the technology space.
The debate over company tax avoidance at home and abroad is a highly politically charged one, but the evidence suggests it offers far more heat than light.
The debate has exposed that the mechanics of Australia’s company tax is poorly understood. Even basic aspects of the company tax – such as the distinction between accounting profit and taxable profit – have been misinterpreted and those misinterpretations repeated.
Such misunderstandings and confusions multiply when the debate turns to the interrelation between company tax in different countries and the international corporate tax regime. Further complications are the growing significance of intellectual property and “border-less” commerce in the digital age. This makes the existence of confusion about the company tax burden understandable. But that confusion is no basis on which to alter the structure of the tax system, nor impose new regulatory controls or privacy-limiting information sharing policies, which could undermine the value of Australia as a business friendly economy.
Furthermore, the overarching public policy goal for Parliament must be the ultimate health of the economy, and the prosperity of the Australian people. We value multinational activity in Australia not because they provide revenue for the government budget, but because they create economic activity: provide jobs, services, and enhance our wellbeing.
Parliament must avoid introducing policy settings which purport to protect the stability of public revenue but at the same time cool the investment climate and push multinational economic activity outside of Australia.
The debate over corporate tax avoidance resembles another controversial and complex tax debate in recent years – that surrounding the mining tax. As we argued in The Australian in in January 2015:
The government should tread carefully. This obsession with multinationals and corporate tax looks like the Rudd government’s mining tax debacle. In 2010, Wayne Swan said foreign-owned mining companies were paying only 13 per cent tax in Australia. Tax office data told a different story but the government ploughed ahead. As we learned, populism made for poor policy …
There’s another reason for [the government] to be careful. When all the dust had settled from Swan’s tax crusade, the mining tax raised almost no money anyway.