From what we’ve seen in the media, you would think the majority of taxpayers are unhappy with the changes and even more unhappy with Australia’s Prime Minister Anthony Albanese. But a survey of 1245 voters between January 31 and February 3 by Newspoll tells us otherwise.

While just 38 per cent of survey respondents said they would benefit from Albanese’s revised tax cut plan, 62 per cent of voters said the Prime Minister made the right choice to amend the Stage 3 tax cuts plan.

So, what does this data mean? 

Backflip or boost?

It is true that Anthony Albanese changed the government’s position on the Stage 3 tax cuts, a plan which was legislated by the Morrison government in 2019 and due to come into effect in July this year.

It was one of Albanese’s election promises to follow through with the legislated tax cut plan, until he announced earlier this year that the Labor government would be revising the plan to “boost the family budgets of middle Australia”.

Coalition parliamentarians, with Opposition Leader Peter Dutton leading the charge, used this announcement as a chance to attack Albanese and the Labor government for “lying” to taxpayers, backflipping and breaking an election promise. 

While that might be true, however hyperbolised, Albanese appeared at the National Press Club of Australia two weeks ago to explain to voters how the changes to the Stage 3 tax cuts might benefit them.

“These tax cuts will provide meaningful help for parents returning to work, particularly women with young children,” Albanese said in his speech. 

“Because one of the things that we know is that when women with children are making decisions about how many hours an increase in their take home pay is a powerful incentive.”

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Albanese has not shied away from media scrutiny. On Sunday, the Prime Minister spoke with David Speers on ABC’s Insiders, backing the call despite hard questioning.

“Circumstances have changed,” Albanese said in his defence of the tax cut revision, “and what we’ve done is respond to the changes to the economic circumstances.

“I’ve gone to the National Press Club and said, ‘we’ve changed our position’. Why have we done that? Because we’ve listened to people.”

Albanese’s clear communication – in the media, at the Press Club, on social media platforms – has clearly not gone unnoticed. Perhaps voters have seen through the negative messaging from the Opposition and understand that this reform could actually be a good thing.

You’ll get a tax cut on July 1, whether you’re a teacher, a nurse, a cleaner, an engineer, or a truck driver. pic.twitter.com/Ke6b1PBS9Z

— Anthony Albanese (@AlboMP) February 4, 2024

Other changes

It’s not the first time a Prime Minister has changed their position on a policy. In the early weeks of her leadership in July 2010, former Prime Minister Julia Gillard declared she would not be introducing a tax on carbon in Australia.

Just months later in early 2011, Gillard unveiled a carbon tax plan.

Opposition Leader Tony Abbott said the decision was a “historic betrayal” and hinged much of his leadership on negativity and opposition of the Labor Party, as well as Gillard’s broken promise.

Again, it’s not the first time a Coalition leader’s foundation is based on negative messaging. We see much of that now with opposition leader Peter Dutton and his outspoken, divisive discourse on issues such as the Voice to Parliament, Australia Day and now the Stage 3 tax cuts.

However, as the Prime Minister said on ABC’s Insiders, Albanese has been “honest” and “upfront” about the position change on the tax cuts. And perhaps that has made all the difference.

Can we forgive him?

Teal independent Member for Wentworth Allegra Spender’s speech at the National Press Club, one week after Albanese’s, also backs up what the Newspoll data suggests. As the MP for Australia’s wealthiest electorate, Spender put the call out to hear from her constituents on how they feel about Albanese’s announcement to revise the tax cut plan.

Spender said the Wentworth electorate is split on the call – but on the whole, “most people are saying this is a good thing”, despite having the “biggest proportion of people who are going to lose out”.

“There’s actually a really significant group of people who would have benefited, who are also saying, you know what, we want to help other people. This is a really hard time right now,” she told the Press Club.

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There is some truth to the messaging of the Coalition beyond the negative, damning attacks on the Labor party. As Spender rightly pointed out, a lot of high income earners were banking on the original Stage 3 tax cuts plan and feel “completely let down” by the changes.

But I think what Spender’s speech and the Newspoll data tells us, is that the majority of people know that there are others doing it tougher, and it’s those people who will benefit from the changes the most.

So maybe Albo’s “broken promise” isn’t such a bad thing. If Newspoll’s data is right, people care about those who are most affected by cost of living. Humanity wins, negativity loses, and maybe this time we can forgive Albanese for a broken promise.

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The Sydney Morning Herald reports this year’s late budget could include a so-called loss carry-back provision.

It would mean a business that was profitable last year can claim back some of the taxes paid on that profit, to help offset losses incurred this year.

Such a scheme would serve to acknowledge the unusually tricky circumstances COVID-19 has brought to businesses and act as something of a stabiliser, helping support businesses that are typically profitable, but making a loss temporarily.

According to Australian small business and family enterprise ombudsman Kate Carnell, it’s a COVID-19 policy encouraged by the OECD.

Indeed, similar schemes are already in place in New Zealand, the US, the UK, Germany, Austria and Japan.

And, it’s not a completely alien concept to Aussie policymakers either.

A loss carry-back scheme was briefly introduced in 2012 under the Gillard government, in response to the global financial crisis, but was scrapped a year later.

Back in 2012, the Institute of Public Accountants (IPA) said the measure would benefit some 110,000 Aussie businesses.

Speaking to SmartCompany, Carnell says, today, that number could be even bigger.

“That was the GFC. This is a whole league worse than that,” she says.

We don’t have any details yet. But, in theory, in order to be eligible for the loss carry-back tax scheme, all you have to have done is made a profit last year, and a loss this year.

“There will be lots and lots of businesses that make a loss this year,” she says.

Already, Carnell notes that businesses can carry a loss forward, balancing it off against tax paid on future profits.

“This is just doing the opposite,” she says.

“You can carry back the loss and get a refund on the money you paid.”

Ultimately, it’s simply a way of boosting cashflow for those businesses that are struggling. Particularly those that were profitable before the COVID-19 crisis, and may well have continued to be in different circumstances.

“It doesn’t help anyone who hasn’t made a profit,” Carnell says.

“But, a lot of businesses that have really got a future, they’ve been profitable in previous years … it’s just this year, with the coronavirus, they’re in a whole lot of trouble,” she explains.

“They’re businesses that will probably be profitable again.”

When asked whether she would like to see this become a permanent policy, Carnell doesn’t go that far.

“It’s an expensive thing to do.”

But, she doesn’t necessarily see it as a one-off, either.

“I think it needs to be in place until the economy is back on track. I don’t think that’s going to happen in 12 months,” she explains.

“It should be in place until the economy is back into growth, and unemployment is down to under 6%.”

This article was first published by SmartCompany. See the original article here.

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There are now more than 3.14 million Australian women working full-time, and 2.7 million working part-time.  That’s over 100,000 more than last financial year and a whole lot more tax returns.

While some women will pay a registered tax agent to do their returns for them, others will try to save a bit of money by doing it themselves electronically or calling on a friend as a favour to assist.

The cost for paying a tax agent is a deductible expense and it varies depending on how complex your tax affairs are. It can range from $100 up to $500 when business and investment affairs are excluded.

Just recently I met a woman, let’s call her Jenny for privacy reasons, who baulked at paying $250 for engaging a tax agent to lodge her return.

The same woman also complained to me that this tax agent only managed to get her a tax refund of $1000, which was significantly short of the $5000 tax refund that her sister-in-law managed to get her in the financial year before.

Jenny’s experience is not unique. In fact new research by NGS Super shows that women are more likely to seek the advice of a trusted friend over an experienced financial expert.

Without knowing the full details of Jenny’s work claims over the past financial years, it’s possible that some things have changed when it comes to what she’s able to claim.

It’s also very possible that her sister in-law was claiming things that perhaps she shouldn’t have been, in order to generate a better refund. 

The Australian Tax Office (ATO) says it wants everyone to claim what they are entitled to, but it draws the line where a person intentionally tries to bend the rules and over claim.

If a claim raises a red flag, the ATO will investigate further and if the claim is incorrect, you’ll be asked to correct it, even if it happened some years ago.

“If you‘ve been overpaid, you’ll obviously need to pay it back, plus interest and maybe a penalty,” ATO Assistant Commissioner Kath Anderson told Women’s Agenda.

Anderson added that the role of a registered tax agents is to help people lodge a correct return and not simply to deliver refunds that you may not be entitled to

“You should be very wary of anyone who promises you a refund that sounds too good to be true, especially unregistered preparers.

“Whether you lodge your own return or you use an agent, you are responsible for making sure your deductions are accurate.”

The penalties vary depending on the mistake and whether it was an accident or intentional. In a small number of cases taxpayers have been found to have deliberately done the wrong thing and the worst-case scenario has been a jail sentence.

According to ATO audits and reviews, there are five main areas where taxpayers are most likely to get it wrong. This includes things like:

1. leaving out some of their income, maybe forgetting interest, a temp job or money earned from the sharing economy.
2. claiming deductions for personal expenses such as home to work travel, normal clothes or personal phone calls.
3. claiming for something they never paid for – often people think everyone is entitled to a ‘standard deduction’, like $150 for laundry or $50 for phone
4. claiming personal expenses associated with rental properties – either claiming deductions for times when they are using their property themselves or claiming interest on loans used to buy personal assets like a car or boat.
5. Not keeping receipts or records of their expenses. If you put in claim, you need a record to prove it!

The main message to women who are either new to or familiar with lodging a tax return this year, or who are looking at ways to cut upfront costs, is if you are claiming a deduction for work then you must have paid for it yourself and not have been reimbursed; it must be directly related to earning your income, not of a private nature; and you must have a record to demonstrate how you calculated your claim.

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The data makes it patently obvious that the gender “pay gap” is no myth. It’s not “so-called”. It’s not a grand conspiracy. It’s a stubborn fact.

The reasons for the pay gap are multi-faceted. It is not as simple as women being paid a perfectly uniformed discounted rate to their male peers. Nor is it explained by women working fewer hours.

It is the cumulative impact of bias, women undertaking more unpaid work and thus being less able to undertake more paid work, being over represented in the lowest-paid fields and underrepresented in the highest-paying sectors.

The “choices” women make play a role but the context in which their choices are made cannot be ignored.

A few facts

In the 2014-15 financial year:

• The median income for all taxpayers is $54,543, while the median for all women was just $47,125 and $61,711 for men.
• Women comprise 45% of all people earning a taxable income.
• The current average total earnings for men working full-time is $89,221, for women full-time workers it is $72,212.
• Women represent 25% of the richest 10% of earners, and 57% of the poorest 10% of earners.

The Guardian’s Greg Jericho has crunched the numbers and highlights a number of the discrepancies between men and women’s earnings here.

Jericho took to Twitter earlier today to illustrate this.

https://twitter.com/GrogsGamut/status/854097184349761536

https://twitter.com/GrogsGamut/status/854095659904794625

https://twitter.com/GrogsGamut/status/854116788526661632

A few questions

Do female athletes, barristers and anaesthetists make such different choices to men that their earnings are substantially different? Are they vastly less valuable?

Or, are there structural factors at play?

Is it harder for women barristers and anaesthetists to secure briefings and work? Do they charge less? All of the above?

How can just 19.7% of all female barristers earn more than $80,000 a year, while 56% of male barristers do?

A version of the same question can be asked of many sectors.

https://twitter.com/GrogsGamut/status/854095034739638272

Even in a field like secondary teaching, which women dominate, men outnumber women in the highest income brackets.

The reasons why this happens matter less than the result. Women in Australia are earning substantially less than men. The cost of this is compounded over the course of their working lives and it explains why the path to poverty is so crowded with women.

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