Terry McCrann: Tax avoidance taskforce conjures images of a SWAT team
THE tax office taskforce announcing it’s clawed back $5.6 billion is just a case of doing what it was supposed to, writes Terry MCrann.
Terry McCrann
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A BIG round of applause please for the tax office. It’s proudly announced that it’s actually doing its job — you know, getting at least some big taxpayers to pay the tax that they should be paying.
Indeed, in many cases it would seem, it’s got them to pay tax that they should have paid at an earlier date — that’s if it had been doing its job back then rather than just “catching up” now.
The ATO on Tuesday said that “with the help of the (impressively named) Tax Avoidance Taskforce, we have collected just over $5.6 billion in the first two years”.
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That’s a rather curious phrase — “with the help of the “Taskforce”; it sort of brings to mind a tax office version of a specialist SWAT team — one that’s bristling with laptops and spreadsheets rather than automatic weapons and armoured cars. Or perhaps it has them as well.
But hey, let’s not be churlish — at least the tax office is, if a little belatedly, actually doing its job.
Not so, according to the banking royal commission, either of the two corporate and financial services regulators, ASIC and APRA.
ASIC is supposed to get the banks (and others) to behave properly, APRA to get them to behave prudently.
The first so they don’t rip off their customers (or investors); the second so they don’t send themselves broke and so also end up ripping off their customers and their investors.
So for every failing by a bank and other financial institution identified by the RC there is also a very clear parallel failing by ASIC — a failing both in real time back whenever and a failing after the event.
But never fear — to digress for a moment — the 2018 ASIC has got its eye firmly fixed on the main game: it has set out to rigorously police any failing by listed companies in detailing their climate risks.
ASIC has devoted considerable resources to examine “climate risk disclosures” by no less than 60 of the top 300 listed companies, 25 recent IPO prospectuses, and some 15,000 annual reports.
Thank goodness ASIC has bounced back from its failure to protect bank customers from being overcharged and ripped off, to rigorously ensure that no climate risk will go undisclosed across corporate Australia.
Call me cynical, but I doubt though that the two biggest risks of all will be disclosed.
The first is the all-too-real risk of boards and managements actually taking all this complete crap seriously.
The second is just how much at risk companies and businesses are from politicians, officious bureaucrats and a coalition of insane interest groups and carpet-bagging businesses imposing huge and utterly pointless costs on them and their customers.
I do think the RC was a little unfair on APRA. Its main complaint was that APRA never took anyone to court. Well, APRA’s main job is to ensure banks don’t go broke. And they didn’t.
NOW, WRITE HAYNE’S REPORT
THERE are two substantial elements in the — belated — moves by the banks individually and collectively to end their so-called “fees for no service” and to give customers back those grandfathered annual commissions they were paying on historical financial products.
The first is the upfront cost of the industry-wide refund of yesterday fees and commissions. The fees (for no service) element will add to something over $1 billion.
As a one-off cost across the industry that’s not much more than a rounding error.
There will be a separate upfront cost in rebating historical commissions paid, but that won’t be huge judging from the cost revealed by CBA of not charging the commissions in the future.
That’s the second element in these customer-friendly changes — the annual impact of both on profits going forward. No longer charging “fees for no service” should have a minimal impact each year going forward — because, quite simply, they are fees that (mostly) should never be charged and would not be charged in a properly governed bank.
Ending commissions is different. That was a legitimate, if dodgy revenue source — albeit one that would decline to zero over time.
The CBA says that ending all those fees on certain legacy products and ending grandfathered trailing commissions will cost it around $45 million a year.
Say $200 million a year approximately across the industry and, again, it’s a rounding error in net annual profits of the big four adding to $25 billion-plus.
It is of course an extraordinarily expensive rounding error in the broader scheme of things.
While it would be stretching things to suggest that “if only” banks had been pre-emptive in not charging fees for no service and forgoing those controversial commissions, they might have avoided the pain of the RC.
No, they were always going to get a RC — from a future Labor government if not from this Coalition one.
But they might have avoided a considerable part of the negatives; they would have also had a “customer-friendly” example to trumpet.
Their task now is to “help write” the RC’s final report — the more they can do proactively like yesterday the better for them and indeed for all of us.
They should take as their cue commissioner Kenneth Hayne’s very big wink, wink, nudge, nudge that he really wants to be able to recommend lighter but more effective regulation. It’s really up to the banks to help him deliver.
How the NBN has delivered just in time
The NBN has delivered, and it has done so in what can only be described as the ultimate — the hit-the-ground running immediate — stress test, rites Terry McCrann.
Sydney airport the wrong place at the wrong time
Sydney Airport has some of the sweetest acreage in Australia but when passengers numbers have dwindled from 9 million in the March quarter to 400,000 in the June quarter, that doesn’t count for much, writes Terry McCrann.