Bill Shorten’s class war against ‘accountant tax rorts’ and real estate industry

Bill Shorten doubles down on plan to stop wealthy claiming accountants’ fees, also taking a swipe at real estate agents.

Opposition Leader Bill Shorten speaking at a press conference after a visit to PRP Diagnostic Imaging in Eastwood in Sydney. Picture: Kym Smith

Bill Shorten has doubled down on his plan to stop wealthy people claiming high accountants’ fees on tax and has taken a swipe at real estate agents.

In a sign of a fierce “class warfare” campaign ahead, the Opposition Leader today said he was sticking with a cap of $3000 on exempting accountancy fees despite scepticism his plan will raise the $1.8bn he predicts it will.

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“I’m 100 per cent confident that Labor is right, to stop allowing people deduct hundreds of thousands of dollars off their tax for what they pay their accountant,” he said in the Liberal electorate of Bennelong.

“I’m 100 per cent confident that what we can do is make sure that this is a fairer system.

“Why should someone who pays $1 million to their accountant to minimise their tax for millions more, why should we pay for the double dip?

“I mean, it’s a sweet deal. It’s not illegal, but enough’s enough.”

Last month, Tax Commissioner Chris Jordan said he was sceptical the savings claimed from Labor’s policy were all sourced from managing tax affairs instead of other exemptions.

“When people see a quick headline, ‘millionaires paying millions not to pay tax’, there might well be some other reason entirely, like GIC (general interest charges) and I think we’re trying to break that box down now,” he told the Tax Institute in March.

“If you’ve got all that GIC and you’ve paid an enormous settlement, you can claim the GIC as a tax deduction so yes you might have millions of dollars of income but I can’t see any rational or even irrational person, spending over a million to not pay tax on a million.”

Mr Shorten refused to answer questions on whether the difference pointed out by Mr Jordan would affect the revenue raised by his policy.

But he did hit back at a national campaign led by real estate agents against his negative gearing policies.

“Well, the real estate agents, it’s obviously in their financial interest to keep taxpayer money flowing to their business model?” he said.

“You’ve gotta ask yourself, why are they campaigning? They’re campaigning because they like to have people bidding for houses who are getting a taxpayer subsidy.

“Because the more people they have bidding for houses, the more they can charge their percentage on the sale.”

The Real Estate Institute of Australia, which represents about 95 per cent of the 36,000 businesses that employ about 120,000 people, is leading the push to coincide with the election campaign.

The industry-backed campaign will harness social media platforms including Facebook, Instagram and Twitter to promote key attack lines against the Labor policy, arguing that it will reduce property prices in a cooling market, fail to raise the forecast revenue and pose a danger to the Australian economy.

BATTLELINES

Labor is accused of going after:
- High income earners — restoring the “deficit levy” on the top marginal tax rate holders
- Accountants — capping deductions for the cast of managing tax affairs at $3000.
- Property investors and agents — restricting negative gearing to new dwellings.
- Retirees — abolishing cash refunds for franking credits.
- Coal companies — committed to a 45 per cent emissions reductions and 50 per cent renewables target.
- Banks — hit with a levy to pay for a $640 million fund to support victims of misconduct.
- Mortgage brokers — proposing a fixed-rate commission to brokers and the abolition of trailing commissions.

The Coalition government has been accused by Labor of cutting funds for:
- Schools — reduced the rate of funding growth promised by the former Labor government.
- Hospitals — reduced the rate of funding growth promised by the former Labor government.
- Universities — cut more than $2 billion through a freeze in commonwealth grants.
- Welfare recipients — cut family tax benefits, increased reviews of people on the disability support pension, means tested the carers allowance.
- Pensioners — strengthened asset tests which brought 300,000 Australians off the pension.