REVENUE RAISING

We’re fully aware that the changes and improvements we want to see in the future planning of this country require funding. This is a collection of our ideas about how to find that funding, that would collect or save a combined total of over $22bn.

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Corporate Community Tax

Many corporations with a turnover in excess of $100m managed to avoid paying any tax at all in the tax period for 2013-14, while the remainder paid a fraction of the percentage we as individuals pay. That just doesn't seem right.

It is, of course, perfectly legal - but to be the responsible community-minded organisations they claim to be, it’s time something more was given back, to boost and support the Australian communities they rely on to make their significant profits.

The Arts Party proposes a levy of 0.2% of reported turnover paid by every company and corporation in Australia with a reported turnover in excess of $100m. Based on ATO figures, if applied in 2013-14, this would have raised over $3.2bn for community projects. Corporations can offset this levy by supporting registered Arts Organisations of their choosing through the financial year, up to the 0.2% threshold.

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Arts Lottery

The Sydney Opera House was paid for primarily through a lottery. We propose reintroducing this approach, to raise $500m+ for small/medium community organisations across the country, the proceeds paid via a special cultural fund.

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Reform Negative Gearing

We can improve the housing affordability problem affecting many Australians and reduce costs to the budget at the same. Unwinding the Negative Gearing system will not be simple. It needs to be done carefully; avoiding economic instability, and problematic devaluations in Australian properties. But it does need to be done.

Negative gearing and the CGT discount are distorting the housing market and costing the budget $7.7 billion per year. The proportion of investment loans is rising, owner occupied loans are falling and rates of home ownership are falling. People are being forced to rent in greater numbers as a growing number of houses are bought by property investors.

Some claim that negative gearing encourages the building of new rental properties and so helps lower rents, but this impact is overstated. The vast majority of investor housing finance, 94 per cent, is for existing houses.

Australia is one of very few countries to allow negative gearing losses to be offset against all income for multiple properties.

We propose that negative gearing be limited to 1 existing investment property or 2 new build properties only, leveraging up to $1.5m in total. This would save over $4bn in subsidies from the budget, while allowing Australians to continue investing in their futures through the property market.

These changes would need to be undertaken gradually, over a period of 5-7 years, to minimise disruption to housing prices, and the economy more broadly.

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Superannuation Tax Concessions

We should scrap wasteful tax breaks for the wealthiest Australians who don't need them to stay off the age pension. Instead, give the bigger breaks to everyday Australians, to ensure everyone can retire in dignity and fewer people need the age pension in years to come. 

The Arts Party endorses The Australia Institute's proposal for progressive super tax rates. This could save the budget $9.6 billion per year. The vast majority of these savings ($9.3 billion) would be collected from the top 20% of earners, using this model. All of the savings would be collected from the top 40% of earners. The other 60% of Australians would receive greater tax benefits than they do now. This change would not be retrospective but would apply to all super and pension schemes, including politicians.

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Super Profits Tax on Banks

Last year Australia's banks made more than $1000 in profit from each person in Australia. It’s not just the size of the bank profits that justifies a super profits tax: it’s their unique position in the market – they control 92% of it.

The Arts Party supports The Australia Institute's proposal to implement a tax surcharge of 30 per cent on all profits banks above a threshold 12 per cent pre-tax rate of return on equity. It is estimated that this would have raised $5.7 billion in the 2013-14 tax year. It is expected that this amount will increase substantially in years to come.

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Legalise Cannabis

Australia has one of the highest cannabis prevalence rates in the world. Cannabis also accounts for the greatest proportion of national illicit drug arrests and seizures in Australia each year. While we do not wish to encourage cannabis consumption, the fact remains that it is extensively used by Australians and the current treatment offers no tangible benefits to Australian society.

We advocate a new taxed regulatory system for the sale of cannabis, taking profits from criminal gangs and creating significant health, community and cultural funding. This can be implemented by the Federal Government in the Territories immediately, while the States would each need to debate these choices further. 

Cannabis consumption is fundamentally a health, not a criminal, issue and should be viewed as such. If cannabis was legalised nationwide, tax income from this is estimated to be in excess of $700m a year in revenue and a saving of up to $300m from police and judicial activity related to cannabis cases.

A significant proportion of this new income should be channelled back into drug and health support, while the remainder could be invested back into communities across the country through artistic and cultural activities. Associated legislation, in line with existing smoking restrictions in indoor and dining areas would also need to be created. 

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