IN WHOSE INTEREST? AN ASSESSMENT OF THE NEW SOUTH WALES GOVERNMENT’S POST-AMALGAMATION RATE PATH FREEZE POLICY
By Brian Dollery AND Joseph Drew
As part of its controversial forced amalgamation program, the Baird Government announced that merged councils would fall under a rate path freeze for a period of four years. During that time, merged municipalities would face the same rate increases they would have experienced had they not been amalgamated. The NSW Government also requested the Independent Pricing and Regulatory Tribunal (IPART) to offer recommendations on how the rate freeze policy should best be implemented and IPART released Freezing Existing Rate Paths for Newly Merged Councils in August 2016. This paper examines the rate freeze policy and the IPART report and demonstrates that they would impose serious efficiency, equity and financial sustainability problems on compulsorily consolidated councils.
COMPARISONS OF TAX EVASION AND WELFARE FRAUD:
HOW WELL DOES POLICY IN AUSTRALIA AND NEW ZEALAND REFLECT PUBLIC ATTITUDES TO THESE CRIMES?
By Lisa Marriott and Dalice Sim
This study reports on attitudes towards tax evasion and welfare fraud. Data is collected in an online survey with 3,000 respondents from Australia and New Zealand. The results challenge the assumption that society views tax evasion as less serious than welfare fraud. This finding is important for the Australian and New Zealand justice systems, where policy settings treat welfare fraud as more serious than tax evasion. In highlighting societal views towards tax evasion and welfare fraud, the study challenges extant policy arrangements that allow for different outcomes where crimes result in similar harm.
DOUBTS ABOUT THE CENTRAL MANAGEMENT AND CONTROL RESIDENCY TEST FOR COMPANIES?
By David Jones, John Passant AND John McLaren
This article critically examines the Australian Taxation Office (ATO) interpretation of the second statutory test for company residence found in the definition of ‘resident’ in sub-section 6(1) of the Income Tax Assessment Act 1936. The statutory test consists of three components: first, if the company is incorporated in Australia then it is a resident; second, if the company is not incorporated in Australia but the company is carrying on a business in Australia and has its central management and control in Australia then it is a resident; and third, it is not incorporated in Australia but it is carrying on business in Australia and has its voting power controlled by shareholders who are resident in Australia then it is a resident of Australia for taxation purposes. The central management and control test contained in the public Taxation Ruling TR 2004/15 has been the subject of considerable conjecture and confusion for many years. The ruling states that the test of residency for a company not incorporated in Australia consists of two requirements: the company must be carrying on business in Australia and it must have its central management and control located in Australia. A company not incorporated in Australia and thus not satisfying the first test of residency must have its central management and control in Australia or have the majority of shareholders resident in Australia coupled with the carrying on of a business in Australia before it is held to be a resident. The contrary view is that the central management and control test on its own may be sufficient to deem a non-Australian incorporated company to be a resident for taxation purposes. It is contended that there is no need to demonstrate that the company is also carrying on a business in Australia. This article contends that the approach of the Commissioner of Taxation contained in TR 2004/14, is open to serious doubt.