11 Aug 2015

Beware the Tax man:- Yes, parliamentarians, tax'em just like us mere voters, that'll fix the expenses problem. Easy peasey !!!

They should be like everyone else.
Let the ATO sort out expenses.
Image result for the tax man cometh cartoon
Taken from an article by Chris Berg

A few years ago my IPA colleague Sinclair Davidson spelled out in The Australian an alternative model for dealing with expenses. Politicians should be well paid - probably a lot better than they are now. But once they've received that lump sum, they should pay their expenses themselves, just like any independent contractor would.

Those expenses - not "entitlements", expenses - would then be treated as work-related deductions. Under that model, if Bronwyn Bishop wanted a helicopter ride she would have declared it not to parliament but to the Australian Taxation Office in her 2014-15 return.

(Ministers' expenses - who actually are employees of the government - would be strictly controlled but covered in the same way employees have their expenses covered.)

This model has many advantages over the present system.

First, it would keep expenses in check. It's easy to be loose with taxpayers' money. It's harder to be loose with your own.

Second, it avoids the interminable debate about what counts as parliamentary or political expenses. Either way, it all constitutes work-related expenses for tax purposes.

Third, it leaves subjective questions of whether spending is extravagant to the politicians themselves. Bishop wants a helicopter? Up to her.

Fourth, it leaves the question of what constitutes work-related to the tax office. I said politics is a weird job but it is not so weird that the ATO wouldn't be able to handle these questions. They have a lot of experience here. Anyway, we're at the mercy of the tax office. Our representatives should be too.

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