Scott Morrison on Mortgage Brokers...

Discussion in 'Property Market Economics' started by BuyersAgent, 11th Feb, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
  1. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    I am hearing rumours that the banks, etc will be spending/have spent $1B on lawyers, accountants, etc for the RC.

    This will lower their profits by $1B and hence their tax liability.

    At 30% tax rate, that is another $300M missing from the Government coffers :eek:.

    $75M + $300M => $375M ‘cost’ to the taxpayers.
     
    Observer and Sackie like this.
  2. Sackie

    Sackie Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    11,965
    Location:
    All over the place.
    lol love your work!
     
    kierank likes this.
  3. Someguy

    Someguy Well-Known Member

    Joined:
    11th Oct, 2017
    Posts:
    188
    Location:
    Sydney
    I see what you are saying but have banks ever really paid significant tax anyway? If anything it’s a positive to Australia from income tax on the extra lawyers and accountants
     
  4. TSK

    TSK Well-Known Member

    Joined:
    14th Apr, 2018
    Posts:
    116
    Location:
    VIC
    who are they paying to do this extra compliance and the systems to support it: other businesses and people.
     
  5. TSK

    TSK Well-Known Member

    Joined:
    14th Apr, 2018
    Posts:
    116
    Location:
    VIC
    True, just had a look at my Industry Super fund and it's sitting under just 10% weighting....so not too heavily weighted that way.
     
  6. Tony3008

    Tony3008 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    279
    Location:
    Docklands, Victoria
    Yes, but the money paid to barristers, accountants etc will be taxable, in many cases at a higher rate than the bank would pay (and that's before franking credit refunds)
     
  7. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    You are kidding, right?

    In 2016, Australian banks contributed more than $14 billion of total tax revenue.

    That equates to 62.5% of the $22.4 billion in total income tax paid by all ASX200 companies. That is nearly two-thirds.

    Here's how much the major Australian banks contributed to tax revenues in 2016

    And that equates to 15% of the total corporate tax collected from ALL Australian companies (around $95B from memory)

    You are kidding again, right?

    How many lawyers and accountants do you think pay their full tax?

    Taking one high profile firm, say Slater and Gordon. In FY16, they made nearly $1B loss :eek:.

    When it comes to profit, I am banking on the banks :D.

    When it comes to tax revenue, so is the Government and the Australian people ;).
     
  8. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    Not the ones I know and love ...;)

    I would expect them to use every legal means at their disposal to optimise their tax liabilities :D.
     
  9. Someguy

    Someguy Well-Known Member

    Joined:
    11th Oct, 2017
    Posts:
    188
    Location:
    Sydney
    My bad putting banks in same boat as many other big businesses
     
  10. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    I think they are all in the same boat ...
     
    Someguy likes this.
  11. TSK

    TSK Well-Known Member

    Joined:
    14th Apr, 2018
    Posts:
    116
    Location:
    VIC
    Mmmmm...must have been a good year for them (although you source is a bit suspect).

    You're paying more tax than some of Australia's biggest companies

    More recent data would indicate they pay less that less that 45% of the top 20 companies and even less when accounting for ASX200. Mind you that's kind of expected given the envious position they have as an almost oligopoly in AU
     
  12. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
  13. TSK

    TSK Well-Known Member

    Joined:
    14th Apr, 2018
    Posts:
    116
    Location:
    VIC
    Both true, in pure dollar terms but a reduction as a percentage of the overall corporate tax take :) ...that year you first quoted must have been a bad year for others or just really good for the banking sector. As for dodgy, it was more referencing the Banking association report rather than the raw figures
     
  14. Redom

    Redom Finance Strategist Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    1,698
    Location:
    Sydney (Australia Wide)
    Hmm in general measuring a company's contribution to the economy via the corporate tax revenue they generate is a bit misleading. Plenty of very large contributors pay little corporate tax, given the nature of the business/timing/intangible nature. Mature businesses (post mature?) typically are bigger tax generators than businesses actively expanding/growing. E.g. plenty of tech companies in early phase startups are in big growth phases but won't pay corporate tax for years. This happens a lot during election cycles, where news reporting gets a fair bit biased (business bashing really). It's quite hard to measure what a 'fair contribution' actually is. Measuring on direct tax revenue misses the larger contributing factors. E.g. CBA employee 50k plus Australians directly. Those Aussies directly pay ~$1.5bn+ in personal taxes, which then collects GST revenue, etc etc etc.
     
    craigc, Leeroy93 and kierank like this.
  15. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    ... and you quoted our ABC :D.

    Thanks for the laugh ;).
     
  16. kierank

    kierank Well-Known Member

    Joined:
    20th Jan, 2016
    Posts:
    3,919
    Location:
    Brisbane
    Totally agree.

    But I was debunking this statement:
    The answer, of course, is that the banks do :D
     
    Redom likes this.
  17. Eric Wu

    Eric Wu Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    1,472
    Location:
    Australia
    $15k payment to the lawyers per day maybe, ;)
     
  18. Eric Wu

    Eric Wu Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    1,472
    Location:
    Australia
    from individual investor point of view, yes, you are correct.

    from a collective point of view (majority of borrowers, the mortgage broking industry..), it is not, it has profound impact on us ( not only brokers).
     
    kierank likes this.
  19. Sackie

    Sackie Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    11,965
    Location:
    All over the place.
    Good point Eric. I was though talking purely from an investor's pov.
     
    kierank and Eric Wu like this.