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Where are Australia's seafarers on Int'l Day of the Seafarer?

THE SIGNIFICANT and invaluable contribution merchant seafarers make to Australia’s economy and society — transporting more than 98 percent of the nation’s imports and exports — is being recognised today as the world marks the International Day of the Seafarer.

Organised by the International Maritime Organization — the United Nations agency with responsibility for the safety, security and sustainability of shipping — June 25 highlights the huge but often overlooked contribution seafarers make to modern society.

The COVID19 pandemic had been particularly hard for seafarers, with 200,000 currently stuck onboard ships around the world, unable to go home to their families due to border closures and a lack of government efforts to repatriate them.

The Maritime Union of Australia (MUA) said the day also highlighted the need to urgently turn around the decline of Australia’s merchant fleet, which has steadily shrunk under the Abbott, Turnbull, and Morrison Governments, leaving the country without the self-sufficiency a smart island nation needs.

With very few ships flying the Australian red ensign, the nation’s supply chains have become increasingly precarious, with the overwhelming majority of ships servicing the nation now foreign owned, crewed and flagged.

MUA national secretary and International Transport Workers' Federation president Paddy Crumlin paid tribute to all seafarers, saying that our nation would grind to a halt without the vital supplies they bring.

“Seafarers are the invisible workforce responsible for supplying the country with crucial supplies, fuel, and the overwhelming majority of everyday products, as well as exporting our resources and manufactured goods to the world,” Mr Crumlin said.

“Put simply, without seafarers, Australia’s economy and society would collapse almost overnight.

“Unfortunately, under the Abbott, Turnbull and Morrison Governments we have seen the continued loss of Australian-flag vessels, leaving the nation in a dangerous position that could see fuel dry up within weeks if a crisis interrupts our supply chain.

“The Liberals and Nationals have driven a race to the bottom on the Australian coast, resulting in highly-skilled Australian seafarers being replaced by flag of convenience vessels registered in notorious tax havens and crewed by exploited foreign visa workers paid as little as $2 per hour.

“The International Day of the Seafarer highlights the need for Australia to restore merchant shipping, with a strategic fleet of Australian-flagged vessels crewed by Australian workers that can ensure our sovereign self-sufficiency and the security for our nation’s fuel and supply capabilities.”

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Own a rental? ATO outlines what you need to know this tax time

THE Australian Taxation Office (ATO) is aware that residential rental property owners may be concerned about how COVID-19, floods, or bushfires have reduced their income.

This may be a result of tenants paying less or entering deferred payments plans, or travel restrictions which have affected demand for short-term rental properties. New legislation also affects the tax deductions that owners of vacant land can claim.

Assistant Commissioner Karen Foat explained that whatever the circumstances, the most important first step was to keep records of all expenses.

“Without good records, you will find it difficult to declare all your rental-related income in your tax return and work out what expenses you can claim as deductions," Ms Foat said.

Reduced rental income

The COVID-19 pandemic has placed property owners and tenants in unforeseen circumstances. Many tenants are paying reduced rent or have ceased paying because their income has been adversely affected by COVID-19.

You should include rent as income at the time it is paid, so you only need to declare the rent you have received as income. If payments by your tenants are deferred until the next financial year you do not need to include these payments until you receive them. 

While rental income may be reduced, owners will continue to incur normal expenses on their rental property and will still be able to claim these expenses in their tax return as long as the reduced rent charged is determined at arms’ length, having regard to the current market conditions. 

This applies whether the reduction in rent was initiated by the tenants or the owner.

Some owners may have rental insurance that covers a loss of income. It is important to remember that any payouts from these types of policies are assessable income and must be included in tax returns.

Many banks have moved to defer loan repayments for stressed mortgagees. In these circumstances, rental property owners are still able to claim interest being charged on the loan as a deduction -- even if the bank defers the repayments.

Short-term rentals

“We recognise that circumstances over the past six months have seen many short-term rentals see cancellations or sit vacant as a result of either COVID-19 or bushfires,” Ms Foat said.

In circumstances where COVID-19 or natural disasters have adversely affected demand, including the cancellation of existing bookings for a short-term rental property, deductions are still available provided the property was still genuinely available for rent.

If owners decided to use the property for private purposes, offered the property to family or friends for free, offered the property to others in need or stopped renting the property out they cannot claim deductions in respect of those periods.  

“Generally speaking, if your plans to rent a property in 2020 were the same as those for 2019, but were disrupted by COVID-19 or bushfires, you will still be able to claim the same proportion of expenses you would have been entitled to claim previously,” Ms Foat said.

To determine the proportion of expenses that can be claimed for short-term rental properties impacted by COVID-19 or bushfires, a reasonable approach is to apportion expenses based on the previous year’s usage pattern, unless you can show it was genuinely available for rent for a longer period of time in 2020.

If you or your family or friends move into the property to live in it because of COVID-19 or bushfires, you need to count this as private use when working out your claims in 2020.

Deductions for vacant land no longer available

For the 2020 year, expenses for holding vacant land are no longer deductible for individuals intending to build a rental property on that land but the property is not yet built. This also applies to land for which you may have been claiming expenses in previous years. 

However, this does not apply to land that is used in a business, or if there has been an exceptional circumstance like a fire or flood leading to the land being vacant.

So, if you are building a rental property, you cannot claim the deductions for the costs of holding the land, such as interest. However, if your rental property was destroyed in the bushfires and you are currently rebuilding, you can claim the costs of holding your now vacant land for up to thre years while you rebuild your rental property.

COMMON MISTAKES

Travel to rental properties

“Last year, we also saw a number of taxpayers make simple mistakes such as claiming deductions for travel to inspect their rental properties,” Ms Foat said.

Residential property owners can't claim any deductions for costs incurred in travelling to residential rental property unless they are in the rare situation of being in the business of letting rental properties.

Incorrectly claiming loan interest

Taxpayers that take out a loan to purchase a rental property can claim interest (or a portion of the interest) as a tax deduction. However, directing some of the loan money to personal use, such as paying for living expenses, buying a boat, or going on a holiday is not deductible use. The ATO uses data and analytics look closely to ensure that deductions are only claimed on the portion of the loan that relates directly to the rental property.

Capital works and repairs

“Each year, some taxpayers claim capital works as a lump sum rather than spreading the cost over a number of years. Others claim the initial work needed to get a property ready for rent immediately instead of spreading the cost over a number of years,” Ms Foat said.

Repairs or maintenance to restore something that’s broken, damaged or deteriorating in a property you already rent out are deductible immediately. Improvements or renovations are categorised as capital works and are deductible over a number of years.

Initial repairs for damage that existed when the property was purchased can’t be claimed as an immediate deduction but may be claimed over a number of years as a capital works deduction.

Short term rentals

We often see people with short term rental properties claiming for 100 percent of their expenses when they actually use the property for their own use or provide it to family and friends for free or at a reduced rate. Properties need to be rented out or be genuinely available for rent to claim a deduction.

Factors such as reserving the property or leaving it vacant over peak periods, not charging the market rate and the types of terms and conditions of the bookings are all taken into consideration when deciding if active and genuine efforts are being made to ensure a property is available for rent.

If a property is not genuinely available for rent, you need to limit your deductions to the days when it is. 

If you are allowing friends or family to stay in the property at a reduced price, you need to limit your deductions to the amount of rent received for these periods.

Don’t forget to include all your rental income, especially from sharing economy platforms. The ATO is matching data received from these providers to information in tax returns and will be following up discrepancies.

Poor record keeping

The number one cause of the ATO disallowing a claim is taxpayers being unable to produce receipts or other documents to support a claim. Furnishing fraudulent or doctored records will attract higher penalties and may also result in prosecution.

www.ato.gov.au

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Review of the Working Holiday Maker Program and its role in the economic recovery

THE Joint Standing Committee on Migration has launched an inquiry into the Working Holiday Maker program to ensure it is working effectively to support the tourism, health care and agriculture sectors during the COVID-19 economic recovery.

Working holiday makers contribute around $3 billion a year to the Australian economy and support jobs in regional Australia. They arrive in Australia with money to spend and inject the wages they earn here back into local communities.

The program is also important for building people-to-people links and gives young Australians the chance to visit and work in over 40 countries.

Working holiday makers are a major contributor to the labour force in the agriculture, tourism, health care and aged care sectors.

There are around 50,000 fewer backpackers in Australia because of the coronavirus, but once borders re-open, they will be key to filling some roles where Australian workers are usually not available, particularly in regional areas.

The Committee will look at how backpackers can complement, rather than compete with those Australian workers laid off because of the pandemic.

Chair of the Joint Standing Committee on Migration, Julian Leeser MP said given the COVID-19 pandemic had effectively closed Australia’s borders and stopped the flow of working holiday makers, it was important to examine how this would impact the economy and look closely at the program to ensure it is working in Australia’s interest.

“The very clear focus at the moment must be on getting Australians back into work and how migration can support our economic recovery,” Mr Leeser said.

“We will be looking closely at the program to make sure it is supporting Australian jobs and making visa holders available to support businesses that need more people, particularly in regional communities which have relied on these workers in the past,” Mr Leeser said.

The Federal Government has already made changes to allow working holiday makers working in critical sectors – such as health care and agriculture – to stay longer with one employer and to be eligible for a further visa to continue working in these sectors.

In February, the Government also made changes to allow backpackers to better assist with the recovery and rebuilding efforts following the bushfires that devastated many rural and regional communities.

The Committee is encouraging people to contribute to the process. Submissions to the inquiry will be accepted until July 24, 2020.

For more information about this Committee, visit its website.

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Unfair contract terms: lessons to be learned says IPA

THE corporate regulator took on the case against Bendigo and Adelaide Bank for unfair terms within small business contracts and the lessons learnt should sound warning bells to others, according to the Institute of Public Accountants (IPA).

“The IPA has been a long-time advocate for leveling the playing field when it comes to unfair contract terms for small business and we commend ASIC for taking this up with Australia’s fifth largest retail bank,” IPA group executive policy and technical, Vicki Stylianou said.

“In the case of the Bendigo and Adelaide Bank, the Federal Court found that the unfair terms in the small business loan contract had caused a major imbalance in the parties’ right and obligations under the contract, and further, the terms would cause detriment to the small businesses involved if the terms were utilised.

“ASIC pursued the case, noting that some of the unfair terms provided the bank with the ability to vary the terms and conditions of the contract without giving the small business borrower due warning, as well as the capability to exit the contract without penalty.

“This case should herald a sharp warning to other financial institutions and corporations, that the insertion of unfair contract terms is potentially breaking the law.

“It is also a telling factor that legislation around unfair contract terms is only as good as the enforcement that prevails as was this case with the bank.

“Small businesses should also be wary in entering contracts, ensuring they understand the terms and conditions and where necessary seek advice from their trusted adviser before signing,” Ms Stylianou said.

About the Institute of Public Accountants

The IPA, formed in 1923, is one of Australia’s three legally recognised professional accounting bodies.  In late 2014, the IPA acquired the Institute of Financial Accountants in the UK and formed the IPA Group, with more than 37,000 members and students in over 80 countries.  The IPA Group is the largest SME focused accountancy organisation in the world. The IPA is a member of the International Federation of Accountants, the Accounting Professional and Ethical Standards Board and the Confederation of Asian and Pacific Accountants. 

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Magnitsky inquiry to hear from Gary Kasparov

AN INQUIRY into whether Australia should adopt ‘Magnitsky-style’ laws will hear from world champion chess grandmaster and human rights commentator Gary Kasparov at a teleconference hearing this week.

The inquiry, run by the Joint Standing Committee on Foreign Affairs, Defence and Trade, Human Rights Sub-committee will be led by Sub-Committee chair Kevin Andrews MP, who said the Sub-Committee was looking forward to the opportunity to speak to Mr Kasparov.

"In addition to his career as a professional chess player, Mr Kasparov has become notable in recent years for his advocacy for democratic principles around the world, and for his criticism of elements of the Russian Government," Mr Andrews said.

"Mr Kasparov has been a strong advocate for Magnitsky-style legislation in other jurisdictions, and we are grateful that he has agreed to provide his perspective on such legislation in an Australian context."

Also appearing at the hearing will be retired Australian diplomat Tony Kevin. In contrast with Mr Kasparov, Mr Kevin opposes Magnitsky-style legislation, writing in a submission to the inquiry that in his view such laws violate "international law and commonly accepted international practice".

"While submissions to the inquiry have been overwhelmingly supportive of targeted sanctions, the committee has noted some evidence with differing views," Mr Andrews said.

"This public hearing will give the Sub-Committee the opportunity to interrogate arguments both for and against Magnitsky-style legislation in detail."

More information about this inquiry, including submissions received by the Committee to date, is available on the Committee’s website.

Public hearing details

Date: Thursday 25 June 2020
Time: 3:15pm – 4.45pm
Location: Via teleconference

The hearings will be streamed at aph.gov.au/live.

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QRC welcomes Federal Government’s $125 million exploration boost

THE Queensland Resources Council has welcomed the Federal Government’s $125 million funding extension to Geoscience Australia’s Exploring for the Future (EFTF) Program.

QRC chief executive Ian Macfarlane said the investment would lead to a clearer understanding of the geological structures in Queensland and Australia.

“This is a vote of confidence in the exploration industry from the Morrison Government and I congratulate the Federal Resources Minister Keith Pitt for backing the exploration industry which is hurting from the economic impacts from COVID-19," Mr Macfarlane said. 

“Geoscientific data plays a critical role in framing policy settings from government and this program provides an in-depth understanding of our resource assets which belong to all Queenslanders.”

QRC’s exploration focused member organisation the Queensland Exploration Council (QEC) said this program was a vital tool for the exploration industry. 

“Queensland is blessed with a rich source of minerals and the skilled people to find them. Connecting this to supportive governments will ensure the minerals discovered today are the foundations of tomorrow’s resources industry,” QEC chair Kim Wainwright said.

‘Industry has long understood the return on investment potential of geoscience data and the recent ACIL Allen analysis showed the total potential benefits flowing from the activities in the current EFTF could be between $446 million and $2.5 billion."

The EFTF program has been in operation for four years.  

Link to Geoscience Australia’s Exploring for the Future (EFTF) Program: https://www.ga.gov.au/eftf

Link to ACIL Allen analysis: https://www.acilallen.com.au/projects/program-evaluation/exploring-for-the-future-program-return-on-investment-analysis

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NSW offers help in improving COVID safety at work

THE NSW Government has launched a new suite of guidance materials to help all types of businesses manage the risk of COVID-19.

Minister for Better Regulation, Kevin Anderson said these new materials had been specifically created for non-customer facing businesses, to ensure everyone has access to industry specific, practical guidance to prevent the spread of the virus.

“About 45,000 businesses have already downloaded the NSW Government’s COVID Safety Plans, and we’ve now created additional resources for offices, construction sites, farms, and manufacturing premises,” Mr Anderson said.

“The materials being made available include practical, inexpensive guidance that will no doubt inspire some innovative strategies as they are put into play.”

For example, in an office environment, a safety plan can be tailored to variables such as numbers of staff, whether the building has lifts, shared amenities or hot desks.

“Common misconceptions for office workers are that hot-desking is banned, and that only one person can ride in a lift at a time. That’s simply not true so long as you clean your desk thoroughly before and after use, and maintain a social distance within the lift,” Mr Anderson said.

“Ultimately we want to focus on getting NSW’s economy back up and running and providing businesses with the right guidance to operate safely and successfully in the current climate.

“I encourage every business to jump online and download these simple yet powerful tools to map out a safe way back to business that puts customers and workers front and centre.”

The new campaign materials including social media tiles, downloadable posters and checklists for all NSW offices are available at www.nsw.gov.au/covid-19/industry-guidelines/office-environment-including-call-centres

 

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Tax agent gets maximum ban for multi-million dollar tax evasion

FOLLOWING a recent investigation, the Tax Practitioners Board (TPB) found that tax agent Peter Biantes had attempted to conceal over $35 million dollars of income from the Australian Taxation Office (ATO) through the creation of multiple overseas entities.

Accordingly, the TPB terminated his tax agent registration, and banned him for the maximum period of five years.

In doing so, the TPB found that Mr Biantes had:

  • deliberately tried to avoid the tax implications of the sale of a business, intentionally misled the ATO, and obstructed the proper administration of the taxation laws;
  • made false statements to the TPB in two of his annual declarations and an application for renewal of registration;
  • repeatedly failed to comply with taxation laws in the conduct of his affairs including in relation to the timeliness and accuracy of his tax returns.

Speaking about the case, chair of the TPB, Ian Klug AM said, "Through serious and repeated misconduct, Mr Biantes attempted to undermine the integrity of the taxation system. Terminating and banning an agent from applying for registration is the firmest sanction that can be imposed by the board and is never taken lightly. The severity of Mr Biantes’ conduct requires the maximum ban to be imposed."

"The TPB is committed to targeting practitioners who undertake, or facilitate, black economy behaviour and tax evasion through schemes such as offshoring and failing to declare proceeds and profits. Where we discover this behaviour, we will act swiftly and take strong action."

About the Tax Practitioners Board

The Tax Practitioners Board regulates tax practitioners in order to protect consumers. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct. TPB is on Twitter @TPB_gov_au, Facebook and LinkedIn

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New IEA report highlights Australia’s untapped energy efficiency potential

A NEW International Energy Agency (IEA) report highlights the massive potential of energy efficiency to create jobs, cut bills and address climate change, but Australia can do much more to seize this opportunity, according to the Energy Efficiency Council.

The 10 recommendations, published by national leaders, ministers, top business executives and prominent energy experts that make up the Global Commission for Urgent Action on Energy Efficiency, show how energy efficiency can play a central role in fixing the social and economic damage of the COVID-19 crisis.

“A major drive to improve the energy efficiency of homes and businesses could create 120,000 job years of employment in Australia, while reducing cost-of-living pressures for businesses and households,” Energy Efficiency Council CEO Luke Menzel said.

“Action on energy efficiency would immediately help those most affected by the economic impacts of COVID-19, including financially stressed households and businesses, and workers seeking new opportunities. 

“However, in 2018 Australia was ranked the world’s worst performing developed country on energy efficiency. We must do better and seize this moment so that we can create thousands of jobs, lower energy bills, and slash emissions," Mr Menzel said.

Over the last month, multiple joint statements – including organisations as diverse as the Australian Council of Social Service, the Property Council of Australia, Australian Industry Group, the Business Council of Australia and Australian Council of Trade Unions – have called for state and Federal Governments to put energy efficiency at the heart of stimulus measures. 

“There is near-universal support for energy efficiency as a key stimulus measure because projects can roll out rapidly, deliver a long term productivity dividend, slash emissions and are highly job intensive,” Mr Menzel said. 

“The Global Commission has called on governments around the world to show leadership, upgrading their own schools, hospitals and other public to save taxpayers money and create jobs straight away.

“Global experts have given us a plan. Now we need state and federal governments to invest at a speed and scale that matches the magnitude of the economic challenge ahead of us,” Mr Menzel said.

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COVID-19, the health sector and Australia's international relations

THE health system will be the focus of the first public hearing of the inquiry on the impact of COVID-19 on Australia’s Foreign Affairs, Defence and Trade. 

Witnesses from pharmaceutical company IDT, and peak body the Australian Healthcare and Hospitals Association, will give evidence on the impacts on the healthcare sector of the pandemic.

Senator David Fawcett, Chair of the JSCFADT, emphasised the importance of the healthcare system to Australia’s national resilience. 

"Australia’s health system is both domestically critical and sensitive to disruption in international supply chains," Senator Fawcett said. 

"Hearing more about the impact of the pandemic is a logical first step in this inquiry, which aims to develop ongoing effective national framework to ensure the resilience required to underpin Australia’s economic and strategic objectives."

Full terms of reference for the inquiry are on the Committee website. Submissions can be made until June 30, 2020.

Public hearing details:

Date: Thursday, 25 June 2020
Time: 3.30pm – 4.30pm AEST 
Location: By teleconference

The hearings will be audio streamed live at aph.gov.au/live.

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AIIA welcomes Victorian Minister to focus on digital economy and job creation

AUSTRALIA'S peak industry representative body for innovation technology, the Australian Information Industry Association (AIIA) had supported the Victorian Government’s decision to appoint a Minister for Innovation, Medical Research and Digital Economy.

The critical role was given to Jaala Pulford, who will also focus on creating jobs and oversee Working for Victoria as Minister for Employment.

AIIA requested appointing a Minister for Digital Capability in addition to a wider set of recommendations recently put to the Australian Government as part of the AIIA White Paper titled ​Building Australia’s Digital Future in a Post-COVID World​.

AIIA CEO, Ron Gauci said, “We welcome the Victorian Government’s approach to appointing a Minister for the Digital Economy and we look forward to working together on rebuilding Victoria post-COVID.

“We thank the role that Martin Pakula played as Minister of Technology and see this new appointment as allowing for greater focus on digital transformation.

“Our future economic prosperity centres on Australia emerging in a way that responds to the opportunities, and addresses the weaknesses that have prevailed throughout this difficult period. Our economy and workforce needs to transition towards increased sovereign capabilities, seeking resilience in global and local supply chains while digitising our economy,” Mr Gauci said.

The appointment of the Minister for Innovation, Medical Research and Digital Economy comes as three new members of Cabinet were also sworn in today, with Natalie Hutchins, Shaun Leane and Danny Pearson joining the Andrews Labor Government Ministry.

The AIIA is a not-for-profit organisation aimed at fuelling Australia’s future social and economic prosperity through technology innovation.

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