Apart from helping to subjugate Japan during the Second World War and stop Khrushchev deploying Nukes to Cuba, the US Navy’s main contribution to modern civilisation is KISS – Keep It Simple, Stupid – a principle the Navy used as a design goal to avoid unnecessary complexity. It was also widely used as a slogan in the computer industry throughout the eighties and nineties. “The Office” made it a meme – but it is an adage worth resurrecting.
Albert Einstein said it even better:
“Genius is making complex ideas simple, not making simple ideas complex.”
Suffice to say, there are not many geniuses apparent among our politicians, nor among those who provide them with advice. Quite the contrary, in the hallowed halls of Parliament House complicating and obfuscating are primary virtues. Too often, simple solutions run contrary to political objectives driven by party strategy, not by logic.
It doesn’t take an Einstein to figure out how to fix this vexing issue that has given the LNP a free ride to attack Labor’s proposed changes.
The original problem was double taxation. But instead of a simple fix, the Keating Treasury devised a convoluted system of credits, benefiting nobody but accountants. Costello “fixed” one of the problems the original solution had created – double taxation would still apply if there was no tax liability to offset. So in their wisdom they added a tax refund for those receiving such an – in effect- unearned benefit.
Long kept in the too hard basket, Labor is now proposing to revert the system to its original (flawed) state, but not completely as it won’t apply to pensioners, only to self-funded retirees.
The simple solution is to revert to the fundamental principle of imposing tax on the recipient of a benefit, i.e. treat dividends as an expense (which it is) at source and tax the recipient at his or her marginal tax rate.
Fairness of Taxation
The tax system is probably the best example of where simplification is desperately needed. And achievable if the will is there.
The never-ending debate about multi-nationals in particular and big corporates in general not paying their fair share of tax won’t stop until the real issue is addressed.
Just like we all do when doing our tax returns we minimise our income (if possible) and maximise the deductions. Companies do the same, engaging the best tax consultants they can afford to make the most of a convoluted system.
Dividend imputations, depreciation, amortisations, cost capitalisations, offsets and deferrals are just a few of the many areas of complication – augmented by different State rules, industry specific allowances and endless exceptions created by changes made to amendments made to intricacies with unintended consequences.
The tax system is a mess of Babylonian proportions and the only way to a fairer tax system is simplification and reverting to first principles.
Complexity invariably benefits those with control. Hence, the political arena is steeped in unnecessary rules designed to confuse – and I am not just talking about Senate voting preferences. But as with the taxation system, if the will is there, simplifications are possible to benefit the public good at the expense of the vested interest (and aye, there’s the rub).
Mathias Cormann may declare his innocence all day long. Maybe he didn’t know his flight tickets were paid for by a party donor and beneficiary to his department’s decisions. It should not matter. It is his duty to know.
But more importantly, it should be his duty not to receive it. Nor should his party, nor should anyone else associated with him.
Donor registers, convoluted and delayed reporting, different rules for different States, expensive audits, Senate hearings and the obligatory denials are all inevitable symptoms of regulations that fail to do the job.
Just ban donations. Small or large, in kind, in lieu of, in good spirits, in cash or by cheque, just ban it all. If elected by the people to represent them that is your privilege and responsibility and their interest is what matters.
Political Parties and their associated entities are not charities, and if not a charity neither business nor individuals should be allowed to make donations.
And if found to contravene those rules, as the recipient, you gotta go, and as the donor, you must pay a fine twice the amount you donated.
Conflicts of interest
If Peter Dutton is found to have an association with Paladin of any kind, directly or indirectly, he should go. Any such interest should be declared without delay, it should be on public record and if not, it is not at anyone’s discretion – including the Prime Minister’s – as to what happens. He has broken the rules and he should go.
Not declaring a conflict of interest is not an administrative error, it is a dereliction of duty.
Just like conflicts of interest, all lobbying activity should be declared and a matter of public record. As my father used to say, if you can’t say it to their face, then don’t say it.
There is nothing wrong with lobbying per se. Business, special interest groups, individuals, localities or communities impacted by legislation all have a right to influence their elected representatives – to advocate for their views.
But make it transparent. No meeting held or conversations had without it being on record and minutes to be mandatory and published within days. If not, you are automatically assumed to be hiding something.
Imagine how that would keep people on both sides of any argument honest and respectful!
Simplicity Rules – Keep it Simple, Stupid
I do realise that there are some valid exceptions to some of these examples, but to keep it open and keep it simple should be the first rule of rules. For too long we have allowed the cloak and dagger, the skulduggery, the fear and the obfuscation to dominate the public discourse (and taxation). If we want an open, more inclusive society built on trust, empathy and respect – and I do – it must start at the top.