The ASP Tax Policy is - to replace or eliminate all current taxes (e.g. personal income taxation, company tax, GST, levies, charges, licenses, rates, stamp duty and Government fees) – except for:

• Customs and Excise Duties
  
  Duties on imported goods should be raised with the objective of halting and eventually reversing the flow of jobs out of Australia to countries that essentially use slave labour. Outsourcing and globalisation only serve trans-national corporations that have no loyalty to any country. "Free trade" is not "fair trade".
  
  
• Debit Tax
  
  The concept of a Debit Tax (i.e. a small tax on all financial transactions of 0.7%) is well researched and documented. Variations of this tax have names such as the Tobin tax, the Wall Street sales tax, the securities transfer tax, and even the “Robin Hood” tax.

Please refer to our Resources -Debit Tax page for an explanation of how the Debit Tax actually works, and the effect thereof on individuals.

ASP Federal Budget

The ASP has taken the current Federal Government Budget (i.e. 2009-10), and adjusted it to reflect what it would look like under the ASP stewardship. The following web sites have been referenced in order to generate the numbers further below:

• The Australian Government Budget for 2009-10.
• The Department of Foreign Affairs and Trade.
• The RBA - About the Payments System - for the 2009 cash flow numbers.

What is important to note is the following:

• The Debit Tax rate that balances the budget is very close to 0.7%
• This rate is the HIGHEST rate that the Debit Tax will EVER BE due to:
  • The government paying for infrastructure using Section 51 of the Constitution.
  • The ASP Monetary Policy which will eliminate the national debt and generate higher GDP.

The 2 numbers in the ASP Federal Budget that are indicated as sourced from the Reserve Bank of Australia are provided below. However, more up to date figures can be obtained from their library of Statistical Tables:

"In 2009, withdrawals from ATMs averaged $12.6 billion a month, which equates to around $575 per person."

"On average, non-cash payments worth around $220 billion are made each business day, equivalent to about 20 per cent of GDP."

Application to companies

The Debit Tax is very simple and very easy to apply. The ASP believes that if this tax is good enough for the people of Australia, then it should be equally good enough for the companies that operate in Australia. There will be numerous benefits that flow to companies from the application of the Debit Tax: These are:

• A reduction of administrative overheads for "tax bookkeeping".
• No need to evaluate capital projects on a "before tax" and "after tax" basis to determine feasibility.
• No need to assess the risk of changing tax regulations on the business.

Having spoken to numerous small companies (e.g. employing 20 people), the feedback has been overwhelmingly positive with statements such as "I will then be able to employ 2 more people". We believe that the Debit Tax will result in higher employment across all sectors of industry.

Multiple Benefits

Some of the most obvious tax benefits that flow from the ASP Tax Policy are:

• Significantly lower tax for individuals. Their tax rate falls to an effective flat rate of 0.7%. See the details under Resources - Debit Tax
• A reduced tax payment when purchasing property (versus Stamp Duty) for a lot of people. See our analysis under Resources - Stamp Duty
• No need for companies to waste time and effort in doing GST paperwork.
• No need for companies to deduct withholding tax from individuals.

Furthermore - the implementation of the ASP Monetary Policy will have a major positive effect on the tax position of the Federal Government. Each and every year (as the population increases), the government will create new money and spend it into circulation so as to keep the per capita money supply constant. This figure has been calculated at approximately $22 billion per year, and the detailed calculations are given in Section 51 - Money Supply.

The implication is that as the government maintains a stable monetary system - it will have an additional $22 billion on hand each year with which to:

• Reduce taxes, or
• Reduce its debt, or
• Pay for new infrastructure.

This ASP Tax Policy (i.e. one based on a Debit Tax) meets all of the criteria as set out at the National Tax Reform Summit held in Canberra during 1996:

• The tax system must be simple.
• It must have a low compliance cost.
• It must be transparent (no hidden taxes).
• It must not be avoidable, especially by the rich.
• It must be adequate (raise sufficient revenue).
• It must be socially equitable.
• It must be efficient.

Tax Background

The ASP is well aware of the following shortcoming of our current tax system:

• Our income tax act is over 5,700 pages long and overly complex – and this favours people and companies with deep pockets who employ tax experts.
• High income earners use numerous tax loopholes to avoid paying their share. For example, Kerry Packer once paid $29 tax for the year.
• GST is a regressive tax, i.e. it takes a progressively larger portion of a person’s income as their income falls.
• GST is an accounting nightmare for small businesses.
• “Bracket creep” forces tax payers into paying more tax, while their standard of living stays the same.

Taxation does not make a nation prosperous. It merely re-distributes the wealth from one group to another. In fact there are numerous examples where sovereign nations had little or no tax – and prospered immensely. Let us look at 2 examples:

• Around 1910 Australia was a beacon of prosperity in the world. We had no foreign debt, had a large middle class, inflation was next to zero – while the largest tax revenues came from customs and excise duties on imported goods. It was only in 1915 that the Commonwealth government introduced an act for income tax to be collected.
  
  
• Around 1820 (after the Napoleonic wars) Guernsey (an island in the English Channel) was in dire straits, both physically and financially. The people wanted to build some sea walls, roads and a marketplace for their goods. There were manpower and building materials aplenty – but limited money. Having been made aware of the problem, the governor of this sovereign state responded with “Could not your parliament issue money?” Acting on these wise words, the government created the money and paid for these public works. The consequence was that the infrastructure was built; a national currency was introduced – all without any additional taxes or debt.

The ASP Monetary Policy and the ASP Tax Policy are closely intertwined. Implementing our monetary policy will drastically reduce our national debt (which will be eliminated in time), reduce interest rates and stabilise price inflation at a low level. The net result will be that the national budget will be easily balanced, and the need for taxation greatly reduced.

Alexander Fraser Tyler, Cycle Of Democracy (1770)

A democracy ... can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over lousy fiscal policy, always followed by a dictatorship.

Existing Taxes

Below is an abbreviated list of the 125 different taxes exist within Australia - and now Julia and the Greens want a new Carbon Tax.

Tax Resources

Below are some web sites that provide basic information around the Debit tax:

• National Debit Tax concept
• The Australian Tax Reform Group Inc
• Australian Tax Overview