Denmark has just announced that here will be no state aid to those companies registered in tax havens during this pandemic.

Should Australia follow suit?

Yep, definitely.

Something we can agree on SR.

I understand that Malcolm Turnbull has his business interests registered off shore so it would be interesting to see if Scott Morrison will give aid to him.

SR,

Yes, indeed: no paper company or shelf company should be given any benefit whatsoever - if anything, only companies and businesses which actually employ people in Australia and would otherwise put them off or go out of business.

Good thinking !

Joe

Has Australia been giving aid to tax dodgers, or has Australia indicated that aid would be given to tax dodgers? Unless the answer is yes, who gives a toss?

ttbn, isn't it better to start caring before any announcements are made?

Hi Ttbn,

In a word:

Google.

Hi Steele,

If Australia followed suit what harm/benefit would
this cause or give us?

Denmark we're told is among the first countries in
Europe to slowly end its lockdown. Apparently schools
re-opened on Wednesday for the youngest students and
small businesses will be able to open for customers
again shortly.

Dear loudmouth2,

Virgin Airlines is a case in point. They did not pay a drop of tax on the 62 billion dollars of revenue they pulled over the last four years.

Their corporate affairs arrangements means all the profits are shifted overseas to tax havens. Richard Branson lives in the British Virgin Islands which is unsurprisingly a tax haven.

It is one thing to support companies who have paid taxes for years to support the Australian system. They are legitimate recipients of support during the current downturn.

But when these foreign owned, tax dodging, multinationals hold out their hand for corporate welfare after contributing zilch then the stance the Denmark government has taken really should be just and justifiable.

Dear Foxy,

Yes Denmark along with the other Scandinavian countries with the exception of Sweden has done pretty well in containing the disease. The fact that Denmark borders German who are also doing well and not Sweden gives them a fighting chance of course.

I certainly don't think they are out of the woods yet by any means. I do applaud their stance on corporate welfare for overseas companies though. It would be great for Australia to look to do something similar.

Dear Steele,

I agree - I don't think that Denmark is out of the
woods yet regarding the coronavirus. And I also
have to admire their stance on corporate welfare
for overseas companies.

I wonder how many overseas companies here in Australia
pay no or very little tax and why doesn't the ATO
do something about it?

Joe,

Google yourself. The person who started the thread should be telling us whether or not our government gives money to tax cheats. There's no point asking if we should stop doing something, or refuse to do something a la Denmark if we are not doing it in the first place. I suppose I shouldn't expect so much from capitalist- hating lefties who are used to thinking that they should be cheered everytime they say, industry, capitalism, tax, right wing and other trigger words.

stop all renewable subsidies that is fraudulently ripping people off and no money for incompetents like Rugby Australia or any other sport. Also stop all arts funding as well as the abc. Let people choose to pay if they want this stuff.

runner,

A majority of Australians believe a strong
independent ABC is critical to a healthy
democracy and oppose a cut to ABC funding.

The Australian Institute found 70% of people
wanted a strong ABC. Their poll was released
after the Coalition slashed the ABC's budget
by $84m.

Australians think that a strong independent
national broadcaster is critical to a healthy
democracy.

Cutting funding to the ABC is the opposite of what
we should be doing in an age of "fake news" and
when the business model for journalism has been
seriously disrupted.

Media ownership in this country is notoriously narrow.
Mainstream media offers precious little diversity and
such diversity as there is runs along predictable lines.

Those of us who are torn between the desert of
mainstream media and the jungle of the internet need a
place where rational but diverse views can be found on
matters of enduring importance. The ABC is such a place.

Of course it would be difficult to agree with every view
expressed on the ABC but it would be difficult to disagree
with them all. And it would be impossible to criticise any
of them as irrational or foolish.

Steele,
AIUI Virgin Australia didn't pay a drop of tax on their revenue because their costs exceed it; they made a loss. Not just a paper loss, but an actual loss. As Richard Branson is very much a minority shareholder in it, his tax affairs are of little relevance. Profit shifting is easy with wholly owned subsidiaries, but much harder when others own most of them.

If you have any evidence I've misunderstood the situation, I'd like to see it.

Dear Aiden,

Virgin Airlines operates on one of the most profitable air routes in the world namely Sydney to Melbourne.

Yet somehow it has paid not a jot of tax over the last four years and still had over 2.5 billion dollars in accumulated losses to put against future profits for another 10 years.

In fact it hasn't turned a 'profit for 7 years straight.

So why do other companies like Eithad, which bought up a 20% share last year, invest in a loss making venture like this? How do you think they are making money? It gets moved around somehow.

Ultimately though the question is whether such a loss making, overseas owned, enterprise deserved 1.4 billion dollars of taxpayers money to bail it out. In my opinion no it bloody well didn't and I am glad the government withheld this largess and allowed it to go into administration.

Steele,
The Sydney-Melbourne air route is one of the world's busiest, but that doesn't automatically make it more profitable. There's fierce competition between Virgin and Qantas, as both airlines have tried to increase their market share at each other's expense. Virgin initially took the view that gaining and holding a high market share was the key to future profitability. For a while their owners were happy to go along with that, accepting losses in anticipation of future profits. When the losses continued, it was recognised that this was a bad strategy, and the CEO resigned.

These are real losses, not just paper losses. Etihad has had an expansion strategy involving buying stakes in other airlines. It still has a large stake in Air Serbia, which is also lossmaking. They still hope to make money from it - though this may have ceased to be a realistic objective after the coronavirus hit.

SR,

Given that you were such a stalwart supporter of the financial black hole that was the car industry, why are you so eager that Virgin goes to wall putting 1000s of Australians out of work and creating a monopoly in Qantas that will result in higher transport costs.

I assume that due to Qantas not paying taxes, that they should be allowed to fail too?

The less aeroplanes the better. And the less homosexual CEO's the better. And more football teams run by footballers for the fans the better.

Dan

Here! Here! Dan

Personally I can see no reason why the taxes of tens of thousands of low paid workers should be used to protect the jobs of a few thousand high paid workers. Virgin has no more claim to tax payer support than did the car industry with it's grossly over paid work force, & should sink or swim on it's own.

Was it not announced yesterday that Virgin was going into receivership, making all the speculation redundant?

Dear Shadow Minister,

Qantas is the national flag carrier and an Australian company. Virgin is a subsidiary of a global brand.

The car manufacturers directly employed 60,000 and indirectly 460,000 Australians.

Virgin employs 10,000. Yet wanted a bailout package the equivalent of $140,000 per worker. Once that money was spent then we would have been locked in to further supporting the company and throwing good money after bad.

The Australian car industry was directly impacted by the mining boom putting the dollar at $1.10 to the USD and thus becoming noncompetitive for a period. Virgin was looking to be a loss making enterprise for 17 years.

Hi Folks,

I found this on the web Apr. 17 2020 - Qantas,
Virgin - restart flights with $165m Government
subsidy:

http://www.executivetraveller.com/news/government-subsidise-qantas-virgin-flights

Bailing out Virgin is no problem at all. Nationalise it, with no compensation, problem solved!

Nah ttbn, Virgin is not in receivership, its in voluntary administration a different thing altogether,

Steele,
It wasn't the mining boom that pushed the Australian dollar that high; it was the RBA setting interest rates unnecessarily high.

_______________________________________________________________________________

Paul1405,
Australia has the rue of law. Nationalization requires compensation!

To steelerudex,

Qantas is the national flag carrier? What a load of bloody rubbish old cock.

The Irish gnome moved all servicing offshore and god knows what else, you really have no idea, lol.

Cheers

Ross

The 90% foreign owned Virgin airline was already $5 billion in debt well before travel restrictions were imposed. Nevertheless, they have always been better to fly with than Qantas and I hope they survive for the sake of Australian staff. No taxpayer support, though.

SR,

"As of 2013, around 45 000 people were employed in automotive and parts manufacturing, with around 11 350 employed directly by the three car manufacturers, Holden, Ford and Toyota (Productivity Commission 2014)."

And all these companies were foreign owned. Virgin with 10 000 employees and 6000 in support roles is a direct analogue with the car industry.

I don't support bailing out the car industry, Virgin or Qantas. However, I don't want to see Australia left with a monopoly airline that is free to gouge local customers. I see a take over by a white knight of the assets as the best option for virgin.

Anyone remember Ansett? We all knew its Australian owner by sight. It went with barely a whimper, and Qantas ruled. What makes us think that a country of 25 million can support more than one airline, anymore than it could support car manufacturing.

ttbn,
Car manufacturing was originally a high value activity, but gradually became a low value activity.
Provision of transport services is generally still high value; for the vast majority of Virgin Australia's routes, there's no competition from low wage countries.

I can't remember who it was, but when I was at TAFE in the early '90s, I heard about an expert who thought the USA domestic market could support seven airlines. When asked about how many Australia could support, his answer (calculated by the same formula) was one! But competition required there be two. Though regulation can theoretically remove the need for competition, it's hard to see how that could work in practice.

Since then, the size of our population has grown by a third, and propensity to fly has also risen. But the importance of market size doesn't seem to be so high anyway. NZ has a much smaller population, yet still has a competitive market for air travel.

Hey ttbn,
"It went with barely a whimper, and Qantas ruled."

There was a whimper alright, from the Ansett employees that lost all their entitlements.
One of my close relatives was a long serving employee.

AC,

I know. But the majority doesn't care about the loss of relatively few jobs as long as theirs is OK.

I don't fly very often any more. When I used to go overseas, my travel agent was always keen to save money on flights and book better accommodation. The 'cheap' flights were never Qantas. They were Singapore or Malaysia, with very good service. The odd time I flew domestically with Qantas I found the cabin crews to be barely civil and grudging with service. Mind you, I wouldn't get on a Malaysian Airlines plane now, given their recent history.

The Unions killed off Ansett, Virgin is being let down by its shareholders !

individual, what makes you think the unions killed off Ansett?
Ansett's big problem with unions occurred, and was sorted, more than a decade before the collapse.

Aidan,
It's not that I think unions killed-off Ansett. I was told by several mates who were Ansett Pilots !
Too many benefits for those higher up on the ladder !

Should Australia follow suit?
SteeleRedux,
Most definitely ! I just wonder what excuses Private Super funds will invent to get out of paying out ?