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[澳洲税务] 重要信息:海外收入和资产申明

在2014年3月27日,澳洲税务局宣布,纳税人需要主动向税务局申明未申报的海外收入和资产。该项行动被税务局冠名为”Project Do It”。
一、 申明内容

主动申明需要包括纳税人过去未申报的海外收入或者错误申报的海外收入,主要有以下几点:
1. 海外收入或者和海外机构的交易;
2. 不正确的海外收入减免申报;
3. 海外资产或者转移到澳洲的海外资产的资产增值税;
4. 从海外企业得到的应纳税的收入。

二、申明表(Disclosure Statement-2014)

在税务局网站上可以下载申明表(Disclosure Statement-2014)。在申明表中,纳税人需要填入以下信息:
1. 纳税人的姓名(或公司名),生日,联系方式;
2. 纳税人的税号(如果是公司,需要提供ABN);
3. 纳税人于何时成为澳洲税务居民;
4. 遗漏的应纳税收入(包括遗漏的收入,资金收入,过多申报的减免税和纳税抵扣,及其他相关项目);
5. 和纳税人相关的海外组织,企业和资产。

三、注意事项

此份申明表中的内容要确保真实准确。同时,申明表必须在2014年12月19日前递交。对于按时提交申明表的纳税人,政府可以考虑减免严重的罚款和不采取刑事追究。

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浅谈188移民和457移民以及海外投资人在澳投资

188投资移民

随着163投资移民越来越吃香,澳洲政府渐渐意识到澳洲永居身份的价值被低估了。于是163投资移民开始被一个新的投资移民项目取代了。188投资移民,不知道是否为了迎合中国投资者的心理而选择这样一个数字代码。澳洲政府推出的新的188投资移民的最大改变就是投资额度的大幅度提升。同时它又被细分为188A,188B和188C三大类,以满足不同的投资者的需要。最为人津津乐道的就是188C的重大投资者500万澳元移民计划。投资人只要投资500万澳元购买指定的政府债券、基金或非上市公司,投资期达到4年就可以申请移民。这个签证不要求雅思成绩,不用会说英语、不要求申请人的学历、不需要经商背景、不需要去澳大利亚经商做生意、不需要打分、不追查资金来源等等的优惠措施,几乎等同只要有钱就可以移民。这些足以证明澳洲政府把移民的入场卷的代价提高很多。

457雇主担保移民

跟163转892中申请人自己来经营生意不同的是,457雇主担保类移民是指申请人是以雇员的身份为一个在澳洲已经成熟的生意打工而被雇主担保,然后在满足一定条件后申请永居的移民类型。在这类签证的申请和发生过程中,雇主和雇员的相互沟通和明确责任是非常重要的。

作为雇主担保了457签证持有人之后,需要注意以下事项:

  1. 要按照签证提名时的工资标准为457签证持有人发放工资。比如提名的工资年薪是52000澳元,那么每周是1000澳元,但是需要注意的是,每周1000澳元是税前工资,需要扣除$178元预扣税后,实际支付$822元税后工资;
  2. 在每个季度结束后的28天内按时为担保人交纳养老金(税前工资的的9.25%)以及相关的员工工伤保险;
  3. 为本地员工提供培训的机会,并满足移民局规定的每年人员培训花费标准。
  4. 如果和457持有人解除工作关系,必须在10个工作日内书面通知移民局

同时在持有457工作签证期间,申请人和雇主都应该注意的几点事项:

  1. 工资每周或者每两周发放一次,最多不要超过1个月一次。发放最好是通过银行转账或者支票形式。
  2. 每个财政年结束后,457申请人要向雇主索要年度工资报税单(PAYG Summary Statement),为将来递交PR申请做好材料准备
  3. 养老金和工伤保险要及时交纳(一般情况,每季度交纳一次)这也是未来移民调查和PR申请核查的重要内容
  4. 很多情况,70%的雇主在工作签证批准的12个月内会收到移民局就的跟踪调查表格,这个表格一定要认真对待,需要按照表格要求按时提供要求的工资发放 和人员培训资料。雇主或者457申请人在担保和工作期间,如果有违规情况,轻则移民局会警告并持续3年跟踪调查,重则取消雇主担保资格或申请人457工作 签证,2年后的移民就根本不可能了。所以申请人要特别注意。

总而言之,无论是自己当老板来经营生意,通过163转892签证来达到移民澳洲的目的还是通过457雇主担保来获取澳洲身份,详细了解签证的要求,认真负责的向目标去努力才是最重要的。同时在申请过程中保持一个良好的心态也尤为重要,过于紧张,犹豫不定,道听途说会严重影响判断力,给移民带来不确定因素。

海外投资人在澳投资

在国内房市过高,起伏不定,政策不明的情况下,越来越多的中国国内投资人开始选择一些有潜力的海外市场来保证自己的财产继续良性增值。所以澳洲就成为了很多投资者眼中的黄金屋,特别是悉尼,墨尔本这些人口相对比较多的城市。

一般情况下,海外投资者只可以在澳洲购买新房或者楼花,是不可以购买二手房的。但是如果购买一个二手房在一年内拆除后重新开发建造新房的情况是被允许的。

在新房实际交割后,海外投资人一般会委托中介出租和管理房屋,用租金收入弥补贷款部分的银行利息和其他房屋产生的相关费用,比如物业管理费,修理费,中介手续费等等。在这样的情况下,海外投资人是需要申请一个澳洲特殊税号,用于每一年申报投资房的收入和费用的相关信息的,以便确认自己在澳洲是否因为有盈余的租金收入需要缴纳相应的所得税税款。

另外,当海外投资人在澳洲有开设银行帐号并存入一定的金额而产生利息的话,如果开设帐号是的时候说明是海外人士的话,银行系统会自动扣去10%作为澳洲政府需要收取的海外人士因利息收入所需要缴纳的利息所得税。这种情况下海外人士不需要做任何税务操作. 而有另外一种情况是在没有说明自己是海外人士,被银行默认为是澳洲税务居民而又因为没有提供税号导致被预留利息收入的47%作为预扣税。这种情况下,海外人士可以通过注册一个澳洲特殊税号,然后在每个财政年结束后递交相关的报税表格来申请退回预缴过多的37%的利息收入(等于47%预先实际扣除减去10%实际应付税金。

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163转892投资移民客户须知的会计税务信息

在澳洲经营一个生意最通常的主体就是有限责任公司(Pty Ltd),此类公司一般情况下面临最常见的税种就是商品服务消费税(GST)和公司利润所得税(Income Tax)。

消费税的税率是10%,它是半成品、商品或者服务在流通过程中产生的增值部分而产生的附加税,这个税种跟中国国内的增值税非常相似,有着同样的核心理论基础,只是在细节方面和税率基准方面有所不同,这里就不深入讨论了。

另外一种常见的税种就是利润所得税。目前为止,有限责任公司的利润所得税是30%。公司需要为每一年的税前利润缴纳30%作为当年的所得税,剩余部分则是税后利润留存在公司账面上,可以在下一年用于股东的分红使用。

除了以上两种税务,公司还可能面临福利税,工资预扣税以及预缴所得税等税种。由于这些税种是因为一些特殊情况而产生的,不适用于所有生意,这里就不一一介绍了。

在大概了解了澳洲的公司在经营生意过程中可能碰到的税种之后,我们来着重探讨一下比较热门的163投资移民需要有关注意事项和涉及会计税务的问题

移民澳洲的途径有很多种,163转892投资移民无疑是一个大热门选择。

首先申请人持163签证必须在澳洲注册一个有限责任公司,然后以公司名义购买并经营一个符合要求的生意两年以上就可以申请转892永居签证。需要满足的要求有:

生意投资净资产超过7.5万澳元

个人在澳洲总资产超过25万澳元

年度年营业额在20万澳元以上

就生意和个人在澳投资额来说,基本上都是非常容易达到的。其次,20万一年的营业额对于澳洲这个高物价水平的城市来说,很多生意都能够达到此要求。申请人从开始登陆澳洲,物色生意,经营生意到递交报表最后拿下身份,大概要花费三年多的时间。虽然时间的跨度长,但是由于难度系数低,而被国人热捧。

在163投资移民的过程中,因为需要经营一个生意超过两年,那就不可避免的会涉及到各种会计和税务的问题。最常见的就是每个季度申报一次的消费税申报和每个澳洲的财政年度(第一年的7月到第二年的6月)的所得税申报。

在前文提到的年度生意的营业额必须超过20万澳元,那么除了做出口类生意和其他非常少数的不涉及消费税的生意之外,大部分的生意都要面临10%的消费税的缴纳,换而言之就是一年最少2万元的应付消费税。当然,在营运生意的日常开销和采购中也会同样已经或多或少的支付了一部分消费税可以用来抵扣需要缴纳的消费税。当然,由于消费税是附加在实际的销售和费用之上的附加税,所以不会影响到公司的实际利润。公司需要做的就是在每个季度结束后,需要按照季度消费税申报要求跟税务局清算需要缴纳多少消费税。

同时,一个163投资移民的生意必须呈现一个上升并且盈利的状态,也就是说需要申请人非常用心的去经营这个生意以达到要求。另外盈利就意味着公司利润所得税的发生。这个税务在每个财政年结束后,通过一整年的数据计算和税务调整先得出税前利润,然后按照30%计提公司当年的所得税。

在处理了很多163移民类报表后,我们总结了一些此类移民报表从生意开始到递交报表时的重要“失分点”。

1. 营业额度达标

我们之前提到的20万的年营业额标准指的是去除GST部分之后的营业额,也就是说,对于一般的零售和餐饮类的生意而言,实际的销售额是要达到22万以上一年,这样在去除GST之后,才能达到20万的标准。这个也是刚开始来澳做生意的申请人很容易落入的一个误区。

2. 投资额度达标

163移民的投资额度是生意净资产保持在7万5以上,个人在澳洲的资产总额超过25万。一般买下一个生意需要花费的投资都会超过7.5万元,然后保持后期不要随意从公司银行帐号抽钱出来就基本上没有什么问题。如果是做进出口贸易生意的话,一般会在公司名下买一辆车或者在公司的银行帐号下保留大量的现金流以确保达到投资额度的要求标准。

3. 工资类费用严格按照法律规定发放和计算

如果涉及到雇佣员工或者通过发放法人工资来消化部分利润,那么工资预扣税(PAYG Withholding),养老金(Superannuation)和员工工作意外伤害保险(Worksafe Insurance)都是需要注意的。工资,养老金和相关保险的按时发放和正确支付也是移民官审核的重点。所以按照税法规定的税表来预扣部分工资作为预扣税,按时计算和上缴员工的工资产生的养老金,以及给员工购买相应的工作意外伤害保险,这些都是从生意一开始就必须注意到的方方面面。如果从一开始就忽略了这些细节,等到两年后制作报表的时候才意识到就为时已晚了。

4. 各类报表的按时缴纳

每个固定季度的消费税申报,每个财政年度的所得税申报都是必须在税法规定的截至日期之前申报给税务局。一般情况下,生意每个季度的报税截至日期是在季度结束后的28天内,另外加上委托在税局登记注册的会计或者税务代理来申报的话可以再延期28天,也就是说有将近两个月的申报时间,所以基本上没有任何理由迟报。因此按时报税也是很多移民官的重点检查之一,千万不要其他要求都达标了,唯独因为延迟报税的问题而导致功亏一篑。

5. 账目记录和保存要求

税局要求在记录交易时,不可缺少的内容有交易发生日期,收款或者付款日期,供应商,客户名称,金额,含有消费税金额,收入种类,费用种类,发票号,支付方式的信息。而录入相关信息的原始凭证,比如发票,银行转账记录,收银机小票的存根等等,必须保存5年以应对税局随时发起的抽查审计。

在坚持了整整两年,随之递交了转892的特殊财务报表和相关申请材料后,申请人可能会放松要求,认为大局已定,可以高枕无忧。但是请谨记递交892移民材料不是最后一步,当移民官真正开始审核892申请的时候才是真正的最后一步。由于163转892递交的申请很多,移民官开始审阅材料的时候可能已经是半年之后了,所以申请人可能会被要求提供当时提交申请到现在发生的消费税申报信息甚至新的一个年度的报税信息。如果因为递交完报表就松懈了,导致生意的表现下滑严重,很有可能在这最后一关惨败滑铁卢。

如果移民官对之前提交的材料有疑问,可能会要求申请人补充材料,甚至需要准备一个电话面试。移民官会从生意的方方面面对申请人进行电话考核,以确保申请人的确亲自参与了生意的管理,并且有在用心经营生意。

本文由墨尔本诚信会计事务所原创
版权所有,盗版必究;未经允许,不得转载! 谢谢合作!

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您的投资房税务申报做对了吗?

根据我们会计事务所多年从事个人报税的经验,因为涉及金额比较大,而且费用种类繁多,投资房税务抵扣一直是税务局在审查个人税务申报中比较关注的方面。特别在2014财政年度的个人税务申报中,税务局在投资房申报抵扣税方面投入了更多的关注和审查力度。作为专业税务代理,我们为您讲解以下几点在投资房报税时常见的、税务局重点关注的问题,可以帮助纳税人正确申报投资房税务情况,降低被税务局审计的风险:

一、 贷款利息的抵扣

在申报因投资房贷款产生的利息用来税务抵扣时,首先必须明确其贷款目的,也就是产生利息的贷款是为了购买或装修投资房产生的,而不是其他目的。贷款利息能否全额抵扣,还需要具体问题具体分析。大部分情况下,一个贷款就只针对一个投资房,而且贷款结构一直是稳定没有变化的。但是还是有部分投资房贷款因为纳税人的种种需求而发生变化的例子。

比如用贷款购买的投资房进行再融资,并且将其再融资的款项用于购买新的自住房的或者转移到自住房的贷款对冲帐户降低自住房贷款利息的情况,那么因再融资部分的贷款产生的部分利息是不能在投资房下税务抵扣的;

以及将原有的投资房贷款额度进行提高,那么增加的贷款额度产生所产生的利息费用是不能在原有的投资房下进行税务抵扣的,而是取决与提高的额度部分的钱的实际用途;

另外通过对原来投资房的贷款进行重组,重组之后由于贷款比例变化而带来利息比例的变化,从而导致出现税务抵扣问题等等。

所以,我们建议您在进行有关投资房的贷款变化之前,咨询专业的会计机构,以避免将来产生的税务问题。

二、 装修及维修费用的抵扣

首先应该明确的是装修和维修的区别。

装修是指对房屋进行更新改造,以达到使房产增值的目的。例如粉刷墙面、更换地板等(需要注意的是:购买新房后进行的首次修缮是被列为装修费用而计入房屋成本的,计入成本就意味着此装修费用不会在当年的投资房报税中抵扣或者每年计提折旧,而是在将来出售投资房计算资产增值税时作为成本来抵扣售房产生的资产增值利润。)

装修的费用是要记入房屋自身价值的,按年进行折旧,不能够一次性全额进行税务抵扣

维修是指为了使房屋达到原本状态而进行的修缮、修复。例如更换损坏的门锁、疏通堵塞的下水道等,是可以在发生费用当年一次性全额抵扣的;

区别维修和装修的费用,其金额并不是唯一的衡量标准。

三、 关于租金问题

现实中经常有些纳税人将投资房出租给家人、朋友等,并且申报的租金明显低于市场标准,以达到更大的税务利益,这样的做法是不被税务局认可的。我们建议您在出租给家人、朋友之前,进行相关的市场调查,确定一个合理的出租价格进行申报。

四、 关于空置问题

投资房在空置期间,必要的维持、维护费用是可以进行申报抵扣的,但是其前提是房屋确实处于空置状态,衡量的标准是投资房暂时无人居住,但是已经达到随时可以出租并入住的状态,房主正在积极寻求租赁客户,如委托中介或发布广告等。以墨尔本的租房市场来看,一般的空置期都相对比较短暂。

五、 关于实际居住问题

现实中,有些纳税人贷款购买了两套或以上的房屋,分别用于出租和自住,为了申报数额较多的利息,将自住房和投资房替换申报,这种行为涉及到虚假申报,是不被税务局允许的。

六、关于再次贷款的问题

有些纳税人为了偿还投资房贷款利息而进行再次贷款,也就是说,纳税人因为购买投资房而发生向银行贷款的行为,产生了贷款利息需要支付,再向银行做一个新的贷款来支付此利息,那新的利息贷款上面又产生了利息,这种做法增加了利息支付金额,其最终目的是为了增加投资房在申报利息税务抵扣的金额。税务局认为这种行为的主要目的就是为了达到更大的税务抵扣,从而减少纳税,因此再次贷款产生的利息部分是不能抵扣的。

以上是为您介绍的在投资房申报抵扣税款时经常出现的、并且是税务局较为关注的一些方面。每个纳税人的实际情况不同,就会面临着不同的税务问题,为了充分保障您的利益,我们强烈建议您在进行投资房类相关操作之前,先咨询专业、可靠的会计报税机构。

以上内容仅供参考,解释权归 诚信会计事务所(David Chen & Associates)所有。

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如何应对税务局对海外汇款(赠与性质)检查

现在,很多移民到澳洲的华人出于对生活、置业等方面的资金需要,会经常收到海外汇款,这些汇款大部分都是来自亲属、朋友、或者汇款公司(鉴于国内5万美金的外汇金额限制)。人们通常认为这些汇款行为并没有什么值得特别注意的。

但是,从去年年初开始,澳洲税务局开始大面积的检查海外汇款项目。如果纳税人在过去几年内有收到海外汇款但是并未申报纳税的,会收到澳洲税务局的通知,要求纳税人在28天内给出合理解释。如果未能在规定期限内给出合理解释,这些汇款金额将被认定为纳税人的个人收入,并被要求补税和拖延缴税的利息罚款和不正确缴税的失职罚款.

那么,当您收到税务局的通知要求解释海外汇款时,该如何应对呢?在此,我们针对不同情况(按照海外汇款人不同的分类)给出一些专业意见以供参考(以下资料是税务局通常所需要的材料): 

  • 当您的海外汇款是由亲属直接汇出时
  • 如果您收到的汇款是由您的亲属直接汇给您的,您需要准备以下材料:
  • 汇款人的银行对账单。能够清楚的显示款项是由您的亲属账号汇出,且时间、金额与您接收汇款的时间和金额相符;
  • 亲属关系证明以及带有英文翻译的公证件。如果是父母汇款,那么户口本加上户口本的翻译公证件就可以;其他情况下,需要由亲属所在地的政府机关出具,并由公证机关出具翻译公证件。
  • 亲属的个人声明。声明内容主要是说明汇款的性质是对您的赠与或无息借款,由亲属签名,并由澳洲具备3级翻译资格的翻译人员出具有效翻译件。

二、当您的海外汇款是由您的亲属通过他人汇出时(由于外汇金额限制)。

如果您收到的汇款是由您的亲属交由他人汇给您的,请您准备以下材料:

  • 汇款人的银行对账单。能够清楚的显示款项是由他人账号汇出,且时间、金额与您接收汇款的时间和金额相符;
  • 您亲属的银行对账单。能够清楚的显示款项是由您的亲属账号汇出给他人,且时间、金额与他人接收汇款的时间和金额相符;
  • 亲属关系证明以及带有英文翻译的公证件。如果是父母汇款,那么户口本加上户口本的翻译公证件就可以;其他情况下,需要由亲属所在地的政府机关出具,并由公证机关出具翻译公证件。
  • 亲属的个人声明。声明内容主要是说明汇款的性质是对您的赠与或无息借款,由亲属签名,并由澳洲具备3级翻译资格的翻译人员出具有效翻译件。

 

三、当您的海外汇款是由您的亲属通过换汇公司(如:安盈公司等)汇出时。

如果您收到的汇款是由您的亲属交由换汇公司汇给您的,请您准备以下材料:

  • 您亲属的银行对账单。能够清楚的显示款项是由您的亲属账号汇出给换汇公司指定的账号,且时间、金额与换汇公司接收汇款的时间和金额相符;
  • 向换汇公司索取换汇对账单等换汇材料,能够清楚的显示换汇公司在收到汇款后的48小时之内将款项汇往澳洲您的账户;
  • 亲属关系证明以及带有英文翻译的公证件。如果是父母汇款,那么户口本加上户口本的翻译公证件就可以;其他情况下,需要由亲属所在地的政府机关出具,并由公证机关出具翻译公证件。
  • 亲属的个人声明。声明内容主要是说明汇款的性质是对您的赠与或无息借款,由亲属签名,并由澳洲具备3级翻译资格的翻译人员出具有效翻译件。

 

四、资料提交时间

税务局会要求您在28天内提交相关资料,如果您认为时间不够,您可以打电话给税务局申请延期提交资料,税务局一般都会批准,给您宽限提交时间。如果经过一次延期后,您仍认为时间不够,您可以再次向税务局申请延期。

以上是应对税务局对海外汇款检查需要准备的资料,所有的资料都是为了能够清楚的证明您所收到的汇款的来源是您亲属的赠与或借款而非您因为海外投资产生的收入。鉴于有些资料由于时间久远将不容易准备以及获取,为了保护您在澳洲的个人税务利益,我们建议您在收到汇款后及时收集、保留上述资料,以备税务局检查之需。

特此声明

(以上内容是本会计事务所根据近两年处理此类税务问题的经验所得,如果您发生海外汇款税务检查,请以税务局信件所述的要求准备。强烈建议您在收到此类税局信件时,可以先和我们联系。以此文中的内容为准来准备材料导致任何税务问题,本会计事务所不承担任何责任。)

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Higher interest rates to slow housing sector recovery

Source: Dow Jones Newswires  |   Date: 12 Jul 2010

A RECENT downtrend in housing activity has shown signs of levelling out after home loan financing rose for the first time since September.

Economists said the 1.9 per cent rise in housing finance in May could be the beginning of the end of a precipitous slide in activity brought on by rapidly rising interest rates and the winding back of generous government grants for new home buyers at the end of 2009.

Economists had expected a rise of 1.0 per cent in May.

First home buyers accounted for 16.1 per cent of new home loans in May, the Australian Bureau of Statistics said today, down from 28.5 per cent a year ago in a period that was marked by a frenzy of buying helped by economic stimulus.

UBS chief economist Scott Haslem said: “The most positive news from today’s data is that the sharp down cycle post the end of the first home owner incentives appears to have ended, with lending now up over the past couple of months.”

Still, recovery in the sector is expected to be slow, with interest rates expected to continue rising through the second half of 2010 and a back drop of shaky global financial markets likely to take a toll on consumer confidence.

The Reserve Bank of Australia is likely to welcome a levelling out in the housing sector as it attempts to steer the economy through a mining boom over the next year, one that will crowd out other parts of the economy like retail sales and housing activity, economists said.

The central bank “won’t be at all worried” about conditions in housing, said Stephen Roberts, chief economist at Nomura.

With its eye on aggregate demand across the economy, the RBA is mindful that it must “make room” for the mining boom, which is being fuelled by stellar iron ore and coal prices and solid demand from Asian steelmakers and power generators.

The RBA has already raised interest rates six times since October 2009, making it one of the more aggressive central banks globally. It has been sidelined since May, with the cash rate target at 4.50 per cent awaiting second quarter inflation data on July 28.

With data last week showing unrelenting jobs growth in the economy, a high inflation result could well bring the RBA off the sidelines in August.

Mr Roberts said he expects the RBA to hold off until November, when the case for a further rate hike will be clearer.

Helen Kevans, economist at JPMorgan, said sluggish demand for new home loans can still be expected over the remainder of 2010 “with rising interest rates largely to blame”.

Rising risk aversion in financial markets, deteriorating home affordability, falling consumer confidence and the expiration of the expanded portion of the first home buyers’ boost will drag on housing demand, she said.

“The downtrend trajectory in home loans should, therefore, resume,” she added.

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Less immigration = higher interest rates

Source: ABC  |   Date: 12 Jul 2010

There is a better-than-even-money chance rates will rise in August. This would be a remarkable turnaround given that futures markets were pricing in rate cuts only a week or so ago. If our Martin Place mandarins do decide to lift interest costs, there will be two key variables driving their decision.

The first is the likelihood that the June quarter inflation outcome released in a few weeks will ’print’ on the acceptably high side. And ’high’ is anything equal to greater than a 0.8 per cent quarterly increase in the RBA’s ’core’ or ’non-volatile’ measures of inflation. This would mean that underlying inflation is running at more than three per cent per annum, which breaches the upper bound of the RBA’s formal, through-the-cycle target of two to three per cent per annum.

While the RBA can temporarily tolerate higher periods of inflation beyond its target, Australia has been suffering from excessive inflation for nearly three years now. Indeed, as the chart below shows, three-quarters of Glenn Stevens’ term as Governor has been characterised by core CPI above the target range. This means the Governor runs the risk of reneging on the accord he signed with Treasurer Wayne Swan in December 2007, which committed the RBA to “keeping consumer price inflation between 2 and 3 per cent, on average, over the cycle. This formulation allows for the natural short-run variation in inflation over the cycle while preserving a clearly identifiable performance benchmark over time.” It is doubtful whether anyone at the RBA seriously considers three years or more as ’short-run’.

We are supposed to be coming out of a period of weak economic growth during which time the RBA would have ideally liked to see inflation fall to a cyclical trough of two per cent or less (thereby also dragging down the through-the-cycle average). The fact that the nadir in Australia’s current inflationary cycle has been stuck belligerently above the RBA’s acceptable target raises grave credibility concerns for the central bank. And there are few things more important to a central bank than its credibility.

The main determinant of future inflation is our expectations of it (this is similar to George Soros’s ’reflexivity’ principle). The more punters get used to living with annual price rises of greater than three per cent, the harder it will be to wrench those expectations back into the RBA’s preferred range. (Boffins will also note that the RBA’s target of two to three per cent is already on the sympathetic side of the acceptable range embraced by other central banks.)

A related point that would be giving Martin Place pause is that Australia’s experience with low and stable inflation is only a recent innovation. The last two decades of benign price rises have enabled the RBA to keep nominal interest rates at half the levels experienced in the decades prior to the 1991 recession. Older heads know that it took searing mortgage rates of 17 per cent and a recession that saw unemployment peak at around 11 per cent for the RBA to crush the inflationary demon. The Bank will want to do everything possible to avoid having to administer this extreme medicine again.

The second driver of any near-term rate hike is the mixed blessing that is Australia’s stunningly low unemployment rate. Just as inflation has remained stubbornly high, joblessness probably did not increase as much as the RBA might have liked when thinking purely about price stability.

After hitting an all-time low of 4.0 per cent in March 2008 (at least since quarterly ABS records began in 1978), Australia’s unemployment rate peaked at only 5.8 per cent in October 2009, which, as Alan Kohler has observed, was the exact reverse of the 8.5 per cent outcome many expected during the GFC. The problem with this is that according to official forecasts Australia’s economy is about to embark on at least two years of above-trend economic growth with little-to-no spare skilled labour capacity to accommodate this expansion.

But the news gets worse for our first female prime minister, Julia Gillard. A fascinating new report released by the RBA last week, which for some reason has been overlooked by the mainstream media, finds that the two variables discussed above – inflation and unemployment – are tied to one another via a troublesome trade-off over at least the medium term.

In short, you cannot reduce unemployment beyond a certain threshold without invoking inflationary pressures. What makes Australia’s present circumstances especially challenging is that at the inception of a new terms of trade boom the jobless rate is already smack-bang in the middle of the 4.75 to 5.25 per cent range that most believe is the level beyond which further labour demand risks inducing wage-price spirals. These dynamics have been arguably exacerbated by the recent empowerment of Australia’s labour force to make wage claims under the more worker-friendly policies of the current government. Here it pays to recall that one of the chief reasons why the so-called ’non-accelerating inflation rate of unemployment’ fell from seven to eight per cent in the 1990s to around five per cent today is because of the liberating labour market reforms first implemented under the Hawke and Keating governments.

The bottom line is that the RBA is unlikely to allow unemployment to fall much further. In last week’s RBA report, two economists, David Norman and Tony Richards, declared that the age-old ’Phillips curve’ – which posits a trade-off between inflation and unemployment – is well and truly back in vogue. In particular, their analysis shows that the negative relationship between inflation and unemployment outlined under the Phillips curve model, which had been discredited by many modern economists, provides the best predictions of changes in Australian inflation over time. Norman and Richards’ research also illustrates that the standard Phillips curve model of inflation outperforms more sophisticated approaches.

Interestingly, the RBA’s standard Phillips curve model does not assume that there is no long-runtrade-off between inflation and unemployment. This latter thesis was fashionable in the modern economics literature, which purported that participants were able to accurately anticipate, and thus negate, monetary policy in the long-term. Indeed, when the RBA tries to incorporate this adaptive expectations assumption into its models, their performance deteriorates.

So is there anything that we can do to cut this Gordian knot? As with most things, the answer lies in ourselves.

Australia is in the enviable position of being a high-growth economy with an extraordinary endowment of natural resources that can be profitably exploited care of the urbanisation and industrialisation of the world’s two most populace nations, China and India. We are able to leverage off this seismic shift in the structure of the global economy at a time when most of our peers are predicted to endure protracted periods of sub-trend growth.

But Australia also faces a major obstacle if it is to capitalise on the swing in global economic output away from the eurozone and anglosphere towards the Middle Kingdom: shortages of people. And this paucity of skilled labour will be made worse as our nation ages, with the working share of Australia’s residents forecast by Treasury to decline strikingly over time. As the number of income producers in the community falls, and the ageing of the nation imposes greater health and medical demands on us all, the tax burden on those remaining workers will rise. One tangible manifestation of this problem is Treasury’s forecast that Australia will run perpetual fiscal deficits between 2030 and 2050.

As I have argued here, like any other high-growth company, Australia is ’short’ human capital. This reconciles why an ostensibly xenophobic Coalition government oversaw one of the biggest increases in skilled migration in Australia’s history, and why our population growth rate has recently ranked among the highest in the developed world. The Treasury also acknowledges that higher immigration would ameliorate the adverse effects of an ageing population by generating stronger growth and a deeper revenue base.

While there are well-known challenges to absorbing a substantial increase in the number of permanent residents over time, there is no reason why these cannot be met with sensible energy, infrastructure, and urban planning strategies, which, crucially, have to be coordinated and funded by Federal and State Governments working as one.

By proudly slashing our foreign labour intake in the name of scoring below-the-belt political points, the Federal Government is directly contributing to capacity constraints and inflationary pressures. And they will be ultimately culpable for forcing higher interest rates if they do not seek to manage Australia’s prosperity with more prudent polices.

What we need to do is change the tenor of our political rhetoric. Lower immigration might mean a little less congestion in the short-term. But it will also translate into higher inflation and higher interest rates. Lower immigration and slower population growth will also exacerbate the economic problems spawned by the ageing of our nation. In particular, cutting back on our investments in people today will result in higher taxes for all future generations of workers.

Both sides of politics need to be more mature, responsible and forward-thinking in their public approaches to confronting what is arguably equivalent to a major national security concern (indeed, The Australian’s commentators have claimed that a larger population is a national security imperative). Here the Coalition has much to answer for by pushing myopic and populist outcomes, which has compelled the government into lowest-common-denominator responses.

The next time residents in South West Sydney complain about immigration (ignoring the fact that more than one-third of them were born overseas), why can’t the Gillard Government commit to investing in more public transport, roads, hospitals and schools rather than thumping boat people or advocating a smaller Australia? Why not provide policy solutions that allow us to absorb and liberate growth as opposed to restricting it?

The simple fact is that with little government debt Australia can afford to make the major investments in high-value public amenities required to get the community across the line on the ’Big Australia’ vision. And given the vast tracts of habitable land situated along most of our island continent’s coastline, there is no reason why we could not, in principle, support a population base multiples its current size with appropriate investments in energy, transport and urban planning technology.

We certainly should not peg ourselves to a population level in 40 years’ time based on existing capacity constraints. Our chief aspiration must be to commit to using our ingenuity to unlock current and future bottlenecks.

As I have suggested before, the alternative is, quite frankly, Japan. A nation that has shunned immigration and is forecast to see its population shrink by up to 25 per cent over the next 40 years. A nation that has experienced two ’lost decades’ primarily attributable to a relentlessly declining population growth rate. A nation that is being increasingly threatened with social and economic irrelevance.

The good news is that our fate is in our own hands.

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