Australian Broadband System - Policies and Reforms

Question: Choose any one industry and discuss reforms in that industry in Australia which include government competition policy, labour reforms and labour laws, minimum wages, productivity and training and technology (broad band). Answer: Introduction Government reforms relating to broadband network in Australia has been a remarkable reform in the industry. Australian Government has invested a huge sum for implementing the ultra fast fibre-to the-home (FTTH) network relating to broadband to give away a speedy network connection amongst the household as well as commercial purposes. National Broadband Network (NBN) is a project in Australian market to update the network and improve, upgrade the infrastructure for a dynamically enhanced digital system. A better quality connection with the implementation of different technologies is essential for education system, better lifestyle, entertainment, bettered workplace and industries. One of the advantages of NBN over the years has been its high speed. A network development in Australia was under the political and social influence for a number of years. The things did not go as it was actually framed. Unplanned beginning, wrong procedures, social and political influence, unwanted delays all were responsible for a rough start. Reports have also evaluated that when NBN expended a $7.3 billion it only could deliver its network resources to 3, 50,000 buildings or premises, but introduction of fibre to the node (FTTN), fibre to the building (FTTB), long term evolution (LTE), fixed wireless, these architectural designs have made its significance relevant in the eyes of the people by imparting the systems among a good number of premises year after year. Government Competition Policy The Telecommunication and Regulatory reform in Australia brings out a system through which the market shall be neutral competitively and flexible relating to price. The reform shall encourage the developers in the market to provide different upgraded services and also safeguarding of the customers. Both the wireless and satellite services could go hand in hand in the market as and when they are required, they are used accordingly. The government made a total fifty three suggestions or recommendations for calibrating changes in the telecommunication markets. The competition regulation was governed by the Competition and Consumer Act 2010 (CCA). The structural issues relating to regulations, overall monitoring of prices, and encouraging new development strategies were some of the key issues of the reform. With response to the suggestions made in relation to the reform the government agreed to make changes in the infrastructural pattern in competitions. New legislations were to be intro duced in Part 7 of the Telecommunications Act 1997 which shall take effect from 1st January, 2017. The act shall also be amended in certain places, in Part 8 specifically. For development or innovation of new products ACCC shall provide with certain instructions. An issue relating to privatization of National Broadband Network was also a key point.(Government, 2014). National Competition Policy was introduced in Australia, in the year 1995. Gradually, reform in the broadband sector took place. But, telecommunication services started liberalizing in the year 1990s only and became popular in the year 1997 as Australian government started selling the telecommunication providers owned by the government itself. The ADSL enabled telephone services are capable of delivering broadband services, in mostly nonmetropolitan areas. With the gradual decrease in cost, the service providers got appropriate controls over the network excepting the copper pair line. In the year 2003, in South Australia (Meningie), an internet service providers inter-node was installed, with this the competition in non commercial infrastructure market took place. The first notable name for competition in the market is Optus (XYZed) for introducing xDSL services and it gave competition to Telstras DSLAMs, and it was in the year 2000. The copper upgrade proposal of Telstra in 2005 and up gradation of the fibre to the node network as well was put on hold; later on an agreement was signed with the company and Optus in 2011 to remedy the same. In later years, Telstra was seen to upgrade their systems and engineering in providing the customers with better experience while surfing net, with a speed up to 8 Mbit/s. Telstra is said to provide almost 3 million retail fixed broadband services. There were companies like Microsoft, Google which sh owed encouragement towards National Broadband Network, Australia and also there were a lot of criticisms and social as well as political pressures for the same. On the other hand, Agile Communication has been significant in providing network connections in rural and regional areas as compared to Telstar. Fixed line broadband and wireless connection, both were acknowledged in this case. The company invested in giving out connections to backward areas with their own microwave network. Later on Government invested a large amount in meeting the network needs in rural and regional areas as well in September, 2006. iiNet brought in the year 2007, the first naked DSL system. With the introduction of this thing, the network connections without telephonic network could be made possible. With the growing development in the broadband industry, the number of people using internet also increased.(Cameron, 2005). During the years 2009-2013 National Broadband Network faced a rollout. For poor decision making, taking short cuts, it faced continuous diminution in its management process. The election pressure also led them to be so. The Coalition and ALP agreed with the government regarding reform thinking that it would provide high speed internet to the regions of Australia. The introduction of fibre optical cable to almost all the buildings in the country and fibre to neighborhood cabinets took almost a decade to reverse the system from copper cables. The ALP completion period is on 2021 and introduction of satellite and fixed wireless customers, creating monopoly power are its motto. The Coalition completion time is on 2019 and its major objective is to allow Telstra and Optus to have a competitive environment using the prevailing network system which was outlined for Pay-tv. The pricing would be kept wholesale. These notable parties would provide a better experience with the networking system in different parts of the country.(Jennett, 2013). The owners of buildings and apartments have to choose between installations of telecommunication equipment into their building for providing services or it would depend upon a network service provided by an autonomous network service provider. If they want to install the device on their own then it shall be checked if the building occupants have any personal choice of opting for a service provider or competition in the future. The regulations imposed by the government are to be properly checked in this regard. The question of end users privacy and net neutrality has seemed to remain a debacle in the Australian network. But, with the integrated companies like Telstra, those problems could be addressed with the better trafficking and improved user experiences. Labor Reforms and Labor Laws In the beginning there was the Conciliation and Arbitration Act, 1904 which involved settlement of arguments and misunderstanding in the industries. Later on due to inconsistencies observed, different regulations were introduced. The Workplace Relations Act, 1996, The Work Choices Act, 2005 was enforced thereafter. In the 46th National Conference in December 2011, a new National Platform was given for the labor market. The government indulged in helping and supporting the working families and their children, creation of employment opportunities in changing economy, and investing in infrastructures to welcome better resource facilities. Australian Labor Party won the election held in November, 2007, and particular schemes of improvements were promised by the party for the coming years, but they suffered from real disasters. Labor is dedicated to create a feasible framework for regional network development and it would ensure each and every regions. When both Coalition and Labor wanted to change the prevailing perspective of Australian broadband, labor was observed to be incompetent to meet the objectives within the stipulated time period as promised by the authority before. In the 2007 election, it was promised by Kevin Rudd that an NBN will be completed within the year 2013 which involved almost $ 4.7 billion public funding. But coping up with the continuous disasters and problems, it is heading to meet the objective so slow that it is at gamble if it could be completed within the year 2021. The promised network was present in around 72,600 buildings and this could properly be utilized in only 10, 400 buildings from those 72,400. Different pricing policies, varied download speed, network errors, wrong decision making and poor management system has been the real drawback in the situation. It is unknown whether the stakeholders would be able to earn a promised 7 % return on investment from this National broadband network policies and reforms, as that is also unforeseeable. In the year 2009, it was chosen to be most costly than any other broadband plans in the whole world, where as practically a broadband plan should be such that would meet the optimum efficiency and customers need in a cost effective way. In this way to mitigate the labors problem relating to cost, the fibre were extended to cabinets in basements of premises or within few hundred metres of buildings. With the use of existing copper cables, the expenses could be managed. Coalition was probable of giving more advantage to the customers in comparison than labor. The government though tried hard to neutralizing the competition among the companies, but they remain somewhat the same, the regulations were made to reduce the cost and variety in broadband plans. The regulation naming WorkChoice came into force which suffered from the following attributes: 1. The convention gives out the workers with a choice to do the job or choice of job. 2. The workers when have poor bargaining power only could attract an individual job, and such individual job contract may involve poor and stringent norms. 3. There were only the liberal party and large business industries which were satisfied with the WorkChoice legislation, neither Australian Labor Party nor the Australian Council of Trade Unions were antagonistic to the proposal or legislation for its harshness. 4. The agreement wanted to weaken the collective bargaining power of trade union. The Australian WorkChoice Agreement also suffered when in the year 2007 a lot of workers were suffering from unemployment which covered almost 10.6% in Queensland, 7.7% in Outer Western Melbourne, 9.4% in Tasmania, 7.8% in Northern Adelaide. The unemployment was because the WorkChoice Agreement failed to address its positive impacts in those regions. As the labors broadband of rolling out the fibre to the node network would take place, it would cover almost 98% of the Australian to a high speed network connection and it was hoped to create new job opportunities as it would address the issues relating to governments failure to deliver the fibre to the node infrastructure. There has been an increase in the minimum wages when the West Australian Industrial Relations Commission decided to increase the same by $20 per week. This shall be applicable to all states. The Australian labor party believes in the amount of wage would be provided along with remuneration which will be in a just and equitable manner and should not result in inflated amount of wage or a very low amount of wage as well. The trade agreement shall be such that the minimum wages and remuneration as the case may be, is protected keeping in view the labors skill and competence. Network Technology 1. The fixed line network system involves some fibre optic cable which helps to transmit the data unlike the traditional copper cable system. In copper cable system the probability of loss of data was found to prevail in the system, which could be made good with the introduction of fixed line networks. The fibre optic cable goes from a building to a street and is fixed at the top of a power pole, and that is kept under ground. The service point covers almost sixteen fibre distribution areas and that is capable of providing services to almost a 3200 premises. 2. The fixed line broadband ADSL +2 have been a phenomenal network system, most widely used and very much cost effective. The cost effectiveness is really an important issue when network service is of crucial importance in a business or in day to day activities involving huge data, the cheaper the broadband plan, the better it is. There are good combo offers available in the market, which includes calling rates plans for national as well as international calls along with particular data for online surfing. The disadvantage associated with this technology is a phone line is required to be taken; a modem has to be fit. The connection may be slower than the wireless fidelity network connections. There might be hidden cost involved along with the installation of the telephone line. 3. Bright Telecommunication was the first company to introduce the fibre to the home network system in Australia in the year 2001. A broadband speed of 50 mbps can be provided by the broadband companies. The nation was firstly decided to be regulated with this kind of networking system and later the fixed wireless system came into effect. Since, there has been a change of the regulatory authority in the year 2013; the fibre to the premises roll out was seen as a bit skeptic for the national broadband network which will be involved in a mix of multiple technologies. (Taylor, 2014) NBN Co. has a plan of evolving with the wireless network, which will be a 4G connection. But, this will not cover a good percentage of regions of Australia. Spectrums of 2.3 GHz and 3.4 GHz shall be put to use for accomplishing the setting up of the system. More electronic devices like desktop, laptop, computer, mobile phones, and cameras with operating systems could be used with the help of the wireless fid elity network from the signals of a particular router. The wireless connection can be city wide, campus wide (in case of a workplace, educational institutions). The companies like NBN provide with a user guide for the operational purposes. 4. In Satellite broadband connection a satellite internet dish is provided by some companies or they provide a device. The data is transmitted with the help of radio waves, very small aperture terminal and a dish antenna which is to be fitted in the premises of the customer. A star network topology is followed in the process where each and every network communication, data and information is transmitted through the main processor. The NBN Co. wants to initiate two Ka band satellites. Impact of Australian Broadband in economy and productivity There have been a number of studies which show that the reforms and changes in the telecommunication and broadband networks in Australia have showed positive impact in its economy since the year 1990s. A multifactor productivity growth of 65 to 85 % between the years 1985 to 2002 was observed to have taken placed due to Information and Communication Technology products and mediums. In the year 2001-02 around 2, 89,000 people got job for the introduction of broadband. The e-commerce activity also improved and was made comparatively simple. In later years, mobile broadband and internet also proved to be a boon to the Australian economy as productivity in mobile sector increased by 11.3 % in the year 2013 from the year 2006. Business operation cost also decreased and the overall economic activity of Australia increased in the year 2013 by $33.8 billion (Data taken from (acma, 2014) ). There are about 6 % premises which are not able to get a fixed internet broadband service. About 28 % p remises have a admittance to peak download speed which is between 25 to 110 Mbps. Coaxial cable network, fibre to the node framework and fixed wireless network is also available to almost a 28 % premises (high speed internet). The areas where broadband connections are not properly served are pointed out and NBN would address those regions in the future with better technology. Coaching/Training of Workers and seniors There are short term trainings or course for the broadband programs which is approved by the NBN Co. Australian government has also conducted online lessons regarding computer and internet. Due to the changing computer and internet activity in the industry, people need to stay updated with the environment. A proper knowledge is provided in such training programs. The workers who are involved in specific industries and activities are provided training relating to their field of activity, there are courses which have to be pursued by the workers mandatorily and there are courses which are recommendatory. Courses involve the regulations and rules, the awareness and safety, power awareness, aerial construction, installation of hardware, fibre optical cable etc. The Australian Seniors Computer Clubs Association has also come up a number of training programs, consists of the elementary as well as the specialized programs regarding computers and networks for the seniors. Conclusion The Australian broadband has improved over the years but there are many developed nations, with which Australia lags in competition. When it was said by the honorable Communications Minister Malcolm Turnbull in the year 2013 that the Coalitions fibre to the node national broadband network will be able to transmit a maximum of 25 Mbps speed, the same could not be met. But, Australia has been remarkable in utilizing the mobile broadband technology amongst the major OECDs. A huge number of mobile broadband customers with a rate of penetration of 114% were observed during the year 2013. Some of the broadband service providers in Australia are BigPond broadband, Optus Broadband, iiNet Broadband, Telstra business broadband, Internodes Broadband etc. Competitions relating to costs, data packages, speed revolves around these companies which the government has tried to neutralize over the years by implementing certain regulations. There have been major ups and downs in the network systems whi ch were further corrected with the introduction of developed network infrastructure. Although, the broadband technology is not as developed in Australia as many other countries across the globe, but the system has grown over the years keeping in view the underserved regions, and introducing better technologies. Weekly reports are exhibited which points out the overall progress achieved with the NBN projects, the number of regions additionally covered in the week, and with what network technologies with statistics. A corporate plan involving three years is chalked out and uncertainties of any kind are to be considered to resume the program as it is even in the time of contingencies. Such corporate plan was firstly formed with a long term business perspective for the period June 2011 to June 2013. Works Cited acma. (2014, April 4). Mobile broadband boosts the economy. Cameron, A. L. (2005). National Competition Policy and Broadband provisions in Australia. In W. T. Stewart Marshall, Encyclopedia of Developing Regional Communities with Information and Communication Technology (pp. 506-508). Australia: Idea Group Reference. Eisenach, J. (2014). Australias failed experiment in government-owned broadband. TechPolicyDaily , 1. Government, A. (2014). Telecommunications Regulatory and Structural Reform. Commonwealth of Australia. Harkness, P. (2008). Labor Market Reform in Australia: The New Industrial Relations Law and the Elections. Monthly Reveiw , 4-6. Jennett, G. (2013). Broadband policy: where the parties stand. ABC News , 1-3. Taylor, J. (2014). Fibre to the node becomes default NBN deployment. ZDNet , 1. Taylor, J. (2014). NewSat offers to buy NBN Co satellites. ZDNet , 1-2.

Taxation Law and Practice

Question: Describe about the "Negative Gearing and its Effects". Answer: Introduction Australian investors are making the most of the real estate sector by reaping rich profits from the combination of negative gearing and discounts on capital gains. The housing sector is coming under pressure because of the savings being made by taxpayers on capital gains tax (CGT) because of the loopholes left by negative gearing. The investors are getting encouraged and are taking full advantage of the benefits being rolled out by the Australian taxation Office (ATO). Especially making use of the benefits are the high income individuals whose tax savings are increasing, (Barkoczy, 2015). A survey conducted by The Australia Institute has revealed that these factors are putting the government to a loss of $7 billion annually. The survey also reveals the fact that taxpayers falling in the middle income bracket, who are contributing the highest percentage of tax amount to the ATO, is not getting anything from these benefits. In fact, 67% of the benefit goes to the top 20% of the taxpaye rs and only about 4% of households in the low income earning are being benefited by this scheme, (Barkoczy et al, 2010). When the benefits of negative gearing are combined with the discounts given on capital gains to taxpayers, a vast majority of investors in Australia are being encouraged to invest in the residential property sector, thus pushing-up the prices in this sector. This is also lowering the percentage of the genuine home buyers who want a home for their own use, (Nethercott, Richardson Devos, 2010). Even the financial institutions are encouraging investment in housing sector with the result that investment is getting concentrated in the limited investment property sector and this is an alarming situation for the Australian economy. Investors are becoming rich at the cost of other peoples money by collecting tax benefits and are also booking their losses against the rental incomes they are earning without paying any tax to the government, (Ault, Arnold Gest, 2010). The Interest Factor in Negative Gearing In the opinion of the taxation experts, and I quote Negative Gearing is a benefit derived by a taxpayer from an investment property in the form of a loss. Unquote. The biggest factor playing a prominent role in this happens to be the interest which the borrower pays on the loan taken from the financial institutions for buying the investment property. The property may or may not earn large amount of rental income, but the borrower gets the advantage of claiming the interest amount from any other assessable income which it declares during the income year in which the interest is being paid, (CCH, 2015). Thus, even if the investment property does not provide any income, it does give an avenue for reducing the tax liability to the borrower[1]. Moreover, if the rental income is low and the expenses incurred on maintaining the investment property are high, the taxpayer can still claim deduction of the excessive expenses from other assessable incomes earned. In other words, the loss being i ncurred by the investor from the investment property is getting compensated by the tax saving being made from the other assessable incomes and the deductible expenses which would also include the interest payment made on loan taken for buying the investment property, (Lindahl, 2008). Taxation experts consider such investments as unusual investments because the government is compensating the loss being generated by the investor. IN the normal course of running a business, the owner tries to make the most from their investments and take utmost care and work with the intention to make profit, (Lindahl, 2008). But in the case of negative geared investment properties, all the investments in the residential investment properties, are made with the sole intention of creating a loss so that the advantage of negative gearing can be taken for availing the permissible deductions. Another factor which favours the investors is that although investors are incurring losses in cash terms on the investment property, the property itself is actually getting increased in value, (Bakker Kloosterhof (ed.). 2010). Capital Gains and Negative Gearing Let this paper take the case of capital gains in situation where an investor sells the investment property. At the time of sale, under normal conditions, the property is worth more than its price when it was purchased, (Bakker Kloosterhof (ed.). 2010). Since the value of the property has increased over the years, the investor is making a capital gain and this will be subjected to capital gains tax (CGT) according to the Australian taxation law. The taxpayer pays CGT on the net value of the capital gain, which is arrived at after deducting all the expenses incurred on maintenance and sale of the property, which the taxpayer can claim from sale amount of the asset, (Barkoczy et al, 2010). The Australian Taxation Office (ATO) introduced a 50% discount in 1999, which was allowable to taxpayers on the net Capital Gain made by them on the sale of a capital asset, provided the asset has been held by the owner for a minimum of 12 months and the net gain is then subjected to the CGT, (Barkoc zy et al, 2010). The purpose was to allow more investment in housing sector by luring the investors with the discount, as the taxpayer was to pay tax on only half of the capital gain amount which was earned from the sale of the investment property. The taxpayer is not only allowed deductions on the ongoing revenue losses (expenses incurred) during the period of ownership of the investment property, it is also getting the advantage of paying income tax on a fraction of the gain which it has made from the sale of the investment property, under the legally admissible negative gearing. This additional discount of 50% allowed on the capital gain amount in fact permits the taxpayer to collect the full amount of the investment made by it, at the expense of the government, (Nethercott, Richardson Devos, 2010). Effects of Negative Gearing and CGT on Housing In Australia, the ATO has been promoting a generous tax treatment to the investments being made in rental property sector. Unlike most of the advanced countries of the world, taxation in Australia does not follow a set limit for allowing the deductible expenses which a taxpayer can claim against those expenses which are related to investment properties, (McCouat, 2012). In the case of negatively geared properties, investment related expenses, including agent fees, stamp duty charges and the interest paid on the loan amount often exceed the rental income earned. The problem is not addressed logically as the investors are not making any losses because the value of the property increases every year, (McCouat, 2012). The other advantage available to the investor is that capital gains do not get included in the taxpayers taxable income till the property is sold. Hence negative gearing has become the combination of the capital gains, which are taxed at half the marginal tax rate after the sale of the property and the advantage provided to the taxpayer for claiming unlimited deductions on account of the incurred expenses. This taxation system is encouraging taxpayers to borrow more for the purpose of speculating in investment properties, (McCouat, 2012). Australia reports the second highest housing price to income ratio among the member OECD countries. This happens not because the houses in Australia are becoming more costly for the genuine Australian buyers, it also happens because the international property trends are showing that Australia has high level of house pricing in comparison to the other member OECD countries. The size of the losses being claimed by taxpayers from the investment properties has grown since 2000 in Australia. According to the available data, the net rental income in 2000 was $219 million and in the last one decade, this has turned into net rental loss, which in 2012 was $7.9 billion, (Lomas, 2011). Not only the tax revenues are getting reduced because of this combination of Negative Gearing and CGT Discount, it is also contributing to the problem of housing affordability in Australia. Another effect felt is on the increasing housing prices, but this is purely speculative because this is there because of the favourable tax treatment given to the investment properties and this is attracting more investors in buying the rental properties and the additional investors are able to outbid the genuine buyers, (Renton, 2012). Negative Gearing and Rental Income The growing rental loss trend is showing that Australian rental property investors are not concerned with the rental yield gained from the investments but are focussing on the capital gains only and these are being offered to them with the combo-pack of incentives of the negative gearing and the 50% CGT discount. The argument out forward by investors for to the government for not removing negative gearing is that if this is done it will increase the rentals and this will largely affect those majority of low income earners, who are the major users as tenants of the investment properties, (Renton, 2012). And the logic given by the investors is that it is because of the negative gearing factor that the investors are getting encouraged in building more houses for these low income earners. This, they state, is actually responsible in making the rental prices low and more investments has been out in to increase the supply of the rental properties, (Ault, Arnold Gest, 2010). In case this argument is found to be correct, then the major portion of houses which are purchased for availing negative gearing should have been in the new housing sector. On the contrary, a survey of ABS shows that only 6% of investments have been made in the new housing stock and a large segment of investors are buying the existing housing stock, (Ault, Arnold Gest, 2010). This also becomes evident from the data which shows that the percentage of investment loans in the new house segment has declined. In 1992, the loans for new houses were just 18% of the total property loans and presently the figure is only 6%. This shows that more than 94% of loans in the investment housing property sector are for existing housing stock and only a small portion of the investments are being put for producing new housing stock into the market, (Ault, Arnold Gest, 2010). A Few Facts about Negative Gearing Fact 1 The reason for increase in rents in bygone times was because of the higher interest rate, combined with boom in the share market. This resulted in diversion of investments from the rental property market although this was limited only to Sydney and Perth, in fact, lending to rental property investors rose by 42% across Australia, (CCH, 2015). Fact 2 Negative gearing has been the fuel during each housing boom as it has been encouraging speculations in the property sector. In recent times, the impact has been seen as growing because the investors have a more easy access to credit. Moreover, the provision of 50% discount on capital gains, which was introduced in 1999 has also helped in making negative gearing a more attractive proposition for investors, (Barkoczy, 2015). Fact 3 It is wrong to suggest that benefits of negative gearing are majorly enjoyed by those investors who belong to the middle income earning segment in the society. This has been portrayed wrongly as the Taxation Statistics to prove this fact are taken after taking into account the deductions claimed by taxpayers for rental property investment, which are already reduced by negative gearing strategies, (Barkoczy, 2015). Fact 4 Most households which appear in the middle income earning segment are actually high income earning taxpayers but are included in the said segment before the deductions are subtracted from their incomes. Actually, more than 50% of the individual taxpayers involved in the negatively geared rental housing investments are in the top 10% bracket of personal taxpayers whose earnings are above $100,000 and about 30% who earned above $500,000, (Barkoczy, 2015). Negative Gearing and CGT Discount What Can be Changed? When there is a proposal to carry out some changes in negative gearing and CGT discount, it is very essential for those in the authority to consider how to retain the positive aspects of the current policy in the revised policy and also to consider a smooth transitional arrangements, (Renton, 2012). Negative gearing should be used for creating additional new houses to be built but as the discussion above shows, this can happen only in small numbers. Any proposal for reforming the policy should also take into account that negative gearing is only for the new houses and that to for the limited period. Such a change will not impact the investors who are planning of buying new housing stock only to avail negative gearing. Such changes in the policy framework will only make a positive impact on the building of new houses, (Lomas, 2011). Taxpayers who are wanting to invest money in residential property sector are finding that buying a house from the new house stock gives a bigger tax advantage as compared to buying from an existing housing stock. This increases the low investment rate being experienced presently in the new house stocks for rental investment properties. When a change in policies is made and which will affect the residential investment properties, it is important for the authorities not to frame such policies which may develop a sudden change in the property sector. If negative gearing can be restricted currently only for new investment property stocks, there is always the possibility that large number of unsold investment properties will be left unsold in the real estate sector and this will cause an instability in the prices of the houses, (Lomas, 2011). Conclusion Currently, the housing policy issue has become a diverse economic agenda for the Australian economy. Taxation experts speculate if it will be bad or good for the countrys economy if housing prices start increasing in Australia. The experts are of the view that answers to these speculative questions will be different for every individual. This is so because different people will offer different points of view and their views will depend chiefly on the type of house they own now or wish to buy one in the near future. Such situations may be good only for the investor who either has an investment property or who is looking for opportunities to downsize their present house or for those who are planning to move from a highly expensive area to a less expensive area. Such speculations, in their true meaning, are quite adverse for those taxpayers who are planning to buy their first home or for those who wish to buy a bigger house because their family is growing. References Ault, H. J., Arnold, B. J. and Gest, G. (2010) Comparative income taxation: a structural analysis. (3rd ed.) Amsterdam: Kluwer Law International. Bakker, A. and Kloosterhof, S. (ed.). (2010) Tax risk management. Amsterdam: IBFD. Barkoczy, S., Rider, C., Baring, J. and Bellamy, N. (2010) Australian Tax Casebook. (10th ed.) Sydney, NSW: CCH Australia Limited. Barkoczy, S. (2015) Australian Tax Case book, (12th ed.) North Ryde, NSW: CCH Australia Limited. CCH. (2015) Australian Master Tax Guide. Sydney, NSW: CCH Australia Limited. Lindahl, D. (2008) How Small Investors Can Get Started and Make It Big. Hoboken, NJ: John Wiley Sons. Lomas, M. (2011) How to Invest in Managed Funds. Hoboken, NJ: John Wiley Sons. McCouat, P. (2012) Australian Master GST Guide. (13th ed.). Sydney, NSW: CCH Australia Limited. Nethercott, L., Richardson, G. A. and Devos, K. (2010) Australian Taxation Study Manual: Questions and Suggested Solutions. Sydney, NSW: CCH Australia Limited. Renton, N. E. (2012) Family Trusts: A Plain English Guide for Australian Families of Average Means. (4th ed.) Milton, QLD: John Wiley Sons. Taxation Law and Practice Question: Discuss about the Taxation Law and Practice. Answer: Tax implication on sale and purchase of house As per the regulation of Income Tax Assessment Act 1997, an individual is required to pay tax on capital gain that arises due to sale of capital assets that includes sale of property. However, individual taxpayers are entitled to claim exemption on capital gain tax provided the required criteria under ITAA 97 be satisfied. The regulation of ITAA 97 on capital gain tax exemption provides that if the individual sells the property, which is main residence, including the adjoining land up to 2 hectares utilized for the purpose of domestic use (Ato.gov.au 2016). However, it is essential for the taxpayer to have only one residence during the taxation year while the taxpayer is entitled to own a new house against the sale of old house within a overlapping period of six months (Hulse and Burke 2015). Additionally, capital gain tax exemption under ITAA 97 provides that the taxpayer can claim exemption only the property has been used for residential purpose for minimum three continuous periods during the span of 12 months before its sale. Further, regulations under Australian Taxation Office provide that the property should not be rented in the same period of 12 months (Austlii.edu.au 2016). It is given that; you have acquired the old house on 31 October 1987, which is your main residence at present. Cost of acquisition was $190,000 including the legal cost of $1,900 and stamps duty $4,850 stating that you stayed in the house since its acquisition except for a period 31 December 2006 to 31 December 2014. As per the provisions of ITAA 97, it is essential that the taxpayer use the property for at least three continuous periods during 12 months time before its sale. Therefore if you sell the main residence during the month of December 2016, it is essential to use the house property for at least three continuous months between the period December 2015 and December 2016 (Rogers, Lee and Yan 2015). On the contrary, in case you acquire a new house against the sale of old one, maximum overlap period can be six months i.e. you need to purchase the new house within June 2017 to claim the exemption referring to the case of Hepples v. FC of T 91 ATC 4808, (1991) 22 ATR 465. If the above conditions are satisfied, you are entitled to claim exemption on the net taxable capital gain from the sale of house against the purchase of new one that can be determined either by using indexation method or by following discounting method @50% (Mangioni and Warren 2014). Considering the cost of acquisition and repairs cost of the old house, taxable capital gain from indexation method would be $186,827 while $ 135,525 using discounting method. Hence, maximum amount of exemption you can claim will be the total acquisition cost of new house. Assessable Capital Gain from old house Indexation method Amount $ Expected sales consideration 480,000.00 Less: Total cost of acquisition Cost on 31 October 1987 190,000.00 Indexed cost of acquisition 274,222.69 Legal cost 1,900.00 Stamp duty 4,850.00 Total cost of acquisition 280,972.69 Add: cost of repairs for the purpose of sale Repainting 6,200.00 Fence construction 3,600.00 Repair the front porch 2,400.00 Total cost incurred 293,172.69 Profit on sale of property 186,827.31 Discounting method Expected sales consideration 480,000.00 Less: Total cost of acquisition Cost on 31 October 1987 190,000.00 Legal cost 1,900.00 Stamp duty 4,850.00 Total cost of acquisition 196,750.00 Add: cost of repairs for the purpose of sale Repainting 6,200.00 Fence construction 3,600.00 Repair the front porch 2,400.00 Total cost incurred 208,950.00 Profit on sale of property 271,050.00 Discount @50% 135,525.00 Net taxable amount 135,525.00 (Source: Created by Author) Tax implications on the house expenditures In view of the regulations of ITAA 97 on capital gains, an individual taxpayer is eligible to claim deduction on the expenses incurred to acquire the capital asset along with the expenses incurred to improve the property in connection with the sale. Further, it is essential to incur such expenses only for the specific property or capital asset. Therefore, you are eligible to claim deduction on the expenses incurred for acquiring the property while determining the assessable amount of capital gain. Apart from that, expenses incurred during the current year for the purpose of repairing and improvement can be claimed as deduction in connection with sale of old house (McKerchar, Bloomquist and Pope 2013). Hence, total amount of expenses to be claimed (subject to indexation) is as follows: Amount $ Cost of acquisition on 31 October 1987 190,000.00 Legal cost 1,900.00 Stamp duty 4,850.00 Total cost of acquisition 196,750.00 Add: cost of repairs for the purpose of sale Repainting 6,200.00 Fence construction 3,600.00 Repair the front porch 2,400.00 Total cost to be claimed for deduction 208,950.00 (Source: Created by Author) Tax implications on apple watch and bravery medal Gifts received by the taxpayers are non-taxable as per the regulations of ITAA 97 if the gift has been received from the relatives or family members. However, if the gift has been received for personal benefits then the same cannot be claimed as deduction. Further, the taxpayer is entitled to claim deduction on gifts if it is received in terms of money or property as well as the value is more than $2. It is mentioned that the gift has been received in favor of saving a boy from shark attack i.e. Apple watch worth $650 will not be included in the assessable income since there was no personal benefit. Similarly, bravery medal received for saving the boy will also not attract taxability under ITAA 97 because it was neither a property nor it attracts any personal benefit. Assessability and deductibility of items to determine the taxable income for the year ended 30 June 2016: In order to determine the taxable income under ITAA 97, any income received during the taxation year is included in the taxable income while expenses are deductible if the expenses have been incurred to generate such income. However, there are certain incomes received by individuals fall under the exemption criteria including perquisites or allowances received under employment. Therefore, salary income against the occupation of teacher amounted to $72,000 would be included in the assessable income for the year ended 30 June 2016. Franked dividends received from Telstra Shares would be taxed as per the imputation system since the company attributed the dividend tax to the shareholders (Ato.gov.au 2016). Further, as the dividend is franked dividend, Telstra Company is required to state the amount of frank credit to claim the difference amount. Holiday received for opening a new savings account valued to $3,200 will be considered as gift that does not consider personal benefit as well as it neither a monetary gift nor a property. Therefore, it will not be assessable in the taxable income. Family Tax Benefit received for 10 years son would be attracted if the son is dependent and younger than 20 years as well as you meet the income test, in view of the case Jayatilake v FC of T (1991) 101 ALR. As per the rates provided under the regulations of FTB Part B, maximum amount to be received for 10 years old child amounted to $3,186.45 per year. Since the amount received $1,300 is lower than the threshold limit, the entire amount i.e. $1,300 will be exempted from the assessable income. Purchase of work clothing and shoes amounted to $450 is to be claimed as deduction since it is related to the work used for generating salary income with reference to the case of FC of T v. Edwards ( 1993) 93 ATC 5162. Cost of private car would be deductible to extent used for school purposes which was 5,600 km while the balance 19,400 km was used for personal purpose. Accordingly, the expenses on car can be deductible by using two methods i.e. cents per kilometer method or logbook method. In order to claim deduction under logbook method, it is essential for you to keep a logbook record for continuous 12 weeks while you must have the ownership. It is important to record all the trips related to work and personal use along with the maintenance of expenditure receipts. Another significant criteria required to be followed is the completion of logbook procedure once in five years or less (Ato.gov.au 2016). As per the regulations of ATO, an individual teacher is entitled to claim deduction for work related expenses on study costs and laptops (Wilkins 2014). Therefore amount of $3,650 including the cost of laptop purchased on 1.02.16 would be deductible as decided in the case of FC of T v. Finn (1961) 106 CLR 60. Superannuation contribution can be claimed as deduction as per the principles under Australian Taxation Office that is allowed for the salaried individual. Hence $3,000 on personal superannuation contribution would be deductible. Tax Agent fees incurred to manage own tax is deductible as per the legislation under Australian Taxation Office that is incurred to prepare or lodge the return on tax and other taxation advice. Hence, $750 for tax agent fees would be deductible. Taxable Income for the year ended 30 June 2016: Income from Salary 72,000.00 Less: Work related expenses Purchase of work clothing and shoes 450.00 Use of private car: 3,915.52 a) Cents per km method: 66 cents per km up to maximum of 5,000 per car 5,000 km out of 5,600 km * 0.66 cents 3,300.00 b) Logbook method Percentage of use for work purpose (5600/25000) km = 22.4% Total Cost incurred Registration and Insurance 1,700.00 Fuel 2,080.00 Speeding fine 450.00 Repairs and Services 750.00 Depreciation (for the period of use) 12,500.00 17,480.00 Entitled car expense (22.4% on $17480) 3,915.52 Since the deduction amount is higher in logbook method, it will be claimed as deduction Cost of study including laptop 3,650.00 Net income from work 63,984.48 Add: Franked dividends 2,850.00 Holiday receipt- Exempted Family tax Benefit- Exempted Less: Superannuation contribution 3,000.00 Less: Tax agent fees 750.00 Net taxable income 63,084.48 (Source: Created by Author) Tax payable/ (refundable) for the year ended 30 June 2016 Tax payable will determined based on the tax rates applicable from the year July 1 2015 provided by ATO along with the Medicare levy. Marginal tax is not applicable since the total taxable income is less than the threshold $87,000. Further, as per the legislation provided by ATO on PAYG withholding i.e. Pay as you go is required to be adjusted with the assessable amount of tax payable reference to the case of Chevron Australia Holdings Pty Ltd v FC of T (2015) FCA 1092. In case the PAYG amount exceeds the determined tax liability then the excess amount is to be claimed as refundable from the federal government of Australia (Ato.gov.au 2016). Tax Payable/ Refundable Net Taxable income 63,084.48 Taxable income on 0- $18,200 Nil Taxable income on $18,201- $37,000 3,572.00 Taxable income on $37,001- $63,084.48 8,477.13 Total tax 12,049.13 Add: Medicare levy @2% 240.98 Marginal tax rate is not applicable since the taxable income is less than $87,000 - Total tax payable 12,290.11 Less: PAYG withholding from salary 15,900.00 Tax refundable for the year ended 30 June 2016 -3,609.89 (Source: Created by Author) Reference List and Bibliography Ato.gov.au. 2016. Home page. [online] Available at: https://www.ato.gov.au [Accessed 16 Dec. 2016]. Austlii.edu.au. 2016. Australasian Legal Information Institute (AustLII). [online] Available at: https://www.austlii.edu.au/ [Accessed 13 Dec. 2016]. Dridi, W. and Boubaker, A., 2015. An Assessment of the Linkage between Financial Reporting and Taxation in Tunisia.International Business Research,8(4), p.168. Fouarge, D., Schils, T. and De Grip, A., 2013. Why do low-educated workers invest less in further training?.Applied Economics,45(18), pp.2587-2601. Hirte, G. and Tscharaktschiew, S., 2013. Income tax deduction of commuting expenses in an urban CGE study: The case of German cities.Transport Policy,28, pp.11-27. Hulse, K. and Burke, T., 2015. Private rental housing in Australia: Political inertia and market change.Housing in 21st-Century Australia: People, Practices and Policies, p.139. Kendall, W., 2014. A Statutory Comparative Analysis of Dividend Taxation Laws in Vietnam and Australia: Restructuring Regulatory Regimes to Attract Capital Investment.IAMURE International Journal of Business and Management,9, p.37. Mangioni, V. and Warren, N., 2014. Re-defining the land tax base in highly urbanised locations.Austl. Tax F.,29, p.455. McKerchar, M., Bloomquist, K. and Pope, J., 2013. Indicators of tax morale: an exploratory study.eJournal of Tax Research,11(1), p.5. Nijland, L. and Dijst, M., 2015. Commuting-related fringe benefits in the Netherlands: Interrelationships and company, employee and location characteristics.Transportation Research Part A: Policy and Practice,77, pp.358-371. Rogers, D., Lee, C.L. and Yan, D., 2015. The politics of foreign investment in Australian housing: Chinese investors, translocal sales agents and local resistance.Housing Studies,30(5), pp.730-748. Wilkins, R., 2014. Evaluating the Evidence on Income Inequality in Australia in the 2000s.Economic Record,90(288), pp.63-89.

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Yasmin almonte lantzs herstory Paper Red is the predominant color in all of Yasmin Almonte-Lantz;s works. This is because she believes that ;Red is blood, red is life, red is death, red is love, red is violence, red is passion.; And truly, all her works reflect much about life from a woman;s perspective. In almost all her paintings, women are made as subjects. For example, in the piece Herstory, we know right away from the title that the subject is a ;her;; a woman. It is also part of her feminism that she depicts women in her paintings as beautiful objects. I especially love the vivid details she puts into the women in her pieces. Although most are in their birthday suits, I understand this method to be a portrayal of the beauty and innocence, innate in every woman. Fromfirst glance, and without knowing the title of Almonte-Lantz;s painting, one would immediately notice the predominant color, red, being used as a background, which looks like some sort of fire. Then there are three images: a puppet, and a kneeling wom an, both bounded together by a red ribbon. However, at a closer look, one could see another feminine figure, blending among the flames. Her face is undefined because of the absence of facial features such as the eyes and mouth, but she does, however have a nose. Also, she is positioned upside down. The painting, with its colors, and characters, is a scary sight. Thefirst thing that I saw upon looking at the painting was agony. The characters looked real and imposing, as if they were in hell. The overall effect was that the subjects of the painting are falling into the fiery abyss. And what I saw from the faces of the subjects was a look of pleasure, yet one of immense pain at the same time. For instance, the puppet and the kneeling woman in the painting had eyes. However, the more I look at it, the more they seem to be hollow slots without eyeballs. The features of the kneeling woman projected a hint of

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