Your Beer Is Taxed More Than Our Gas Exports

Jason · 00:00Welcome to the Numbers Game. I'm Jace. I'm joined with Nick. How are you mate?

Nick · 00:03Mate, better than ever. I had a um a reasonably busy weekend, so you know I'm slowly And getting the energy levels back up, but um yeah today's Wednesday so I'm I'm I'm okay.

Jason · 00:17Good, good mate, good. Well how are you going mate? You good? I'm I'm actually pretty upset. I'm pretty angry. I'm I've uh I've gone down a rabbit hole which I want to share with you today, but essentially I've come across a guy called Senator David Pocock. Now have you heard of David? At all?

Nick · 00:33Yeah, ex-rugby union player. Very good one. Yes. Um very good. Born and bred in South Africa and ended up playing in Australia and yeah.

Jason · 00:40Very good. Well There's a video that's going viral and uh it's come up on my my feed and I don't know if my algorithm's turning a bit political and things are going on, but As as somebody who works in the tax environment, as someone who does tax returns for hardworking Australians, and as someone who contributes to the beer excise tax by drinking a beer on the weekend, which I'm sure you've also contributed to as well. I uh I couldn't believe the numbers that came out of this video. Now if you haven't followed Senator David Pocock and checked it out, I recommend it. But essentially He's sitting there and he asks in Parliament around the petroleum resources rent tax, the PRRT. Now this is a tax on exporting Australia's minerals, including LNG, our gas and oil And would you believe it if I told you that Australian general everyday Aussie punters who drink a beer at the pub are paying more tax than what we collect on shipping our gas offshore?

Nick · 01:39Uh as in paying more tax on the beer, it is it's hard to s well, pardon the pun. It's hard to swallow, Jace. Yeah. Is what I would say.

Jason · 01:47Yeah. So And and to put this into numbers, uh, because it you know, this is what we do here at the numbers game, and then you know, there is a bit of a journey I want to take you on on the bit of a what if scenario that if if we made some change, what would actually be possible with the sheer amount of money that could be made? to fix up our country and to fix up the government's uh deficit and our level of debt. But just in this year alone, Aussie beer drinkers through excise tax. So every time you buy a beer, there's tax there's an excise on beer and and every other spirit and and whatnot. But we are going to collect co close to $2. 7 billion in revenue, which is what the government collects in taxes to then on spend elsewhere. We're gonna collect two point seven billion in revenue from beer tax or tax uh the excise on alcohol. Do you want to have a guess how much tax we're gonna collect on the gas that is going offshore by these big mining companies and exporters?

Nick · 02:40Well you've said it's lower. I can't imagine it's much lower. Okay. I'll go with 2. 4. 2. 4. If I told you it was $1. 5 measly billion dollars. Uh yeah, that's that's again, Jace, pardon the pun, hard to swallow. Good. Good. Hardest so well I might survey you on a few other things.

Jason · 03:00Okay. Let's talk about other taxpayers. That, you know, let's let's say, you know, may maybe 1. 5 billion isn't that relative and you know it's it's not a bad amount of tax to collect through sending our gas uh offshore. Um how much tax do you think our emergency services workers pay?

Nick · 03:17Oh, wow, we police, fieries. Yeah, yeah, yeah.

Jason · 03:21Three billion. 3. 2 billion. Teachers? 4 billion. 9 billion. Wow. Yep. And we'll give you just one more for for shits and gigs. Truck drivers. Uh fifteen billion. Uh three billion. Really? Aussie's under twenty-five, six billion. So, you know, this this example of like when when we're talking about government policy and the decision of who to tax You know, we've ended up with an economy and a country that has decided that, you know, we we are resources rich when you think about our oil, our iron ore, you know, all the other different things that we have are in a show that we have in abundance We should be one of the richest, most well-run economies and countries in the world. But unfortunately, it doesn't look like it's gone that way. Now there's a few ways we can challenge this, but I also then want to talk a few more numbers just to kind of build into what I'm trying to get out here. Do you know the size of the Australian government debt right now?

Nick · 04:15No, no, off the top of my head.

Jason · 04:16One trillion dollars. One trillion. That's easy to remember. One trillion. So Uh today today realistically what I want to get into is the trillion dollar question and there's two of them. Um so this is the first one. Is this first one trillion dollars How much interest do you think we pay per day on that?

Nick · 04:36Uh I don't know. Um I'm gonna just throw a real wild stab at and say a million dollars.

Jason · 04:4367 million is our daily interest bill.

Nick · 04:48Goodness me.

Jason · 04:49Yeah. So again, this this gets this is why I said I was fired. Because it gets me people quite upset to go the mismanagement and the misappropriation of the funds that we could have as as a country, and we are going to piss away $67 million a day when we could be building better roads, high schools, education, uh in help debt repayments for university students. We actually get more money in help debt repayments. from uni students than we do from the tax on our gas, the PRT. So, you know, that's the kind of stuff that as this starts to become more mainstream and now that we have, you know, things popping up in our Instagram feed because of guys like David Pocock out there spreading, you know, the the awareness of this. I think that for me, the message here is the more that we know about this and the more we actually give a shit. the more impact we can have. You know, we've got to go to the polls and vote. We've got to help, you know, craft policy. And maybe it's not each individual, but the people in Parliament that get enough backing from the everyday punter like us, there's petitions to sign. There's different things you can do. This is me just kind of going, these numbers are big. And if we don't care, eventually it's going to come back to bite us because the everyday Australian is the one that's going to pay the price for this. You think about how many new taxes are in Victoria as an example or how much tax we pay here in Australia. And it's getting pretty out of control. Now, while we've done the episode that says maybe compared to, you know, the other established economies, it's not that bad. But what could it have been? So I want to take you to then an example of what it could look like if we did this properly.

Nick · 06:21So you're saying here the underlying message is there's a clear misalignment with where the government's money Is coming from. Yeah. That's your underlying message here.

Jason · 06:31Yeah. Correct. Correct. And I think it's just You know, like anything, you know, I've talked about GST needing to change, but you know, you come back to it and go, cool, we can put GST up and collect more goods and services tax, great. But is there a bigger impact we could have by actually somebody having the balls to go against mining and, you know, the offshore exporters of these to actually go, you know what? You guys have had your day, you've made your your billions and billions. And is it time for the Australian government and the Australian people to stand up and go, we actually want a slice of that? And I want to give you an example of where this has actually done been done well. So Do you know the Norway story? No, not in regards to tax.

Nick · 07:11Okay. I assume is where this is going.

Jason · 07:13Correct. Yes, correct. So Norway in the late 60s had their oil boom or discovered their oil. And by the 70s, they strengthened their taxation on that. So something that we didn't do. And I know you can't go back in time, but this is the example that I kind of want to give you the comparison. So not only do they have a 22% company tax, so like we have our 25% tax or 30% tax on the bigger business, they then also added a 56% special petroleum tax Now you think about our PRRT that's collecting this tiny little sliver. Imagine we were actually collecting 56% special petroleum tax on that. Remind me that percentage? Uh it's it's not really a percentage because it's kind of a a weird it's a rent. So the P R R T is a rent, and that's based on the profits, but The reason it's such a small number is you've got capital expenditure. They come here and have to set things up. Yep, run their profits down. These organizations aren't silly. There's where there's a will, there's a way to make that number small

Nick · 08:14So just to put that into the numbers, so and um obviously this is a lot smaller number than what we're talking, but if it's a million dollars, they pay their twenty-two percent on that. Um and then so on top of that, they of that a million dollar profit, they lose another 56%. 56%. So in total, they're paying 78% in tax on profits. Yep. That seems like too much. Correct. But would that not um hinder motivation?

Jason · 08:49Potentially, but where people needed the resources And they were able to sell it and they've done that for years. And then what they ended up doing with that was to create their funds, so their government pension fund. And what's ended up happening since that time is they have invested close to $2. 5 trillion through the ability to collect this extra resource tax and invested that and it now equates to nearly $460,000 invested per Norwegian citizen. So they have this insane crazy amount of money gobbled up and you know going through the comments on one of the recent posts as well of people going, yeah, I was recently in Norway and the roads are beautiful and everything's clean and everyone's happy and doing this and When you think about every single citizen has a a fund with four hundred and sixty thousand dollars sitting there contributing to their economy's strength and the c and you know everything else that they can invest in. So then I looked back and went, well, what was the possibility in Australia's numbers? And I'll and I'll just kind of take you on a quick little journey of the possibility. So we export $450 billion a year on average through uh our iron ore. our coal, our LNG, our gold lithium. So if we were to even put so they did something crazy with a 56% petroleum tax I've run the numbers on what if we just did a 10% tax on that particular resource, uh, that particular industry. So I'm going to tell you what Australia could have built with the 10% over the last 20 years alone. So of the 450 billion in exports across As I said, iron ore, gas, uh, coal, oil, $45 billion per year over 20 years and conservatively about 6% annual returns. We would be looking at a $1. 3 trillion fund sitting there over the last built up over the last 20 years For Australians' benefit. Now when you sit here and think that we have a one trillion dollar government deficit that we're spending sixty-seven million dollars a day on.

Nick · 10:46Yeah.

Jason · 10:46But the potential if somebody had made the hard decision or just the smart decision to tax appropriately our resources of Australia, which is well and truly deserved that the Australian people should benefit from, that's the position we could be in How does that make you feel?

Nick · 11:01Oh look, it's it is it is crazy and it's crazy to think that um the d the discrepancy between the numbers, obviously Australia versus Norway. What I'm thinking though is it is is it appropriate to tax profit or is it appropriate to tax the gross amount of exports? Because Obviously profits can be manipulated, as you well and truly know, as an accountant. And I'm thinking about beer Obviously that's uh a tax on the gross expenditure of the beer. So is a smarter way not to say, well, it's a percentage of the gross, it's not a percentage of profit because we can't Uh we can't have any influence on that as a as a country versus um a a business who's um You know, obviously writing down profit. So would that not be a better way to go?

Jason · 11:58Yeah, correct. There's got to be a smarter way. And and I completely agree. I think the the number around LNG alone was $70 billion worth was exported. So when you think of $70 billion worth of LNG per year or in the recent years, that's around the numbers they were they were putting out, but we get $1. 5 billion of that $70 billion comes back to us as rent tax or royalties, P R R T. It's just such a small minute number. And you know, Elbo was on um the Carl Stefanovic podcast, and you know, David again has done a bit of a breakdown of it. It's a killer video, and I love that he did it. But you know, Albo's political spin actually sounds like that he works for the mining and and the the LNG. Like it it's it's actually sickening that our prime minister doesn't sound like he's got the backs of the everyday Australian He sounds like he's defending, oh, well, you know, what what David's not telling us is that the company tax that these companies paid. Yeah, great. We but you pay company tax, Nick, and I pay company tax. But we're also not digging gas out of the ground or oil out of the ground and sending it offshore, which you know again, they're making uh a ridiculous amount of money. And again, the manipulation around what they've done to be able to pay such a small amount is where it gets a little uh a little disheartening, uh, I would say. So You know, my message here, I think, you know, for me it's around taking an interest. For me, it's around we can't change what's happened in the past. But I really hope that through people taking action, these messages spreading and going. crazy, uh, what do you call it, viral online really starts to drive the message home that, you know, and I'm glad someone out like David is out there taking an interest in this and and having a voice for the everyday Australian. And I think more people need to not just you know, sit back and not take interest, but create a voice, you know, the comments, the likes, the reshares, the signing of the petitions. We need to make some change in in Australia for the benefit of, you know, us and and our future.

Nick · 13:54So um you've listened to the elbow well the the mashup of the elbow interview is the concern around the demand for the resources if they do make changes?

Jason · 14:07Nah, d they didn't mention anything like that. Or it didn't go into the detail because I've only seen the snip.

Nick · 14:12After me though, right? Yeah. Like apart from pressure. Um They must be concerned about the impact that it would have.

Jason · 14:21I would say, I mean look again, it's gonna sound very political, but the f the funding that comes back through the government, the b the major parties that are running our country, they are very much funded by these companies.

Nick · 14:32You know, so you know pressure in a way. Correct. And but then it comes back to the um You know, these these lifetime politicians, I think this is where it it all comes back to the core issue is these people that are really only concerned whether they whether they present it to or not, about their own tenure and their own um progression through a system, not necessarily putting the um the livelihood of the country first. And I and I think that we've seen that over and over again. And that also goes into the conversation about people being um not equipped to handle decisions that they're making inside of politics. Because clearly what you're just um demonstrating here, which is what Pocock has, is it Some of these decisions are to be made or could be made are no-brainers, but they're not getting made. So is that an inability of politicians? Probably. Um and again a fact that the fact they're not really caring about the long-term prosperity of the country. It's more about protecting their own positions and their own um their own career. Path.

Jason · 15:46I couldn't agree more. I think it is really that short-sighted view of that the time that they're in their career, what they can do, not ruffling feathers and making big big huge changes that would either see them knifed in the back and removed if they get it wrong with the wrong people. And but I mean when you there's been some talk around as well of what our politicians are paid, you know, compared to the top CEOs and executives of the biggest companies in Australia. Now they're on tens of millions of dollar salaries to run, you know, either Macquarie Bank or the Combank or the big mining companies. But we've got our finance ministers and politicians that might be on $500,000 salaries or $700,000 salaries. And then comparing, you know, the mistakes that they might make because maybe, you know, how do you attract the top talent to be a politician if that is the salaries. Now, for everyday people, you sit back and go, shit, a $500,000 salary is pretty good. But if you want the best of the best talent. And they're not on $10 million a year. You can imagine the the again, this everyday Aussie who is at the pub, sinking the pint, contributing to the beer tax, going, why would I want to pay Katie Gallagher $10 million? And that, you know, that particular example's one that's gonna, you know, has also done the viral news of, you know, Katie Gallagher's our finance minister and was asked Um, she went on ABC Radio, I think it was and said that she'd saved that her government had found a way to save $114 billion. And then when she was challenged on it, it turned out that They didn't actually save 114 billion. I think that ended up sp like saving it from one area and then re spending close to 142 billion elsewhere.

Jason · 17:19Yep.

Jason · 17:20Yeah. So again, you know, there's there's there's the counter arguments uh of you know, do we have do we have the right structure set up to attract the right people to be in those positions? But I'd say the ones that are there now aren't the best talent that we can get

Nick · 17:32Yeah, and it's a vicious cycle because, you know, no matter what the the pay packet is, particularly in today's day and age, who would want the scrutiny? Yeah, life's stressful enough as it is, like you know, right family business. to then be in the public eye and having every single decision that you make scrutinized and it doesn't matter what decision you make whether it's the right the right or wrong one. 50% of the people are going to disagree with it because that's just that's just how society works. So, you know, it's it is really difficult to find the r top talent that would want to do this, particularly what's been paid in the private sector. But maybe there is there is a a certain bunch out there who who would do it. But there's also got to be some minimum standards as to who's allowed in. So, you know, you might not have to pay people 10 million, but maybe you could pay people a lot more than what they're getting paid and have some minimum standards because I think with the finance minister, that's the question that's been asked. Hang on. If you look at some of her um historic roles, how did she end up there? Wouldn't happen in normal business.

Jason · 18:35Well no, if if your CFO made a mistake that big, you'd probably be you'd be performance manager them out of the business. Or they or they wouldn't be hitting their KPIs and they they wouldn't have a job. Yeah. I think the other thing we need to understand