SALARY/ETHICS PACKAGING

Have you ever heard of salary packaging? It's been offered to private enterprise workers for some time. Now it's being offered to state public servants. I went along to an information session to see what it was about.

What I learnt was that salary packaging is a way for the rich to avoid sharing their wealth. It enables wage-earners to pay less tax while consuming more. If this sounds selfish to you, you are seriously out of step with economic rationalist thinking. Forget redistribution of wealth; you're supposed to leap at the chance of participating in a scam that helps the rich get richer at the expense of the poor.

Here's how it works. You take a portion of your pay as salary packaged payments. So instead of receiving your whole salary as taxable income subject to Pay As You Go tax, you can elect to take your salary in some other form. So you might buy a laptop computer out of pre-tax income rather than post-tax income, reducing your taxable income. This reduces the amount of PAYG tax payable.

We were told how to 'achieve' significant tax savings by buying a vehicle for private use and leasing it back. The cost of leasing, along with running costs, including fuel, comes out of pre-tax income. You have a new car (GST-free) and you are suddenly in a lower tax bracket. But to make it work, you have to run a high mileage in your car and it needs to be a high-value car. Apparently a lot of people go on long trips just to get their expenses up so they can keep their taxes down.

Mad if you don't? Immoral if you do. It's bad for the environment and it fuels consumerism. And it reduces the contribution you make with your taxes to the rest of the community. There's less money for public education and health. But you're okay. Your disposable income has increased.

Of course, not everything the government does with our taxes is desirable. Many of us don't like our taxes being used to exploit Iraq, or to overpay local members of parliament. But this is no justification for avoiding tax. What's an ethical path? Maybe carry out our own redistribution of wealth. Pass our tax cuts onto local or global non-government organisations which we have faith in. This is a preferred way for me. However, in the long term it's a dangerous path. The Federal Government would love to abandon welfare and aid, leaving it up to private corporations and individuals. The trouble is that corporations and individuals aren't always in a position to choose fairly, or to be consistently generous. The fair and equitable redistribution of wealth is the government's job.

Paying tax seems to be regarded by the wealthy as a major evil which we should avoid at all costs. In this town, anyone who has a job is lucky. Anyone who has a job which pays well enough to attract a high tax rate is extremely lucky, and in a far better position than most in the valley.

Individualism, selfishness, greed, reluctance to share, indifference to the needs of others: it's all part of capitalism at its ugliest. It's a kleptomaniac society. Subvert it any way you can.