Pirate Congress 2023/Motions/Economics Policy Update

'''Note: this is intended to form a diff to the current policy. Please use "View history" to compare the latest version of this page with the earliest version.'''

=Economic reform=

Citizens Dividend: A Streamlined and Empowering Solution


The excessive complexity of Australia's tax and welfare systems with over 120 distinct taxes and more than 20 separate welfare payments has been a burden on both the government and recipients. The current welfare system incurs annual administrative costs exceeding $5 billion. A Citizens Dividend would simplify these costs by consolidating multiple welfare programs into a single consistent payment. This streamlined approach promotes transparency and eliminates disincentives to work and save.

A Citizens Dividend is intended to provide a financial safety net for all citizens, empowering individuals to break free from abusive relationships and facilitating smoother transitions from welfare to employment. Consolidating various welfare programs into a single regular payment reduces bureaucracy, strengthens individual rights and fosters positive liberty. This freedom enables citizens to pursue education, training, volunteer work and creative endeavours without the burden of complex payment rules and regulations.

Furthermore, a Citizens Dividend bolsters workers' bargaining power, empowering them to negotiate improved working conditions, fair wages, and a healthier work-life balance. A Citizens Dividend lays the groundwork for 21st-century entrepreneurship and innovation, fostering a thriving and dynamic Australian society.

Choosing 'Citizens Dividend' Over 'Universal Basic Income'
We have chosen the term 'Citizens Dividend' to emphasise that the payment is for citizens as a rightful share of the nation's wealth. This will foster a sense of belonging and responsibility, and reduce the social stigma of traditional welfare programs. Using the term 'Citizens Dividend' highlights our aspiration for the payment to exceed 'basic' needs and have the potential to scale up, empowering individuals to pursue their passions and dreams, invest in their personal growth, and contribute to a vibrant, innovative, and resilient Australia.

''milspec note: I am advocating for a Citizens Dividend over a Negative Income Tax (NIT) model because it promotes simplicity, fairness and equal opportunities for all Australians. The NIT model introduces administrative overhead, complexity, and implementation challenges like needing to distinguish between citizens and non-citizens for tax purposes, requiring individuals to nominate a 'tax-free threshold employer', and needing citizens to report (and the government to track) changes in income circumstances. In contrast, a Citizens Dividend streamlines the process by offering a consistent payment to all citizens, irrespective of their employment status. It fosters a sense of shared ownership in the nation's prosperity and reinforces the democratic connection between citizens and their government.''

Funding the Citizens Dividend
The Citizens Dividend will be financed by two streams: immediate changes to spending and revenue plus the returns generated by a Sovereign Wealth Fund. This approach ensures a sustainable, long-term financing mechanism for the Citizens Dividend, while simultaneously allowing for a gradual ramp-up of the dividend as the fund grows. Introducing a $580* per week Citizens Dividend for all Australian citizens is estimated to cost $504* billion per year. The total number of eligible citizens is estimated to be 21.3 million based on 2021 census data. To reduce economic shock, the following changes (and thus the UBI) will be phased in over a period of eight years.

''milspec note: *If all of the following measures are passed, then that would allow us to fund a Citizens Dividend of $580 per week. I will adjust this final number depending on how many measures are passed at the NC.''

Return to contents

Inflationary Effects
While some may express concerns that implementing a Citizens Dividend could lead to inflation, it is crucial to recognise that this is a complex issue with multiple considerations that influence the potential impact on inflation. Firstly, it is worth noting that net inflation of this proposal would likely be close to zero. This is due to the revenue-neutral approach of the Citizens Dividend, which ensures the overall money supply in the economy remains stable.

However, it is acknowledged that areas from which the funds are drawn, such as from land value and capital gains, might experience slight deflation, while areas of the economy receiving the funds, such as low-income spending, could see a net inflation. This effect is desirable in two ways; it means that the economy is prioritising the needs of lower-income individuals, and it moderates land values, reducing the barrier to entry into housing. In the first instance, there may be increased pricing for some goods and services that are now in higher demand, such as children's extracurricular activities for example, but this price signal will lead to a market response, increasing supply and ultimately bringing prices down from their peak. This price response is healthy, as it leads to an increase in the supply of services that society needs more of.

Return to contents

Displaced Existing Welfare
"Milspec Note: The following changes will amount to $164.4b which is the equivalent of $189.46 per week of CD."

The following welfare services will be streamlined and replaced by the Citizens Dividend. This displacement will replace a total of $164 billion of current spending as listed below. The values below are from the 2020 budget. In determining whether a welfare program should be displaced by the Citizens Dividend, the guiding principle used was a consideration of the specificity and complexity of the needs that the program addresses. Programs that provide to those who have no or low income, were identified as candidates for displacement, as their roles could be efficiently served by a universally applicable Citizens Dividend. On the other hand, programs dealing with unique circumstances and needs, such as disability support or veterans' benefits, were earmarked for retention. These programs address needs that are not universal and may be significantly higher or more specialized than what could be covered by a general Citizens Dividend. The Citizens Dividend is seen as a floor upon which other necessary supports can be built, not a replacement for all forms of assistance.

The following welfare programs will be retained:

Pirate Party Australia proposes the following reforms:
 * Implement a Citizens Dividend to all adult citizens (excluding incarcerated persons) of $580* per week.

Return to contents

Transition to a Flat Income Tax System
"Milspec Note: This change to a 25% flat tax contributes $32.68 per week to the CD. If we changed the flat tax rate to 20% instead of 25%, instead of raising money, it would cost $19.2b, or cost the equivalent of $22.14 per week of UBI."

The implementation of a 25% flat income tax system in tandem with the Citizens Dividend provides numerous benefits that simplify the tax system, promote economic growth, and ensure equity. By eliminating the need for multiple thresholds, offsets, and tax breaks, we can reduce the advantages enjoyed by wealthy investors and those who can afford tax accountants. The flat tax system also curtails tax evasion opportunities and discourages the use of trusts and company structures for income diversion, creating a more equitable system.

In a world where the labour share of total income is declining due to increasing automation, a flat tax coupled with land value tax and capital gains tax reform provides a more future-proof source of revenue. By discouraging tax-driven income diversion, we can level the playing field for all taxpayers, regardless of their income or employment status. Moreover, a flat tax reduces economic inefficiencies, such as 'deadweight loss', by diminishing the disincentive to work. The simplified tax code could eliminate the need for tax returns for a substantial segment of the population and make Australia more attractive to highly productive individuals who might otherwise seek lower tax regions. The flat tax system also addresses the disparity in tax burdens between couples with uneven incomes and eliminates the need for income levelling across years for those with fluctuating incomes, such as small business owners. In essence, the flat tax system prepares Australia for a more efficient, equitable, and future-ready state. The replacement of our current income tax system with a flat tax is estimated to generate an additional $28.4 billion per year. This figure is estimated from a Total Personal Income of $951.4 billion and Total Personal Income Tax of $209.49 billion.

Most tax offsets are set to be replaced by the Citizens Dividend. This includes offsets for senior Australians, mature age workers, overseas civilians, entrepreneurs, low and middle income earners, and termination payments, as well as zone offsets. However, it does not include tax offsets for private health insurance and foreign employment income.

Pirate Party Australia proposes the following reforms:
 * Transition to a 25% flat income tax system.

Return to contents

The Case for a Federal Land Value Tax
"Milspec Note: This change contributes $157.92 per week to the CD."

Australia's stamp duties and payroll tax system, imposes burdens that hinder economic growth and housing affordability. Stamp duties, levied on transactions, create market distortions, discourage mutually beneficial property exchanges, and result in deadweight loss. Payroll tax stifles job creation and business expansion, escalating hiring costs, and imposing a growth disincentive due to differing thresholds and rates across regions.

A fundamental shift to a Land Value Tax (LVT) presents an efficient and equitable solution. LVT, a charge on the unimproved value of land, encourages optimal land use and channels capital towards more productive sectors. Unlike stamp duties and payroll tax, it maintains economic efficiency as it does not influence decisions about work, savings, or the use of land.

One of the key advantages of LVT is its impact on land and housing prices. As the LVT rate rises, it decreases the net return from owning land, effectively reducing its market price. This mechanism discourages land speculation, induces idle or unused property into the market, and notably improves housing affordability over time. Valued at $5.8 trillion, with an average annual increase of 5.8% between 2011 and 2016 , Australia's land offers a significant tax base. A proposed federal LVT at 3%, half the average annual growth rate, could yield approximately $137 billion per year, even after compensating states for lost revenue from abolishing stamp duties and payroll taxes.

Importantly, a federal LVT is superior to state-based LVTs, which often include tax-free thresholds that individuals and companies can exploit by spreading portfolios across states and using companies and trusts. A uniform federal LVT eliminates these loopholes, establishing a fair and efficient system.

Pirate Party Australia proposes the following reforms:
 * Abolishing inefficient taxes like payroll tax and stamp duties on cars and houses.
 * Implementing a 3% federal LVT on the unimproved land value, extending to owner-occupied housing.
 * Protecting income-poor taxpayers by allowing tax payments to be deducted from the equity of the land via a Line of Credit or lien.

Return to contents

Inheritance
"Milspec Note: This change contributes $21.21 per week to the CD."

Under the current tax system, when an individual inherits an asset, Capital Gains Tax (CGT) implications are usually deferred until the asset is sold or otherwise disposed of. In some instances, the cost base of the inherited asset is effectively reset, effectively exempting the asset from CGT on gains accumulated prior to inheritance. This arrangement can be perceived as inequitable, as it allows the inheritance of substantial wealth without immediate tax obligations. In essence, it favours wealth accumulation for a few at the expense of broader societal welfare.

In pursuit of a more equitable taxation system, Pirate Party Australia proposes a reform to the handling of inherited assets. Specifically, we advocate for the levy of CGT at the point of inheritance rather than at the point of disposal. This measure ensures that tax obligations are addressed immediately and prevents the deferment of tax liability. This reform would see the taxation of inherited wealth in line with income generated through labour and entrepreneurship. In cases where cash is not readily available to pay the tax, alternative means could be arranged. For example, the tax could be paid by ceding a proportionate amount of equity in the asset, through mechanisms such as a lien or shares. This provision prevents the need for forced sales to meet tax obligations. Low value goods below a threshhold (such as furniture) will be exempt.

Since ‘one-half of capital gains are held until death or donated to charity, thus escaping tax’ we shall estimate the additional revenue available to be approximately the same as the Capital Gains Tax that was collected - $18.4 billion. By capturing tax on inherited gains at the point of transition, we aim to ensure that the compounding returns of that wealth benefit all Australians, not just the few.

Pirate Party Australia proposes the following reforms:
 * Reform Capital Gains Tax by levying CGT at the point of inheritance.

CGT when Loans are Secured Against Assets
"Milspec Note: This change contributes $21.21 per week to the CD. This change is already policy."

The current taxation system allows investors to take out loans against their assets and defer Capital Gains Tax (CGT) indefinitely. This practice often distorts market behavior and creates the "lock-in effect," where investors are incentivised to hold onto their assets longer than they otherwise would to avoid CGT. These practices can significantly distort investment decisions and inhibit the efficient allocation of capital.

In response to this issue, Pirate Party Australia advocates a reform that would levy CGT at the point when loans are secured against an asset. This measure disrupts the loophole that allows investors to defer CGT, ensuring that tax obligations are also met at the time of securing a loan in additional to at the time of asset disposal. To alleviate any potential burden, no forced asset sales would be necessary under this reform. As is currently the case, the valuation of the asset would be agreed upon mutually by the lender and the asset owner, reflecting a fair market value at the time of loan issuance.

The additional revenue that this would generate is difficult to estimate. However research shows that decreasing the tax deferral period from 35 years to 10 years changes the Effective Tax Rate from 10% to 20%, or a doubling of the CGT collected. Since Capital Gains Tax collected was $18.4 billion, the additional revenue is estimated to be also approximately $18.4 billion.

Pirate Party Australia proposes the following reforms:
 * Reform Capital Gains Tax by levying CGT when loans are secured against assets.

Removal of the 50% CGT discount
"Milspec Note: This change contributes $13.48 per week to the CD. This change is already policy."

Australia's tax code currently includes a provision that allows for a 50% discount on Capital Gains Tax (CGT) for assets held for more than one year. While this provision may have been implemented with the aim of promoting long-term investment, it has been widely criticised for disrupting the equity and neutrality of the tax system. Indeed, this discount incentivises individuals to structure their finances in a way that allows them to derive a significant portion of their income in the form of capital gains, thereby reducing their tax liability.

This not only introduces an element of bias in the tax system, favouring capital gains income over other forms of income, but also risks eroding the tax base and contributing to wealth inequality. Other forms of capital income, such as dividends and interest, do not receive comparable inflation adjustments, leading to uneven treatment within the taxation system.

To address this, Pirate Party Australia advocates for the abolition of the 50% CGT discount. However, to maintain fairness and address the impact of inflation, we propose adjusting the cost base of the asset for inflation over the period it was held.

This reform could generate an additional $11.7 billion per year in tax revenue. This additional income could be utilised to fund public services, support social initiatives, and promote economic stability and growth. The Pirate Party Australia is committed to tax reforms that promote fairness, equality, and economic prosperity for all Australians.

Pirate Party Australia proposes the following reforms:
 * Reform Capital Gains Tax by removing the 50% CGT discount

Owner-Occupied Homes
"Milspec Note: This change contributes $69.15 per week to the CD. There would be some interactions with Land Tax. As a result of land tax changes, land value growth will be dampened which means that this change may not generate the same revenue as if it was made in isolation. Our flat tax change would also interact with it."

The Pirate Party recognises the need to create a more equitable and efficient tax system. As part of this effort, we propose a significant reform: the reevaluation of the capital gains tax (CGT) exemption currently given to owner-occupied homes. This exemption, which is estimated to be worth about $60 billion a year by the Treasury, disproportionately benefits wealthier households and contributes to the distortion of the housing market. International bodies such as the International Monetary Fund (IMF) have urged Australia to review this substantial tax concession.

The current exemption is more generous than what is typically seen in many other advanced economies. It promotes investment in owner-occupied housing over other types of assets and can contribute to inflated housing prices. By restricting the CGT exemption for the family home, we can reduce these distortions and generate additional tax revenue. This approach aligns with our vision of a tax system that treats all forms of capital income equitably.

In implementing this change, we will consider the potential impacts on homeowners, particularly those who may be asset-rich but income-poor. Specific measures, such as a threshold for tax exemption or limiting the policy to future gains, can be implemented to mitigate any negative effects.

Pirate Party Australia proposes the following reforms:
 * Reform Capital Gains Tax by broadening it to include owner-occupied homes.

Return to contents

Taxing Gifts and Inheritances as Income
"Milspec Note: This change contributes $34.57 per week to the CD."

Under current tax laws, only income earned through labour is subject to taxation, which results in a disparity between earned and unearned income. By classifying gifts and inheritances as taxable income subject to the new income tax rate, we can eliminate this discrepancy and foster a more equitable tax system. This adjustment counters the randomness of the existing laws and hinders tax avoidance through the tactic of strategic gifting.

Although some might label this as a "death tax", it's important to clarify that the tax is levied on the recipient, not the deceased. This change coexists with the recipient's current tax situation, allowing for applicable offsets and other adjustments. Taxing gifts and inheritances as income aids in correcting intergenerational financial disparities, and helps to bridge the wealth gap between those benefiting from intergenerational wealth and those without such advantages. The administration of this system will resemble the Fringe Benefits Tax system, and a threshold will be established to exempt low-value goods (e.g., typical birthday presents).

Considering the total value of wealth transfers, inclusive of inheritances and intervivo gifts, reached over $120 billion, implementing a 25% flat tax on such transfers could potentially generate $30 billion of revenue per year.

Pirate Party Australia proposes the following reforms:
 * Broaden the income tax base by including gifts and inheritances as taxable income.

Return to contents

Removing GST Exemptions
"Milspec Note: This change contributes $23.86 per week to the CD."

The proposal to broaden Australia's GST base involves eliminating current exemptions on essential items such as healthcare, education, and fresh food, among others. These exemptions were initially implemented with the aim of promoting equity and stimulating the consumption of 'merit goods', which generate positive societal externalities. However, according to the Organisation for Economic Co-operation and Development (OECD), this approach does not efficiently serve its intended purpose of promoting equity or encouraging consumption of such goods. The inefficiencies stem from the fact that these exemptions inadvertently benefit higher-income households more, as they are the ones who generally spend more on these exempted goods and services.

By eliminating these exemptions, we could simplify the tax system, decrease compliance costs, and reduce distortive effects between different types of goods and services. Modelling suggests that the broadening of the GST base could increase GST collections by approximately $20.7 billion.

This additional revenue will be directed towards the Citizens Dividend and this would mitigate any regressive impacts of the expanded GST on lower-income households, effectively transforming the policy into a progressive one. It is worth noting that a significant proportion of this additional GST revenue would come from higher-income households, and while lower-income households might pay a larger proportion of their income in GST, they would receive a net gain as a result of this change.

Regarding goods that produce positive externalities such as education, a targeted approach like direct subsidies would likely be more effective at stimulating their consumption (refer to the Education policy section). The GST system's role should not be to promote socio-economic goals but to collect revenue efficiently. The funds collected could then be utilised in a more targeted and effective manner, like providing subsidies to promote the consumption of goods with positive externalities.

The proposal to eliminate GST exemptions and introduce a Citizens Dividend would lead to a more equitable, efficient, and simpler taxation system. This approach not only improves the overall efficiency of the GST system but also mitigates its regressive impacts, thereby establishing a fairer and more effective taxation system for all Australians.

Pirate Party Australia proposes the following reforms:
 * Broaden the GST base by removing GST exemptions.

Return to contents

Removing Superannuation Concessions
"Milspec Note: This change contributes $49.67 per week to the CD."

The proposal to remove superannuation concessions and redirect the funds to support a Citizens Dividend offers a more equitable approach to public spending. Superannuation concessions, as outlined in the Treasury's "2021 Tax Benchmarks and Variations Statement" total a staggering $43.1 billion. However, instead of aiding those most in need, these concessions have disproportionately benefited the most affluent, creating an unfair advantage that contravenes the ethos of equal opportunity for all citizens.

Over time, superannuation concessions, initially intended to reduce reliance on the aged pension, have inflated at an exponential rate. This bloating of concessions has led to a situation where these tax breaks, ostensibly designed to aid retirement saving, have instead morphed into a vehicle for wealth accumulation for high-income earners, who are best positioned to exploit such incentives.

The fairness of the current system has been repeatedly called into question, as data shows that 60% of superannuation tax concessions go to the top 20% of households, with a meagre 11% directed towards the bottom half of all Australian households. This, coupled with gender disparities, where women, despite making up about half of the workforce, receive only 30% of superannuation tax concessions, makes the case for reform even more compelling.

In light of these insights, the reform of superannuation concessions is not just critical but urgent. It represents a significant stride towards a more equitable Australia, where funds are allocated in a way that is transparent, fair, and genuinely promotes the well-being of all its citizens.

Pirate Party Australia proposes the following reforms:
 * Remove superannuation concessions.

Return to contents

Revolutionising Migration: Visa Rent
"Milspec Note: This change contributes $20.74 per week to the CD."

The Visa Rent policy reinvigorates Australia's immigration system by embodying fairness, efficiency, and market-driven principles. It simplifies the visa system by merging all classes into one, thereby eliminating burdensome processing times and the sizeable visa backlog that currently bog down our immigration system. More importantly, it prioritises migrants who stand to gain the most from coming to Australia, thus maximising both individual opportunity and the economic and cultural value these immigrants bring to our shores.

At the heart of the Visa Rent policy is a market-driven mechanism, with migrants paying a visa rent. The amount of this rent is determined by market forces, balancing the supply and demand for visas. By setting the rent at a level where demand matches supply, the policy ensures that Australia attracts the optimal number of immigrants without straining services and infrastructure. It responds dynamically to global migration patterns and economic shifts, adjusting to maintain this equilibrium.

This approach has a two-fold advantage: it benefits migrants who experience a substantial improvement in living standards or career opportunities by moving to Australia and it compels employers to offer competitive wages that take into account the added cost of the visa rent. This means that Australian workers are on a level playing field with overseas workers, as employers cannot undercut local wages by hiring low-cost labour from abroad.

Simultaneously, the Visa Rent policy generates a significant, continuous revenue stream for the government. This revenue could be returned to all Australian citizens in the form of a Citizens Dividend, fostering economic equality by sharing the benefits of immigration with the entire community. At a steady state, the Visa Rent policy could collect up to $18 billion per year, based on 4.5 million non-citizens.

The transition to this new system will be fair and gradual, with a ramp-up mechanism allowing new migrants ample time to secure employment, adjust to Australian living costs, and manage their finances effectively. Importantly, the policy will not apply retrospectively to current visa and permanent resident (PR) holders, safeguarding their rights and providing certainty.

By fostering an environment of fair competition, promoting inclusivity, and leveraging market forces, the Visa Rent policy stands as a testament to Australia's commitment to a diverse and prosperous society. It offers an innovative pathway to immigration that boosts economic growth, upholds our tradition of supporting newcomers, and shares the benefits of migration equitably among all Australians.

Pirate Party Australia proposes the following reforms:
 * Implement a visa rent system set at a level at which the demand for visas equals the supply of migration places.

Return to contents

Remove Religious Tax Concessions
"Milspec Note: This change contributes $35.73 per week to the CD. Sorry, Alex, I couldn't find another source for the $31b figure."

Pirate Party Australia maintains that all organisations, irrespective of religious ties, should adhere to the same tax laws and regulations. We acknowledge that churches and other religious institutions currently enjoy tax concessions, including exemptions from land value taxes and rates. Although religious activities may offer certain societal benefits, these concessions are estimated to result in a significant shortfall in revenue for the Australian government.

We advocate for the abolition of all tax concessions for religious organisations, including exemptions from land value taxes and rates. All entities, religious or otherwise, should be subject to the same taxation criteria. We suggest the removal of the 'advancement of religion' as a charitable activity when determining tax exemption. However, exemptions should be retained for non-commercial income earned by religious organisations, provided they meet other qualifying categories for exemption, such as provision of charity or community service. Previous estimates by others indicate these tax concessions could account for as much as $31 billion per year.

Pirate Party Australia proposes the following reforms:
 * Remove tax concessions for religous organisations. Exemptions are to be retained for qualifying activities such as charity or community service.

Return to contents

Education Equality: The Education Dividend
"''Milspec Note: This change makes children eligible for the Citizens Dividend and represents a net cost of $70 billion, or the equivalent of $80 per week of the adult Citizens Dividend. Given the removal of many family-related benefits in the current welfare system, this change could greatly make it up to those families. I have updated this to be consistent with our education policy: continuing direct government funding of public school and ceasing funding for religious and private schools"

The Pirate Party is committed to addressing the deep-seated issues of access and equality within our education system. Our current public school funding model, largely influenced by geographical catchment areas, tends to favor wealthier families who can afford properties within the vicinity of superior public schools. This system not only perpetuates social stratification but also disproportionately disadvantages lower-income families who can't afford private education or additional extracurricular resources.

To rectify this, we propose augmenting the current model with an Education Dividend - a trailblazing initiative that aligns with the amount of the Citizens Dividend, $580* per week. This Education Dividend, granted to the guardian, is primarily to be spent on accredited education or childcare services. Any surplus can be allocated to education related expenses or, in cases of severe financial hardship, made accessible as cash to support the family's basic needs. 'Severe hardship' would be as currently defined and evaluated by Services Australia. Education related expenses could include:


 * 1) Academic Resources: Such as textbooks, educational software, and tutoring services.
 * 2) Extracurricular and Enrichment Activities: Such as sports, arts programs, coding classes, foreign language learning programs, and more.
 * 3) Wellbeing and Support Services: This can cover costs associated with the physical and mental wellbeing of a child, including gym memberships, counseling or therapy sessions, nutritional needs, and other health-related expenses that could impact a child's capacity to learn.
 * 4) Technological and Infrastructure Needs: Funds can be used for necessary technology and infrastructure, like laptops, tablets, and internet services.
 * 5) Transportation and Accessibility: This refers to costs associated with ensuring a child can attend school and extracurricular activities, like transportation fees.

Consistent with the Pirate Party Education Policy, public funding to private and religious schools shall be discontinued. Public school funding will be unchanged, but for those opting for public school education, the equivalent public school funding (approximately $284 per week) would be deducted from their Education Dividend. This figure is based on the 2020-21 education expenses of $59.49 billion for 4.04 million students enrolled in public education. However, families would retain the flexibility to utilise the remainder of the dividend for education related expenses.

Our reform not only encourages competition among schools but also gives children the liberty to enroll in any school they prefer, regardless of their location or financial situation. By promoting participation in a range of extracurricular activities, we hope to enhance the overall learning experience and contribute to the holistic development of our students. With the implementation of the Education Dividend, the Pirate Party envisions a more equitable, accessible, and innovative Australian education system that benefits all students and their families.

The Pirate Party Australia proposes the following reforms:


 * Implement an Education Dividend, equivalent to the Citizens Dividend of $580* per week, to replace the current school funding model. This amount, given to the child's guardian, should be used for accredited education or childcare services first, and then any remaining amounts can be used for education related expenses.

Return to contents

Reinstate the Commonwealth Employment Service
Rent-seeking in the employment services sector needs to be addressed. It is clear that the existing Job Active system is a dismal failure which handicaps job seekers more than it helps them, while syphoning off large amounts of public money for private profit. The system has now reached breaking point, while costing $7.3 billion per year - half of which is spent on administration. The Commonwealth Employment Service (CES) was a vastly superior model by comparison and produced far better outcomes at much lower cost. At its peak, the CES handled 41% of job vacancies and had various specialised and experienced staff that served the unemployed well, while providing employers with a low cost "one stop shop" for workers. Small business has joined calls for a reinstatement of the CES, which would be more beneficial for them in finding staff. The CES should be reinstated to replace Job Active and resume their previous responsibilities.

Pirate Party Australia advocates the following reforms:

Reinstate the Commonwealth Employment Service (CES)


 * End rent seeking in the employment services industry by replacing Job Active with the CES.

Return to contents

Distributed Digital Currencies
Distributed digital currencies such as Bitcoin (also referred to as cryptocurrencies) are an emerging and potentially highly disruptive technology, and are the subject of numerous official inquiries around the world. Existing payment methods carry significant risks - such as the need for consumers to share credit card details - and also impose dead-weight middle-men costs. Digital currencies offer a solution to these issues and a potential diversity of new financial services.

Digital currencies allow the population of a country to avoid potential currency devaluation as a result of fiscal and monetary policy. They offer a mechanism for risk-free online purchases, with transaction fees and middle men removed. Digital currencies also offer much to retail businesses. Existing payment systems are structurally unsuited to online transactions: paying online with a credit/debit card involves divulging card details to a slew of interested parties, with all costs associated with poor practices or fraud falling on the retailers, and ultimately on consumers. Distributed digital currencies correct this issue inherently and eliminate the need to divulge account details, ensuring vendors have access to incoming funds immediately with no risk of fraud.

Pirate Party Australia anticipates a large future for the general distributed currency concept, but to be successful Australia needs to actively engage in its development. Pressure from incumbent financial organisations seeking to restrict competition must be resisted, as self-exclusion will deny Australia potentially enormous benefits.

Pirate Party Australia advocates the following reforms:

Support the development of new technology businesses Change tax regulation to support distributed currencies in the broader community
 * Ensure clear guidelines and a suitable regulatory environment are available for businesses.
 * Treat restriction of basic banking services to crypto-currencies businesses as an illegal restriction on trade, excepting where trade poses direct financial risks to the bank.
 * Ensure crypto-currency businesses with control over customer funds are subject to equivalent regulation to banks.
 * Ensure crypto-currency businesses without control over customer funds are not subject to traditional banking regulations, but are encouraged to self regulate.
 * Re-define digital currencies from a commodity to a currency for tax purposes.
 * Count digital currency gains through 'mining' or speculation efforts as capital gains.

Return to contents

Sovereign Wealth Funds and Market-Based Resource Extraction Rights
Mining as an industry has numerous conflicting considerations. There are environmental issues, land rights, and economic issues around employment, taxation, royalties and other regulation. This policy is focused on the economic issues.

From a long term nation building perspective, minerals are a limited resource, and although we are gaining efficiency in their extraction, we will eventually face diminishing returns. Living off the recurring income from taxation and royalties of a limited and diminishing resource is not a sound long-term strategy for Australia. The extraction of finite and exhaustible natural resources has implications for both the current and future generations. To address this issue, there is a moral case for establishing a sovereign wealth fund that would store the wealth generated from resource extraction for future generations. This fund would only distribute returns on the principal, ensuring that future generations can still benefit from these resources.

A general effect of taxation, is that it tends to reduce the thing that is taxed. In relation to mining, we don't want to reduce employment or exploration, but we do want to retain more of the value that is generated from the extraction. We propose auctioning extraction rights to the highest bidder on the market, rather than using a fixed licensing system. This approach allows the market to set prices and ensures that productive efforts are not stifled. The government can set a reserve price for the auction, which would prevent low-value projects from proceeding and preserve resources for future use. This strategy also minimises profit shifting, which can enable companies to evade profit-based taxes such as super-profit taxes. To incentivise exploration, a percentage commission of the final auction price of the resource could be offered.

Pirate Party Australia advocates the following reforms:


 * Establish a Sovereign Wealth Fund from resource royalties

Addressing Negative Externalities through Targeted Taxation
The Pirate Party remains dedicated to the challenge of climate change and related environmental issues, viewing the implementation of a carbon tax as a primary policy tool. Our previous carbon tax implementation raised $15.4 billion, embodying a practical strategy to internalise the negative externalities from carbon emissions. This measure encourages both businesses and individuals to reduce their carbon footprint and to invest in cleaner technologies. Moreover, beyond carbon pollution, several other negative externalities merit the application of targeted taxation. These externalities and their respective fiscal interventions include:


 * Congestion Tax: To alleviate traffic congestion in heavily populated urban areas and stimulate the use of public transportation or carpooling, we propose a congestion tax. This levy would attribute a price to the external costs of congestion, such as time delays and heightened pollution, thus incentivising more efficient use of our roads.
 * Pay-as-you-throw Fee: A generalised pay-as-you-throw charge for waste disposal could effectively reduce waste generation and stimulate recycling and reuse. By holding households and businesses accountable for their waste output, we can incentivise waste reduction and foster more responsible consumption and production patterns.
 * Sugar Tax: To combat the negative externalities associated with high sugar consumption, we propose a tax on sugary beverages. By increasing the price of such drinks, the tax could encourage healthier choices and generate revenue to fund public health initiatives.
 * Tobacco and Alcohol Taxes: By levying higher taxes on tobacco and alcohol products, we can mitigate the negative externalities associated with their consumption, such as health issues and societal costs. These increased taxes could discourage consumption and help fund public health and addiction treatment programmes.
 * Pesticide and Fertiliser Taxes: To address the environmental harm caused by pesticides and fertilisers, including water pollution, soil degradation, and ecosystem damage, we propose implementing taxes on their usage. This measure could encourage more sustainable farming practices and support the development of eco-friendly agricultural methods.

The revenue generated from these taxes will first be allocated towards initiatives that counter the respective negative externality. For instance, funds from the carbon tax could be directed towards carbon sequestration efforts. Should the collected tax exceed what is needed for these initiatives, the surplus will be invested into the Sovereign Wealth Fund. As these taxes are correcting behaviors whose costs often burden future generations, it is only just that the resulting revenue should benefit those future generations as well. This approach ensures that these taxes directly fund the rectification of the issues they aim to resolve, thereby eliminating the perverse incentive for the government to promote harmful behaviours for revenue collection. Furthermore, this strategy ensures that any remaining funds are invested prudently, providing a sustainable financial foundation for the future of Australia.

Return to contents