It’s amazing how many times I tell friends we’re one of the lowest taxed countries in the world, and end up pointing them to that wiki entry. It used to be that we had the most taxes, and thats what confuses people, but since GST there really arent all that many, and for most of them they are either largely one off hits (stamp duty), or so small and rare you never hear of them or they simply arent enforced.

Even income tax, until you’re earning something like twice the average salary, there arent many countries that tax less than here. And of those, one pays zero income tax no matter what you earn.

There is a simple test called the Big Mac test. Because McDonalds largely work off the same margins around the world, you can get a pretty solid idea of the disposable income in each country based around what it costs to buy a Big Mac meal. We’re pretty favorable.

End of the story, we have one of the highest proportions of disposable income in the western world. Need to use that as a reference more than average income, it gives a better picture.

Our Corporate Tax rates are lower than the US and Japan, are you suggesting no one does “IT” in either of those places due to their higher taxation?

We actually have lower taxes here than a most of the RotW, and we could have even lower still if we didn’t fork so much of it over to rent seekers like the miners…

In an effort to remove loop holes, Rudd made it almost impossible to form a company here. If you give someone shares in a startup to incentivise them to work with you at the early stage when you can’t pay them a wage, then those shares are valued and the person has to pay tax immediately. The sensible thing is to pay tax when they actually make money – ie. when they sell the shares, but instead, they pay tax when they get the shares.

Because of this, all Aussie tech companies are encouraged to incorporate in Delaware, and many do, ensuring they are taxed in the US and find it easier to leave Australia.

If you want innovation in Australia you don’t need the NBN (although it will help). The cheapest and best thing for the innovation economy in Australia is to fix the ESOP problems.

I’m sorry, but it’s unreasonable for the NSW Govt to build teleworking projections of the kind you and Richard are suggesting into their current transport plan. That’s a side issue for them, and this is a side issue for discussion on Delimiter. This line of debate is off-topic — please do not continue it.

Cheers,

Renai

I worked at a medium to large Australian IT company, specifically in the video games industry, and me and around 150 other individuals world wide were completely and utterly burned by our American parent company. They failed to pay staff for months on end, they withheld super, and didn’t pay up to two million dollars in Tax. Effectively they used the Government and the taxpayer as a bank. Every single Government agency we tasked to help us simply sat on their hands, or could do nothing, because our American company directors were illegally living overseas while running the company. Some months after our American bosses had fled the country with all the intellectual property and not paying a cent for it, after exhausting ALL avenues (Pro Tip : ASIC is the biggest waste of taxpayer money in Australian history), we pled our case to the then Federal Workplace Relations Minister, Ms. Julia Gillard. Unfortunately two weeks later she stabbed Kevin Rudd in the back and became Prime Minister, and never replied to our petition

The bottom line is, if you want the formula for how to run a digital sweatshop in Australia with zero consequences, I can sell you that formula. The Government doesn’t give a shit.

Google “interzone the downward spiral” for the full, sorry, pathetic tale, and think twice about this article. If the Government really cared about the IT sector, where were they when some of their taxpayers working on a potentially massively lucrative project (successful MMO games make in the hundreds of millions of dollars) were left out to dry, including their own taxation revenue?

The problem can be spelled out in three simple word : “Free Trade Agreement”. Australia gives Uncle Sam the right to completely exploit Australia, with zero consequences.

Unlike Barry, most people have long under-estimated the inevitable pervasiveness of first computers, then IT and now the Internet. We need to recognise that IT is *the* future and the only question is whether the mining boom will be our “Dutch Disease” or a stepping stone to the future.

http://optics.michaelwyres.com/documents/btre_congestion.pdf

“BTRE base case projections have these social costs of congestion rising strongly, to an estimated $20.4 billion by 2020. The city specific levels rise from $3.5 billion (2005) to $7.8 billion (2020) for Sydney, $3.0 billion to $6.1 billion for Melbourne, $1.2 billion to $3.0 billion for Brisbane, $0.9 billion to $2.1 billion for Perth, $0.6 billion to $1.1 billion for Adelaide, $0.11 billion to $0.2 billion for Canberra, about $50 million to $70 million for Hobart, and $18 million to $35 million for Darwin.”

There was a BTRE report somewhere – (I’ll try dig it up) – that estimated the loss of $20b of GDP annually in Australia by 2020 due to road congestion.

If having decent bandwidth – (up and down) – to allow for decent teleworking – (and that’s not “working from home”) – allows for a 10% reduction in the congestion problem, it’s not unreasonable to expect a $2b improvement in GDP.

Then there’s a flow on effect.

10% less cars on the road equal 10% reduction in vehicular emissions.
10% less cars on the road means the 90% that are left are held up less, further increasing GDP.
10% less cars on the road means 10% less wear and tear on the roads, reducing maintenance costs.
10% less cars on the road means 10% less accidents, and less pressure on insurance premiums.
10% less accidents means less pressure on ambulance and hospital services.
If you’re one of the 10% teleworking, you’re spending less on fuel, less on city parking, and less wear and tear on your car, and not having to service it as often, so there’s more money in your pocket.

Not to mention less stress in your life not having to deal with traffic jams every day.

And you could extrapolate that in all sorts of other directions too.

This is what they mean when they say the NBN is economically transformative.

The development path for the industry is quite clear – get together with a bunch of your mates and try to build the next angry birds or attempt to gain 2 years experience in a commercial setting using all of the latest technologies before entering the industry.

Back to the article: “nothing was more important to the success of Australia’s digital economy than building the NBN”. No, nothing is more important to a vibrant and creative economy than a vigorous and open ideas market in which people are free to to bring their thoughts to the table without risk of censorship and without having to second guess future laws bound in KGB like webs of data retention.

Sorry Renai, I disagree with your optimism. IT can be done anywhere. While the NBN may enable some individuals to bid for international work, the tax, cost and now censorship structures in this country prohibit its development as an IT mecca. Malaysia has had its IT SuperCorridor for a while now – while they have some very capable people the public sector settings are not conducive to a wild risk taking IT environment and neither are ours. Our PM may utter all the buzzwords she likes but it does not change the fact that India and China (once it gets its legal system sorted out) will be where IT is done. We will be consumers, patting ourselves on the back for being early adopters of other peoples technology just like we are for TVs, computers, smart phones, flat pack furniture, etc.

The new data centres being created should include a focus on being promoted as a secure data storage for the information of the planet. Ping times might be longer, but you’ll know the data will be there when you need it. The government could support this with policy on managing customers’ data when any single data centre goes bankrupt.

I’m sorry, I don’t really see the link between transport and the NBN in your comment — nor does it seem to have much to do with the current discussion.

Renai

The $50 billion contribution of the internet to the economy would most likely be internal churn through ISP services or domestic service/sales. So to be more valuable than the mining industry you’d think you’d be looking at new activities with potential to generate income from exports. Sizable export dollars at that.

It’d be interesting to identify where they hope the industry is to develop – if only to allow students to get an idea of where they should focus their studies to best improve future ICT job prospects.

This sad news is illustrated by the lack of any mention of the NBN as a factor in helping to reduce (Sydney’s) peak transport challenges in recent reports from Infrastructure NSW and Transport NSW. And not just for occasional teleworking.

As Renai’s piece says: “Information workers, after all, deal with information, and when uploading and downloading that information from each other is such a slow process, things are going to be inhibited”. Traditionally such workers have clustered together to exchange information, but in the near future workplaces can be decentralised to transport nodes in the suburbs reducing the need for expensive and quickly filled roads.

If IT ever becomes more profitable than mining, an IT-super-profits tax wouldn’t be a bad idea.