THE High Court has put a bit of a dent in John Howard’s 2001 election slogan: “We decide who comes here, and the circumstances in which they come.” Last week, the court overturned action of the Minister for Immigration which would have blocked a stateless refugee’s chance at applying for a visa.
A lot turned on the interpretation of the Migration Act, nonetheless, the court made some fairly pertinent comments about the legalities of the detention system.
It said that the Executive could only take people into detention if it was done for a lawful purpose – in this case to determine immigration status and to either give a visa to stay or to deport. The Migration Act “does not authorise detention at the unconstrained discretion of the Executive”, it said.
There could only be three lawful purposes: “the purpose of removal from Australia; the purpose of receiving, investigating and determining an application for a visa permitting the alien to enter and remain in Australia; or the purpose of determining whether to permit a valid application for a visa.”
More importantly, the court said, “Because detention under the Act can only be for the purposes identified, the purposes must be pursued and carried into effect as soon as reasonably practicable.”
In short, no allowing refugees to be locked up for indefinite periods of time while bureaucrats dawdle.
More strongly, the court said, “The duration of any form of detention, and thus its lawfulness, must be capable of being determined at any time and from time to time. Otherwise, the lawfulness of the detention could not be determined and enforced by the courts, and, ultimately, by this Court.”
It is an almost an open invitation for long-term detainees to seek court relief. It is certainly a message that the Government must get on with the business of processing refugees promptly.
The judgment invites a wider question. The Constitution gives the Commonwealth power to makes laws with respect to “immigration” and with respect to “naturalisation and aliens”.
It may well be beyond the power of the Commonwealth to enact a statutory scheme which enables the Minister to detain people indefinitely or which enables the Minister to provide temporary protection visas which give no certainty for refugees.
The law aside, the Government should move much more quickly in deciding the fate of the 30,000 people in detention or in the community but whose status is in limbo.
Otherwise, the courts might start doing it for them.
The Government should certainly abandon temporary protection visas and do its job of either deporting those who do not qualify for refugee status or allowing those who do to settle permanently.
DOT DOT DOT
PETER Costello, the man who in 1998 gave us the paper “Not a New Tax. A New Tax System” was back this week to tell the Government how to … er … introduce a new tax system.
He suggested the GST be increased to 15 per cent; that the top marginal income tax rate be cut from 47 per cent to 40 per cent; and that the company tax rate be cut from 30 per cent to 25 per cent.
Clearly, he has learned nothing from the Government’s domestic woes since the Budget was brought down four months ago. Surely, the lesson was that major reform has to pass the fairness test or you are wasting your time.
When Costello, as treasurer, introduced the GST he persuaded the Democrats who held the balance in the Senate of the reasonableness of the whole package because it included large reductions of income tax at the lower and middle levels and the removal of a lot of nasty state-level taxes, like stamp duty. (The states, of course, later reneged on that part of the deal).
But to now suggest that a higher GST which hits everyone should be compensated by cuts to the taxes paid by the rich invites ridicule.
Increasing the GST is a good idea, but only if it comes with substantial indexed tax relief at the lower end and substantial increases in welfare.
Costello’s entry to the tax fray comes as the Government is gearing up for major inquiries into the tax system and into the federal structure – of which tax is a crucial part.
His entry serves as a reminder that one-off “great big reforms of the tax system” are perhaps hopeless for several reasons.
Too many people want just the good bits. You can never change the system and guarantee that no-one will be worse off. Of course, there will be some people worse off and others better off; that’s the point of reform.
More importantly, though, any change to the tax system invites changes in behaviour, usually in unpredictable ways. And therefore the system requires constant later tweaking.
We do not need another tax review – especially one that will inevitably be headed by the Coalition’s sort of person who will deliver Coalition-type recommendations: lower tax for the better off.
Instead of a new review, why can’t we just look at all the previous ones.
Costello’s call for a reduction in the top marginal rate (those earning more than $180,000) from 47 per cent to 40 per cent is a reminder of just how unfair Australia’s present income-tax is.
In Struggle Street – incomes between $37,000 and $80,000 — the marginal tax rate is 34.5 cents in the dollar.
In Comfortable Street – incomes between $80,000 and $180,000 the marginal rate is just a few cents higher at 39 cents in the dollar.
People on $37,000 are having a hard time. Their marginal tax rate should be much lower than just 3.5 cents in the dollar less than someone on $179,000.
Moreover, you can bet the person on $179,000 has all sorts of ways to deduct things so they get short- and long-term advantages.
Below the modest income of $37,000, the rate is 19 cents – so it is a big jump at quite a low income level.
Those rates should changed and indexed to stop very modest income earners silently sliding into higher tax brackets with no political announcement, no media questioning and no berating politicians about someone being worse off.
CRISPIN HULL
This article first appeared in The Canberra Times on 20 September 2014.
On tax: in this age of electronic processing, I can see no reason why tax rates cannot be set as a continuous curve rather than the current huge steps, which create poverty traps at the bottom and tax avoidance further up the scale. On a continuous curve, described by an equation, i.e. tax=function(income) each increment of income invokes an increment of tax. A progressive tax scale would be a curve which starts out rising slowly and increases more steeply at the upper end. Such a system eliminates all the inequities and resentments associated with just crossing thresholds into much higher marginal rates that you point out.