Canberra bureaucrats could learn a few things from a quick trip to Singapore

Those readers lucky enough to fly know that it's better to have a direct flight.  When we first started to travel abroad the Qantas Lockheed Constellation on the Kangaroo Route, as it was known, would have to stop every four hours or so to refuel on its way to London.

The first stop for the 29 passengers and the 11 crew was Darwin, followed by Singapore, Calcutta, Karachi, Cairo, and Tripoli (passengers stayed overnight in Singapore and Cairo). 

Treasurer Scott Morrison has left little on the tax table.
Treasurer Scott Morrison has left little on the tax table. Photo: Andrew Meares

It was quicker than the four weeks that Prime Minister Menzies would spend getting there on a boat but only just, if you took recovery time into account.

These days a direct flight is highly sought after.  So imagine the excitement of our hard working federal bureaucrats and politicians now that Virgin has announced direct flights from Canberra to Singapore will start in September.

President Barack Obama, left, points to where Singapore Prime Minister Lee Hsien Loong, center, should stand, at a ...
President Barack Obama, left, points to where Singapore Prime Minister Lee Hsien Loong, center, should stand, at a meeting of ASEAN. Photo: AP

I happened to be in Singapore last week as the tax debate back here got even more confusing with the Treasurer saying that everything is on the table.

"Impossible,' says Louise, "there's no table big enough." 


"It's a tax table" pipes up Charlie.

In any event something started to creak and the GST and a few other items were summarily removed. 

Illustration: Cathy Wilcox
Illustration: Cathy Wilcox 

What is a fair share

Tax in Australia is felt to be a heavy burden by many and I've argued here before that some of our important international companies don't pay their fair share. But what is a fair share for business?

I think that our Treasury and tax officials should jump on the direct flight to Singapore where the highest tax rate for companies and individuals is 17 per cent.

The Prime Minister has quite rightly said that there has never been a more exciting time to be an Australian.

But I suspect that it is a much more exciting to be a Singaporean, whose government really knows about incentives.

Here is a country with no natural resources that has become richer than Australia.

Last week Prime Minister Lee and President Obama, sat down in California and discussed the great world of innovation that is ahead of us.

Tax holiday is one we all want

And to really make sure that Singapore is high on the list of places to be if you're interested in innovation, the government does everything possible to make you welcome including a free holiday. 

"Really?" says Louise, already planning a shopping trip.

Charlie, our resident disrupter, informs the conversation that it's the holiday you would like, a break from tax for 15 years for innovative companies.

"How do you define an innovative company?" asks Louise. 

Simple. It's a startup company in the high tech space that deals with at least four Asian countries.

In Australia, readers will grimace with the reminder that our top personal tax rate is 49 per cent and our company rate is 30 per cent for small business.

Singapore works harder on fairness

Singapore simply makes the whole system work harder with a fairer tax base.

So, with such a low tax rate, what sort of an economy is it? Consider this.  For its 5.5 million people, on a land area about 1 per cent the size of Tasmania, Singapore is third richest in the world on GDP per capita. Australia is 16th.

Singapore has a growth rate in these straightened times of 2.9 per cent, slightly ahead of us, but its unemployment rate is 2 per cent, compared to our 6 per cent. And its monthly average wage on a purchasing power parity basis is in fact the same as Australia. 

They do pay 20 per cent of their salary into superannuation but young people are able to make a case to borrow against their super to buy their first home.  How clever is that?

Here is a country with no natural resources that has become richer than Australia.  Singapore's main exports are consumer electronics, IT products, medical and optical equipment and pharmaceuticals. Other big industries are transportation and business and financial services. 

From the swamp that it was at the end of World War II, a city state has emerged as a clean, safe and successful nation that is a powerful example of what can be achieved by just being able to get on with intelligent government policy and investment.

Louise thinks we should buy every one of our Canberra officials a return ticket to Singapore to sort out what currently seems like a very confused group of bureaucrats.


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