Are Australian expats a "soft target" for tax changes?

Are Australian expats a "soft target" for tax changes?

When overseas, Australian politicians like to be seen in the company of successful Australian expatriates - usually in London, New York, Los Angeles and other attractive city environments. Few, if any, visit Australians working in remote resources projects in Africa, South America or various parts of Asia - it's probably neither newsworthy or comfortable for them.

Nevertheless, there have been several tax changes made over the last two or three years which suggests that the government is targeting the expatriate community because it has little apparent leverage at the ballot box. Two particular cases are the changes announced, with little or any notice, in respect of s23AG and more recently the decision to disallow the capital gains tax discount on Australian property for non-residents - compounded by an increase in the non-resident tax rates. We have previously taken the view that Australian expats should retain a residential property investment in Australia, as both an investment and insurance against disadvantageous movements in the housing market and exchange rates. The latter decision considerably impacts on the economics of this approach.

One organization, the Southern Cross Group, has argued for years that Australia's expatriate population has been effectively disenfranchised by electoral laws and we support their view. Unless the 650,000 Australians who are considered to be of voting age overseas are scrupulous in their attention to maintaining their votes in Australia, they find themselves unable to vote and seemingly targeted by politicians looking to maximize revenue while minimising the impact at the ballot box.

What makes it worse is that we view most of these decisions as exceptionally poor from a broad economic perspective. The original changes to S23AG were supposed to generate income of AUD400M for the government - clearly this is not happened, and our experience is that the tax change has markedly affected the competitiveness of Australians working abroad and our international profile. Meanwhile, the newest change to the CGT is supposed to save AUD50M over three years, which is a significant underestimation and will lead to large drops in inward investment.

So, our plea to expatriates, particularly in advance of a likely Federal election later this year, is to read the Southern Cross Group note on how to ensure that you remain eligible to vote in Australia. Regardless of which political party is in power, we think it's becoming clearer that expatriates need to be more forthright in advancing their position. The fact that you are overseas, should not mean that you are forgotten, or worse, become a political victim.

You might also want to consider supporting this Petition to extend the voting rights of Australian expatriates.