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The unfreedom of tax academia for the left

June 15, 2019 - 12:10 -- Admin

The Australian and other Murdoch outlets have been running a faux University freedom campaign for years now. As they lose more and more ‘sensible centre’ journalists – how much longer can Peter van Onselen stay there more or less on his own? – they seem to have become more strident in their condemnation of cultural Marxism, our takeover of Universities, education, and the like.

Apparently our Gramscian march through the Universities continues unabated. Let me interrupt their wet dreams with some personal reality of my march through the universities.

Recently I was looking back at the ten Bills that became law when I was the Assistant Commissioner in charge of international tax reform. My team worked closely with Treasury on developing those Bills. We were, according to the relevant General Manager in Treasury at the time, the best ATO team, among the dozens, to work with, from their point of view.

I, along with one other senior ATO Officer, was the major ATO contributor to the 2002 Treasury discussion paper entitled The Review of International Tax Arrangements (RITA). See http://www.taxboard.gov.au/content/int_tax/int_tax.asp

Then there were the reforms made during the period I was in charge of the ATO contribution to RITA (both to the law and to getting the rest of the ATO ready for the particular reform). They include:

  • New International Tax Arrangements Act 2003, which among other things amended the Foreign Investment Funds (FIFs) and Controlled Foreign Corporation (CFC) regimes and made changes to Interest Withholding Tax and unit trusts.
  • New International Tax Arrangements Act 2004, which modified certain foreign investment fund rules; provided an interest withholding tax exemption for interest paid on certain debentures issued by eligible unit trusts; removed the need for certain income of a controlled foreign country resident to be included as notional assessable income; and prevented double taxation of royalties subject to withholding tax.
  • New International Tax Arrangements (Participation Exemption and Other Measures) Act 2004 which among other things reduced the amount of the capital gain or capital loss that will be subject to capital gains tax rules where Australian companies and controlled foreign companies sell shares in a foreign company with an underlying active business; extended the current exemptions for foreign branch profits and foreign dividends to all countries from 1 July 2004; and reduced the scope of tainted services income.
  • New International Tax Arrangements (Managed Funds And Other Measures) Bill 2004
  • New International Tax Arrangements (Foreign-owned Branches and Other Measures) Act 2005
  • Various Double Tax Agreements implementing policy from RITA, and the review of the anti- CFC and FIF rules leading to Foreign Accumulation Fund (FAF) rules. The anti-deferral rules review which produced the change from FIFs to FAFs (well after I had retired). 

The Board of Tax has estimated that these various international tax reforms have had roughly the same impact as tariff reductions for the economy about a 0.024% annual GDP increase.

I look back on my team’s achievements with pride.  Interestingly not one tax academic has approached me about these groundbreaking reforms. Not one.

From 1989 to January 1997 I was a tax lecturer in the law school at the ANU. I left in early 1997 after the promotion round saw five of six academics promoted from lecturer to senior lecturer. My crime had to been lead those 50% of Law School staff who had opposed the introduction of $9000 fees for the Legal Workshop, the almost year long course to enable those who had earned their law degrees to practise as lawyers. This mad me never to be promoted among the powerful conservative and soft left factions in the School.

I was a great teacher. I got rave reviews from students, year after year. My research was certainly unique, marrying left wing and Marxist ideas with tax law.  It was also regular enough, according to the creeping neoliberal standards Universities were then beginning to apply.

So I left the ANU and eventually, after ten months with the Welfare Rights and Legl Centre, rejoined the ATO.  I retired from the ATO in 2008 and began looking for a job with academia. After all, I had 8 years tax law teaching experience and a successful career as a tax administrator behind me.  My two years in 2010 and 2011 at the University of Canberra should have forewarned me, but it did not.

I resigned in disgust from there in November 2011 and over the next six or so years applied for tax law academic jobs. Of the 38 applications I lodged, I had one interview (because I knew one of the professors well.) I was doing a PhD, the new neoliberal apprenticeship requirement evidently.

I merely note that a number of my ATO colleagues from that time, without PhDs, have been employed by academic institutions. I should also add that a number of my tax teaching colleagues would, in my view, be less than ideal employees as tax administrators. They are OK gatekeepers for conservatism but not good educators.

So why am I unemployable? The excuse is often my lack of a PhD. Given my life experience, I doubt this would be a problem, if I were a conservative. There’s the rub.

Tax and legal academia is, by and large, conservative. It employs like minded people. For a socialist and Marxist like me who organised and took action against the neoliberalisation of Universities, this is a death sentence.

Is there a lesson from all of this? Tax academia is a bastion of reaction and conservatism. Lefties have to try to survive in this all-encompassing environment. For leftists and socialists, if you want a job in tax academia or want to keep it, do not put your beliefs into action.   

John Passant is a member of the Canberra Press Gallery and an adjunct Faculty member of the School of Law and Justice at Southern Cross University.