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Australia could tax Google and other tech giants with a digital services tax

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Australia could tax Google, Facebook and other tech giants with a digital services tax – but don’t hold your breath

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Fei Gao, University of Sydney and Richard Krever, The University of Western Australia

Tech giants like Google, Facebook and Netflix make billions of dollars from Australian users every year. But most of those profits are not taxed here.

To address this tax gap, some countries have introduced a new kind of tax called the digital services tax, or DST. It applies to revenue earned from users in a country, even if the company has no physical operations there. Some European Union member countries, the UK and Canada have all introduced such a tax.

In Australia, it is estimated the five largest tech giants recorded A$15 billion in revenue in Australia last year, but combined they paid only $254 million in tax.

Australia has never contemplated imposing a similar tax. New Zealand tried but backed down last week after the United States threatened to impose higher tariffs on New Zealand goods.

So what’s holding Australia back?

How 20th-century tax treaties create 21st-century problems

To understand why Australia thinks its hands are tied on the taxation of the multinational tech giants, we need to step back in time.

About 100 years ago, Australia and other developed nations decided to tax residents on all their income earned worldwide, while non-residents were taxed only on income earned locally.

After the second world war, Australia entered into tax treaties so foreign companies selling to Australian customers would no longer be taxed here. Instead, those companies’ home countries would tax all their profits.

As the world moved to digital products this century, it became easy for giant multinational enterprises offering advertising on social media (such as Facebook and Instagram), advertising on search platforms (Google), and streaming services (Netflix) to provide those services from abroad. Little or no activity is conducted through local branches.

But countries where the sales are made have increasingly questioned the wisdom of having forfeited their taxing rights over income by foreign providers.

The rise of the digital services tax

The obvious solution would have been to renegotiate the treaties. This would restore the right of countries like Australia to tax foreign companies’ profits made from local customers or users.

However, treaty renegotiation is slow and complex. So several European countries, beginning with France in 2019, came up with a short-cut solution.

They introduced a discrete new tax on sales of digital services, called digital services taxes (DSTs). While the specific design varies by country, most DSTs apply a low tax rate, typically between 3% and 5%, on revenue rather than profits. They target large digital platforms that earn money from users within the taxing country, regardless of the company’s location.

Because DSTs are levied on revenue and are structured as separate from income tax, governments argued they could be introduced without breaching income tax treaties.

The new taxes quickly became popular and spread widely.
In Australia, the Greens have called for a DST, but both major parties have remained steadfast in their objection to a new tax. This is due to the concern that the US may impose retaliatory tariffs on Australian goods.

US tech bosses at the inauguration of President Trump: (from left to right) CEO of Meta Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, CEO of Google Sundar Pichai and X CEO Elon Musk.
Julia Demaree Nikhinson/AFP

How big is the tax loss?

Australians are enthusiastic consumers of digital products. Depending on which companies are included in the calculation, the annual revenues vary between $15 billion and $26 billion a year, but only a fraction of that is taxed here.

At a time when the federal budget is forecasting deficits for the foreseeable future, Australia is foregoing potentially millions in lost revenue from these digital giants.

While Australia has avoided a DST as a solution to the income tax loss, it has been willing to regulate and tax foreign digital companies in other ways.
Australia collects 10% goods and services tax, or GST, on digital services provided to Australian companies, including streaming platforms and app subscriptions.

This helps ensure foreign providers are taxed similarly to domestic ones when it comes to the GST.

Australia has also imposed non-tax obligations on digital giants such as the requirement that digital platforms pay Australian media outlets for using their news content.

Serious hurdles for reform

In February, the Trump administration described DSTs as tools used by foreign governments to “plunder American companies” and warned retaliatory tariffs would be imposed in response.

The accompanying White House fact sheet singled out Australia and Canada, arguing the US digital economy dwarfs those countries’ entire economies. It suggested any attempt to tax US tech companies would not go unanswered.

Six weeks later, the US imposed a 10% tariff on most Australian exports to the US and a 25% tariff on steel and aluminium exports.

The US sees its penal tariff plans as a useful negotiating tool to pressure trading partners into retreat on a broad range of peripheral complaints, including the digital services tax.

To date, only two countries have retreated: New Zealand and India. Other countries are standing firm.

In Australia, the Greens have called for the adoption of a DST, but the current and previous governments remain firm in their opposition. There is concern about antagonising the US at a delicate time when our broader trade relations are under scrutiny.

For the foreseeable future, the digital giants will continue to earn billions from Australian users. Most of those profits will remain beyond the reach of Australian tax law.

Fei Gao, Lecturer in Taxation, Discipline of Accounting, Governance & Regulation, The University of Sydney, University of Sydney and Richard Krever, Professor of Tax Law, The University of Western Australia

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Israel and Hamas agree ceasefire deal – what we know so far

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Scott Lucas, University College Dublin

After two years of violence and the deaths of 68,000 Palestinians and more than 1,200 Israelis, most of them civilians, it has been reported that Hamas and the Netanyahu government will sign a phase 1 ceasefire agreement.

This is the first part of a 20-point plan promoted by the US president, Donald Trump, and supported by the major Arab power brokers in the region.

What we know so far is that Israel will cease its military assault in Gaza. Hamas, meanwhile, has agreed to free the remaining 20 Israeli hostages still alive in Gaza.

The Conversation’s international affairs editor Jonathan Este spoke with Scott Lucas, a Middle East expert at University College Dublin, who addressed several key issues.

How is this different to previous ceasefire agreements?

Until we have details, this agreement is similar to the phase 1 60-day ceasefire at the start of 2025. There is a pause in the killing, particularly from the Israeli side, but lasting arrangements remain to be confirmed.

The key difference is that Hamas released only some hostages and bodies in the previous ceasefire. This time they are freeing all hostages and the bodies which can be collected, in return for a still unannounced number of Palestinian detainees released from Israeli prisons.

That gives up Hamas’s main leverage against not only Israeli attacks but also the Netanyahu government’s occupation and veto on aid to Gaza.

So key elements of a lasting deal – the extent of the Israeli military’s withdrawal, the restoration of aid, the establishment of governance and security in the Strip – will rest on guarantees and who provides them.

What are the possible sticking points for the rest of the deal?

The immediate “sticking points” are whether central provisions will be agreed in further discussions.

The Israelis will demand complete disarmament by Hamas and possibly the expulsion of some of its officials. Hamas is likely to respond with rejection of any forced removals and its retention of “defensive” weapons.

The make-up of the international “board” overseeing the strip is vague beyond Donald Trump declaring himself the chair and no provision for any Palestinian representation. Hamas will probably seek some Palestinian membership.

At this point, the International Stabilization Force for the Strip is a wish rather than a plan. Israeli agreement to a force replacing its military in Gaza is far from assured, especially as it is not clear who will contribute personnel. The Italian foreign minister, Antonio Tajani, has offered to send troops to contribute to the force.

The plan for a day-to-day government to administer the Strip is equally sketchy. While the presence of Palestinian technocrats is mentioned in Trump’s “plan”, we do not know who these will be. We know that Hamas is excluded. Israel is also likely to veto the Palestinian Authority in the short-term. And the release from imprisonment of potential Palestinian leaders – such as Marwan Barghouti, who has been held by Israel for more than 20 years – is not confirmed.

And before consideration of all of these, there is the question of the far-right in the Netanyahu cabinet. The finance minister, Bezalel Smotrich, and national security minister, Itamar Ben-Gvir, have yet to comment on the latest news, but have previously opposed any deal short of the “total” defeat of Hamas and a long-term Israeli occupation. Neither have threatened to block the agreement – so far – but they have expressed opposition.

How much of this is due to pressure from Arab states?

While many headlines are likely to give the credit to Trump and his envoys, son-in-law Jared Kushner and real estate developer Steve Witkoff, the role of Arab states has been vital.

A month after Israel shattered Qatar’s sovereignty with the airstrike trying to assassinate Hamas’s negotiators, the Gulf state and Egypt were the brokers of this Phase 1 agreement. Behind the scenes, other Arab states and Turkey were urging Hamas to accept the Trump “plan” in principle and to reach a deal to release the hostages.

Those states will be needed for the next phase, particularly if Trump threatens to return to his previous position of a blank cheque for Israeli military operations and cut-off of aid.

Is there a future for Palestinian civilians in Gaza?

I hope so. The immediate issue is survival. The Israeli attacks have been paused. The urgent issue is getting essential aid into the Strip. Then it is a matter of being able to return to what is left of homes. The Trump administration has dropped its talk of displacement, stemming the demand of Netanyahu’s far-right ministers for the removal of many Gazans.

However, after two years of scorched-earth tactics by Israel, little is left of many of those homes. The majority of the health sector has been destroyed, as have many schools and other public buildings. Rafah has been razed, and Gaza City’s high rises have been blown apart.

Recovery cannot just focus on the profits to be made – including for Trump, Kushner, and Gulf state business interests – from the “development” of Trump’s “Riviera of the Middle East”. It has to begin with day-to-day subsistence for the civilians who have paid the heaviest price in this mass killing.

Does Trump get his Nobel peace prize now?

I don’t care. Sometimes good things happen from a convergence of cynical and self-serving motives. Trump is desperate for the Nobel peace prize because Barack Obama received it in 2009. Kushner, whose investment fund is bankrolled by Saudi Arabia and Qatar, and Gulf state entrepreneurs see the possibility of large profits. US-Gulf relations need to be repaired after the shock of Israel’s airstrike inside Qatar.

If that means lives are saved, fine. But those lives need to be saved not just for today or tomorrow. They need to be respected and supported with a lasting agreement for security and welfare.

And that would mean a two-state solution for both Palestinians and Israelis – something which the Netanyahu government and the Trump administration will not countenance. For Netanyahu and his ministers are devoted to expanding Israel’s illegal settlements, with the accompanying threat of violence, in the West Bank.

Celebrate phase 1 on the behalf of the Israeli hostages, their families, and Gaza’s civilians. And be clear about what is needed for phase 2, phase 3 and beyond.The Conversation

Scott Lucas, Professor of International Politics, Clinton Institute, University College Dublin

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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The Supreme Court is headed toward a radically new vision of unlimited presidential power

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In a series of cases over the past 15 years, the Supreme Court has moved in a pro-presidential direction.
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Graham G. Dodds, Concordia University

President Donald Trump set the tone for his second term by issuing 26 executive orders, four proclamations and 12 memorandums on his first day back in office. The barrage of unilateral presidential actions has not yet let up.

These have included Trump’s efforts to remove thousands of government workers and fire several prominent officials, such as members of the Corporation for Public Broadcasting and the chair of the Commission on Civil Rights. He has also attempted to shut down entire agencies, such as the Department of Education and the U.S. Agency for International Development.

For some scholars, these actions appear rooted in the psychology of an unrestrained politician with an overdeveloped ego.

But it’s more than that.

As a political science scholar who studies presidential power, I believe Trump’s recent actions mark the culmination of the unitary executive theory, which is perhaps the most contentious and consequential constitutional theory of the past several decades.

A prescription for a potent presidency

In 2017, Trump complained that the scope of his power as president was limited: “You know, the saddest thing is that because I’m the president of the United States, I am not supposed to be involved with the Justice Department. I am not supposed to be involved with the FBI, I’m not supposed to be doing the kind of things that I would love to be doing. And I’m very frustrated by it.”

The unitary executive theory suggests that such limits wrongly curtail the powers of the chief executive.

Formed by conservative legal theorists in the 1980s to help President Ronald Reagan roll back liberal policies, the unitary executive theory promises to radically expand presidential power.

There is no widely agreed upon definition of the theory. And even its proponents disagree about what it says and what it might justify. But in its most basic version, the unitary executive theory claims that whatever the federal government does that is executive in nature – from implementing and enforcing laws to managing most of what the federal government does – the president alone should personally control it.

This means the president should have total control over the entire executive branch, with its dozens of major governmental institutions and millions of employees. Put simply, the theory says the president should be able to issue orders to subordinates and to fire them at will.

President Donal Trump appears seated in the oval office.
President Donald Trump signs executive orders in the Oval Office next to a poster displaying the Trump Gold Card on Sept. 19, 2025.
AP Photo/Alex Brandon

The president could boss around the FBI or order the U.S. attorney general to investigate his political opponents, as Trump has done. The president could issue signing statements – a written pronouncement – that reinterpret or ignore parts of the laws, like George W. Bush did in 2006 to circumvent a ban on torture. The president could control independent agencies such as the Securities and Exchange Commission and the Consumer Product Safety Commission. The president might be able to force the Federal Reserve to change interest rates, as Trump has suggested. And the president might possess inherent power to wage war as he sees fit without a formal authorization from Congress, as officials argued during Bush’s presidency.

A constitutionally questionable doctrine

A theory is one thing. But if it gains the official endorsement of the Supreme Court, it can become governing orthodoxy. It appears to many observers and scholars that Trump’s actions have intentionally invited court cases by which he hopes the judiciary will embrace the theory and thus permit him to do even more. And the current Supreme Court appears ready to grant that wish.

Until recently, the judiciary tended to indirectly address the claims that now appear more formally as the unitary executive theory.

During the country’s first two centuries, courts touched on aspects of the theory in cases such as Kendall v. U.S. in 1838, which limited presidential control of the postmaster general, and Myers v. U.S. in 1926, which held that the president could remove a postmaster in Oregon.

In 1935, in Humphrey’s Executor v. U.S., the high court unanimously held that Congress could limit the president’s ability to fire a commissioner of the Federal Trade Commission. And in Morrison v. Olson the court in 1988 upheld the ability of Congress to limit the president’s ability to fire an independent counsel.

Some of those decisions aligned with some unitary executive claims, but others directly repudiated them.

Warming up to a unitary executive

In a series of cases over the past 15 years, the Supreme Court has moved in an unambiguously unitarian, pro-presidential direction. In these cases, the court has struck down statutory limits on the president’s ability to remove federal officials, enabling much greater presidential control.

These decisions clearly suggest that long-standing, anti-unitarian landmark decisions such as Humphrey’s are on increasingly thin ice. In fact, in Justice Clarence Thomas’ 2019 concurring opinion in Seila Law LLC v. CFPB, where the court ruled the Consumer Financial Protection Bureau’s leadership structure was unconstitutional, he articulated his desire to “repudiate” the “erroneous precedent” of Humphrey’s.

Several cases from the court’s emergency docket, or shadow docket, in recent months indicate that other justices share that desire. Such cases do not require full arguments but can indicate where the court is headed.

In Trump v. Wilcox, Trump v. Boyle and Trump v. Slaughter, all from 2025, the court upheld Trump’s firing of officials from the National Labor Relations Board, the Merit Systems Protection Board, the Consumer Product Safety Commission and the Federal Trade Commission.

Previously, these officials had appeared to be protected from political interference.

President George W. Bush appears with several soldiers.
President George W. Bush signed statements in 2006 to bypass a ban on torture.
AP Photo/Pablo Martinez Monsivais, File

Total control

Remarks by conservative justices in those cases indicated that the court will soon reassess anti-unitary precedents.

In Trump v. Boyle, Justice Brett Kavanaugh wrote, “whether this Court will narrow or overrule a precedent … there is at least a fair prospect (not certainty, but at least a reasonable prospect) that we will do so.” And in her dissent in Trump v. Slaughter, Justice Elena Kagan said the conservative majority was “raring” to overturn Humphrey’s and finally officially embrace the unitary executive.

In short, the writing is on the wall, and Humphrey’s may soon go the way of Roe v. Wade and other landmark decisions that had guided American life for decades.

As for what judicial endorsement of the unitary executive theory could mean in practice, Trump seems to hope it will mean total control and hence the ability to eradicate the so-called “deep state.” Other conservatives hope it will diminish the government’s regulatory role.

Kagan recently warned it could mean the end of administrative governance – the ways that the federal government provides services, oversees businesses and enforces the law – as we know it:

“Humphrey’s undergirds a significant feature of American governance: bipartisan administrative bodies carrying out expertise-based functions with a measure of independence from presidential control. Congress created them … out of one basic vision. It thought that in certain spheres of government, a group of knowledgeable people from both parties – none of whom a President could remove without cause – would make decisions likely to advance the long-term public good.”

If the Supreme Court officially makes the chief executive a unitary executive, the advancement of the public good may depend on little more than the whims of the president, a state of affairs normally more characteristic of dictatorship than democracy.The Conversation

Graham G. Dodds, Professor of Political Science, Concordia University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Does AI pose an existential risk? We asked 5 experts

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Aaron J. Snoswell, Queensland University of Technology; Niusha Shafiabady, Australian Catholic University; Sarah Vivienne Bentley, CSIRO; Seyedali Mirjalili, Torrens University Australia, and Simon Coghlan, The University of Melbourne

There are many claims to sort through in the current era of ubiquitous artificial intelligence (AI) products, especially generative AI ones based on large language models or LLMs, such as ChatGPT, Copilot, Gemini and many, many others.

AI will change the world. AI will bring “astounding triumphs”. AI is overhyped, and the bubble is about to burst. AI will soon surpass human capabilities, and this “superintelligent” AI will kill us all.

If that last statement made you sit up and take notice, you’re not alone. The “godfather of AI”, computer scientist and Nobel laureate Geoffrey Hinton, has said there’s a 10–20% chance AI will lead to human extinction within the next three decades. An unsettling thought – but there’s no consensus if and how that might happen.

So we asked five experts: does AI pose an existential risk?

Three out of five said no. Here are their detailed answers.

The Conversation

Aaron J. Snoswell, Senior Research Fellow in AI Accountability, Queensland University of Technology; Niusha Shafiabady, Associate Professor in Computational Intelligence, Australian Catholic University; Sarah Vivienne Bentley, Research Scientist, Responsible Innovation, Data61, CSIRO; Seyedali Mirjalili, Professor of Artificial Intelligence, Faculty of Business and Hospitality, Torrens University Australia, and Simon Coghlan, Senior Lecturer in Digital Ethics; Deputy Director, Centre for AI and Digital Ethics, The University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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