SYD Airport's pot of gold

[Hvr]

Sydney Airport has paid no tax in the 10 years since it was privatised by the government.


While other international gateways such as Melbourne and Auckland are also held in private hands and regularly pay corporate tax, the last time Sydney Airport paid tax was before its sale to Macquarie Bank in 2002.
Not only has the company that controls the airport continued to structure its affairs so that it has no tax liability, it has won a tax benefit also.

Read more: Airport's pot of gold
​

Ahh privatisation, the gift that keeps on giving. And costing the Australian taxpayers.

 

[samh004]

I read about this earlier, very interesting, though also saw someone smarter than I in regards to tax on Facebook suggesting that the money that is coming out of it would be subject to tax, so it is being taxed. Either way, seems like the government should open a second airport and pass a law that says they can't own both of them perhaps throw in some nice new terminals and lower landing fees and see who's laughing.

 

[Plodder]

This is a little misleading - Sydney airport is held within a trust. They don't pay corporate tax because they're not a company. Trusts only pay income tax if they retain income within the trust. If it's all distributed out (which I assume it is, they seem to be paying out some good money) then all tax is borne by the trust unit holders. Consequently there would be plenty of tax paid on the airport's profits, just not by Sydney airport. Although some unit holders would pay higher rates of tax than others.

 

[BAM1748]

Ah, so if they are paying less tax they don't need to charge as much.

I avoid parking costs there whenever I can.

 

[whatmeworry]

We must thank John Howard for his brilliant foresight and vision in privatising vital pieces of transport infrastructure.

The government should really have just paid those MacBankers a billion dollars in protection money and hung onto Sydney Airport. A contract might even have been drawn up by the prime minister of the day, John Howard: ''We, the people of Australia, pay you, Macquarie, $1 billion upon your undertaking not to deplete the finances of the Commonwealth by your financial engineering.''
Instead, Macquarie owns the airport, and a cool $1 billion-plus in fees so far - and it celebrated its 10th anniversary this very week of not paying any corporate tax.
As for we, the Great Unwashed, we mere taxpayers, we now have a hole in our annual tax-take, and no airport either. But it is true that Macquarie did scrape together $5.6 billion of other people's money to pay for it. So, we mustn't complain.

Read more: Sydney Airport and the magical mystery tour
​

 

[serfty]

$1B + in fees represents a gross GST take of $100,000,000+

 

[Melburnian1]

If it had been retained in government ownership, would the airport have developed as fast as it has?

The same question can be asked of other Australian airports.

Generally I am in favour of privatisation, but the airport sale seems to have been an example where the price obtained (unlike say the Victorian electricity distributor sales, where an excellent price was obtained given what occurred to the assets a few years later) was insufficient.

The private airport owners have behaved as one expects monopolists to. The margin on car parking fees in SYD and MEL (and probably elsewhere) is outrageous.

Nonetheless, hindsight is a marvellous thing. I cannot recall at the time if the airport sale prices were regarded as good for the times.

 

[harvyk]

Is it incredibly dishonest? probably.

Are they the only company in Australia (or the world) doing it? hardly.


I whole heartedly agree that cleaning up tax loopholes is probably not a bad thing, of course the other argument is that if they did remove said loopholes mac bank would simply raise prices to cover the "loses", it's not like SYD airport has competition from another airport 5 minutes down the road.

 

[BAM1748]

Turning a govt monoply onto in a private one is a bad choice and a money grab, in this case by Howard but it happens on both sides.

They will have completed the circle when when Barry privatizes the Sydney Trains that serve the airport. The Sydneys Buses route 400 will be the only cheap way in and out. They have even made walking nearly impossible.

Matt

 

[Melburnian1]

BAM1748. if structured well, privatisation can be extremely beneficial to taxpayers.

One difference between the airport and future possible Sydney surface transport (ferry already, and perhaps rail and bus at some stage) privatisations is that with the airport sell off, consumers have not been very vocal (until the last couple of years, when some attention was paid to rising car parking charges.

In contrast, surface travel is highly visible. State governments are accountable, especially at election time.

 

[el_rooto]

Michael West has it in for Macquarie Group. Look at his previous writing.

 

[badseed]

Just your average tax minimisation strategy. Whilst some tax would eventually be paid upon the distribution of profits, these types of company structures can effectively run rings around the ATO's discovery and compliance mechanisms!

It is somewhat of an abuse of what trusts are all about - purely corporate trusts really should be taxed, and at company levels.

 

[clifford]

Michael West has it in for Macquarie Group.

But who wouldn't have?