Strategy Refocus

Focus and simplicity…once you get there, you can move mountains.

 — Steve Jobs —


Fix the Tax Treaty! (FTT) advocates for the Australian Government to renegotiate the underpinning legacy Australia-US tax treaties and intergovernmental agreements to provide a fair go for all Australians.

Sure, our group also provides other services like educating our members on US-Australian taxation issues and pitfalls, providing a wiki-style knowledge base and maintaining a private forum where members can seek advice and share experiences.

Nevertheless, our core purpose is all about effecting positive change here in Australia.   As a grass-roots volunteer organisation, FTT seeks to

  1. find solutions to the many adverse impacts resulting from the US practices of citizenship-based taxation,
  2. target its efforts in our home country of Australia, and
  3. provide a vehicle for organised collective action.

Our group membership has grown to over 1,200 members in only four years and we are proud to provide help to those in need.  However, group administration demands have increasingly occupied our small Steering Committee leaving little time to actually pursue our core change agenda.  You may not be aware but our group has long had a strategy roadmap, albeit several years old and in need of updating. 

To address this, we are attempting to refocus our strategy and develop an achievable forward action plan.  Any initiatives must focus on key issues, emphasise greater group involvement and leverage the strengths of our membership.

What better way to start this process than to seek input and feedback directly from our group membership?  As such, we recently ran four focus group sessions (via Zoom VC) with volunteers from our group – huge thanks to those members who took the time to meet with us and contribute!

The purpose of these focus groups was to:

  1. double check to see if we are focusing on the right issues and seek to prioritise them
  2. get membership ideas on how we might approach the change process, and
  3. solicit input on how we might translate this into an action plan.

You can view the introductory slides used at the Focus Groups at the end of this blog.

Pleasingly, we weren’t blindsided by any of the discussion content, with most of the key issues already recognised by the Steering Committee and previously documented in our initial strategy roadmap, blog posts, etc.

To summarise the focus group outcomes, I’ve grouped the outcomes into themes below with a brief discussion synopsis:

  1. Top-3 “Pain” Issues
    • Double taxation of retirement accounts (Super, but also ATO taxation of US retirement accounts)
    • Taxation on sale of personal residence
    • Investments taxation restrictions (PFICs)

What was particularly helpful was prioritising the key taxation issues to those few critical issues that impact most of our membership.  The number one issue was clearly the taxation of retirement accounts, where current taxation laws results in double taxation while preventing expatriates from fully taking advantage of their country of residence’s retirement savings incentives.   In short, there is a huge need to reform both US and Australian taxation treatment of retirement accounts in order to provide retirement account portability, facilitate labour mobility and minimise economic leakage. 

Similarly, US taxation on the sale of personal residences in Australia becomes a major issue as high housing costs force Australian residents to tie up a large proportion of their savings in their home with the expectation that these illiquid savings can be “unlocked” during retirement through downsizing or other mechanisms such as reverse mortgages, home equity lines of credit, etc. 

Finally, the investment opportunities available to Australian residents are severely limited by US taxation laws such as PFIC legislation and regulations that punitively tax a wide variety of common non-US investments. 

  1. Focus & simplicity
    • Prioritisation required
    • Wrap up in over-arching themes; eg economic advantages of retirement portability / labour mobility
    • Focus on messages that will resonate with our elected representatives
    • Simple messaging formats; 
    • Provide appropriate level of supporting analysis but avoid analysis paralysis

All focus groups were strongly of the view that in order to be more effective, we need prioritisation, increased focus and simplicity in our efforts.  Framing our requests into over-arching themes such as “effective labour mobility” and “retirement portability” is recommended.  Importantly, we need to focus on justification that will resonate with the key decisions makers, our elected representatives.  For example, we should aim to educate politicians that these changes will actually provide economic opportunities as Australia recovers from the COVID-19 recession. 

Messaging needs to be simple and direct; Infographics were recommended as an effective communication tool for both politicians and media.  Of course, some level of supporting analysis may be required to provide important quantification such as economic metrics, but this does not and should not be exhaustive or hugely time consuming as we need to avoid analysis paralysis. 

  1. Develop and conduct sustained campaigns on key issues

Focus groups all agreed on the need to develop clear, ongoing and sustained campaigns on key issues.  Specifics however are challenging with no group consensus emerging.  Further work will certainly be required in this area.  

  1. Seek to identify develop key alliances with political and Industry groups

Focus groups also recognised the need for alliances that would share our objectives and ideally have greater resources and lobbying connections.  Further work is required but potential allies could be State and Industry Development Groups, Australian Super or Investment organisations, etc.

So what comes next?  We’ll be updating our Strategy Roadmap and seeking to develop action plans and sustained campaigns around these simplified and prioritised objectives.  If you missed the focus groups, it’s not too late to provide input into our revised strategy – just drop Karen (karen@fixthetaxtreaty.org) or me (gstreet@fixthetaxtreaty.org) an email with your thoughts.  We are particularly interested in thoughts around how we might conduct effective campaigns on our key issues (Item 3 in the themes summary).

As always, “many hands make light work.”  To bring about positive change, we must leverage our group as a volunteer resource.  Please get involved!


FG Introductory slides:

Our Stories – The Human Element

When we tell other Australians about the issues we face from the long reach of the United States, it is easy to lapse into technical speak – double tax, PFICs, NIIT, FATCA, IGAs and the like.   But the reality of the situation is something more and deeply emotional:  fear, anger, frustration and resentment are only some of the gut feelings most of us experience.

To affect positive change, we need to educate Australian policy makers and the public on the harm being inflicted on not only a large group of people but also the Australian economy.   By its very nature, this is a technical topic and our arguments require verifiable stats, well thought-out positions, identified and viable alternatives, a business case and the like.

However, like any good novel, we will stand a better chance of hooking our audience if we also appeal to them on an emotional or gut level.

This is where you come in.  Continue reading “Our Stories – The Human Element”

Strength in Numbers

Many Hands Make Light Work
Old English Proverb

United we stand, divided we fall
Aesop

There is always strength in numbers.  The more individuals or organisations that you can rally to your cause, the better
Mark Shields

All for One and One for All!
Motto from the Three Musketeeers, by Alexandre Dumas

I not only use all the brains I have, but all I can borrow
Woodrow Wilson

Alone we can do so little; together we can do so much
Helen Keller

With an estimated 200,000 persons of American origin living within Australia, one would think that the awareness would be greater of the significant threats imposed on them through the US Government’s harmful and unjust practices of extraterritorial taxation.   I’ve been baffled at how few actually understand the breadth of compliance expectations, costs and potential risks such reporting compliance penalties and double taxation but I also recognise that following years of minimal enforcement or education, many would have been able to stay blissfully ignorant of expectations imposed by a far far away country.

However, all this is changing now that the USG, with Australia’s full cooperation, has begun to enforce their extraterritorial Citizenship Based Taxation regime, aided and abetted by FATCA.  Stakeholders are starting to wake up to the material threats they face and are motivated to seek change.  This led to the recent formation of Let’s Fix the Tax Treaty! as an Australian focused advocacy group seeking to press the Australian Government for amendments to the Australia/US Tax Treaty and the FATCA IGA to eliminate discrimination against a subclass of Australian citizens that is also disadvantageous to all Australians

As a new, word-of-mouth grassroots initiative, it is pleasing to see that membership in our Facebook group has already reached over 125 members.  Nevertheless, current membership is a very small fraction of the impacted community and clearly our cause will be better served by greater membership representation.

Why does membership numbers matter?  Firstly, if we are seen to represent a large stakeholder group having aligned goals, we’ll have much greater creditability and a better opportunity to influence Australian policy and opinion makers.   Secondly, our advocacy group strategy (currently under development –look for blog posts on this soon) will flow onto specific activities that will require volunteer efforts to execute.  To successfully bring about change, we will all need to get involved.  Recently, a call went out for volunteers to serve on a Steering Committee (which remains open, hint, hint!) and there will be further calls for volunteer support as standing committees are formed to support targeted activities.   Thirdly, the more broad and diverse the skills and mindsets we can draw upon, the more successful our efforts are likely to be.

Who are the Stakeholders we need to attract?  Stakeholders consist of:

  • Australian residents of American origin, many of which are dual citizens;
  • Australian spouses of American citizens;
  • Australian citizens living in America who are now subject to US tax laws including potentially material (penalty) taxes on Superannuation and passive investments they established before moving to the US
  • Indirectly, all Australians who have to pay for FATCA systems, suffer money being unfairly diverted from their domestic economy into a foreign economy and tolerate a loss of Australian sovereignty as Australia domestic policies are undermined by a foreign power.

 

So if we accept that larger membership is desirable, what can we do about it?

  1. Spread the word to your network and ask them to do the same. Most of us know many impacted people so this is a great place to start.  To make this easier, I’ve previously posted a “model email” (look for it in the comments) that you are welcome to modify and personalise as your own.
  2. Let appropriate organisations know about our group. I’ll cross-post this in the a couple of relevant Facebook Groups I am a member of (Yanks Down Under and North American Expats in Adelaide and South Australia) please do this with other appropriate groups and please tell us about them in the comments.
  3. Media helps immensely. After the recent SMH article featuring our very own leader Karen Alpert, we saw a sharp uptick in FB membership requests and visits to our blog site.  We’ll be formally working the media angle further as the Steering Committee and group strategy gets rolled out but perhaps some of you already have connections or ideas here?  Please tell us about it in the comments.
  4. Finally, we are happy to take other ideas in the comments.

I think we should be targeting to grow this group to the 2,000 to 5,000 persons size, which seems to me both a reasonable and achievable target.  Of course, we recognise that numbers for numbers sake is not what we are here for and we will soon table an advocacy strategy and corresponding activity plan for your input and feedback.  Then it will be time to get involved!  Look for my next post soon on the benefits of having a well thought-out advocacy strategy.