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:

Revenue Neutrality

When the US Congress considers legislation, one of the standard criteria often applied is that the proposed bill should be revenue neutral – that is, any new costs must be offset by new revenue. But, should this be a consideration for proposals to move to a system of residence based taxation?

No other developed country taxes nonresidents solely on the basis of citizenship. Those who left the US as toddlers to return to their parents’ home country are (under US law) US citizens, but most do not identify as Americans and have few, if any, ties to the US. Taxing the residents of other countries who no longer have substantial ties with the United States is clearly over-reach. While there might be many opinions about exactly where to draw the line, a line must be drawn. It is a question of doing the right thing – and the revenue generated does not alter the immorality of taxing those who are clearly domiciled in other countries.

Furthermore, it is not clear how much revenue is actually generated by the taxation of nonresident citizens – or how much revenue might be generated by taxing nonresidents under the provisions currently applied to nonresident aliens. So any calculation of “revenue neutrality” is only a very rough approximation.

Last Friday, I joined John Richardson and Laura Snyder for a discussion of these issues prompted by a post on John’s website. Here is the resulting podcast:

Part 1: Our FOI Journey – Challenges & Pitfalls

Looking For a Needle in a Haystack… 

Those of you who follow our blogs might recall we commenced a Freedom of Information (FOI) campaign with both the ATO and Treasury a full year ago to develop a deeper understanding around the issues we face with an intent to use this information to inform future policies and actions (see Behind the Curtain – FOI Requests, Nov 2017).

In practice, exercising our Freedom of Information rights became a much more involved, complex and time consuming process than initially envisioned.  Along the way we learned a great deal about the FOI process and challenges in obtaining useful information.  Although the information we obtained wasn’t the insightful contextual documents we had hoped for, we still gained some information and insights along the way.

I’ve split this blog into two parts to keep the length down

  • Part 1 – Challenges and pitfalls – Our journey through the FOI process
  • Part 2 – What did we learn and what steps might we consider next?

Continue reading “Part 1: Our FOI Journey – Challenges & Pitfalls”

From Little Things, Big Things Grow – Annual Report

“…but this is the story of something much more
How power and privilege can not move a people
Who know where they stand and stand in the law

From little things big things grow
From little things big things grow”

From Little Things, Big Things Grow,  Paul Kelly and Kev Carmody, 1991

Let’s Fix the Tax Treaty! seeks to be an open, transparent and effective advocacy group.  As part of this commitment, not only do we, the Steering Committee, believe it is good practice to set annual objectives as part of our action planning, it is also useful to look back and reflect on what was achieved with the resources available to us.

2017 was our first full year of existence and much of the year was spent building the foundations upon which we intend to build activity, momentum and scale over the coming years.   Key milestones along the way included publishing our Strategy Roadmap, creating and implementing a Wiki framework for knowledge capture and ongoing membership development and support.

Many of you will recall that we prepared a 2017 Scorecard which we issued as part of the Strategy Roadmap document.  How did we do?  See the table below this post.  Although not everything was achieved, we believe we made solid steps towards our goals.  Currently, we are finalising our 2018 objectives which will inform our efforts over the coming year.

As always, we value your feedback and comments.  Most of all, we value your involvement.  Are we moving too slow?  Do you want us to go in new or different directions?  Get involved!

Karen, Carl & Caroline

Continue reading “From Little Things, Big Things Grow – Annual Report”

Behind the Scenes

It’s been almost three months since Carl posted our revised Strategy Roadmap. In that time, the Steering Committee (Karen Alpert, Carl Greenstreet, and Caroline Day) have been working behind the scenes on creating a package of materials to support organised action. I’ve written a “Talking Points” paper and am working on a more detailed Issues paper. We also plan to boil this down into one or more single-page briefs that can be used to help inform members of Parliament, policy-makers and other key decision-makers and influencers. We have a series of questions that we would like to ask the appropriate government agencies under Freedom of Information and Carl is preparing FOI requests.  The bottom line is that we need to have both well-documented evidence and a clear objective before we start any campaign to inform policy-makers.

As we have said before, many hands make light work. There are several areas where we could use some help. Please read through this list and consider what you might be able to help with:

  • Steering Committee (see section 2 of the Strategy Roadmap) – we are still looking for two more members to fill the vacant positions (see page 9 of the document)
  • Developing and organising our evidence base – We are creating a wiki to organise and index information from this website and others. Even if you don’t feel up to adding original content to the wiki, consider becoming a wiki editor to help populate the wiki with links to other resources.
  • Branding – Do you have graphic design skills? If you would like to design a logo for us, let us know via our contact form.

 

Plan to Succeed (Part II) – Strategy Roadmap & Action Plan

Clearly articulating our group’s vision, objectives and action plans is essential if we are to be effective in achieving our aims. Many of you will recall that the Steering Committee members (Karen Alpert, Caroline Day and myself) have long been working on a Strategy Roadmap document, as previous discussed in a number of blog posts:

“A goal without a plan is just a wish.” ― Antoine de Saint-Exupéry

A good advocacy plan will help our group decide where to spend time and effort to achieve our goals and assist us to be as effective as possible with our limited resources.  The plan will be a key reference document that is periodically updated as we progress towards achieving our goals.

I’m pleased to announce that we have completed a final draft of our Strategy Roadmap.  You can view it here.

Continue reading “Plan to Succeed (Part II) – Strategy Roadmap & Action Plan”

“Just the facts, ma’am” … Introducing the Fix The Tax Treaty Wiki!

I was once involved in a contentious activity involving a polarised stakeholder group comprised of big business, activists, regulators and government representatives.   Despite all parties agreeing to fact-based outcomes, I observed “the facts” changed depending on the party involved and decision makers were often presented with inconsistent, confusing and unverifiable information even by different members within the same faction.    At times, I was contacted by policy makers or media with questions and frustratingly could not immediately respond as the information was not at my fingertips.

The lessons I learned from this were if you want to affect change, you must gather your supporting evidence (the “case for change“) early and it must be verifiable and readily accessible.

Continue reading ““Just the facts, ma’am” … Introducing the Fix The Tax Treaty Wiki!”

Strategy Document Feedback

Just before Christmas, Karen released our initial Steering Committee work on the group strategy for your feedback through the blog comments, our Facebook Group or Private Message.   Perhaps the timing was not the best given how frenetic things get for most of us over the holiday season? Continue reading “Strategy Document Feedback”