Tuesday, January 15, 2013

Aussies Working Harder Than Ever Before

The Treasurer has announced that the government will finally be moving away from its commitment to budget surplus for this financial year, as company tax revenues have not met expectations and the strength of the local currency has made economic conditions more difficult to navigate through. Treasurer Wayne Swan said that deficit was now likely for the financial year ending June 2013, after months of opposition criticism and questioning about where the government intended to get the funds from. This announcement came after the Finance Department said that tax receipts for the year were nearly $4 billion below what had been predicted, at $17 billion. This sentiment goes against the promise that was delivered in 2010 when Swan earmarked Australia to be the first developed economy to see a return to surplus by 2012/2013. Many Australian banks lower rates and offering attractive promotions to clients to attract local investment. 

And as officials lament the departure of surplus and an economy that is being tried and tested through adverse conditions, workers are trying to correct their own financial situations by putting more hours in at the office, but in many cases are not being remunerated for their efforts.

Despite trying economic conditions, local workers are putting their heads down and getting more hours in at the office. This is according to census data that demonstrates how Australian workers are injecting an average of 52 extra days of overtime into the work schedule every year. According to the Australian Financial Review and 2011 census data many people are now putting an extra 10 weeks a year into their work but they are not all necessarily being compensated for it.

There are now 6.3 million full-time employees in the country earning salaries. Out of that figure 26% or 1.7 million people say they worked at least 49 hours in the week leading up to last year’s census. And it is employees, not company owners who are most likely to be putting that overtime into their working day.

If you were wondering which professionals are working hardest, surgeons top the list as putting the most hours in, followed by legislators and crop and livestock farmers who are mostly self-employed. The legal profession followers with more than 50% of people employed in the industry working more hours than average in a day. As far as industry is concerned faring and mining saw the biggest time investment but the figures did not take into account traveling or commuting to mine sites.

The statistics are enlightening considering the public’s love affair with credit and increasing household debt came to an end and was replaced with more conservative spending behaviour, longer working hours and a focus on saving in conditions that are becoming more difficult for the average household to survive.

In other news that will see more financial restrictions for some people, the 1st of January 2014 will see the introduction of FATCA or the Foreign Account Tax Compliant Act which will put foreigners under pressure to declare their earnings. The act has been drafted to address tax evasion by US residents living in other countries. This act will regulate offshore assets by forcing people to disclose any foreign financial transactions that affect their investments.

FATCA works on an opt-in basis wherein foreign financial institutions (FFIs) can collaborate with the IRS. FFIs need to agree to a reporting system, hold back on obligations to US account bearers and comply with due diligence requirements. It has been put down as optional but it is in FFIs’ best interests to sign an agreement if they want to escape the 30% withholding tax which includes income, dividends and interest payments if they do not sign the agreement.

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