Are Taxes Included In The Menu Price Australia 2022✨

Annual CPI inflation increased to 3.5 percent in the December quarter, due to higher dwelling construction costs and automotive fuel prices.

Trimmed mean annual inflation, which excludes large price rises and falls, increased to 2.6 percent, the highest since June 2014.

CPI, Trimmed mean & Weighted median: Annual movement (%)

	CPI	Trimmed mean	Weighted median
Dec-13	2.7	2.7	2.9
Mar-14	2.9	2.7	2.7
Jun-14	3	2.8	2.7
Sep-14	2.3	2.4	2.6
Dec-14	1.7	2.2	2.4
Mar-15	1.3	2.3	2.4
Jun-15	1.5	2.2	2.3
Sep-15	1.5	2.1	2.2
Dec-15	1.7	2.1	2
Mar-16	1.3	1.7	1.5
Jun-16	1	1.6	1.3
Sep-16	1.3	1.6	1.1
Dec-16	1.5	1.5	1.2
Mar-17	2.1	1.7	1.6
Jun-17	1.9	1.7	1.9
Sep-17	1.8	1.7	2
Dec-17	1.9	1.7	1.9
Mar-18	1.9	1.7	1.9
Jun-18	2.1	1.6	1.9
Sep-18	1.9	1.7	1.9
Dec-18	1.8	1.8	1.9
Mar-19	1.3	1.6	1.5
Jun-19	1.6	1.6	1.4
Sep-19	1.7	1.6	1.3
Dec-19	1.8	1.5	1.2
Mar-20	2.2	1.7	1.6
Jun-20	-0.3	1.3	1.3
Sep-20	0.7	1.2	1.2
Dec-20	0.9	1.2	1.4
Mar-21	1.1	1.1	1.3
Jun-21	3.8	1.6	1.7
Sep-21	3	2.1	2.2
Dec-21	3.5	2.6	2.7

Costs of construction are rising, which drives up costs for new houses.

Construction activity is at an all-time high. activity, coupled with a shortage of labor and materials have led to the two quarters with the most significant increase in new home prices since the introduction of the GST. 

The lower amount of government construction grants than the previous quarter has also played a role in the rise this quarter. 

The grants are a way of reducing the out-of-pocket costs associated with new houses that are being built.

A new dwelling is purchased by the owner-occupier Australia annually and quarterly movements ( percent)

quarter	Percentage increase from last quarter	Change in annual percentage
Jun-99	0.9	4.1
Sep-99	2.0	5.5
Dec-99	3.2	7.9
Mar-00	1.6	7.9
Jun-00	0.5	7.5
Sep-00	8.1	13.9
Dec-00	0.3	10.7
Mar-01	0.1	9.1
Jun-01	-0.3	8.2
Sep-01	0.9	1.0
Dec-01	1.0	1.8
Mar-02	0.9	2.5
Jun-02	1.0	3.8
Sep-02	1.0	3.9
Dec-02	0.7	3.6
Mar-03	1.5	4.3
Jun-03	1.9	5.2
Sep-03	1.7	6.0
Dec-03	1.1	6.4
Mar-04	1.0	5.9
Jun-04	1.4	5.4
Sep-04	1.1	4.7
Dec-04	1.5	5.2
Mar-05	1.4	5.5
Jun-05	0.9	5.0
Sep-05	1.2	5.0
Dec-05	0.8	4.3
Mar-06	0.4	3.3
Jun-06	1.1	3.5
Sep-06	0.2	2.5
Dec-06	0.5	2.1
Mar-07	1.0	2.8
Jun-07	0.9	2.7
Sep-07	1.0	3.5
Dec-07	1.4	4.4
Mar-08	1.7	5.1
Jun-08	1.0	5.1
Sep-08	1.3	5.4
Dec-08	0.2	4.2
Mar-09	-0.5	2.0
Jun-09	0.9	1.8
Sep-09	1.1	1.6
Dec-09	0.9	2.4
Mar-10	1.3	4.2
Jun-10	0.5	3.8
Sep-10	0.5	3.3
Dec-10	0.7	3.0
Mar-11	0.8	2.6
Jun-11	0.4	2.5
Sep-11	-0.1	1.8
Dec-11	0.3	1.4
Mar-12	-0.1	0.5
Jun-12	0.1	0.2
Sep-12	0.9	1.2
Dec-12	0.1	1.0
Mar-13	1.7	2.8
Jun-13	0.9	3.6
Sep-13	0.5	3.2
Dec-13	1.0	4.1
Mar-14	0.1	2.4
Jun-14	1.6	3.2
Sep-14	1.1	3.8
Dec-14	1.1	4.0
Mar-15	0.9	4.8
Jun-15	1.5	4.8
Sep-15	0.7	4.3
Dec-15	0.1	3.3
Mar-16	0.2	2.5
Jun-16	0.9	1.9
Sep-16	0.4	1.6
Dec-16	0.5	2.0
Mar-17	1.0	2.8
Jun-17	0.9	2.8
Sep-17	0.8	3.1
Dec-17	0.6	3.2
Mar-18	0.5	2.7
Jun-18	0.8	2.7
Sep-18	0.1	2.0
Dec-18	0.4	1.8
Mar-19	-0.2	1.2
Jun-19	-0.2	0.2
Sep-19	-0.2	-0.1
Dec-19	0.4	-0.1
Mar-20	0.4	0.5
Jun-20	0.1	0.7
Sep-20	0.5	1.4
Dec-20	0.7	1.7
Mar-21	-0.1	1.2
Jun-21	-0.1	1.0
Sep-21	3.3	3.8
Dec-21	4.2	7.5

• GST was introduced

Prices for petrol at a record high

Prices for automotive fuel rose for the sixth straight quarter, leading to the biggest increase in annual prices since 1990. 

In the Automotive Fuel series, prices hit an all-time high during the December quarter because of higher global oil prices, despite the economic recovery and a decrease in global supply. 

The national average quarterly price of unleaded gasoline increased by $1.64 per liter during the month of December. 

This release contains an upgrade to the piece on the background of ” automotive gasoline as part of the CPI’.

The average cost of unleaded fuel (91 Octane) in cents per liter

Quarter	Quarterly Average Australia
Sep-13	151.31
Dec-13	148.73
Mar-14	154.8
Jun-14	153.64
Sep-14	147.9
Dec-14	136.4
Mar-15	120.02
Jun-15	136.42
Sep-15	133.76
Dec-15	125.28
Mar-16	111.11
Jun-16	119.19
Sep-16	115.23
Dec-16	123.27
Mar-17	130.86
Jun-17	127
Sep-17	124.2
Dec-17	136.71
Mar-18	137.75
Jun-18	147.11
Sep-18	149.19
Dec-18	144.61
Mar-19	131.92
Jun-19	146.26
Sep-19	143.35
Dec-19	149.89
Mar-20	139.4
Jun-20	110.49
Sep-20	123.34
Dec-20	123.17
Mar-21	134.65
Jun-21	143.59
Sep-21	153.85
Dec-21	164.21

• GST was introduced

Prices rise for goods that exceed services

The price of gasoline for cars and new home purchases were the major contributors to the rise in prices of goods in 2021. 

The prices were also up across a variety of other products due to an increase in demand and disruptions to supply which led to price increases for items like furniture and motor vehicles.

Services, goods, and other products Movement of goods, services, and selected items ( percent)

December quarter 2021
Goods – total	4.3
Services – total	2.3
Furniture	5.7
Motor vehicles	6.3
Motor vehicle components	4.5
Accessories for clothing	6.8

The two-speed rental market continues to be present across capital cities.

The rents in Sydney and Melbourne decreased again in the month of December. It was the fourth quarterly decline for Sydney as well as the 3rd consecutive quarterly decline for Melbourne. 

The rents in the other capital cities continue to increase which is a reflection of the low vacancy rate in these cities.

Rents, percentage changes from the previous quarter, and from the March Quarter 2020 (pre-COVID)

	Change in percentage in the March quarter of 2020 (pre-COVID)	Change in percentage from the last quarter
Sydney	-4.2	-0.3
Melbourne	-2.5	-0.4
Brisbane	2.5	0.5
Adelaide	3.1	0.7
Perth	7.2	1.6
Hobart	6	1.1
Darwin	5.5	3.1
Canberra	3.6	0.5
Australia	-1.1	0.1

Rents for homes located in Sydney as well as Melbourne have increased more rapidly than those of other residences following the introduction of COVID-19. 

The rental conditions for other dwellings are still subdued for Sydney in both Melbourne. In the other capital cities, the rents for dwellings and houses have risen by the same amount.

Change in rents, percent change in March quarter of 2020 (pre-COVID) for homes and other dwellings

	Houses	Other residences
Sydney	-1.8	-5
Melbourne	-0.3	-3.2
The remaining six capital cities	3.8	3.5

Non-discretionary inflation greater than double The inflation of discretionary items

The annual rate of non-discretionary inflation is more than the CPI and is more than double the rate of discretionary inflation. 

Non-discretionary inflation covers products and services that consumers will not be able to cut in their use, for example, automobile fuel, food as well as health, housing, and fuel expenses.

CPI, Non-discretionary and discretionary: Annual movements ( percent)

	December quarter 2021
CPI	3.5
Non-discretionary inflation	4.5
The discretionary inflation	1.9

The main factors that influence the change

CPI groups

A weighted average of 8 capital cities, change in percentage from the previous quarter

Groups	Change in the percentage of change from the last quarter	Change in CPI percentage for all groups from the previous quarter
All types of CPI		1.3
Non-alcoholic and food items	0.7
Tobacco and alcohol	0.9
Shoes and clothing	2.6
Housing	1.8
Equipment, furnishings, and other services	1.1
Health	-0.3
Transport	2.8
Communication	0.1
Culture and recreation	1.5
Education	0.1
Financial and insurance	1.2

The taxation foundations of multinationals

Similar to many developed countries the Australian corporate tax system decides what activities are tax-exempt in Australia according to what source as well as the location of the taxpayer. 

The tax system generally is assessed Australian resident companies for income-generating activities that take place in Australia.

To stop tax avoidance the current tax laws in Australia have provisions that target specific tax avoidance behaviors, complemented by general anti-avoidance provisions.

The increasing number of huge multi-national business models along with changes to how they provide their products and services has caused problems for tax authorities around the world who are incorrectly attributing tax-deductible income.

Australia is a participant in the OECD’s development and implementation of taxation best practice guidelines. 

Since 2012 the OECD has given a particular focus on tax planning by corporations that multinational companies (MNCs) trying to minimize their tax burden. 

This led to the formulation of the Base Erosion and Profit Shifting (BEPS) Action Plan, which was released in 2013.

Profit Shifting and Base Erosion

BEPS is a term used to describe tax avoidance strategies that make use of the gaps and inconsistencies of tax regulations to transfer profits into low or tax-free locations. 

A few typical BEPS strategies that have been identified by the OECD are:

Absence of a tax-exempt presence. Some multinationals have a business presence in a particular country but they can’t have a tax-exempt presence in the country by exploiting the differences in the rules of residency for different countries or by making fake arrangements

Transfer mispricing is a technique used by multinational corporations to lower their tax liability by increasing the cost of transactions or by reducing the price that they pay when they enter into transactions between their entities across different countries

Relocating capital such as assets, functions, and functions. are able to relocate profitable functions and assets to tax-free locations so that profits earned from these properties are taxed with an extremely low tax rate

tax arbitrage and treaty-shopping–MNCs are able to exploit differences in countries in tax laws rates, treaties, or rates to transfer profits to low or no-tax countries, or to obtain double taxation of transactions, as well as

debt loading. MNCs could use huge amounts of related-party debt in order for financial transactions to increase how much interest they are able to deduct.

The leaders of the G20 have endorsed the first BEPS Act Plan within Their July 2013 Communique in which they stated that “profits are tax-deductible where the functions that generate the profit are fulfilled and value is generated. 

This framework is the foundation for a range of recent initiatives taken by the Australian Government to tackle BEPS.