local government act

Local government is the third level of government in Australia. It was established by an Act of state parliament.
In Victoria, local government is made up of 79 councils representing over 5.5 million people. Councils are area-based, representative governments with a legislative and electoral mandate to manage local issues and plan for the community’s needs.
Each council varies in size, population, rate base and resources, but all must operate in accordance with the Local Government Act 1989.
Local government is responsible for implementing many diverse programs, policies and regulations set by the Victorian and Australian governments. Councils also have to respond to local community needs. They have powers to set their own regulations and by-laws, and provide a range of services. Local laws developed by councils deal with important community safety, and peace and order issues.
Local laws often apply to noise, fire hazards, abandoned vehicles, parking permits, street stalls, disabled parking, furniture on footpaths, graffiti, burning off, animals in public spaces and nuisance pets.

Reporting obligations

Under Victorian legislation, councils must develop a council plan, strategic resource plan, annual budget and annual report.
The council plan specifies the council’s major goals. A strategic resource plan identifies the resources required to achieve the goals outlined in the council plan.
The annual budget delivers a single year’s financial resources to achieve council plan goals. Councils release draft budgets to consult with communities about the priority expenditure needs.
The annual report includes the council’s financial statements. Reports are independently audited by the Victorian auditor general.
Some important financial indicators used to measure financial performance include whether:

•  a surplus or deficit is delivered 
• there is enough cash to pay for immediate liabilities 
• debt redemption expenses and debt are excessive, relative to own-source revenue 
• a budgeted capital works program is delivered 
•  assets are adequately valued, which will directly affect depreciation.

A copy of the council’s Annual Report must be submitted to the Minister within three months of the end of each financial year. The report should be sent to (check this link): Municipal Association of Victoria

Dividend washing

occurs when shareholders seek to claim two sets of franking credits on what is effectively the same parcel of shares. https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Preventing-dividend-washing/
Dividend washing involves arrangements that enable a taxpayer who effectively holds a single parcel of shares to obtain double franking credits. This occurs when an investor, who has access to the Special Market operated by the Australian Securities Exchange, sells shares ex-dividend (seller retaining the dividend with franking credits) and then in 2 days buys cum-dividend shares (ie with dividend rights still attached) in the same company on the Special Market (buyer receiving the dividend with franking credits).
The price paid for shares in this market is usually very close to the price in the normal ex-dividend market, plus the value of the dividend to be paid on the shares. https://www.ato.gov.au/Media-centre/Media-releases/ATO-confirms-dividend-washing-not-allowable-under-tax-law/
The new law will apply from July 1, 2013, to investors who have franking credit tax offset entitlements in excess of $5000. Small shareholders will be excluded. However, experts said that the ATO was relying on a broader anti-avoidance provision to examine share trades which pre-date the new law.
The ATO has been given the go ahead to start chasing investors (including SMSF trustees) after the release of a draft tax determination (TD 2014/D1) which basically outlaws the practice.

Preventing dividend washing 24 March 2014 | Exposure Draft

This draft legislation would amend the tax law to deny an entity the benefits of any additional franking credits that an entity receives as a result of dividend washing.

Shadow economy

Goods and services are traded for cash, and therefore are not declared for tax.

Shell companies

Exist on paper only, with no real employees or offices AND serve as a vehicle for business transactions without itself having any significant assets or operations.