Poor Priority

One of the great things about technology is how it’s enabled us to take advantage of opportunities for exchange in a real-time and more convenient fashion.

Companies like Airbnb and Uber are not the first to integrate the internet and smartphone apps into their business strategy. They are, however, among a handful of companies that use technology as their primary means of doing business — where the business is about connecting buyers with sellers rather than selling.

My first Airbnb experience was on the long weekend in Orange, where I had a choice between a decidedly average motel in the centre of town, and a picturesque rural property a short drive from town with a lovely retired couple for roughly the same price.

The thing I find exciting about Airbnb in particular is how it has made it so much easier for people to make a bit of money from an asset — their home — of which they would otherwise only make personal use.

New guidelines recently issued by the ATO mean that people who make money from Airbnb are required to declare it on their tax returns, so it is subject to ordinary income tax.

But I doubt I’m alone in thinking that expecting the ATO to fully enforce these new guidelines and ensure this income is declared is rather churlish in the grand scheme of things. After all, this is happening against a backdrop of the federal government being happy to quietly increase the tax burden, and state governments being determined to keep people up to their eyeballs in debt with planning laws that stifle housing affordability.

Given this, it’s a very poor set of priorities that may see ordinary people so vigorously pursued for a little extra cash, in the same way that people might decide to pocket the proceeds of eBay sales or a market stall selling homemade goodies.

It’s true it’s technically correct that tax should be paid on this income. But there are rich, varied and valuable opportunities for exchange out there which could be threatened if enforcement is taken too seriously.