Is it a typo? Australia’s monopoly of tollroad monopolies, Transurban has broken hard with hallowed tradition and actually paid tax. A little bit, at least that’s what it’s interim profit release to the ASX shows.
Given payouts to shareholders were up 13%, free cash up almost 19%; and given the thwacking $2b in toll revenue just for the half year alone, the tax payable of $21m was a drop in the ocean. But what’s the scam here? Transurban usually pays nothing.
The scam is they are a complicated ‘stapled trust’ security. Crudely, costs and losses go into the company, while profits and cash go into the trust, and trusts don’t pay tax.
So when your car passes under the ‘gantry’ on the tollroad, when you hear that little jangly sound taking your toll money, that gantry is probably in the trust. Anyway, there are a lot more tricks but suffice to say, shareholders and bankers in this are a lot better off than taxpayers and customers. Road traffic was up 2.1% while total revenue was up 6.3%. And last year, for the half Transurban got a tax benefit – not a payable – of $97m – so on a two year basis they are sticking to their knitting … of sticking it to the taxman.
This post was originally published on Michael West.