It’s desperate measures for a desperate PM, via Domainfax:
The Turnbull government offered to exclude Australia’s big four banks from its company tax cuts in a last-minute pitch to gain the support of One Nation for the signature economic policy.
In a move that will deepen entrenched animosity between the banking sector and the Coalition government, Treasurer Scott Morrison drafted legislation that excluded banks with held assets worth more than $500 billion and delivered it to One Nation leader Pauline Hanson last week.
Senator Hanson – who had previously said she could never vote for a tax cut for the big banks – rejected the approach, ensuring the $35.6 billion package will fail when it comes to an expected vote on Tuesday.
Splendid. This policy was as bad if not worse than the NEG:
- Foreign owners/shareholders would receive the lion’s share of benefits because they are not subject to dividend imputation;
- The cost to the Federal Budget would be enormous (around $4 billion a year), which would need to be made up via higher personal taxes or cuts to government services; and
- Treasury’s claimed benefits to ‘jobs and growth’ are miniscule and uncertain, even with spurious modelling assumptions adopted.
Removing the banks only made the policy marginally less disastrous.
