After Treasurer Scott Morrison’s cognitive dissonance yesterday, the Business Council of Australia (BCA) has maintained the delusion, warning on Budget repair and Australia’s AAA credit rating whilst demanding a company tax cut. From ABC News:
Newly-appointed Business Council of Australia president Grant King has warned that the Government’s AAA credit rating is at risk if efforts to repair the budget fail.
Mr King told the ABC’s AM program that a ratings cut “just follows as a matter of logic”… If those budget deficits continue to expand then our credit rating will be at risk,” Mr King said…
“We are seeing indications that the deficit is deteriorating so it is going to be a challenge,” he added…
Mr King underscored the importance of Australia maintaining the AAA sovereign rating to ensure it can deliver on services Australians have come to expect during the boom years…
Mr King also defended the government’s plans for corporate tax cuts of $48 billion over ten years, despite perceptions the money will go into shareholders’ pockets rather than create new jobs.
The business push for company tax cuts comes after confirmation last week that wages are growing at the slowest pace on record.
Righto, so Australia needs to repair the federal Budget to avoid losing its AAA credit rating, but it still makes sense to cut the company tax rate to 25% from 30% over a decade, even though:
- most of the benefits would flow offshore;
- national income would be reduced;
- the Budget would lose revenue, resulting in a blow-out in the deficit, tax rises and/or expenditure cuts elsewhere (lowering jobs and growth); and
- Treasury’s own modelling showed almost no benefits to jobs and growth.
You can’t make this stuff up.
With the Federal Budget facing immense structural pressures and a “revenue problem”, and Australia’s AAA credit rating on the line, there is absolutely no sense in gifting tens-of-billions of dollars to foreign owners/shareholders, and in the process worsening the Budget position and lowering national income.
The BCA is simply feigning concern while talking its own book.
