Australia’s real estate treasurer, Scott Morrison, gave a typical aggressive, arrogant, smarmy and contradictory interview on ABC’s 7.30 Report last night, whereby he talked-up the Coalition’s ‘jobs and growth’ mantra, attacked Labor for the Budget deficit, and then championed the Coalition’s expensive company tax cut plan:
Scott Morrison: “The government is focused on important challenges. And the most important of those is to stay in jobs, get people in jobs, help them stay in jobs and relieve the pressure on the household budget… What I am concerned about is what is concerning those Australians about their jobs, what they are paying for power, what they are paying for childcare, what they are paying for a house, and that’s what we are focused on, and we are not distracted by this [Bernardi’s departure]”…
“The Labor Party isn’t serious about bringing the Budget back to balance. Having lit the fire on the Budget when they were in government, they now refuse to support the government as we seek to clean up their mess”…
Leigh Sales: “Your company tax package, when are we going to see that come up?”
Scott Morrison: “That will be debated tomorrow… We don’t resolve for one second from bringing in measures which support investment, which support jobs… We will be stranded if we cannot get support for these measures, and that will put at risk the jobs that will come from additional investment. Everything we do in this government is to drive investment, because that’s what secures people’s jobs”.
You’ve gotta wonder about Scott Morrison’s intellect. On the one hand he continues to howl at Australia’s ballooning Budget deficit, which has placed Australia’s AAA sovereign rating at risk, only to then push the Government’s $48.7 billion company tax cut, which would see the corporate tax rate fall from 30% to 25% by 2026-27.
I have explained many times why the Coalition’s company tax cut policy is plain stupid, namely:
- most of the benefits would flow offshore;
- national income would be reduced;
- the Budget would lose significant revenue, resulting in tax rises or expenditure cuts elsewhere (lowering jobs and growth); and
- Treasury’s own modelling showed almost no benefits to jobs and growth.
Sadly, while Morrison continues to push his expensive and ill-targeted company tax cut, many worthwhile reforms that would genuinely boost ‘jobs and growth’ continue to go missing.
First, Morrison has categorically ruled-out reforms to negative gearing and capital gains taxes, despite the fact that these would actually raise Budget revenue, reduce growth in household debt and land/house prices, lower the dollar, as well as lower the nation’s over-investment in non-productive housing.
Second, Morrison has ruled-out providing incentive payments to the states to encourage them to undertake competition reforms as identified under the Harper competition policy review. Why? because the Federal Budget cannot afford it, even though it can somehow afford tens-of-billions of dollars of company tax cuts.
Third, Morrison supports the states swapping stamp duties for a land tax on residential property, noting that it would improve efficiency and housing affordability. But yet again, Morrison has refused to provide the states with incentive payments to ensure that reform actually gets done.
Finally, Scott Morrison is a strong supporter of mass immigration, which has lead to strong inflows of new residents into Australia’s cities (especially Sydney and Melbourne), causing all kinds of problems such as productivity-sapping congestion and deteriorating housing affordability. And yet his government – which receives the bulk of Australian tax revenues – has refused to provide the states with the necessary funding to cope with such growth.
Even Morrison’s esteemed predecessor, former treasurer Peter Costello, does not believe that cutting company taxes is worthwhile. Back in October 2016, Costello claimed that the Coalition’s company tax cut policy lacked funding, balance or coherency. And last month, Costello argued that cutting personal taxes would be far more beneficial than cutting company taxes.
In short, Scott Morrison needs to take the blinkers off. There are a world of potential reform possibilities that would deliver far bigger economic and social returns at lower cost than the Coalition’s lame plan to cut company taxes.
Heck, if Morrison wants some low hanging fruit to go after, how about using the tens-of-billions of dollars that would be spent on cutting company taxes to undertake critical infrastructure investment and restore Australia’s dilapidated infrastructure stock, which is under siege from the government’s mass immigration program?
