Once again, Australia’s business lobbies have hypocritically called for ‘urgent’ Budget repair and slashing welfare spending, while at the same time demanding more company tax cuts. From SBS News:
Corporate Australia wants Canberra to deliver wider tax cuts for business and boost “good” spending in the federal budget next week, even as it urges the politicians to agree on a quicker path to a budget surplus…
“Australia’s corporate tax rate is well above the OECD average and needs to be lowered progressively to restore our global tax competitiveness,” the Minerals Council of Australia (MCA) has told Canberra.
The lobby group, which counts heavyweight global miners among its members, says tax reform is essential to drive future investment and to create more high-wage jobs…
Canberra is also being pushed to boost “good” spending, such as that on infrastructure, and is expected to oblige with details next week…
At the same time, the business community wants the government to put its finances in order, quickly.
“The task of getting Australia’s budget back in order is now urgent. Parliament must ensure the Australian people receive much better value for the $440 billion spent each year,” peak lobby group Business Council of Australia warned in its pre-budget submission.
Righto, so Australia needs to urgently repair the federal Budget, but it still makes sense to cut the company tax rate even though:
- the Budget would lose billions of dollars in revenue, thus blowing-out the deficit and necessitating tax rises and/or expenditure cuts elsewhere (thus lowering jobs and growth);
- most of the benefits would flow offshore;
- national income would be reduced; and
- Treasury’s own modelling showed almost no benefits to jobs and growth from cutting company taxes.
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 billions of dollars to foreign owners/shareholders, and in the process worsening the Budget position and lowering national income.
The business lobby’s concurrent demand for its own tax cuts, increased public spending on infrastructure, as well as Budget repair can only mean one thing: that it wants recurrent spending on things like health, education and welfare to be cut hard, thus placing the burden of Budget repair on Australia’s most vulnerable citizens.
Instead of feigning concern over the Budget deficit while demanding a tax cut, it would be nice to instead see the business lobby advocate for policy reforms that would actually improve Australian’s living standards. You know, basic stuff like:
- Unwinding inefficient, inequitable and expensive tax lurks like negative gearing, the capital gains tax discount, fringe-benefits taxes on company cars, etc.
- Reducing immigration and foreign worker visas, which are crush-loading Australia’s cities and lowering living standards, as well as depriving Australia’s youth of job opportunities.
- Or even addressing the east coast energy crisis that the BCA’s Grant King was central to creating by building his Curtis Island white elephant.
And while you are at it, how about demanding some wage restraint from CEOs, senior executives and politicians, rather than demanding that lower income Australians bear the full burden of adjustment?
Until Australia’s various business lobbies lead by example, and start promoting equitable reform in the interests of ordinary Australians, they will continue to be looked upon with derision – as just another fat cat in a flashy suit.
