One Nation rolls on tax cuts for a tummy tickle

By in Australian budget

| 113 comments

By Leith van Onselen

As expected, Pauline Hanson’s One Nation party has rolled on company tax cuts, agreeing to support the Turnbull Government’s package in exchange for a few trinkets of silver. From The ABC:

Pauline Hanson has struck a deal with the Turnbull Government to support its company tax cuts in exchange for an apprenticeship pilot program targeting young Australians.

Under a deal struck between the One Nation leader and the Government’s Senate leader Mathias Cormann today, the Government will fund a pilot program for 1,000 taxpayer-funded apprentices in private business.

Senator Hanson told the ABC she had long lobbied for extra apprentices.

“It will open up apprenticeships for young people, especially in rural and regional areas,” she said.

“I’m for helping the kids. Getting them off welfare. Getting them off drugs. Getting them into jobs…

It is understood that the apprentices would be 75 per cent taxpayer-funded in their first year, 50 per cent funded in their second, 25 per cent funded in the third and fully funded by the employer in the fourth.

If Ms Hanson is concerned about the prospects for Aussie youth, one wonders she didn’t demand an immigration cut to lower youth unemployment, lift wages and reduce housing costs.

Anyway, with One Nation’s three Senate votes, along with the votes of Cory Bernardi (Australian Conservatives), David Leyonhjelm (Liberal Democratic Party), Steve Martin (independent), and Fraser Anning (independent), the Turnbull Government has seven of the nine votes required to pass the package.

The Nick Xenophon Team (three votes) and Derryn Hinch (one vote) are believed to be opposed but could also flip, whereas independent Tim Storer’s position is unknown.

At the same time As One Nation has agreed to support the package, University of NSW Business School professor Professor Swan has questioned the merits of cutting company taxes, warning the claimed foreign investment benefits are spurious. From The Canberra Times:

[Swan’s] new study on every Australian share traded over the past 14 years concludes foreign owners have largely “exempted themselves from paying corporate tax on marginal investments” by selling their shares to Australians ahead of dividend payments and then buying them back again afterwards.

The tax rules allow so-called recycling or “harvesting” of dividends so long as foreign owners sell the shares at least 45 days before dividends are paid.

“Those who do it face an effective tax rate of close to zero,” Professor Swan told Fairfax Media. “This is an ideal outcome for Australia as we gain the largest and most efficient corporate sector undistorted by taxes”.

But it meant a cut in the company tax rate would be unlikely to trigger a big boost in foreign investment because the foreign investors who were sensitive to tax already had ways to pay very little…

Professor Swan suggested the ongoing annual cost of the tax cut was likely to be $8 billion – more than the government’s estimated $3.7 billion net cost – because the expected boost in foreign investment would not eventuate.

“Where is the case to show that higher investment, even in the unlikely event that it were to eventuate, would yield a gain of this magnitude, even in the longer term?” he asked.

MB has opposed the proposed company tax cuts from day one on the following grounds:

  1. Foreign owners/shareholders would receive the lion’s share of benefits because they are not subject to dividend imputation;
  2. The cost to the Federal Budget would be enormous (possibly $8 billion a year), which would need to be made up via higher personal taxes or cuts to government services; and
  3. Treasury’s claimed benefits to ‘jobs and growth’ are miniscule and uncertain, even with spurious modelling assumptions adopted.

Let’s hope The Nick Xenophon Team, Derryn Hinch and Tim Storer oppose the package, ensuring it remains blocked in the Senate.

[email protected]

Leith van Onselen
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Comments

  1. Thallus

    “1,000 taxpayer-funded apprentices in private business.”
    Why isn’t private business 100% funding this from their tax cut?
    So that’s about 142 apprentices per state/territory.
    And here’s me thinking Sam Dastyari was cheap to buy.

    • Phil

      Because it is the Ginger Baldrick’s cunning plan. Cut taxes, so that the taxpayer can them majority fund 1,000 apprenticeships. TAFE is already getting ready for the deluge of future baristas and personal trainers.

      Honestly, you couldn’t make this stuff up even if you were Rob Sitch.

  2. Counterfiat

    Has to be acknowledged, top shelf:
    ‘One Nation rolls on tax cuts for a tummy tickle’
    outright pathetic policy.

      • BradleyMEMBER

        I just logged on, read this and promptly called to reach her message bank. Politely asked for call back and quickly explained my disbelief at such a poor deal. Lo and behold, 10 minutes later had a 5 minute call with a young ON bloke. My line was I was appalled at the seemingly dud deal that was being done. About 4 times I was told there is no deal and the vote has yet to happen. He also asked if I was robo called as apparently others have it seems. I expressed my view that Pauline would be in no way be supported if she did this alleged, hypothetical unnecessary deal. He basically kept saying the technically correct “no deal has been done”. Parting words were if anything like this passes in the Senate, I wont support her party.

  4. Jacob

    She has been a fraud for many months now – just like Xenophon.

    Jacqui Lambie hates 457 visas.

    The number of immigrants coming into AUS every year is greater that the number of immigrants coming into Britain each year!

    245,000 vs 244,000. http://www.bbc.com/news/uk-43301325

    Remember, Britain has way more hospital beds than AUS, so the numbers should be proportional but the numbers are insane.

    • proofreadersMEMBER

      I think that until about the year ago (with the Brexit effect starting), Great British MIM was closer to 350,000 a year BUT Great Britain has twice the population of Straya and as you say, our NIM is insane – jobs and growth …, sardines and cans …

      • ErmingtonPlumbingMEMBER

        Actually Britain has twice our population plus another 15 million.
        65.6 million v our 25.

      • proofreadersMEMBER

        Ermo:
        UK (= England, Scotland, Wales and Nthn Ireland) has about 65m, of which England has nearly 54m.

      • Fabian AlderseyMEMBER

        We’re trying to get to 65 million ASAP, so that the immigration rate doesn’t look so high.

    • bolstroodMEMBER

      PH office ; 07 3221 7644 let her know you won’t vote for her
      Time to act key board warriors

  5. patrick

    Disappointing.
    This is the party whose forte is supposed to be immigration.
    Her concerns about lack of apprenticeships, would’ve been better served if she had put up the 457 visa as a bargaining chip – this is what’s displacing the need for apprenticeships. Tsk tsk

    • Mining BoganMEMBER

      “This is the party whose forte is supposed to be immigration.”

      That’s why she will never actually do anything about immigration cuts. Her very existence relies on Strayans feeling uncomfortable. Cut the numbers and her reason for being disappears…and then she’ll be off the gravy train. Poorleen loves the gravy train.

      • Phil

        You don’t think she risks losing her voter base if a rival anti-immigration “and WE MEAN IT” party starts up, or if Abbot recaptured leadership of the “mainstream right” on a “we mean it” platform? She really can’t win either way.

        I recall Nigel Farage’s often stated position that “we want our own MEP jobs abolished as fast as possible”, in contrast to mainstream politicians. It is not impossible for movements founded on principle to garner popular support, it is deeply cynical to assume that every single person taking a courageous outlier policy position is “in it for the perks” same as the cosy establishment figures!

      • dumpling

        It pays to be deeply cynical – many seemingly irrational things start making a lot of sense.

        “movements founded on principle to garner popular support” might have applied to Poorleen before, but not now. Instead, it turned out to be a classic case of the law of inverse relevance; “The less you intend to do about something, the more you have to keep talking about it.”

        Poorleen accomplished two things for “cosy establishment figures”; (1) derail the immediate call for immigration cuts, (2) discredit future “movements founded on principle to garner popular support”.

        Yes, truth hurts.

      • St JacquesMEMBER

        Absolutely spot on. Mass immigration is One Nation’s reason for being, without it they;’d be nothing. They’re literally a *dummy* vote, and through their antics they draw votes away from intelligent individuals and parties who really want to make a difference.

      • bobalotMEMBER

        Merely pointing this out the other day sent one MB poster / Hanson supporter into a deranged rant about how “leftists” like me are the real dupes because I once pointed out that racism exists in Australia.

      • DarkMatter

        “Merely pointing this out the other day sent one MB poster / Hanson supporter into a deranged rant about how “leftists” like me are the real dupes because I once pointed out that racism exists in Australia.”

        Let it go bobalot! Not everything is about racism.

    • bolstroodMEMBER

      PH office ; 07 3221 7644
      Time to act
      Let her know how you feel
      It’s our $ 50 Billion

  6. sydboy007MEMBER

    1000. frack me. maybe if it was 50000 which is probably the amount we need to cope with boomer retirements.

    not sure how this will play in hanson heartland. hopefully she gets plenty of fish heads and day old chips thrown at her. maybe a good ol’ chips and seagulling is what she deserves.

    • dumpling

      You mean, slowly grill a witch alive in a good old-fashioned way, as dedicated Christians are supposed to do?

      Come to think of it, Tony may be a good fit for that role.

    • truthisfashionable

      Or 50000 so that we can start to execute on the cries of “we just need better planning” from the big Australia shills and actually start to build some decentralised cities that Sydney and Melbourne people will want to move to.

      • bolstroodMEMBER

        Ric, now is the time to contact Pauline and let her know that you ,a once PHON supporter are outraged at her betrayal of the Australian people .
        I am going to, and I suggest all of us do.
        Here are the contacts
        Pauline Hanson Parliamentry Office ; 02 6277 3184
        ” ” Electoral Office . ; 07 3221 7644
        https://www.aph.gov.au/Senators_and_Members/Parliamentarian?MPID=BK6

        Not getting thru to the parliamentry office .
        Did get thru to Electoral office.

      • bolstroodMEMBER

        Can’t get thru to the parliamentry office
        Did get thru to the Electoral office

        ….and why is my previous comment marked for moderation??????????

  7. AngryMan

    Hunch has stated he will support the cuts if the banks are excluded. He may be unable to back out of this commitment having stated it publicly. And the govt won’t agree to exclude the banks even if you could prove they personally crucified the Messiah.

    • Jacob

      18 Feb 2017

      The Australian has reported several Coalition MPs were questioning why the centerpiece of the government’s economic vision should include multibillion dollar banks.

      lol.

      Turnbull has rejected suggestions Australia’s big four banks should not be part of the government’s proposed company tax cuts.

      “The company tax rate has really got to go across all corporations,” Mr Turnbull said in Queenstown.

      “Distinguishing between one section and another is not a practical measure.”

      So why not apply the same principle to work visas? Require every one of them to be paid $180k/year, you psychopath, not just some of them.

  8. wowser

    You mean One Nation aren’t the “heroes” we’ve been led to believe!!? Shocked! Shocked I say!

  9. Jacob

    Another propaganda piece about “skilled” immigration published 11 hours ago:

    https://www.mybusiness.com.au/human-resources/4085-new-temporary-skills-visa-ignores-mid-tier-firms

    “From our experience, there are many, great people globally who are willing to earn a lot less than $180k per annum to enjoy the lifestyle opportunity that Australia offers,”

    Thanks for stating the obvious, Einstein. Of course 3rd world passport holders are willing to work here for illegal wages. Which is why the 3rd world is the biggest source of immigration into AUS.

    Hair & Makeup owners Jules Peacocke and Amajjika Kumara, who last year told My Business: “We need the foreign workers, 150 per cent, because there [are] very few qualified Australian hairdressers. We have sponsored 457 staff for 15 years.”

    Jesus Christ! Pay more! Or bring in staff from NZ or Britain. The fact that this psychopath brings in staff exclusively from the 3rd world should raise alarm bells.

    • Ric

      Why NZ and Britain?

      They still clog infrastructure. They still buy houses. There should be no migrants before infrastructure and full employment for Australian kids.

      So depressing seeing what’s happening to Australia, now Hanson’s done this. We should be fearful of what’s coming. Who’s going to stop the destruction of Australia?

      • Jacob

        AUS has had an open border with NZ for decades. Kiwis do not come here to work for illegal wages. 3rd world passport holders on the other hand…

        Britons actually voted for Brexit to stop more 3rd world passport holders from coming over.

    • truthisfashionable

      Keep up the good work Jacob, finding and pointing out this kind of evidence that these visa’s are all fake is needed to build awareness of the issue.

  10. dumpling

    “Let’s hope The Nick Xenophon Team, Derryn Hinch and Tim Storer oppose the package, ensuring it remains blocked in the Senate.”

    As I noted yesterday, out of all the businesses only the banks would have vested interest in keeping the federal budget in a good shape. So blocking of the tax cut bill would indicate nothing other than a triumph of the banking sector over the foreign-controlled export earners. It could be a close call with the banks accounting for the lion’s share of All Ordinaries Index weighting.

    Macrobusiness hoping for bank’s victory over productive export earners….. time has surely changed.

    • Even StevenMEMBER

      Ouch, dumpling. Tax cuts pass = we lose. Tax cuts blocked = we lose? That’s grim.

      • dumpling

        That’s not true – we will lose right away in the former but we will only lose a little bit later in the latter.

  11. Ronin8317MEMBER

    Unlike Hinch, Pauline has to think about what happens after politics. She just score herself a board member seat!!

  12. proofreadersMEMBER

    Poorleen flattered by a Twiggy charm offensive? The depth of Strayan politics?

      • ErmingtonPlumbingMEMBER

        Yes,…thas how Twiggy got Pauline to acquiesce to his proposition.

        Cunninglinguist has been my avatar for all phone and Computer games for decades!
        😜😜😜😜 😝😝😝😝 😘😘😘😘

  13. Phil

    Can somebody please explain to me why COMPANY taxes are so “sacred” versus taxes on INCOME TO INDIVIDUALS which applies once profits are distributed?

    Taxing it prior to distribution is nothing more than a spite tax, founded in ignorance, on the only source of true capital investment and hence economic growth. In fact it is the only real source of a new business’s financing of its own growth in stock and debtors; and hence a tax on it is a cause of attrition among new businesses that would not otherwise be the case.

    The advantages to any economies that abolish or ameliorate this stupid tax are so great that the evidence will become undeniable over time if they stay the course.

    Yes, I have heard all the excuses about “missing out on taxes when profits are distributed to overseas owners”, this is simply something that would need to be addressed by the right reforms, not a valid reason to perpetuate the most economically masochistic tax in the entire tax base.

    • Even StevenMEMBER

      Rubbish, Phil.

      Let’s say we drop company tax to zero. I can set up a company, stack it full of investments (shares, property etc) and use it as a tax shelter to compound my gains at a MUCH faster rate than is possible under personal tax rates. I then only pay tax at end at withdrawal (if I do indeed withdraw from it). It just turns into a big tax shelter and estate transfer mechanism.

      It will benefit the wealthy disproportionately as they are the ones that can take maximum advantage of the compounding effect.

      Try again.

      • RubiconMEMBER

        Exactly ES, this is exactly what they do today even with a 30% tax rate.
        Why pay marginal rates when a company shelter is possible. Further a lot of personal spending/ expenditure, like first class flights, can also be funded by the Company further decreasing the amount that is taxed even at 30%!
        At a lower company tax rate this becomes advantageous even to those on modest/median incomes.
        Why not instead tax companies at the highest MTR; given our imputation system there is then an incentive to actually take out earnings and pay MTRs offset by the franking credits. Oh wait, this won’t work if franking credits are not refundable anymore. Over to you UE & H&H to devise a better system under Labor’s new proposal (cheerled on by you).
        Companies being taxed as trusts may be too much, but as described above may be a better solution since it allows for retained earnings and timing of paying dividends/distributions as an offset for paying top tax.

      • Phil

        My point remains valid. All your objections merely need addressing as part of the right reform. It is stupid to forego genuine economic growth and increased survival of genuine productive businesses just because “the structures will be rorted”. Well, if this is so predictable, why can’t an overall tax law package address the rorting without throwing out the productivity baby with the tax-structure bathwater?

    • Swifty

      Because companies are a separate legal entity and shareholders only get taxed when they receive a dividend*.
      Drop the rate to zero and they become the ultimate tax shelter for the wealthy. Its like the dividend imputation argument all over again. Makes me scream when people say the company is just paying the tax “on my behalf” – no they are not – its because they the company have a tax liability. Want something paid for on your behalf??? Then set up a trust!!!

      *Unless the shareholding is in a controlled foreign corporation (‘CFC’) and it fails active income tests in which case the shareholder is automatically assessed on the profits within the CFC. The lack of CFC laws in the US tax code and their tick the box regime pretty much lead to the whole double irish dutch sandwich melarkie…..

      • Phil

        Then what we need is a well-designed system that at least allows claw-back of company taxes paid on profits that have been used to grow a genuine business. It is not rocket science to tell the difference between a genuine business and a “paper shell”. These are stupid excuses for foregoing the most genuine economic stimulus a nation’s fiscal structures could provide. No-one is addressing my central point about foregone genuine economic growth; all you are doing is making excuses based on “what tricksters will do with the on-paper structures”. Come ON. A genuine business providing goods and services would not be that hard to devise a criteria for.

  15. St JacquesMEMBER

    Please pay Hanson & Co 30 pieces of silver Jeeves. .

    Thankyou very much say the multinationals. Just two more Senate votes and they will have billions more to shell out as share buy backs, dividends, executive bonuses and Bermuda accounts. Oh, and most of it will head overseas. And it will
    be left to wage earners to make up the difference in tax revenue on the back of their sliding wages.

    One Nation = Fake Nationalist Right sell-outs.

    Vote SUSTAINABLE AUSTRALIA PARTY (SAP) for the Senate.

    • fitzroyMEMBER

      I am a member. I suspect most of the sponsors of Big Australia are on shore and hope, like Messrs Smorgan and Scanlon to turn the farmland they purchased in Keysborough on the outskirts of Melbourne into house blocks and make I billion dollars each. That pays for quite a few political parties and Migration Councils

    • Ric

      Until SA lifts the too softly message, they’ll continue getting 2% of the vote.

      They’re smart people with a fantastic story to tell.

      It’s the telling of the story they’ve gotten wrong.

      Start pointing fingers. Start describing the future we’re creating for our loved ones. Start some hyperbole about Australia’s future environment. Start calling out the lies Australians have been sold.

      • Jacob

        SAP needs to have “jail for wage theft” in their manifesto. I thought they want immigration cut in order to make us better off?

    • jimboMEMBER

      He probably got a 10 minute circuit in FMG’s Global Express. Drooled over the glass cockpit, then went back to his Jabiru.

  17. Ric

    After the Democrats GST, this has to be the dumbest politics I remember.

    Hanson, you really are an idiot, and I’m embarrassed having ever championed you.

    Maybe she’s gotten $65b and $65m mixed up?

    • fitzroyMEMBER

      You did say “box of hammers”. I am a member of SAP, but ON has political clout in Qld that challenges the main parties. It is important, even if they don’t know it.

    • dumpling

      “Maybe she’s gotten $65b and $65m mixed up?”

      LOL, it is only three zeros, right? What difference could it make?

      • Ric

        Yep. 1000 fold. Easily confused by Hanson.

        It’s just a b and an m yeah.

        Refer to fitzroys box of hammers above.

      • proofreadersMEMBER

        Didn’t Barnababy Joyce fairly importantly once have a problem with his millions and billions?

        Must be something to do with the water they drink in Queensland?

      • Jacob

        That is kind of excusable – the Greens did not think Turnbull would get knifed by a mad monk (Abbott). But once the Greens put in a massive carbon tax of $23/ton (when it was $10/ton in Europe), they did not even give me a $50 carbon compo cheque – let alone a $500 carbon compo cheque. What is the carbon price now, morons? $0. Well done, braindead Greens.

  18. adelaide_economistMEMBER

    A full 1,000 apprenticeships? Nice. Meanwhile, here in SA one of the pre-election promises of the new Liberal Government was for 20,000 apprenticeships just for SA. Note also that it’s 1,000 taxpayer funded positions in *private* companies. So basically these companies are getting a huge tax cut and then some more funding to probably replace the few self-funded apprentices they take on…

    I want to be so angry about this. As said by others, this huge hole in the budget is going to be filled the average person. It’s going to be fewer hospitals, roads and schools (even as the migration ponzi continues) and/or more bracket creep on wages. Paying 40%+ on an average full time wage? No worries. But foreign mega corps can’t be expected to pay 30% (not that many of them do anyway). What a fantastic deal. Yet, I’m just not surprised.

    I note in other press that the companies that signed the letter to get Hanson’s support are *already* backtracking on any actual commitment to hire more people or pay higher wages. You couldn’t make this stuff up. Unfortunately it looks like Hinch is about to roll over and I have a feeling Storer will as well.

    As for wanting to be angry? Nah. It’s pretty clear that we’re on a certain path now and there’s nothing going to stop it. You can’t even stop it by voting independent or minor party from the looks of things. Either something massive happens overseas that brings an end to what is playing out here or its 21st century feudalism for almost all of us (including the vast majority of people who kid themselves they are the new ruling class because they have 3 IPs running at a loss).

    • St JacquesMEMBER

      Well said. All we can do for now is keep calling the bull, keep mocking them, keep banging the drums, until the situation gets really nasty.Then things will turn and turn fast and hard.

      In the meantime Vote #1 Sustainable Australia (SAP) in the Senate.

  19. Alku

    There will not be enough skilled Aussies to fill the Apprentice positions, They will then need to create a new Visa class to bring in the apprentices from overseas.

  20. jimboMEMBER

    And not a single thing about it on her Facebook page. She’s crowing about every other inconsequential garbage she’s involved in but not this big ticket item. Dud.

    • St JacquesMEMBER

      Exactly. Like the Trans Pacific Partnership (TPP), easily the most important thing in years, and how much news time has that taken up since PMT signed it on the quiet?

    • Ric

      Exactly what I thought. I was perusing it over the past few days looking for references to it. Inane BS while this is happening. I hope this is the end of her.

      FFS will someone with a big brain start a party that aggressively educates Australians on the dire position we’re in?

      SA harden up. Ramp up the message.

  23. Know Your Enemy

    Laughable
    Just talking to brother about this. ex builder Melbourne – private worker, did CFMEU work etc etc.

    “Go out to any number of sites now, no apprentices. All underpaid Asian labour on 457s. [Ed: this includes as far as I can understand it, CFMEU sites]. This won’t make any difference”

  24. Ozquoll

    The other biblical story that comes to mind is Jacob and Esau – she has sold her (or rather, our) birthright for a mess of pottage. She really should change her name by deed poll to ‘Useful Idiot’. We might have been able to start a sensible debate on immigration years ago if it wasn’t for her brain-dead racism.

    • dumpling

      That’s the whole point – keeping Poorleen up and high effectively prevented a sensible debate on immigration and also prevented the rise of the SAP. So the brain-dead had a dual function.

  27. DarkMatter

    They have all rolled. Very poor.

    Looks like they might all have woken up this morning with a horses head in their beds.