Investment write-off three times better than company tax cut

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By Leith van Onselen

With the Turnbull Government expected to continue pressuring the Senate to pass its company tax cut package, researchers Janine Dixon and Jason Nassios of Victoria University’s Centre for Policy Studies have argued that the Government would be better off implementing investment subsidies similar to those introduced by US President Donald Trump.

They note that while domestic investors do not gain all that much benefit from company tax cuts because of dividend imputation, both domestic and foreign investors would benefit from investment subsidies. Dixon and Nassios also claim that an investment subsidy would create more capital investment than a company tax cut, as well as causing less drain on national income. From The AFR:

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.