WHY do Australian families have to “shoulder the burden” of taxation, funding cuts and job losses while our ultra-conservative government continues to look after the big end of town?The government tells Australians our country is in dire financial circumstances, but looks after its mates in big business. Blazing out from the Liberal’s own website is the proud claim: “The Coalition will cut the company tax rate by 1.5 per cent from 1 July, 2015. Businesses will benefit from a new rate of 28.5 per cent from 1 July, 2015”.
The claim is that a “company tax cut will encourage investment in Australian businesses and jobs” and that “our fully funded tax cut will restore confidence in the management of Australia’s economy, boost job creation, and help workers across all sectors of our economy”.
So, if it is a fully funded tax cut for corporates, who is actually funding it?
The theory supports a “trickle-down effect”; such tax breaks encourage investment, increase profits, create jobs and improve the economy. In the past week President Barack Obama scotched this myth, saying: “Reality has rendered its judgement: trickle-down economics does not work, and middle-class economics does”.
The idea of 28.5 per cent taxation is a façade, of course. A report by the Tax Justice Network – an international group focused on investigating tax avoidance – and the United Voice union says almost a third of companies listed on the ASX 200 pay 10 per cent or less in corporate tax. They also argue “57 per cent of all ASX 200 companies have subsidiaries in tax havens”.
The huge international mining companies are not funding the break for the corporates. Oh, dear! The poor mining companies. Reality has hit. The boom of the last decade has receded to the norm. The big mining companies are always looking for a tax break. Their prime goal is profit for their (often international) investors – and certainly not for the public resources to be used to assist ordinary Australians.
Remember the strong support the mining industry had from the conservatives when Labor PM Kevin Rudd attempted to introduce a small additional tax on the huge profits they were making?
The Resource Super Profits Tax was a key factor in toppling him. An attempt to have an increased tax of 30 per cent limited to the incredible profits of the boom times – earned from Australia’s shared natural resources – was defeated with the support of the Liberals.
The most recent effort by the conservatives is the most laughable of all. According to Assistant Treasurer Josh Frydenberg, there will be “real safety concerns” if the $100 million+ companies publish tax information. He told the Liberal Party room that more than 1600 companies with a turnover of more than $100m should be exempt from the public disclosure law.
The big end of town hates regulation. Despite all the concerns over contaminated berries and tuna, the government has proposed to remove regulations requiring product makers and sellers to report food-related deaths and disease outbreaks to the consumer watchdog.
Small Business Minister Bruce Billson argues that “state and territory laws required hospitals and doctors to report food-linked illness and death, and that this was enough”. The same government that favours “personal responsibility” for families wants to unburden the big end of town of their responsibility.
The government cries poor at the same time as it provides financial breaks for the big end of town. Something is awry. Surely it is time for a Royal Commission to examine the relationships between government, political parties and the big end of town, to examine the economic realities and consider what is happening to the distribution of wealth in this “lucky country”.