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How Company Tax Cuts Will Save Australia And Why Penalty Rates Need To Abolished!

Hallelujah, the company tax cuts have gone through and Australia’s tax rate is competitive again!

Now, I know this confuses some of you because it’s only companies with a turnover of less than $50 million and one of the big arguments that the Coalition put forward was that a higher rate of tax discouraged overseas investment which stifled jobs and growth. Huh, some of you are saying, it’s hard to see billions pouring into Australia to invest in those piddly little companies with a turnover of a paltry thirty million or so. But you’re overlooking the fact that companies can be broken up into lots of little companies each of which has a turnover of less than fifty million. In the event of the company inadvertently increasing its turnover above the magic figure, well, it can easily declare bankruptcy after distributing its assets to its Cayman Island subsidiary.

Which, of course, raises the very important point: How on earth are we meant to compete for the investment dollar when there are places that require no tax at all?

The answer is, of course, we can’t. If we want to be internationally competitive we need to lower our company tax rate so that there’s nowhere better in the world for people investing their money. And to do that, I’m proposing that we have a zero tax rate. That would encourage more investment which should, of course, lead to jobs and growth and when you have that everybody benefits. Even the unemployed who haven’t got off their backsides and borrowed a few million from the banks to start their own company, but in spite of this, they’ll benefit because there’ll be more jobs for all of us.

Of course, this presupposes that the companies can actually make a profit in this country, which is hard because of all the red tape and high wages. I mean, some of the biggest companies in the world struggle to make any money here! With workers here demand safe working conditions, we have lots and lots of regulation which is totally unnecessary because when was the last time you heard about a company director being injured at work?

And then there’s wages. People complained about losing their penalty rates and the government was ridiculed for pointing out that many of those on the minimum wage were in high income houses. That’s right! We have high income houses in Australia. It’s outrageous. How can companies make a profit when they have to pay their workers so much. During the Depression people were happy to work in exchange for food, but now they want a roof over their head as well. The government quite rightly points out that if wages were less then more employers would put people on.

Speaking personally, I’d be happy to hire dozens of workers were it not for the fact that they’d expect me to pay them.

No, the answer is simple. If we want this to be a prosperous country, we need to understand the logic of the Turnbull government and pursue it to its natural end point. Once companies pay no tax and once workers get no pay, then it’ll all be ok and jobs and growth will ensure that we have plenty of economic activity and there’ll be no unemployment and the budget crisis will go away…

Oh wait, I keep forgetting. It’s already gone away because nobody ever talks about getting back to surplus any more.

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24 comments

  1. passum2013

    Bull less income then the government will need to tax more so less earnt the less tax money available for government waste so expect an increased payroll taxes, massive price increases and Gst on everything possible

  2. Rossleigh

    Good to see that you read the article so carefully, passum2013!

  3. 1petermcc

    I was pondering this “must be competitive” mantra just the other day when the suggestion was we had to compete with the proposed Trump cuts. Considering Donald is going to drive debt levels through the roof, I can’t believe it is in our interests to follow him in the race to the bottom.

    But after seeing the contribution from Joe Hockey this week, it seems like economic management is the last thing the Libs worry about. Granted, once upon a time Joe realised debt was important, but once he discovered he didn’t have the skill set to run the Economy, he lost interest and decided to bury his snout in the trough and get the most out while he can.

    How his narrative gets past the Voters is an interesting question.

    Excellent piss take by the way. Probably go over a few heads though. 😉

  4. Jaquix

    Rissleigh has smartly spotted the first Rort possibility this tax cut will throw up. There will no doubt be many more.

  5. Freethinker

    Then again, passum2013, less income and less tax for the business is Ok for them, just have to provide less services and become equal to the bottom on the list of the 3rd world countries.
    Massive price increases are not an issue for the ones in the top.
    After all, many of you will remember that John Howard say that to make Australia competitive the wages and services have to be equal to those in the region.
    That it is what they want and they will get if they have the chance.
    So far, with the help of the “independents” they are on the way to achieve their agenda, so it is not bull.

  6. Matters Not

    .

    And to do that, I’m proposing that we have a zero tax rate.

    Well that might work but we might have to do better. And we can! Why not work out how much a company would pay at 25% – let’s say $X – and then give them $2X compensation so that they will be really incentivised to employ more people. It’s a type of multiplier. And it’s effects are truly spectacular.

    Instead of having a notional tax bill of $X – that will rise quickly to $2X and the compensation will double to $4x. And on and on and on it will go. Give the STEM graduates employment.

    Stupid? No way! Already we pay companies not to pollute. So why not pay companies when they don’t pay any tax? It’s consistent and the business lobby will love it.

  7. roma guerin

    It really is a worry that so many people think this is the way to run a country. Please do not share this with Poorleeeen. She will fall for it hook, line and sinker.

  8. diannaart

    Perhaps (and this is only a suggestion, after all WTF do I know anyway?) perhaps, Australia’s leaders need to look for our real competitors; not China or India and similar nations heavily populated which pays workers way less than Australia or Germany or Denmark, or Canada (First world) – we can or could compete very well with like nations.

    Of course, the Rineharts et al, would much prefer Australia devolved into third world status and compete on that playing field… we can do that as well, however I prefer the more equitable option which is for the long term for the majority of Australians – I guess that’s what makes me a lefty bleeding-heart, latte-slurping elitist.

  9. bobrafto

    Here’s my tweet to Xenophon last night
    @Nick_Xenophon $75 for pensioners, that’s what I call crumbs and a damn right insult. Don’t ever try and represent me again! It got retweeted a few times.

    And this on Fb
    On the premise that the LNP are ‘good’ economic managers, the $50B tax package would have to be affordable.

    The compromised tax package is estimated to cost $24B.

    Therefore a savings of $26B was achieved.

    If that savings of $26B was affordable why didn’t Xenophon negotiate to spend that money on Health, Education, pensions, dole, etc? All he got was $260M from all those savings and when dispersed to pensioners, it amounted to crumbs and a damned right insult to pensioners.

    It would have been more than a win/win/win deal, for businesses, the government’s clients (that’s us) and the economy.

    Ahhh well, back to LNP basics, aided by Xenophon in shafting Health, Education and the welfare sector..

    If you folks are not on twitter, I suggest you should as one can let a bit of steam off by having a crack at someone of your choice.

    One tweet to Abbott was in a reply to Abbott looking forward to something and which I tweeted him. “I look forward to your retirement and have you considered migrating to where you came from?”

    It’s real fun, try it.

  10. diannaart

    Dear Bob

    I tweet. Yes it is entertaining.

    The only replies I have had have been from a couple of comedians (real ones, both male. Wendy Harmer never replies) who have shown themselves to be very generous and warm-hearted.

    Have not received ANY replies from Abbott, Turnbull, Hanson, Latham, any Bishops, Ley’s, Cashes, Rudd’s, Bolts, Pells… Oh, how long is a piece of string?

    If I do receive a cogent reply from ANY of the above mentioned – I’ll tell you first, Bob and expect the same from you.

    🙂

  11. Freethinker

    The idea to cut company taxes it is well built with the neoliberal theory.
    Quote from 2013 labor policies:
    “We will cut the company tax rate to 29 per cent for all Australian companies to stimulate investment across the economy … A lower company tax rate will increase investment, raise productivity, and increase the real wages of working Australians.”
    And Guillard said, quote:
    “I stand for bringing the budget back to surplus in 2013 because we want the Government to have a strong balance sheet. I stand for cutting company tax because that’s going to help our businesses grow and help them offer people jobs.”

    All the above was supported by current ALP members because they were convinced (based on their macro-economics knowledge) that it was the correct approach.
    No many economists change their view on this, politicians yes and in many cases due to in which side of the fence they are.

    Going back on history in this issue in Australia only the Greens opposed to company tax cuts

  12. Shogan

    It’s the middle & bottom end of the food chain that drives the economy & the more they earn the more they spend, which increases demand, which in turn increases employment to meet that demand.

    The top end of the food chain squirrel any surplus from lower taxes & clever accounting overseas in tax havens like the Cayman Islands.

    If you think any income above $200,000 is approaching the top end of the food chain then seeing that the minimum politicians wage is $199,000 plus expenses it’s easy to see why “SOME GOVERNMENTS” are always trying to reduce business taxes.

  13. bobrafto

    Dear Diana
    I do expect or want a reply, really I’m more interested in expressing my arsefelt sentiments..

  14. Mark Needham

    “but now they want a roof over their head as well.” a four wheel drive, a beach house, the holiday in France, mobile phone and so on and so on.
    Greed, absolute greed.
    The lying premise, the construct of this sort of argument, lends itself to the Labour argument. Shine a light in a rabbit warren, there are no rabbits here. We may be fluffy, little bob tail, smell like rabbits………
    why bother, hey.
    Mark Needham

  15. Kronomex

    I can’t wait to see the 10’s of 1,000’s of new jobs this will create. Who will pay for this windfall to the big end of town? Oh gosh, let’s see…(snaps fingers)…got it…the little people that Morriscum and the rest of the LNP sneer down upon (except when an election looms) from their gold pedestals.

  16. susan

    I couldn’t fault your logical conclusion to LNP policy but I would be interested in your take on the logical conclusion to the government not having enough income to pay for all the taxpayer funded positions that Lucy and the rest of Turnbull’s family now occupy.

  17. iggy648

    In August 2013, Australians worked 1650 million hours. In February 2017, Australians worked 1662 million hours. The Coalition have added a total of about 12 million hours per month in their three and a half years in office. In the same period, the population has grown by about 1.5 million people. So each of the newcomers is sharing a massive 8 hours work per month, or about 2 hours per week. Even if half the newcomers are kids or not looking for work, this is only 4 hours per week. How about some jobs and growth guys? .

  18. Ria Young

    Today is April Fools Day. I sincerely hope thst this article was meant as a joke!!!

  19. Anomander

    “During the Depression people were happy to work in exchange for food, but now they want a roof over their head as well”

    But we already heave this situation – remember the Coles workers recently who were asked by their manager to come-in on a Sunday to clean-out the stock room, in exchange for pizzas?

    Or the Dominos workers who were paid with pizzas?

    There was even an article on the ABC today talking about the “cashless society” – I presume they will soon be replacing weekly wages with pizzas? I wonder when the banks will start accepting pepperoni slices in lieu of my mortgage payments?

  20. crypt0

    “Once companies pay no tax and once workers get no pay, then it’ll all be ok ” …
    N.B. Oz is already well on the way to success
    As Anomander pointed out re the wages situation, and we already know 40% of large companies and wealthy individuals pay zero tax !
    We’re nearly half way there !
    What could possibly go wrong ?

  21. Clare O'Rance

    When will these neo liberal politians ever learn. The trickle down theory does not work. I cannot see any guarantee of more jobs being created through this action only an increase in company profits.

  22. Keitha Granville

    They do not want to learn , They will never need to, they will never be on pensions below the poverty line, never have to find somewhere to sleep in the stareet, never have to worry about being ill and unable to afford medicine. Courtesy of the taxpayer they will live comfortably until they die and then their wealth will trickle down to their children and grandchildren who will be exactly the same – they wil never to have to worry where money comes from …… and so on. it’s how the upper classes have been since time immemorial, and will ever be thus. Sadly no-one on the left has decided to come out and declare they will change to all to be fairer, because they are waiting for the retirement benefits too.
    We are on our own.

  23. Alan Baird

    Like I said, yer put the tax cut in this end of the machine and wage rises come out this end. DON’T WORRY ABOUT WHAT HAPPENS INSIDE THE MIDDLE! IT JUST DOES, ALRIGHT? And yer’average Tele-reader-2GB-listener says, “Yeah. That makes sense. Vote 1 Trump. And continue to take the medication”. Oh, and keep working hard. Sort of like a draught-horse in “Animal Farm”. But for Christ’s sake, please don’t think, or look up. “Yo-oh heave ho, yo-oh heave ho!” Sorry, it all sounds a bit Putinesque. Inside my head anyway, but Volga, very Volga.

  24. Kathy Heyne

    Thanks for the laugh, Rossleigh.

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