income tax cuts to be approved in house of representatives

Corporate Tax Cuts Needed to Keep Australia Competitive

The federal government is pressing to get corporate tax cuts passed this week, in the final Parliamentary sitting before the May Budget.

With the agreement of just two more senators needed, it’s a tense time for Turnbull.

But the planned cuts have stalled in the senate, as the coalition struggles to negotiate with the Upper House crossbench.

Finance Minister Mathias Cormann, who is leading the government’s efforts to pass the legislation, is yet to secure support from both Victorian senator Derryn Hinch, and the South Australian Senator Tim Storer. This comes after Hanson’s withdrawal of support for the cuts which she expressed back in late March this year.

Pauline Hanson’s ‘One Nation’ is now determined to block the senate tax cut plans. She does not believe that giving Aussie companies a tax cut will result in the highly sought-after wage increase for our workers.

But it’s no secret that the One Nation’s history on economics is patchy at best.

For example, Senator Hanson previously produced a much-ridiculed plan to levy a flat 2% on tax levels of value adding production, which if passed would have destroyed some companies and awarded others massive tax cuts.

Why are corporate tax cuts necessary?

Meanwhile, senator Hinch has joined calls from One Nation to cut big banks out of proposed tax cuts, in the wake of damning evidence presented to the royal banking commission.

But Senator Storer, Hanson’s crossbench colleague — who previously voiced concerns about whether the proposed benefits of the company tax cuts have been exaggerated — isn’t won over by that argument. He told ABC Radio National Breakfast:

Obviously, the royal commission has thrown up some findings which are extremely disturbing and the public are certainly not agreeable to that sort of behaviour in general…But I think the issues are distinct and separate.’

And Storer agreed ‘company tax cuts are relevant to all companies, and as such I won’t be seeking a carve out of the banks as proposed by other senators’.

International tax experts have warned, Australia will soon lose investment and jobs to lower-taxed countries.

In a report prepared for the minerals council of Australia, the University of Calgary’s Jack Mintz revealed Australia’s rate was the ninth highest of the 43 countries he surveyed — tying with Mexico as the fourth highest in the OECD (The Organisation for Economic Co-operation and Development).

It also says that ‘lower company taxes allow higher compensation to be paid to workers and lower prices for consumer goods’, according to Minerals Councils interim chief executive, David Byers.

The federal government is arguing that cutting company tax from 30% to 25% by the 2026–27 financial year, would trigger jobs and wage growth.

Turnbull wants companies in Australia to be in a position where they could invest, create more jobs and offer better paid jobs. The Treasury analysis is said to give workers an average $750 more in wages.

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Leah Wallace

The Australian Tribune Editorial

The Australian Tribune Editorial

The Australian Tribune is an unorthodox news service. Your Australian Tribune editorial team deliver the unfiltered stories that could impact your daily life — political and economic stories you’re unlikely to get anywhere else. And we’re not afraid to step on some toes to do it. We are honest, conservative and never dull. We are an independent service, meaning we don’t answer to shareholders or outside advertisers. This helps avoid conflicts of interest that inhibit mainstream sources, which keeps our voice independent. The Australian Tribune is owned and operated by Port Phillip Publishing.
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  1. Hmm
    A wise person recognizes they have biases from whatever source, they are our “mental shortcuts” like subroutines in programming.
    However it is advantageous to reassess these at times
    For a glimpse at how it has worked in the US
    https://www.dailykos.com/stories/2018/4/23/1759311/-Wall-Street-Journal-struggles-to-deal-as-Republican-tax-scam-fails-to-make-the-economy-soar
    From the comments (they are well worth a read)
    Apparently like all Republicans they slept through Economics 101. They never heard of the marginal propensity to consume. If you give an extra $199 dollar to a middle class or lower income family they will spend 100% of it on goods and services and with the multiplier effect this $100 will turn into $400 or more and the economy with grow. Give $100 to a wealthy person and they are going to put it into the bank because they don’t need anything else. Hence the economy is not going to grow because it will not increase demand for goods and services.If demand does not grow then why should company increase production and their tax breaks are just goin into their profits because there is no reason in increase production? So the Republican tax plan is nothing more that a Tax scam.

    Then of course with the drive to deregulation and increasing profits (all part of the same mantra) whilst socializing losses and privatizing profits to the Nations cost (A la the current Commission and the drive to get the very well performing for the members Industry Super Funds in the hands of these fraudsters and the funds diverted into pork barreling projects for the Government or funding Coal power plants in India or Australia destroying member value hand over fist)
    The very dangerous precedent in the US
    https://climatecrocks.com/2018/04/25/republicans-enacting-anti-science-agenda-at-nasa-epa/
    On Tuesday, the House Committee on Science, Space, and Technology is expected to hold a hearing on a bill to undermine health regulations that is based on a strategy cooked up by tobacco industry strategists more than two decades ago. At what Republicans on the committee have dubbed the “Making EPA Great Again” hearing, lawmakers are likely to discuss the Secret Science Reform Act, a bill that would limit the EPA to using only data that can be replicated or made available for “independent analysis.”
    The proposal may sound reasonable enough at first. But because health research often contains confidential personal information that is illegal to share, the bill would prevent the EPA from using many of the best scientific studies. It would also prohibit using studies of one-time events, such as the Gulf oil spill or the effect of a partial ban of chlorpyrifos on children, which fueled the EPA’s decision to eliminate all agricultural uses of the pesticide, because these events — and thus the studies of them — can’t be repeated. Although it is nominally about transparency, the bill leaves intact protections that allow industry to keep much of its own inner workings and skewed research secret from the public, while delegitimizing studies done by researchers with no vested interest in their outcome.

    Note this “Protected data” including personal patient and family details and medical records available to bona fide researchers including Industry – they have not been able to discredit the findings. Further the effects of lifting these regulations will lead to a large percentage of chronically ill or disabled children and a whole generation – the private health funds will not cover chronically ill

  2. Now for another look at a spookily accurate essay from 150 years ago – a long read and one I am sure you are already chock full of preconceptions about, but this is the beginnings of wisdom, recognise other viewpoints and study them and see the flaws in them as well as those in the paradigms we hold dear – then maybe viable win win solutions for the only planet we have and for the nations, people and economies. That we cannot achieve with a myopic tunnel vision of can’t see the woods for the trees.
    https://www.theguardian.com/news/2018/apr/20/yanis-varoufakis-marx-crisis-communist-manifesto
    Yanis Varoufakis: Marx predicted our present crisis – and points the way out
    To see beyond the horizon is any manifesto’s ambition. But to succeed as Marx and Engels did in accurately describing an era that would arrive a century-and-a-half in the future, as well as to analyse the contradictions and choices we face today, is truly astounding
    Marx and Engels failed to estimate the impact of their writing on capitalism itself. To the extent that the manifesto helped fashion the Soviet Union, its eastern European satellites, Castro’s Cuba, Tito’s Yugoslavia and several social democratic governments in the west, would these developments not cause a chain reaction that would frustrate the manifesto’s predictions and analysis? After the Russian revolution and then the second world war, the fear of communism forced capitalist regimes to embrace pension schemes, national health services, even the idea of making the rich pay for poor and petit bourgeois students to attend purpose-built liberal universities. Meanwhile, rabid hostility to the Soviet Union stirred up paranoia and created a climate of fear that proved particularly fertile for figures such as Joseph Stalin and Pol Pot.

    Now of course since the collapse of the USSR , all those “benefits”to the middle classes and the workers are being eroded and destroyed as we revert to a cruel dystopian future.

    Maybe read and discuss – we have the cards we are dealt and are playing on a field set up by others, but must do the best we can., do we leave this world a better place or a degraded one

  3. The article states in error that Dr Mintz’s study found Australia is 9th highest of 43 countries surveyed (Mintz figure is 10th highest) & that Australia is 4th highest of OECD countries (Mintz’ figure is 9th highest) – both errors accentuating the case for tax reduction;

    The Australian headline company tax is inappropriately compared to other countries’ tax rates. While the Australian headline rate is 30% in practice it averages at app 17%.

    The gov’t is arguing for a REDUCTION to 25% whereas the OECD average ROSE 1% over 5 years (2010 – 2015)

    It is much more appropriate to measure Australia’s rate against countries that are competitors for exports with Australia across a range of high value products

    As Mintz points out there are several other attributes that foreign investors consider (eg; political stability; skills of the labour force; royalties; federal & State/Territory policies re mining rehabilitation;m affect on ground water; environmental issues etc.