Under pressure, broadcaster censors reports on proposed company tax cuts.
ABC management censored a news report and analysis criticising the Coalition government’s proposed company tax cuts after complaints from Malcolm Turnbull and three government ministers.
The articles by the ABC’s chief economics correspondent, Emma Alberici, cast doubt on the government’s plan to give $65 billion in tax cuts to Australia’s biggest companies.
Turnbull, communications minister Mitch Fifield and treasurer Scott Morrison all wrote letters of complaint to ABC managing director Michelle Guthrie.
Fifield’s letter to Guthrie said Alberici’s coverage was “neither fair, balanced, accurate nor impartial. It fails to present a balance of views on the corporate tax policy”.
Turnbull and his finance minister, Mathias Cormann, also attacked Alberici’s coverage during question time
in parliament.
Her news report revealed that one in five of Australia’s top companies paid zero tax for the past three years.
The ABC rewrote and reposted the report following the government’s complaints.
One in five companies pay zero tax
In her analysis accompanying the news report, Alberici said there was no case for a corporate tax cut when one in five companies did not pay tax.
She warned that a major company tax cut would “blow a massive hole in the government’s revenues and push the budget and national debt further into the red.”
“It’s been 10 years since the Australian budget was last in surplus. With a debt of more than $600 billion, many are questioning the merits of prioritising a $65 billion giveaway to big business in the form of a tax cut.”
The ABC said it removed this analysis from its website because it “did not meet editorial standards”.
The Guardian Australia newspaper reported that ABC News management was in “crisis meetings” for two days after the government’s attack.
The ABC claimed however, that, “Any suggestion the ABC is responding to outside pressure over these stories is incorrect.”
Tax cuts for big business are the centrepiece of the government’s economic policy. It argues that lower company tax will lead to more investment, more jobs and higher wages.
Foreign companies the winners from tax cuts
In the article taken down from the ABC website, Alberici noted that government ministers repeatedly claim that Australia’s “headline” or top corporate tax rate of 30 per cent will push companies to invest in other, lower taxing countries.
However, “the facts don’t bear that out” Alberici wrote. “Business investment in Australia has been at historically high levels over much of the past decade despite our comparatively high headline corporate tax rate.”
“In truth, businesses make decisions about where in the world to park their money based on myriad reasons, possibly least of which is the headline corporate tax rate.
“The principal beneficiaries of a cut in Australia’s corporate tax rate are overwhelmingly foreign companies and foreign shareholders in Australian companies.
“There is no guarantee at all that cutting the tax they pay in Australia will lead them to increase the level of business investment in Australia.”
Alberici said investment decisions were driven by the effective tax rate not the headline rate.
She noted that according to a report published last year by the US Congressional Budget Office, Australia’s effective tax rate, at 10.4 per cent, is among the lowest in the world.
Effective tax rates take account of what companies actually pay once deductions, depreciation and other tax minimisation strategies are considered.
Few companies pay anything like a 30 per cent tax rate “thanks to tax legislation that allows them to avoid paying corporate tax”.
Make up your own mind
You can still read Emma Alberici’s censored article online:
There’s no case for a corporate tax cut when one in five of Australia’s top companies don’t pay it: https://johnmenadue.com/emma-alberici-theres-no-case-for-a-corporate-tax-cut-when-one-in-five-of-australias-top-companies-dont-pay-it/
Why many big companies don’t pay corporate tax: http://www.abc.net.au/news/2018-02-14/why-many-big-companies-dont-pay-corporate-tax/9443840
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