Tax cuts won’t flow to workers
Shareholders and CEOs will pocket the benefits from lower corporate taxes.
The Turnbull government claims that giving the country’s biggest companies a tax cut will lead to higher wages for employees.
However, there is “no compelling evidence” for this claim, wrote Emma Alberici in her censored ABC analysis.
“Since the peak of the commodities boom in 2011–12, profit margins have risen to levels not seen since the early 2000s, but wages growth has been slower than at any time since the 1960s,” she said.
Qantas chief executive Alan Joyce is a leading advocate of the government’s tax cut plan.
But Qantas has not paid any tax for 10 years and “has already indicated an intention to invest $3 billion across 2018 and 2019 regardless of where the corporate tax rate sits”.
Alberici said the overwhelming benefit of higher profits flows to shareholders, not the bulk of employees.
“A zero corporate tax bill at Qantas has certainly seen one significant wage rise at the company – the chief executive’s. The benefit to workers has been less pronounced.
“According to the Australian Services Union, representing just under half of all Qantas workers, the average pay rises for staff since the airline has returned to profitability have barely kept pace with inflation.
“Alan Joyce, on the other hand, has seen his total salary close to double from $12.9 million in 2016 to
$24.6 million last year, thanks to a huge jump in the value of shares provided as part of a bonus scheme.”
Stealing from the public purse
Revelations of corporate greed have fuelled growing public anger over company tax dodging in recent years.
Almost two years ago, The Lamp reported that Australia lost $5.37 billion to corporate tax dodging by just 76 foreign multinationals in 2013 and 2014.
According to researchers at the University of Technology, Sydney, these corporations paid an average effective tax rate of just 16.2 per cent, compared with 24 per cent paid by the average nurse.
“To put this in perspective, these 76 corporations stole enough money from the public purse to restore $650 million ripped from Medicare, $1 billion from aged care, $500 million from Indigenous services, $240 million from the Rental Affordability Scheme – with $2.4 billion in spare change,” said GetUp, an independent community campaign group, that commissioned the research.
“Corporate tax dodgers have been robbing our local schools, hospitals and communities for decades.”
In May last year The Lamp reported that multinational gas producers are paying minimal tax while our hospitals are starved of funds.
We quoted a report by the McKell Institute revealing that under the Petroleum Resources Rent Tax (PRRT), offshore gas producers pay minimal tax on the profits they make.
Major petroleum companies “poorly compensate the Australian public for the publicly owned resources they are extracting and selling for profit,” the report said.
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