The Australian Senate must not pass large company tax cuts: Oxfam
Oxfam started out as a chain of charity shops in England. They have now however transmogrified into a carping Leftist pressure group. They still seem however to understand secondhand clothes better than economics. They complain below that many large companies pay no tax in Australia while at the same time opposing tax cuts. Anyone see a problem there? Surely the companies who pay no tax will not be affected by tax cuts!
Multinational companies are often in a position to take their profits in a jurisdiction where tax rates are low -- as in Singapore or Ireland -- so it is sensible for companies to do that. So the companies that pay no tax in Australia will pay tax in (say) Singapore.
Australian government revenues lose from that but the solution is to get Australian company tax down to the Singapore rate -- 17%. Despite being so lacking in natural resources that it even imports water, Singapore is a very prosperous place -- so if Singapore can do it so can we.
It won't happen soon. The Left would mount a Jihad to stop it -- while the Singapore government enjoys tax money that could have gone to the Australian government.
The unfortunate Mr Turnbull is trying to get our company tax down -- our rates are about twice Singapore's -- but the ignoramuses of the Left would rather have our money go to Singapore
Commenting on the push to have large company tax cuts pass through the Senate this week, Oxfam Australia’s economic policy advisor Joy Kyriacou said:
“The proposed $65 billion hand-out for big business would make Australia the latest country to join the global race to the bottom on corporate tax rates.
“Slashing the corporate tax rate would undermine attempts to tackle inequality and poverty, both in Australia and around the world. When governments enter a race to the bottom on corporate tax rates, everyday people lose.
“It is utterly inconceivable that the Federal Government wants to push ahead with slashing the corporate tax rate when Australian Taxation Office data shows that more than one in three large Australian companies paid no tax at all in Australia for the past three years of reporting.
“Passing the corporate tax cut for large companies would be a further step in unravelling the fairness of our tax system.
“Right now, the use of tax havens and other loopholes by Australian multinationals is ripping billions of dollars from public coffers in developing countries, as well as in Australia.
“Oxfam estimates around $5-6 billion is lost to Australia’s public purse through the tax avoidance practices of multinationals – and global estimates are that the poorest countries loose well over $100 billion annually.
“This is money that should be spent on the things everyday people need: schools, hospitals, roads and public infrastructure.
“It would also be completely nonsensical to promise a crackdown on multinationals that are avoiding paying their fair share of tax in exchange for rewarding big business with these tax cuts.
“And the stubborn push for these tax cuts comes with little evidence of benefits to the economy and community – and in exchange for no more than a ‘pinky promise’ that big business will invest more in jobs and wage growth.
“What Australia should be doing is cracking down further on tax avoidance, including by introducing public country-by-country reporting that requires large companies to declare details of income, taxes paid and profits around the world.
“Oxfam calls on Senators to support the Australian people this week, not further profits for large companies. The corporate tax cuts for large businesses should be rejected.”
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