Cutting through the Company Tax Cuts Guff
The big four banks get an extra $7.4 billion dollars.
Australia’s big four banks are some of the most profitable banks in the world and are the big winners here, getting an extra $7.4 billion dollars in the first 10 years of the tax cuts when they’re already making record profits. By the 2025–26 financial year, the tax cuts for the big four banks will be $3.2 billion every year.
The big winners are tax avoiders and foreign shareholders
The big winners from the company tax cut are tax avoiders and foreign shareholders. The benefits of the company tax cut mostly go to foreign shareholders, not to Australian shareholders due to Australia’s dividend imputation system.
There is no correlation between lowering company tax and economic growth
Paying less company tax isn’t going to convince Coles or Woolies to hire more checkout staff, is it? There’s no correlation between lower company tax rates, employment, or economic growth. Common sense shows this, and historical and international data confirm it. (Are Coles or Woolies going to hire more checkout staff if they pay less company tax? Don’t think so.)
Companies do business in Australia because they want to do business in Australia.
Companies do business in Australia because they want to do business in Australia. Foreign investment isn’t dependent on the company tax rate. In fact, most of Australia’s foreign investment comes from countries with lower tax rates.
Just 15 companies share a third of the benefits of the cut.
Just 15 companies will get a third of the benefits from the company tax cut. Most of these companies are huge players in markets with few competitors (e.g. telecommunications, supermarkets), and therefore unlikely to change their hiring practices due to the tax cut.
There’s better ways to create jobs and help the economy.
There are way more cost effective ways to create jobs and help the economy. Studies show that investing in schools and education is more likely to help the economy than giving businesses a company tax cut.
The benefits are based on farcical assumptions.
The idea that cutting the company tax rate would magically make multinational corporations suddenly stop avoiding tax is ridiculous. This is just one of the bizarre assumptions in the economic modelling that claims to show company tax cuts help the economy.