Company Tax: Research promoted in TV advert challenges $65 billion cuts
A TV advertisement which will begin airing nationally today features research from The Australia Institute into the government’s $65 billion dollar company tax cuts plan.
Building on research showing a lack of evidence that company tax cuts promote either jobs or growth the advertisement identifies the likelihood that the gift to the corporate sector will come at the expense of infrastructure and community services.
The Australia Institute is also releasing new polling today which shows 58% oppose the government plan, while just 25% support cutting the tax rate for large companies. In fact when asked if company tax rates should go up or down more people supported increasing the company tax rate than decreasing it.
65% said, dollar for dollar, funding public services is a better way to support employment and economic growth. The sentiment cut across political lines, including a majority of Coalition voters:
Figure 3: Dollar for dollar, what is a better way to promote jobs and growth?
Nationally representative sample by gender, age, state and territory of 1,417 Australians surveyed between 5th and 7th of December 2017
“The economic case for company tax cuts is poor. Research shows that a there is no correlation between lower company tax rates, employment or economic growth,” Executive Director for The Australia Institute, Ben Oquist said.
“A multi-billion dollar company tax cut represents an enormous hit to the budget, and it has to come from somewhere. It means either racking up a much bigger deficit or cutting back on critical investments like education, hospitals and infrastructure or likely both.
“The polling continues to show that the politics of company tax cuts are almost as bad as the economics, with support in the Australian public for the government’s policy sinking to new lows,” Oquist said.
“A recent report by Senior Research Fellow at The Australia Institute, David Richardson, analysed data on tax rates from Australia and OECD countries, finding cutting company tax rates did not correlate with economic growth.
“The research did however find that OECD countries with lower company tax rates have lower standards of living, measured as purchasing power of GDP per capita, and that as corporate and company taxes have been lowered in other countries, there has been a rise in average unemployment rates and decline in wages and mixed income.