Malcom Turnbull’s tax cuts for multinationals will deliver nowhere near enough bang for 65 billion bucks, and will jeopardise Budget repair and investments in the productive capacity of our economy. Scott Morrison’s own Treasury advice shows any benefits of a $65 billion handout to big business are negligible at best and will not be felt for a very long time.
Treasury modelling indicates the tax cut will boost GDP by just 1 per cent in 20 years’ time – an average increase of just 0.05 per cent a year.
The Liberals are trying to use the latest International Monetary Fund World Economic Outlook to spruik Donald Trump’s tax cuts in the US and, by association, their own big business tax cut at home.
After mentioning an initial ‘sugar hit’, the IMF report actually points to the negative impact of the US tax cut package on growth:
“Due to the temporary nature of some of its provisions, the tax policy package is projected to lower growth for a few years from 2022 onwards.” – (IMF World Economic Outlook January 2018).
The report makes no mention of the $65 billion tax handout the Liberals want to give to multinationals and the big banks in Australia. It’s misleading to compare Australia’s situation to the US anyway – unlike other countries, Australia has a system of dividend imputation and we don’t have state corporate taxes. The best global conditions we’re seeing in a decade can’t be attributed to unlegislated tax cuts here or recently introduced cuts in the US; the signs have been there for some time.
Turnbull and his Liberals are presiding over record and growing debt, with gross debt having already crashed through half-a-trillion dollars on their watch and net debt blowing out to new highs over the next three years.
Giving a $65 billion hand out to big business makes the Liberals’ Budget mess even worse, and prevents them from investing in the real drivers of economic growth like education and training. The IMF report also calls for inclusive growth, but the Liberals’ policies on tax, wages and the social safety net will make our economy less inclusive and more unequal.
The Liberals just don’t understand we won’t get growth by hoping for benefits to trickle-down from the top end of town, by attacking workers’ pay and conditions or cutting education and training, which will have consequences for productivity. We won’t get growth by giving the biggest tax breaks to those who need them least, while increasing taxes on middle Australia.
We will only get the right kind of inclusive growth in this country if we invest in the productive capacity of our people, reward their effort, and ensure they have the means to spend, invest and keep up with the costs of living.
Jim Chalmers, Federal Member for Rankin