Thursday 28th of March 2024

from one joyce to the next...

coneheads

Having just managed to rid itself of one Joyce, the government has been keen to embrace another member of the clan. At Sydney airport on Friday, Mathias Cormann, the acting prime minister, and treasurer Scott Morrison enlisted Qantas chief executive Alan Joyce to promote their plan to cut corporate tax rates from 30% to 25%.

What better embodiment of Australian corporate success than the airline’s boss? After plumbing the depths four years ago with losses of $2.8bn, the national carrier is now soaring into the wide blue yonder of profitability this week with half-yearly earnings of $976m. 

But it’s a bold move by the ministers to align themselves so closely with the big end of town. One reason is that the justification for tax cuts – the trickle-down theory that they are good for everyone because more profitable companies invest more and create more jobs – is heavily contested and might not give the economy the boost the Coalition is hoping for. Many economists think Australia’s faltering housing market and a possible drop in Chinese demand for raw materials will have a bigger part to play in the next couple of years.

And while Qantas can be seen now as a corporate champion, its (perfectly legal) ability to avoid paying corporate tax in recent years on its huge profits may yet make it a pariah. It’s hard to explain why a business that is throwing off cash like Qantas hasn’t made much a contribution to the nation’s coffers. Analysts can explain all about how the company has been allowed to use the losses as credits against tax, but that cold accounting might wear thin with the public when one of the biggest issues at the next federal election will be why it is that the corporate share of Australia’s economic cake is growing at the expense of the workforce.

Forty years ago the percentage of gross domestic product that went on workers’ pay was 54%, according to figures from the Australian Bureau of Statistics, compared with 15% on what the bureau classes as the gross operating surplus of corporations. Fast forward 40 years and it’s a different story. The most recent quarterly figures from the Australian Bureau of Statistics show that in September 2017, workers’ share was 47.35% while the slice taken by companies was 24.4%. 

That’s a stark change and tells the story of globalisation. High tariffs and strong unions kept wages high back in the 70s before the trade agreements and the rise of Asian economies able to take advantage of a more level playing field changed the game. The result has been bad for pay but good for the profits of companies that survived the opening up of the world economy.

 

Read more:

https://www.theguardian.com/business/2018/feb/24/trickle-down-trouble-co...

 

incentives for the boss...

Joyce earned a total pay package of $24.6m in the 2016-17 year, the company’s annual report showed on Friday, nearly twice as much as the $12.96m he pocketed in the previous 12 months.

Joyce’s huge pay bump reflected a big rise in the company’s share price in the past financial year, the report said, which drove a big increase in the value of his performance-based incentives to $18.5m from $3.16m.

Read more:

https://www.theguardian.com/business/2017/sep/15/qantas-boss-alan-joyce-...

yes minister...

Pressuring the ABC for the removal of Alberici's tax cuts article amounts to unjustified censorship by the Turnbull Government, whether or not its premise is correct, writes Dr Steven Hail

AUSTRALIAN POLITICIANS of a certain age were brought up watching the British political comedy Yes Minister on the ABC.

Perhaps we shouldn’t be surprised, then, that they so often seem to be acting out one of its scripts.

Who can forget the episode in which government minister Jim Hacker and his chief bureaucrat, Sir Humphrey, pressured and intimidated the BBC into suppressing a story the honourable Jim found to be an embarrassment?

In the episode, the BBC’s director of planning did exactly as he was told, all the while maintaining that “the BBC couldn’t possibly give in to government pressure”.

Fast forward nearly 40 years and moving into the real world – if Canberra can be so described – and Prime Minister Malcolm Turnbull and Treasurer Scott Morrison have done a more than passable impression of Jim and Humphrey. Sir Humphrey was subtler about it than Scott and Malcolm but he was a British civil servant, after all.

The journalist who upset the PM was the usually conservative (small "c") Emma Alberici of all people — hardly a socialist firebrand. In a piece posted on the ABC site on 14 February, she pointed out that giving large companies an income tax cut might not be an effective way of boosting wages.

 

Read more:

https://independentaustralia.net/politics/politics-display/yes-minister-...

 

See the coneheads at top...

canning a dumb idea...

The Turnbull Government's company tax cuts arguments are comprehensively debunked with detailed evidence conducted by The Australia Institute.

1. A business tax cut means less for schools, hospitals and other services

Giving business a $65 billion tax cut means billions of dollars less for services like schools and hospitals. Treasury modelling even assumes these company tax cuts will be matched by cuts to services and higher taxes on people instead.

2. The big four banks get an extra $9.5 billion dollars — really

Australia’s big four banks are some of the most profitable banks in the world and are making record profits. The tax cut will net them an extra $9.5 billion in the first ten years of the tax cuts, with $2.8 billion of that figure going to just the Commonwealth Bank alone.

By the 2026-27 financial year, the big four banks would be getting $3.5 billion each year. That’s right — each year.

3. The big winners are tax avoiders and foreign shareholders

The big winners of 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.

If Australian investors are the big losers why is the Business Council of Australia pursuing the tax cuts so aggressively? The BCA is funded by its members and even a cursory look at the BCA’s membership uncovers their true motivations.

Read more:

https://independentaustralia.net/politics/politics-display/why-the-turnb...

 

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