22 March 2018
Every person in Australia will have to pay for the government’s proposed company tax cuts being discussed in Parliament today.
Dr Cassandra Goldie, CEO of ACOSS, says “Any economic gains from cutting company taxes are decades away, while the cost of the cuts will be felt immediately, from $1.8 billion in 2019 rising to $14 billion in 2026.
“Treasury projects that extra investment from the company tax cuts would increase household spending power by less than 0.7% in 20 years’ time, $150 per person according to recent estimates, and many have questioned whether that extra investment would happen at all.
“Right now the federal budget is in deficit, and we can’t be confident it will move back into surplus in the next few years. Those predictions have been wrong before.
“What that means is that if unfunded tax cuts go through, people across Australia will have to start paying more for essential services they have always relied upon.
“Anyone who’s ever gone to a school, driven down a road or seen a doctor has benefited from Australia’s taxes.
“In the last few years billions of dollars have been ripped out of essential and community services such as hospitals, primary health, income support, education, and community services.
“Before the company tax cuts bill was tabled in Parliament yesterday, the Senate passed the Welfare Reform Bill. In this Bill, more than 80,000 people stand to be cut off from payments following just 12 months of this new legislation. This is on top of over $12 billion in cuts to social security that have been made since 2013.
“In addition, in the last couple of years Medicare rebates and family payments for low income families have been frozen and people looking for paid work are struggling to survive on just $277 per week.
“People in Australia don’t want to pay upfront for hospitals, doctors and aged care. People across Australia don’t want a ‘pay as you go’ essential service sector.
“A strong social safety net including great essential services like health, education and community services are the bedrock for all Australians.
“We have a choice. We can pay more for services like hospital care, aged care and home care and continue to tolerate high levels of poverty and homelessness, or close the revenue gap by making sure everyone pays their fair share – including the many companies and wealthy individuals who take advantage of tax avoidance mechanisms.”
Notes from the ACOSS 2017 Budget Priorities Submission to government:
In the 2014 and 2015 budgets alone, over $15 billion (over four years) was cut from vital community services including Aboriginal and Torres Strait Islander services, community legal centres and refuges for victims of domestic violence.
[1]
The government’s proposed company income tax reductions would reduce future revenues by an estimated $1.8 billion in 2019 rising to $14 billion in 2026, while the Treasury projects that it will increase household spending power in approximately 20 years’ time by less than 0.7%: a poor return for a costly investment.[2]
[1] ACOSS calculations [2] Kouparitsas, M et al (2016), Op.Cit. Discussed in ACOSS (2016), ‘Treasury Laws amendment (Enterprise tax plan) Bill 2016, Submission to Senate Economics Legislation Committee’. Available: http://www.acoss.org.au/wp-content/uploads/2016/09/ACOSS-submission-to-the-Treasury-Laws-amendment-Enterprise-tax-plan-Bill-2016.pdf