Given my rotten history with predictions, this is definitely tempting fate, but you could expect the government to back down and agree to a $500 million-threshold company tax cut if it can tempt Pauline Hanson into her eleventieth position on the issue. It’s a political no-brainer of such magnitude that even this government can’t fail to recognise its benefits.
Currently the government is stuck between staying committed to its massive handout to multinationals, which is unpopular and cramps its capacity to offer tax cuts to voters, and abandoning them and looking like it doesn’t believe in anything. Providing tax cuts for companies up to $500 million is a messy but solid compromise — it will deliver tax cuts to the great majority of Australian companies, cost far less over the medium-term than the full package, and allow the government to in effect declare victory and go home on the issue. No need to take the handouts to the next election and give Bill Shorten a line about a $17 billion gift to the big banks that he’ll gleefully use all the way to polling day. No pictures of multinationals celebrating their billion-dollar windfall. And room to offer more tax cuts.
The Business Council will jack up, and big business donations will slow, but it will upset Labor, which is counting on using the tax cuts as one of its main political weapons, to no end.
Currently, however, the compromise isn’t on the table. Indeed, Mathias Cormann is entirely dismissive of the idea. “It was always designed as a ten year plan. I can’t see that legislating at that level [$500 million], and locking it in at that level, would ever then be able to be addressed successfully down the track. This now needs to be addressed as one package.”
Cormann is a true believer in company tax cuts. He’s been the leading advocate within the government of holding the line on the full package, even if it meets with defeat in the Senate, and then taking it to the next election if need be. He can’t be bargained with. He can’t be reasoned with. He doesn’t feel pity, or remorse, or fear. And he absolutely will not stop, ever, until the cuts are passed. But others in the government, especially the Prime Minister, the Treasurer and Peter Dutton, who exercises a veto in a number of areas of policy, might not be quite so committed to the full package, especially if backbenchers start to question it.
The $500 million compromise might, for them, be a neat resolution to a political problem their opponents have adeptly exploited. And look, the government can retain a Tony Abbott-style “aspiration” to further lower company tax rates without having any specific plans to do so, freeing up funds to be shifted to personal income tax cuts that will be more competitive with Labor’s. And who cares about the Business Council, which is a Liberal branch office anyway?
When that happens, it will significantly reshape the political contest, and in the Coalition’s favour.
Thanks Bernard. Why do so many journalists feel the need to give tips to save this Lame government? They don’t deserve saving. They deserve baseball bats, and plenty of them.
It is unethical to for the government not too exclude company’s that are operating outside the law/ rules- any guilty banks, financial services, company’s that are not paying their full tax burden or exploit their consumers unnecessarily, should all be barred from any tax cut.
Governments worldwide need to reevaluate who they represent, citizens or corporations
Pauline Hanson, not surprisingly, being led by the nose with an obviously dodgy piece of push-polling by Newscorpse/Newspoll. She’s had more positions on Company Tax Cuts than I’ve had hot meals.
Bernard, when will it finally sink in that the coalition is dead, once any government loses its credibility it never recovers it, Turnbull had his chance when he stabbed Abbott but blew it when he sold his soul to the hard right to get their support and simply carried on with Abbott policies, as more and more journalists move into the terrified zone of news limited and start trying to appease their master to desperately save their jobs they also lose credibility and no one then takes any notice of their articles except the rusted on brain dead conservative supporter base, the intelligent 20/30% swing voters long left the coalition and they are the only section that matter, they are the government changers and all ways have been, its sad that the serf like mentalities of the few remaining journalists dont realise they are a dying race and will be replaced for good as soon as it suits their masters and all their grovelling not only will not save them, but is the basic reason they find themselves in today, if they had made a stand years ago things may have been different , but even if not, as least they would have kept the integrity and decency.
I wonder if any of the pensioner/superannuants have twigged that they will get less money back from the imputed tax in franked dividends if the company tax cuts go through.
Given that they whinged and whined when Labor made their policy known of not paying the imputed tax back to them, I wonder if a reduction of 1/6th (30% to 25% tax rate) will raise their hackles?
I’m betting that none of them have twigged that they will be getting less money because of this. In fact, I suspect that many of the journos and business commentators haven’t realised either. Never get between a superannuant and their dividend imputation cheques.