Why the Senate should block major company tax cuts
The proposed $65 billion hand-out for big business would make Australia the latest country to join the global race to the bottom on corporate tax rates.
Slashing the corporate tax rate would undermine attempts to tackle inequality and poverty, both in Australia and around the world. When governments enter a race to the bottom on corporate tax rates, everyday people lose.
It is utterly inconceivable that the Federal Government wants to push ahead with slashing the corporate tax rate when Australian Taxation Office data shows that more than one in three large Australian companies paid no tax at all in Australia for the past three years of reporting.
Passing the corporate tax cut for large companies would be a further step in unravelling the fairness of our tax system.
Right now, the use of tax havens and other loopholes by Australian multinationals is ripping billions of dollars from public coffers in developing countries, as well as in Australia.
Oxfam estimates around $5-6 billion is lost to Australia’s public purse through the tax avoidance practices of multinationals – and global estimates are that the poorest countries loose well over $100 billion annually.
This is money that should be spent on the things everyday people need: schools, hospitals, roads and public infrastructure.
It would also be completely nonsensical to promise a crackdown on multinationals that are avoiding paying their fair share of tax in exchange for rewarding big business with these tax cuts.
And the stubborn push for these tax cuts comes with little evidence of benefits to the economy and community – and in exchange for no more than a ‘pinky promise’ that big business will invest more in jobs and wage growth.
What Australia should be doing is cracking down further on tax avoidance, including by introducing public country-by-country reporting that requires large companies to declare details of income, taxes paid and profits around the world.
Oxfam calls on Senators to support the Australian people this week, not further profits for large companies. The corporate tax cuts for large businesses should be rejected.
Joy Kyriacou became Oxfam Australia’s Fair Economies Advocacy Manager in March 2015. Her expert team works to encourage governments and the private sector to uphold human rights across the areas of economic justice, mining, tax, labour rights and international development policy.
