Voters doubtful about Coalition's big business tax cuts: poll    

Sydney Morning Herald
February 6 2018


A planned 2018 political recovery for Malcolm Turnbull's government built around generous tax cuts for big business could struggle to attract public support, with polling showing most voters believe the tax rate should stay at 30 per cent or even increase.   

Most also believe the revenue would be more productively spent on health, education, and other services, than on lower company rates.

The cool response to what is the Coalition's central policy goal between now and the next election, comes from a survey of voter attitudes conducted by the polling company Research Now for the progressive think tank, The Australia Institute.

The left-leaning body has begun an advertising campaign including television ads aimed at strengthening public opposition to the business tax cut.

The statistically weighted online survey of 1,417 electors nationally was conducted between the 5th and 7th of December last year, some weeks ahead of the government's renewed push to promote the broader economic benefits of the business tax cuts.

The result suggests that voters are largely unconvinced by the central justification for the massive revenue hand-back put forward by the Prime Minister and Treasurer Scott Morrison, which is that the lower company tax bill will encourage businesses to invest more, increase hiring, and inevitably lift wages.

Asked "dollar for dollar, what do you think is a better way for the government to increase economic growth and employment?" 64.6 per cent of respondents opted for "funding health, education, and other public services" ahead of "cutting company tax", which attracted less than one in five voters or 15.3 per cent.

Even among Coalition supporters, more than half, 52 per cent, favoured more spending on health, eduction or other areas.

The government has trumpeted its solid performance as the economy shifts to a higher gear marked by the addition of some 403,000 new jobs on its watch. But that growth has so far failed to produce an expected lift in wages growth.

When voters were told the planned cut would see some $16 billion a year trimmed from Commonwealth revenue when the full 25 per cent rate applies to all companies after a decade, 57.7 per cent opposed the cut and just 25.1 per cent supported it. A further 17.2 per cent were undecided.

“The economic case for company tax cuts is poor," said Australia Institute executive director Ben Oquist.

"Research shows that a there is no correlation between lower company tax rates, employment or economic growth ... a multibillion-dollar company tax cut represents an enormous hit to the budget, and it has to come from somewhere. It means either racking up a much bigger deficit or cutting back on critical investments like education, hospitals and infrastructure or likely both.

“The polling continues to show that the politics of company tax cuts are almost as bad as the economics, with support in the Australian public for the government’s policy sinking to new lows,” Mr Oquist said.

He said research by the Institute found that OECD countries with lower company tax rates "have lower standards of living, measured as purchasing power of GDP per capita, and that as corporate and company taxes have been lowered in other countries, there has been a rise in average unemployment rates and decline in wages and mixed income".

Mr Turnbull has recently stepped up the case for the company tax cut, but has also held out the prospect of significant personal tax cuts as part of the overall tax reform mix.

He used a landmark interview on the ABC's Insiders program to step up his case that high profits would feed through to bigger pay packets.

"You will see more investment, you get stronger economic growth, unemployment comes down - we've seen that - you get more people coming into the workforce, you get competition for labour, some parts of the labour market you get real scarcity of skills, firms compete for it, and they pay more. That is what happens. That is the reality. Now, you know, the law - as I said, the laws of supply and demand have not been suspended," he said on Sunday.

The government has run into a brick wall in the Senate in its previous attempts to cut the corporate tax rate for the top end of town.   

Labor has campaigned strongly against the move but has not been definitive on whether it will roll back the tax cut already legislated for companies with a turnover of less than $50 million for the 2018-19 income year.

whiteknight wrote on Feb 7^th, 2018 at 5:25pm:

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