John Menadue. Tax reform and vested interests.

We are in the midst of a misleading campaign on tax and budget reform.

Large corporations and high income groups are pressing the government to increase the GST in order to reduce company tax and taxes for high-income groups. I have seldom seen such a blatant and self-interested campaign by vested interests. And they seriously suggest that it is in the name of tax and presumably, necessary budget reform. Even Mike Baird has joined in this nonsense.

We are told by these vested interests that the benefits of tax advantages for the powerful and wealthy will ‘trickle down’ to the rest of us, including the disadvantaged and the poor. These stories about trickle-down have been with us for years. It is claimed that the ‘trickle down’ from the wealth would encourage ‘growth’ and ‘jobs’. But there is no empirical evidence anywhere to back up this argument. Scott Morrison continues in the same vein, that if only there were more tax incentives, we would ‘work, save and invest’ more.

See an excellent article on this issue by Ross Gittins in the SMH on February 1, entitled ‘Business-led tax “reform” won’t fly’.





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In general, I’d agree that Ross Gittins does a good job at reminding his readers of the social impact of economic policy. His failing as I see it is that he, like many mainstream economists, appears to think of Government budgets in terms similar to that of a household budget. The zombie belief Gittins supports in his article that Treasury and by implication the Government has a ‘sacred duty … above all else’ to practise financial rectitude and return the Budget to surplus reflects an out dated mode of economic thinking. A Government’s Budget is a summation of the priorities… Read more »

Wayne McMillan

Thanks John. This is so true and its’s very sad that high-income and vested corporate interests think this type of tax reform will be acepted by ordinary workers and the larger community.