Tax cuts, censorship and the media

February 20, 2018
Emma Alberici.

If the federal government is convinced its proposed corporate tax cuts will bring happiness all around, why is it so worried about those challenging the idea?

On February 14, the ABC published two stories by Emma Alberici on tax: one analysis piece on why Prime Minister Malcolm Turnbull’s reduction of corporate taxes would not lead to more jobs and higher wages; and a news piece that looked at several of the largest corporations that have not paid tax in Australia for years.

Alberici’s news piece, initially titled “Mega profits with no tax — corporate tax avoidance rife in Australia” and subsequently softened to “Why many big companies don’t pay corporate tax”, was based on publicly available Australian Tax Office data.

This is the sort of data that many people (including most journalists) do not have the time to wade through. Alberici did, and it made for very interesting reading.

It gave details of how, for instance, Qantas has not paid tax in 10 years — about the same length of time as its CEO Alan Joyce has been in charge.

Joyce is a corporate union buster in the league of former Liberal minister Peter Reith. In October 2011, Joyce locked out the entire workforce of engineers, pilots and baggage handlers, who were taking protected industrial action for a new enterprise agreement with fair wages and conditions. Importantly, pilots were fighting for their jobs against Joyce’s push to outsource them.

The strike, which had widespread community and union support, ended only when then-Labor PM Julia Gillard lobbied Fair Work Australia to terminate the dispute — which it did. In 2012, the commission ruled in favour of Joyce and rejected key union pay and contract-worker restriction demands.

So, when Joyce awards himself a pay rise — bringing his pay to $20 million last year — it is on the back of more than 1000 job cuts and reductions in workplace rights and safety.

Corporate greed is newsworthy and Alberici’s article reminds us just how systemic and widespread it is in this country.

If one in five of Australia’s largest companies paid no tax for at least the past three years, it weakens the case for Turnbull’s tax cuts even more.

It took just a couple of hours for the censoring to begin. Not just Turnbull, but the communications minister Senator Mitch Fifield and Treasurer Scott Morrison demanded the articles be removed or changed. One was removed, with the excuse that it “breached” editorial guidelines, and the other was rewritten.

To most observers, there was no breach. As academic economists like John Quiggin said, the article was factually correct and reflected what many economists have been saying about the affordability and effectiveness of corporate tax cuts.

It was a clear case of the ABC buckling to government pressure. It could have labelled the offending article “opinion” and continued to run it.

But no, the ABC decided to pull an article that put a clear case for why laws that allow these companies to get away with not paying tax would also benefit from the proposed corporate tax cuts.

As Mr Denmore from The Failed Estate put it: “Who would have thought an analysis of corporate tax policy would set so many pulses racing?”

Pulses are racing, also because the Turnbull government is so on the nose. Newspoll and other polls put Labor increasingly ahead of the Coalition, and the rorts and lies around Barnaby Joyce have only widened this gap further.

On its tax cuts for corporations, the government is pissing into the wind. Many people think the corporate tax rate of 30% is already too low, and should rise.

A Guardian Essential poll on February 13 found a majority approve of compelling businesses to pass on a proportion of their tax cuts as pay rises for their workers. That view was reflected across all voting groups and across full-time and part-time workers.

Morrison has ruled that out, saying that it is “a highly interventionist method” and not the way the Coalition “pursues growth”.

No, his government’s method is to continue with its corporate welfare and handouts to companies with record profits generated from slashing jobs, and cutting wages and conditions.

Most people know that cutting the company tax rate will not provide “jobs and growth”. We know that because the corporate taxes have been on a steady decline since the 1980s and jobs and industries are disappearing, either to the wall or offshore.

Federal Labor was supporting corporate tax cuts as inevitable, but has now changed tack. When profit margins continue to rise to levels not seen since the early 2000s, but wage growth has been slower than at any time since the 1960s, cutting the tax rate for the 1% is simply rubbing salt into the wound.

Alberici told it like it is — and the government didn’t like it. The obedient ABC complied. Thankfully, her article has been reposted at various sites, including John Menadue’s Pearls and Irritations, and it is worth sharing around. This whole incident underscores the need for independent, fearless media, like Green Left Weekly.

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[Editor’s note: This article was based on Emma Alberici’s original analysis piece, which was pulled by ABC management after Coalition MPs pressured the ABC to remove it. On February 22, the ABC published a new piece by Alberici that continued to argue that a cut to the corporate tax cut would not necessarily lead to jobs and growth (the Coalition’s mantra), but omitted any reference to the high profile Business Council of Australia member and Qantas CEO Alan Joyce, who is leading the charge for the corporate tax cut. ]

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