New international research highlighting the positive impact of company tax cuts on job creation, wages and reducing inequality has removed yet another excuse Labor has been using to oppose the Government’s Enterprise Tax Plan.
An empirical study published in the flagship American Economic Review by three German economists determined high company taxes actually reduced the wages of low-skilled and marginalised workers.
This finding demolishes once again, Labor’s tired, self-serving argument that reducing company tax rates only benefits the big end of town.
Quite the contrary, according to Professor of Economics at UNSW Business School Richard Holden, one of Labor’s ‘go to’ economists for many years:
“Cutting the Australian company tax rate from 30 per cent to 25 per cent is not just good for business, and workers. It also helps redress economic inequality.”
Professor Holden said the “best, most credible evidence we have” suggests the benefit from a reduction in company tax is shared between “businesses and workers in fairly equal measures”. “And the benefits to workers tend to flow disproportionately to women, young people and the less skilled.’’
Labor has run out of excuses for opposing the Coalition Government’s plan to support more and better paid jobs in our economy by reducing company tax rates.
Labor’s stubborn refusal to support the Government’s Enterprise Tax Plan not only penalises Australian businesses by leaving them with some of the highest tax rates in the world, it hurts those who need a pay rise the most.
Labor has already been embarrassed by the IMF who last week confirmed company tax cuts would be a key growth driver for the US economy. This week, Professor Holden has called Labor out, urging them to get behind the Coalition’s tax plan in the Parliament.
By continuing to block the Coalition’s Enterprise Tax Plan, Labor are simply demonstrating the absence of any economic instincts and why they cannot be trusted to manage our $1.8 trillion economy.