Wednesday, April 01, 2015

The cost of corporate tax cheating in Australia

How much does corporate tax-cheating cost us? In Australia, A$25 billion a year - enough to eliminate two-thirds of the government budget deficit:

Australia's biggest 900 companies claimed tax deductions and exemptions worth a total $25 billion last year – enough to wipe out two-thirds of the current federal budget deficit at a stroke.

As Treasurer Joe Hockey prompted a national "conversation" about tax reform, including the prospect of a higher and broader GST, the Australian Tax Office's own data showed the top 900 companies paid an "effective tax rate" of just 19.3 cents in the dollar on pre-tax profits in 2014.

The corporate tax rate is 30 per cent.

Companies now pay proportionately less tax on their income than the average wage-earning Australian.

And because companies are overwhelmingly owned by the ultra-wealthy, what this means is that the 1% are directly benefiting from this corporate tax-cheating, while ordinary Australians are paying for it through reduced public services and higher personal taxes.

It would be fascinating to see similar statistics for New Zealand. Last year, NZ companies paid almost $6.5 billion in company tax. If the proportion of cheating is similar to that in Australia, they're scamming us for ~$2 billion a year. Which was the difference between surplus and deficit last year, and an amount which would make a huge difference to our public health and education systems. And its hard to escape the conclusion that those systems are being rundown because of the sociopathic selfishness of our corporations.