Beoz

Depends if you want to believe this guy or not.

BHP chief Andrew Mackenzie says tax cuts will create 'more well-paid jobs' | afr.com

"The reality is when we decide what we are going to do with the excess cash that we make as a business, some of it we will return to our shareholders in the form of dividends, and the other part, if our balance sheet is strong, we will invest," he said.

"That competition for investment is a global competition between possibilities in Australia, possibilities in the US and when we have lower taxes in some parts of the world compared to others, all other things being equal, we will choose that place in preference to that.

"We have plenty of opportunities to invest in Australia, we will pursue many of them but we will pursue more if the tax rate were lower."

Amazulu

I actually agree with you to a degree (there's a surprise)

Norway is the only Western resource rich country that thought from the beginning about how to exploit said resources. Australia, Canada, UK, USA, South Africa etc didn't. Australia has greatly benefitted from our mineral wealth - look around you - but not to the extent that Norway has

The super cycle is still in play and resources are going to growingly contribute to our economy, so going forward we should be looking at long-term benefit and not just at the next election cycle

the troubadour

In reality it is about naming and shaming. Call corporate tax avoidance what you want but ensure the public is fully aware of the shenanigans they (or many) are up to. The reality that they do not contribute their fair share impacts severely on society . Don't be a dick an attempt to read things way above your ability to do so. There are still a few left not totally obsessed with own situation, but want to live in a society that accountable and a government that actually does what it is supposed to do. That being governs for all, with an intent to actually improve the living standards of its citizen.


Quaint in your book I know, but you know you might even feel better about the world if you adapt a more holistic approach in endeavour to see a broader picture.

the troubadour

Australia problem is forever and a day short term thinking. The political cycle is far too short in span and it is basically about buying votes around election time with very little strategic planning.


So Australia has greatly benefited from mineral wealth has it? How exactly? Some of the most over priced housing in the world. Close to the most indebted population in the world, Stagnant wages, developing world population growth even though the boom is over, less social support services, oh looking at WA, we've got the infrastructure but broke. The state where it principally all happened.
Some may conclude with some justice, it would have been better to stay as was pre boom...

Beoz

Oh so close. Can't you just say you wish governments would get serious about tightening up corporate tax laws?

Well they are trying. ..... apparently. A bit of global simplification and sanctioning would go a long way.

Read til the end. This one is all about deductions.

http://mobile.abc.net.au/news/2018-02-14/why-many-big-companies-dont-pay-corporate-tax/9443840?pfmredir=sm

astera

The gov't should gladly send them on their way and pick up where they left off. This whole thing about jobs is just a smokescreen and form of blackmail.

Sure there might be some delays during a transition period, but ultimately those same people will be needed in the resource industry if a national conglomerate similar to Norway's Statoil were to step in.

Plus I don't quite buy the jobs argument when in return these companies are to be allowed to plunder resources. Imagine going up to the Amazon and saying, "Nice trees, we want them. Of course we'll give you a shovel and a paycheck to load them onto our ships."

Norway has played this out brilliantly. They've stood strong and kept control of the resource sector, and now that country of just 5.2 mln people has an absolutely massive sovereign wealth fund that continues to work for the future of the nation.

Just imagine what a rich nation Australia would be if it had the strength to do the same. But Australia is unfortunately corrupt, and the big corporations plundering its resources are much more powerful than the gov't itself. If they want to kick the PM out of his or her stool it's as easy as taking candy away from a kid.

Beoz

Well, apparently trees are living things. Rocks aren't.

What if the government lowered the corporate tax rate for those who met few criteria?

Employing a 5% increase of local staff.

Saying you are going to be a bigger employer with tax cuts makes sense, but what if something goes wrong and you can't hire - then you don't get the discount.

There's got to be incentive there I feel.

astera

Replace trees with ore, oil, gas, whatever. It's still the same old story - dangle a paycheck and expect the goods to be handed over freely.

In fact it's a smart way to get into a market and stay there like a leech. Just create a number hi-paying jobs and then use that to keep the government's hands tied behind their back.

Car manufacturers tried something similar with the jobs threats, going as far as to having the gov't pay for or subsidise the very factories themselves! It worked for a while, but finally someone came to their senses and ended this extortion.

Tax rebates? Why not regain control of the resource sector step by step, and (before taking over completely) start of by outsourcing contracts where the resources belong to the state, but companies get paid a set price per ton/barrel/etc. to deliver them?

the troubadour

You might just begin by explaining why there was so little benefit in UK after tax cuts to 19%...
There is no justification for tax cuts and increasing fiscal deficit in order to make that happen would be the height of irresponsibility.

Beoz

Ok. Easy. Financial crisis then Brexit. Tax cuts just keeping them a float.

Amazulu

Ireland - 12.5%

Guess where all the profits of multinationals are reported?

Ireland has gone gangbusters - a prefect example of how to turn a socialist basket-case into a modern, growing, prosperous economy

the troubadour

Well not quite correct. Ireland has shown some recovery from the days of it being labelled The Gallic Tiger, where excesses led to a chronic collapse. Nothing to do with socialism, but a lot to do with greed and quick profit all round.


Data on Irelands modified gross national income is published every year, alongside traditional quarterly data. By this measure Irelands economy is about a quarter smaller than GDP suggests.


Leprechaun economics were called out by Nobel prize wining US economist Paul Kruger a few years back. Hence the additional set of figures more in line with the truth.

the troubadour

Tories and right wing tabloids of course attempted to sell it is booming Britain.


No big thing is and will always be is that tax cuts do not provide more work nor does trickle down economics work. USA in eighties was another example.


Now a tax cut to workers, raising the threshold to a liveable amount may get people consuming. Corporate tax cuts will further erode economy as money has to be found somewhere. More taxes? More overseas debt? Your call. A dumb call to cut corporate tax though.

the troubadour

More on the foolishness of tax cuts...


Moody's credit rating agency said it did not expect USA corporate tax cuts to lead to any meaningful boost in business investment....


Consultant firm Aon Hewitt found that 83% of larger companies don't expect tax cuts to boost salaries at all....


Courtesy of Gordon Sachs we know where most the tax cuts is really going. It's paying stock repurchases for corporations, as Corporate America despairs in investing much other than dividing the pre produced by near record profit into fewer larger pieces.


Further according to Treasury's modelling between $6 to $8 billion net cost by corporate tax cuts, a figure since revised in recent figures to $4 billion, not sure why the downward figure, but regardless this money needs to be found somewhere.


Now in a time of static wage rises and tightening job market, a time when large slathers of the population are levered up to the hilt, an increase in impost of any sort will hit home very, very hard. It will likely further incite belt tightening even more with the implications that brings to small business and spending.


All so totally un necessary as well....

the troubadour

What a laugh. Treasury has ben forecasting a return to surplus if tax cutting bill to Big Business passed......Same mob that have been forecasting as much along with falling net debt since 2010. A big failure to date.


Hardly non biased so supporting government comes with the territory. Not to be taken seriously. What will occur of course is what is happening in US. The buy back of shares which in turn will boost equity market and do little else. Of course the money given to big business will have to be replaced from some source. Any ideas?