We might be mocked for our plastic criticism of the amount of tax companies pay in Australia, but the truth is we should be angrier.
Some of you may have seen these figures circulating lately:
Now, I am going to be upfront: I do not know the accuracy of these numbers. However, what I did find an article about how a third of the top Australian companies paid no tax at all in the 2013-2014 financial year.
Well-known brands like Qantas, Virgin Australia, Vodafone and the Ten Network were among those named. Now, it goes on to talk about how, if a company doesn’t make a profit, it can avoid paying any tax, which “happens quite often”. Your average worker only pays no tax if they earn less than $18,200 – not including the 2% Medicare levy.
If the company does make a profit, it can make deductions to avoid paying more taxes, but, of course, there are ways to cheat the deduction system in order to make it appear as if the company made less taxable income. Enough, even, to look like it made no profit during a financial year and, therefore, avoid taxation.
Qantas got another write up in February of this year after CEO Alan Joyce was all thumbs up for the Turnbull government’s massive corporate tax cut – you know, despite the fact that Qantas hasn’t paid any corporate tax since 2009, “thanks to Australia’s generous depreciation provisions and the ability to offset massive historical losses made by the company against past and future profits.” That’s point one for the table above.
And hey, despite the fact that your power bill keeps going up, guess who also hasn’t paid corporate taxes in about a decade? Yup, Energy Australia. This is despite the fact that they are, obviously, running profitably. Another point for the table!
You’ll love this one. Do you guys remember the 2008 Global Financial Crisis? The one caused by big banks and Wall Street and corporate greed? Yeah, so foreign banks can make nice, tidy sums on Australian soil and not have to pay corporate taxes.
“The underlying profitability of these banks is obscure but Goldman Sachs generated revenue of $1.84 billion over three years and reported operating profits in each year but paid zero corporate tax.”
So, you know, that’s fine.
“(The 2,043 companies detailed in a spreadsheet that was released) chipped in $38.2 billion to government coffers through company income tax – about 60% of the $62.9 billion of total company income tax paid that year,” Jessica Irvine wrote for the Sydney Morning Herald.
“They did so off the back of $172 billion in taxable income, giving an average corporate income tax rate of 17%.”
In case you missed it, that’s just over half of what they’re supposed to be paying. Now, again, Irvine writes that the reasons these businesses pay little to no taxes are legitimate, and that there are “benefits” to it, such as “promoting investment and job creation”. Now, if that sounds like trickle-down economics, that’s because it…sort of is.
To make up for the loss of revenue, the government takes more from private citizens. This is so we can continue to have the good things we like, such as hospitals and schools and roads. Now, I am fine with being taxed. I recognise that my taxes go towards things that I benefit from. What I think is despicable is that these corporations use what are effectively loopholes in order to avoid paying taxes so that they can have more money for themselves.
Not for jobs. Not for investment in the community. For themselves.
That missing 13-30% of taxes from corporate taxes represents a ludicrous amount of money. And I’m paying it. And so are you. Banks and companies have an upper-echelon of employees who keep giving themselves pay rises and cutting paychecks regularly in the six- or seven-figure range; that’s where that money is going. It isn’t creating new jobs, it’s being thrown at people who just want to get richer.
We need to hold these people, these corporations, accountable. If we don’t, they’ll keep getting away with more and more until only small businesses and everyday people will be the only ones paying taxes. Corporate tax cuts are not good. They only serve to increase a company’s profits. That’s it. And if we keep doing it, we’re going to ruin ourselves.