South Australia, Tasmania and Queensland all miss out on company tax cuts with only 11% of beneficiaries headquartered in those three states, analysis of Department of Finance data and ATO statistics reveals.
The Australia Institute has today released new analysis of a list compiled by the Department of Finance and distributed to crossbench senators outlining large companies that may benefit from the further company tax cuts for big business. The list was released under Freedom of Information laws.
• There are major discrepancies between the list provided to Senators and official ATO statistics.
• The ATO’s statistics also include how much tax companies paid in 2015-16, something omitted from the Senate list. Of the 967 companies that matched between the lists, 316 (33%) didn’t pay company tax at all in 2015-16, so would have had zero benefit from a tax cut.
• Of companies that benefit from a tax cut based on 2015-16 results, 52% are in NSW, 28% in Victoria – 80% of the beneficiaries even though those states are responsible for 57% of production.
• Almost half of the benefit of the tax cut would accrue to companies in Finance (36%) and Insurance and Super (7%), sectors dominated by the big four banks.
• Other beneficiary industries would be Metal Ore Mining (11%) dominated by BHP and Rio Tinto, Telecom Services (7%) dominated by Telstra and Food Retailing (5%) dominated by the owners of Coles and Woolworths.
“This is a tax cut for Sydney and Melbourne, where 80% of the beneficiary companies are, like the big banks, big miners and telcos,” said Rod Campbell, Research Director at The Australia Institute.
“Meanwhile, just 8% of beneficiary companies are based in Queensland, 2% in South Australia and 1% each in Tasmania and the ACT. Just one company based in the NT would have benefited based on 2016 results.
“The company tax cuts for big business are a bad deal for most states. There is minimal benefit but big loss of revenue that could be used on services for everyday South Australians.
“Almost half the benefit of the tax cut would accrue to companies in finance, insurance and superannuation: sectors dominated by the big four banks. This is clearly not in line with community expectations.
“Our research has consistently shown that there is no correlation between lower company tax rates, employment, or economic growth.
“When a third of companies are already not paying any tax, the claim that a lower company tax rate would lead to the creation of more jobs does not even make logical sense, let alone economic sense.
“The big winners are tax avoiders and foreign shareholders, and now it seems Australians outside of Sydney and Melbourne are among the biggest losers.”