Originally published in The Age on January 13, 2017

The travel rorts scandals make the Turnbull government look like it’s out of touch, but its plans to give $50 billion in company tax cuts over the next 10 years are about to prove it beyond doubt.

First published in the AGE and Canberra Times – see here

This time last year Prime Minister Turnbull was fumbling the national tax reform debate. Now he’s going to have the unenviable task of selling the public on company tax cuts straight after an entitlements scandal.

Following the Centrelink debacle, the ATO meltdown and #Censusfail, the Turnbull government must have been almost relieved for a good old-fashioned travel rorts scandal. At least it’s familiar territory.

But it turns out they couldn’t even get a rort right. Rather than admitting her error and apologising to taxpayers, Health Minister Sussan Ley instead smiled as she apologised only to her Liberal Party colleagues and asserted she’d done everything by the rules. Nevertheless, she has now resigned as health minister and the Prime Minister has been forced to announce an independent body to oversee MP entitlements. It’s long overdue and should ensure someone can explain, in simple terms, that travel entitlements are not there to facilitate ministers acquiring investment properties.

It’s really not a great time to be busted in the entitlements cookie jar amidst stories of single parents, students, pensioners and people with disabilities being pursued for debts that, in many cases, they did not even owe. When even A Current Affair is sticking up for people on the dole, you’re doing your scapegoat politics very badly.

Nothing could better illustrate how woefully out-of-touch Malcolm Turnbull’s government has become than a minister popping out to buy an “unplanned, unanticipated” $795,000 flat while travelling on the taxpayers’ dime, at the same time as Centrelink was referring distraught victims of its robo-debt recovery debacle to the suicide hotline Lifeline.

That is until the media started digging into the travel entitlements trough like news hogs hunting for truffles. And they hit pay-dirt: Julie Bishop claiming travel allowance for attending a polo match; George Brandis, Peter Dutton and Mitch Fifield billing the taxpayer almost $7000 to attend a private New Year’s Eve party hosted by Malcolm Turnbull (Simon Birmingham claimed just a $60 cab charge, while 18 other ministers didn’t think it qualified as “official business”); and Dutton managed to drop a lazy $4000 on a single meal in a salubrious Washington DC restaurant. Thanks taxpayers, it was delicious.

For a bunch of people who talk constantly about “the pub test”, you have to ask: what pub are they drinking at?

By establishing this new body, Turnbull is admitting MPs aren’t to be trusted. A national corruption watchdog is what he should have announced to restore trust in federal politics, but neither body would fix the government’s incompetence.

The Centrelink debt debacle has come about because the government insists there is $4 billion that can be clawed back from Centrelink overpayments.

Can we assume this $4 billion figure is accurate? Up to 20 per cent of the debt notices appear to have been raised in error. It would be an assumption best described as “heroic” to accept the remaining 80 per cent of debts are totally 100 per cent fair dinkum. Who knows how many people just paid the debt because it was too hard to challenge Centrelink? Or how many started paying debts they don’t owe while they do challenge Centrelink?

The menacingly issued debt notices can be as cruel as they are erroneous. Jack Rogerson, a 21-year-old who has autism, would have paid $3000 to Centrelink for a debt before his mother stepped in to help show he didn’t owe a cent. The automated system incorrectly spat out a distressing $24,000 debt notice to a single mum because she supplied the name of her employer in two different ways. Claire Etheridge from Perth received a letter from Centrelink claiming she owed $26,274 – it turned out Centrelink owed her almost $5000.

This is a system that Minister for Social Services Christian Porter described as working “incredibly well“. Thank goodness he’s a minister not a Qantas engineer.

Though you can see how a $26,000 error might seem trivial to a cabinet minister who earns $26,000 in a single month. Imagine the horror of opening those letters just before Christmas.

These are all problems that used to be picked up by human beings working at Centrelink, but the public service is one of the only places where the Liberal Party abhors “jobs and growth”.

Here’s the real problem for the government: the travel rorts and the Centrelink debt debacle are not the only signs that the Turnbull government is directionless and out-of-touch.

The theme of the Turnbull government’s attack on the poorest Australians as its ministers luxuriate in their own entitlements extends to the treatment of their mates the corporate sector.

Let’s agree, for argument’s sake, there really is $4 billion in Centrelink overpayments that help the budget bottom line. If $4 billion is so important to the budget bottom line, then here’s a suggestion for how the government can save 10 times that figure: scrapping the proposed company tax cut would leave $50 billion in the coffers over the next 10 years.

We’ve seen the welfare crackdown, where’s the corresponding crackdown on the almost 700 companies that paid zero company tax according to the latest ATO data? Or what about getting tougher on the multinational companies using tax havens like the Cayman Islands to avoid paying company tax in Australia?

Imagine if the ATO simply put in the data about how much money these companies made and spat out debt notices for them. They could even quote the Human Services Minister, Alan Tudge: “We will find you, we will track you down, and you will have to repay those debts and you may end up in prison.”

No such stick for multinationals, it’s all carrot. The government’s assumptions about their company tax cut actually attributes a $3.9 billion gain in government revenue to multinationals suddenly and voluntarily deciding to cease avoiding tax because the company tax rate drops 5 percentage points.

Giving Coles and Woolies a tax cut isn’t going to make them replace their automatic checkouts with jobs for actual people. About one-third of the benefits of the company tax cut would go to the 15 most profitable companies. The policy would give $7.4 billion in company tax cuts to the four big banks alone. Does anyone really think the banks will use that windfall to install more regional branches or scrap ATM fees?

Cutting the company tax rate will put a very big, permanent hole in the nation’s budget bottom line. There’s no evidence it will lead to “jobs and growth” to help people living on the brink. But as usual, while we can afford $50 billion in company tax cuts that will benefit mainly large companies and foreign investors, we apparently can’t afford to increase Newstart from 37 per cent below the poverty line. Just like we’re told we can’t afford to implement changes to negative gearing so more people can buy their first home before Ley buys another investment property. It’s obscene.

The Turnbull government’s priorities are warped and out of touch. To paraphrase Ann Richards, this is a government with a silver foot in its mouth.

Ebony Bennett is the deputy director at The Australia Institute.

Twitter: @ebony_bennett

General Enquiries

Tanya Martin Executive Assistant

02 6130 0530


Media Enquiries

Jake Wishart Senior Media Adviser

0413 208 134


RSS Feed

All news