13 June 2024
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Believe it or not, Labor might cut the company tax rate!

Peter Switzer
29 May 2024

Pigs will fly! That’s my new age hope after Federal Labor Industry Minister Ed Husic told an AFR Summit on artificial intelligence (AI) that company taxes needed to be cut to encourage businesses to invest in AI technologies. Now that from a Labor stalwart means I could have been knocked down by a feather, except for one thing — it came from Ed Husic.

Ed is an impressive guy, who, like too many politicians (unfortunately) has had to fall in with the party line on subjects I’m sure he’d like to publicly ‘bag’. But that’s politics.

US comedian Groucho Marx summed politics astutely with this: "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies”.

While Mark Twain was a little tougher on US politicians with this line: “Reader, suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself”.

Ed Husic isn’t an idiot. He impressed me when he had the ‘gig’ as Shadow Minister for the Digital Economy. He has always shown a comprehension that government policy shouldn’t frustrate the real creators of jobs in this country i.e. small businesses.

By the way, Ed is a ‘Westie’ from Sydney’s Plumpton. Because he was perceived as being young when he entered parliament in 2010, he has often been lumped with the new age ‘stuff’ that our economy and governments have had to deal with.

So, it’s no surprise that Ed was sent into bowl for the Albanese government against the team of business leaders who showed up to this conference and he opened with a bouncer.

When Labor talks about cutting company taxes, it’s a bouncer from left field — excuse my mixed metaphor, but I couldn’t resist it.

This is what the AFR reported he said:

  1. He supports AI-driven robotics and automation as part of the Albanese government’s Future Made in Australia plan.
  2. He sees AI as helping provide workers with secure and well-paid jobs in the net zero future.
  3. He’s concerned that the retirement of manufacturing assets is outpacing the investment required to replenish it.
  4. He says Labor needs to look at company tax reform — a lower tax rate — or investment allowances that reduce the effective tax rate for investing businesses.

Interestingly, he put Labor’s ‘higher pay and better job security’ achievements of recent years into a positive context for being nicer to business. He effectively said, when business profits are high and wages are low, it’s hard to talk about a lower company tax rate. But now he thinks it’s time for a conversation about taxing investing businesses less.

As the AFR’s editorial pointed out, in 2015 at the newspaper’s National Reform Summit, the former secretary to Treasury Martin Parkinson made the smart point that you have to hope Labor is learning from. Parkinson said that cutting company taxes would spur business investment that gives workers better and new tools to work with. This then would deliver higher, real pay packets and living standards.

I often think Will Rogers got it right about too many politicians when he said: “"Everything is changing. People are taking their comedians seriously and the politicians as a joke."

I really hope Ed has the backing of the Government or this great news from him might be seen as a very unfunny joke.

 

 

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