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The show must go on: The artistry of corporate tax cuts

The show must go on: The artistry of corporate tax cuts

Friday 7 April, 2017
Corporate tax cuts represent the Turnbull government's most daring production, but will such an edgy play put bums in seats?
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Corporate tax cuts represent the Turnbull government’s most daring production, but will such an edgy play put bums in seats?

Prime Minister Malcolm Turnbull is standing centre stage and taking his third bow. He is flanked on either side by his cabinet ministers. He acknowledges Scott Morrison and Mathias Cormann. They link hands, take a step forward and raise their arms in triumph – faces beaming, teeth shining in self-congratulation.

It has been a wonderful night, a tremendous show – the bizarre follies of corporate tax cuts.

Nobody thought the cast could pull off such a complicated production but they defied the critics. And the storyline had it all. A battered and bruised government pounded in the polls, desperately needing a win. The odds were against them as one by one senators withdrew their support. Then in the final scene, a face-saving manoeuvre saw them snatch an unexpected victory from the jaws of defeat – classic theatre.

The underlying theme was a complete neoliberal fantasy, of course. The well-worn mythical tale of a rising tide floating all boats has been done to death. The analogy is as seductive as it is false. Surely the tide won’t float a leaking boat, and don’t rising tides also cause floods, destroy property and, like Cyclone Debbie, leave people stranded on rooftops, screaming for help?

Why all the hype around this tax policy? Seems it’s not about good policy, but really about winning the politics. There’s nothing like the divine pleasure of a well-executed play – outwitting your understudy. Never mind that the benefits are vague and marginal at best. It’s a celebration of power and ideology in the theatre of Canberra politics.

Treasurer Scott Morrison is talking up this unlikely stage presentation, declaring the audience will love the ending – more jobs and higher wages for workers. His script is a little light on detail at this point – didn’t want to make a scene. That’s probably because there’s debate, even amongst experts, but many seem to agree that the benefits of tax cuts will be marginal. After all, with record low-interest rates, businesses have had access to cheap investment money for years. And how likely are corporate tax cuts to trickle down to workers, anyway? After a decade of rising productivity which should have seen employees rewarded with pay increases, the wages of workers have almost stagnated. Shadow Treasurer Chris Bowen suggests the whole tax cut will result in a minor wage rise – but only $2 a day in 20 years from now! Even the government’s own treasury figures predict a wage increase of only 0.8 percent.

So, the production values of this political farce are low and the costs are high. These tax cuts affect the government’s bottom line and the stage directions are a little vague on how the cuts are to be funded. But if past performance is anything to go by, a sub-plot of government program and service cuts will feature prominently. Imagine a fleet of omnibuses careening across the theatre, taking out most of the audience, before ploughing into a troupe of unemployed thespians and various welfare recipients.

Since April Fool’s day, the government have been slapping themselves on the back and talking up their business tax cut victory, but the benefits do seem to be a bit of a joke. Even Morrison has declined to give any figures or detail the economic benefits of his tax cut coup.


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So if you’d need “a microscope to find the economic dividend” as Chris Bowen suggests, why all the hype around this tax policy? Seems that it’s not about good policy, but really about winning the politics. There’s nothing like the divine pleasure of a well-executed play – outwitting your understudy. Never mind that the benefits are vague and marginal at best. It’s a celebration of power and ideology in the theatre of Canberra politics.

This is a long-running play for the government and there are likely to be multiple plot twists before the end. We can expect more theatrics and the audience could be squirming for some time before the promised pay off. While waiting out intermission in the foyer, people have been chatting about this melodrama.

With all the hype around this production, the writers better deliver. Because, if audience expectations are anything to go by, the players can expect to be booed off the stage in the second act.

 

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