This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/australia-news/2017/nov/21/australias-economy-could-be-harmed-by-trumps-tax-plan-government-warned
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Australia’s economy could be harmed by Trump’s tax plan, government warned | Australia’s economy could be harmed by Trump’s tax plan, government warned |
| (2 months later) | |
| Thinktank says ‘import protectionism and territorial tax treatment pose significant risks to Australian revenues and trade’ | |
| Gareth Hutchens | |
| Mon 20 Nov 2017 21.29 GMT | |
| Last modified on Mon 20 Nov 2017 21.30 GMT | |
| Share on Facebook | |
| Share on Twitter | |
| Share via Email | |
| View more sharing options | |
| Share on LinkedIn | |
| Share on Pinterest | |
| Share on Google+ | |
| Share on WhatsApp | |
| Share on Messenger | |
| Close | |
| Donald Trump’s tax plan may harm Australia’s economy if the government responds in the wrong way, the Australia Institute has warned. | Donald Trump’s tax plan may harm Australia’s economy if the government responds in the wrong way, the Australia Institute has warned. |
| In a report delivered to senators last week the progressive thinktank said the government should not try to cut Australia’s headline company tax rate to compete with Trump, dismissing concerns that a US cut of its corporate tax rate to 20% would lead to capital being withdrawn from Australia. | In a report delivered to senators last week the progressive thinktank said the government should not try to cut Australia’s headline company tax rate to compete with Trump, dismissing concerns that a US cut of its corporate tax rate to 20% would lead to capital being withdrawn from Australia. |
| The treasurer, Scott Morrison, has written to hundreds of Australia’s chief executives encouraging them to support the Coalition’s plan to cut company taxes. | The treasurer, Scott Morrison, has written to hundreds of Australia’s chief executives encouraging them to support the Coalition’s plan to cut company taxes. |
| Morrison sent an 80-page booklet, comprising copies of five economic speeches he has given since July, to the business bosses to remind them of the government’s economic vision for Australia, and warning of the economic consequences of a future Labor government. | Morrison sent an 80-page booklet, comprising copies of five economic speeches he has given since July, to the business bosses to remind them of the government’s economic vision for Australia, and warning of the economic consequences of a future Labor government. |
| The Australia Institute’s executive director, Ben Oquist, said Trump’s tax package should not be used as justification to cut Australia’s corporate tax rate at a cost of $65bn to the budget. | The Australia Institute’s executive director, Ben Oquist, said Trump’s tax package should not be used as justification to cut Australia’s corporate tax rate at a cost of $65bn to the budget. |
| “Australia is likely to have nothing to fear from the cuts in headline tax rates, but other elements of the Trump plan could have negative effects,” Oquist said. “Many respected economists in the world are lining up to argue that the Trump plan will not work to increase either jobs or economic growth in the US. | “Australia is likely to have nothing to fear from the cuts in headline tax rates, but other elements of the Trump plan could have negative effects,” Oquist said. “Many respected economists in the world are lining up to argue that the Trump plan will not work to increase either jobs or economic growth in the US. |
| “The devil is in the detail of the Trump plan. For example, import protectionism and territorial tax treatment pose significant risks to Australian revenues and trade. | “The devil is in the detail of the Trump plan. For example, import protectionism and territorial tax treatment pose significant risks to Australian revenues and trade. |
| “US companies with Australian operations could have new incentives to move those operations out of Australia. Even the IMF is warning of the dangers of a company tax ‘race to the bottom’.” | “US companies with Australian operations could have new incentives to move those operations out of Australia. Even the IMF is warning of the dangers of a company tax ‘race to the bottom’.” |
| On Monday the International Monetary Fund said conditions seemed right for a pickup in growth in Australia but warned it would only be modest, with record low wage growth weighing on household incomes. | On Monday the International Monetary Fund said conditions seemed right for a pickup in growth in Australia but warned it would only be modest, with record low wage growth weighing on household incomes. |
| It predicted Australia’s ultra-low interest rates would persist for years, and a sustained rise in inflation would come about only when the economy had been at full employment “for some time”. | It predicted Australia’s ultra-low interest rates would persist for years, and a sustained rise in inflation would come about only when the economy had been at full employment “for some time”. |
| In the Australia Institute paper, its senior research fellow, David Richardson, criticised Treasury’s recent argument that if a substantial cut in the US corporate income was not financed by US domestic saving, it would initially have to be funded from the existing global supply of funds, meaning the rest of the world would get less investment. | In the Australia Institute paper, its senior research fellow, David Richardson, criticised Treasury’s recent argument that if a substantial cut in the US corporate income was not financed by US domestic saving, it would initially have to be funded from the existing global supply of funds, meaning the rest of the world would get less investment. |
| “The idea that a US investment boom will harm Australia certainly seems counterintuitive,” Richardson said. “We have a recent example to compare with that scenario. It has now been many years since Australia has received the benefit of the Chinese investment boom and there is still no sign of the Chinese economy inducing a massive capital inflow from Australia to China. | “The idea that a US investment boom will harm Australia certainly seems counterintuitive,” Richardson said. “We have a recent example to compare with that scenario. It has now been many years since Australia has received the benefit of the Chinese investment boom and there is still no sign of the Chinese economy inducing a massive capital inflow from Australia to China. |
| “Indeed, ... over the last decade Australian investment in China increased from $1.1bn to $68.7bn while Chinese investment in Australia increased from $3bn to $87.9bn. | “Indeed, ... over the last decade Australian investment in China increased from $1.1bn to $68.7bn while Chinese investment in Australia increased from $3bn to $87.9bn. |
| “The net effect was an increase in Chinese investment in Australia from $1.9bn to $19.2bn. So far from the Chinese investment boom draining capital from Australia the opposite happened. | “The net effect was an increase in Chinese investment in Australia from $1.9bn to $19.2bn. So far from the Chinese investment boom draining capital from Australia the opposite happened. |
| “If the effect posited by Treasury does exist it is not large enough to nullify the benefits to Australia of the Chinese investment boom.” | “If the effect posited by Treasury does exist it is not large enough to nullify the benefits to Australia of the Chinese investment boom.” |
| Tax | |
| Australian economy | |
| Business (Australia) | |
| Scott Morrison | |
| Coalition | |
| Australian politics | |
| news | |
| Share on Facebook | |
| Share on Twitter | |
| Share via Email | |
| Share on LinkedIn | |
| Share on Pinterest | |
| Share on Google+ | |
| Share on WhatsApp | |
| Share on Messenger | |
| Reuse this content |