Concluding the Senate debate on company tax changes which will allow a tax break to corporations with a turnover up to $50 million per annum, Senator Mathias Cormann, the Minister for Finance, told the Senate on 30 March 2017:
'Letting businesses keep a little bit more of their money to reinvest in their future success will help them hire more Australians and pay them better wages over time. That is what this reform is all about.'
More jobs and better wages, especially for the lowest paid, would be welcome outcomes, given that there are 714,000 Australians presently unable to find suitable work and a further 1 million Australians looking to increase their hours of work in order to improve their family lot.
Unfortunately the Treasurer, Scott Morrison, is not able to share with us any economic modelling to demonstrate how this round of corporate tax cuts will assist. He has urged that we use 'the pub test'.
The discerning drinker might like to consider also the government's submission to the Fair Work Commission's Annual Wage Review which was delivered the day before Senator Cormann successfully cut the deal with the Senate cross benchers. The government cautioned against any significant wage increase for Australia's lowest paid workers suggesting:
'Wage increases that are not supported by higher productivity or higher prices for customers and consumers will most likely cost jobs. Excessive increases in minimum wages are likely to reduce employment in award-reliant industries, particularly for youth, and especially when wages growth elsewhere in the economy remains moderate and inflation is low.'
The government argues the need to keep the national minimum wage low so as 'to help long-term unemployed people and other disadvantaged groups enter the workforce, noting that low-paid employment is an important "stepping stone" to sustained employment and higher paying jobs.'
The government concedes, 'Inequality has risen across the developed world in recent decades, driven in large part by strong growth in wages for high skilled jobs, and slower growth in wages for low-skilled jobs.' But it continues to boast that a job, even if low paid, is the best path to beating inequality.
"No doubt the electorate in time will have its say on whether the present government's economic recipe is the correct one for increasing jobs and growth, and for arresting inequality."
While the rich who can order their affairs through corporate arrangements get tax cuts, the poor who work shifts are losing their penalty rates