Clive Palmer, if he had his way, wants all Australian companies to pay their tax on an annual basis, rather than in monthly, or quarterly instalments.
But Deloitte Access Economics director Chris Richardson has told News Corp Australia this policy, which wasn’t submitted to the Parliamentary Budget Office for costing, simply wouldn’t work, and would cause the government to miss out on $70 billion in company tax revenue for an entire year.
“When the Labor government wanted to find budget savings a few years ago, it forced big companies to move to monthly, rather than quarterly, tax instalment payments — generating a one-off, multi-billion dollar boost to the bottom line.
“Mr Palmer’s policy — to push instalment payments out — would have the opposite effect on the bottom line for a year. The government would be forced to borrow more to fund the budget gap.”
Palmer believes companies would be able to spend that money and therefore boost GST revenue. Richardson also said this is unlikely, unless the savings were passed onto employees as wage increases, as companies would be more likely to invest them as opposed to spending excess capital on goods and services.
The policy does not stand up to scrutiny. But it was the semblance of big ideas which helped see Palmer elected. They don’t have to work because he doesn’t need to govern the country.
But this, as well as intense campaigning and Australia’s voting preference system, has allowed him to gain a stranglehold over the new Senate and a seat in the Lower House.
Prime Minister Tony Abbott, as the News Corp report points out, is due to meet with Palmer soon to discuss passing his unpopular federal budget, a negotiation necessitated by Palmer’s new-found power.
There’s more here.
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