- Only 16-17% of Australian CEOs would use tax cuts to boost employment.
- More than four in five would use extra funds to return money to shareholders or boost investment.
- The findings were the results of an internal Business Council of Australia survey obtained by the Financial Review.
A secret survey by the Business Council of Australia (BCA) reveals less than one in five Australian chief executives would pass on gains from tax cuts to either pay staff higher wages or employ more staff.
Instead, findings obtained by the Australian Financial Review show that more than 80% of respondents said they would use the extra funds to return money to shareholders or increase capital expenditure.
It stands in contrast to the public proclamations of the BCA last week in an open letter signed by the CEOs of some of Australia’s largest employers.
The letter pledged to “invest more in Australia” if the Turnbull administration’s proposal to reduce the company tax rate is approved by the Senate.
“If the Senate passes this important legislation we, as some of the nation’s largest employers, commit to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect,” the statement said.
But according to the AFR, an internal CEO survey was carried out among the BCA’s member base of more than 130 companies, in the wake of the Trump administration’s tax cuts which passed through US Congress in December.
The respondents were asked which of four options they would take in the event of a tax cut:
1. Returning funds to shareholders;
2. More investment;
3. Increasing the wages of their existing workforce; and
4. Increasing employment.
More than 80% went with the first two options, while only around 16-17% chose options three and four.
A spokesperson for the BCA confirmed the survey to the AFR, but said the response rate was relatively low and didn’t include replies from the CEOs of Australia’s larger companies.
Instead, the spokesperson said the BCA sought on-the-record statements from its members.
“As a result many CEOs in the last three months have made public statements about what they would do with the tax cut,” the spokesperson said.
The Turnbull government is still hopeful of passing the tax cut legislation this week, which still requires two cross-bench votes in the Senate.
Labor — which has pledged to roll back the tax cuts if it wins the next elections — has established a Senate committee whereby CEOs who signed the BCA’s letter will be required to back up their investment claims.
There’s more at the AFR here.
NOW READ: The Business Council of Australia’s ‘commitment’ to invest more if company tax cuts are passed is an embarrassment
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.