Australia’s national broadcaster, the ABC, has removed from its website an analysis piece by its chief economics correspondent that attacked the case for corporate tax cuts, saying the article “did not meet ABC editorial standards and has been removed for further review”.
An accompanying news article has also been updated “to add further information and context”, the ABC said in a statement about the stories by Emma Alberici, which were the subject of criticism in parliament this week by Prime Minister Malcolm Turnbull and drew a furious response from Qantas CEO Alan Joyce.
Corporate taxation will be a central policy battleground in the next federal election. Turnbull wants to reduce the corporate tax rate to 25% for all companies, a move bitterly opposed by Labor.
The deleted analysis piece, which you can find a cached version of here (thanks, internet!), was headlined “There’s no case for a corporate tax cut when one in five of Australia’s top companies don’t pay it”.
The article said it was “disingenuous to talk about a 30 per cent rate when so few companies pay anything like that thanks to tax legislation that allows them to avoid paying corporate tax”, and singled out Qantas for special criticism, with the article featuring a photo of chief executive Alan Joyce and highlighting the company’s failure to pay any corporate tax over the past 10 years.
High-profile chief executives like Qantas chief Alan Joyce are adamant that investment decisions rest largely on the rate of a country’s corporate tax. But it’s hard to see how a lower tax rate is an incentive for investment when one in five of our biggest companies haven’t paid any corporate tax at all in at least three years.
Qantas is about to clock its 10th year tax free. Qantas won’t pay tax again until its profits exceed the tax losses recorded since 2010. Only when all the accumulated losses are offset will a lower tax rate mean a higher cash flow. Besides, regardless of where the corporate tax rate sits, the airline has already indicated an intention to invest $3 billion across 2018 and 2019.
A central pillar of the Coalition’s case for corporate tax rate reduction is that it will encourage companies to invest in Australia.
Qantas posted a $2.8 billion loss in 2014 at the nadir of its financial cycle following an existential crisis that saw Joyce grounding the airline when industrial talks with workers broke down.
What has followed has been a spectacular corporate turnaround with billions of dollars in profit, and the airline has been able to carry through some of its losses to reduce its tax liability in the process.
A furious Joyce described the ABC analysis this week as “very misleading” and said: “Corporations tax is a tax on profits, if you don’t make money you don’t pay the tax.”
He added: “That is the way the system works. It allows companies to take a huge loss and digest that over time.”
Soon after the announcement that one article had been deleted and the other had been updated, the author, Emma Alberici, posted a pointed tweet:
— Emma Alberici (@albericie) February 16, 2018