Why ‘taking on big business’ is a poor idea

Dropping tax is an effective but underappreciated revenue maker

By Sean Jacobs

‘Some regard private enterprise as if it were a predatory tiger to be shot,’ said Winston Churchill. ‘Others look upon it as a cow that they can milk. Only a handful see it for what it really is – the strong horse that pulls the whole cart.’

Thirty-one year old ALP Senator Sam Dastyari is clearly not one of the handful. A recent profile of Dastyari exposes not only an alarming ignorance of tax and economic growth but everything that is slowly becoming wrong with Australian politics, which catapults people with little knowledge of the wider world (and commerce) into positions of power and responsibility.

Dastyari is currently Chair of the federal Senate Economics Committee, and has used his position not to generate ideas on economic growth but to attack companies like BHP and Leighton while leading the so-called Coalition of Common Sense that has blocked much-needed reforms to reduce Australia’s debt.

He wants to talk about ‘tax avoidance’ in Australia as a priority issue. But this is at a time when the list of more urgent economic reforms is getting longer – unemployment and debt are becoming fused parts of the Australian landscape, regulation and compliance is increasing, productivity is dropping and China’s internal attributes, upon which Australia heavily relies, aren’t showing the same enchanting metrics of dynamism. This is on top of an older Australian population that is increasingly evacuating the workforce.

I feel that Australians, especially future Australians, need to reacquaint with the pivotal role that business plays not just in a free market economy but a free society. Australian companies, both small and large, already pay tax. They also provide capital and jobs, while adding to innovation, lowering costs, enhancing productivity and stimulating economic growth. The government does not do this – business does. And the penalty of higher taxes simply makes these great outcomes harder.

Read the rest of this entry »