Tuesday, May 1, 2018

Today by Paddy Manning

For the common good … not
An anti-anti-business campaign may target your feed

The Business Council of Australia’s major campaign for larger company tax cuts appears to be unravelling already. Following the awkward appearance last week of president Grant King and chief executive Jennifer Westacott, fresh questions are being asked about the campaign’s links to controversial internet firm Cambridge Analytica, which stands accused of manipulating social media to help elect US President Donald Trump and win the Brexit vote of 2016.

The BCA, remember, held an ill-timed launch of the campaign at Parliament House at the end of May, on the same day the results of a survey of BCA members were leaked. In the survey results, executives said they would use the proceeds of company tax cuts to boost returns to shareholders or re-invest in their companies, rather than increase wages. This also coincided with the government conceding that it had fallen two short of the numbers in the Senate on its company tax cuts legislation.

Company tax cuts for companies with turnover exceeding $50 million may still pass the upper house – the latest ploy is to seek support from the two former NXT senators. In the meantime, however, a Senate committee is inquiring into the supposed commitment given by the BCA to the Senate, “to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect”.

Last week saw two days of hearings in Sydney and Melbourne and they did not go well. The BCA does not like hard questions at the best of times – some complained the committee was a star chamber – but some of the questions that stumped King and Westacott weren’t hard at all. Particularly that from Greens senator Lee Rhiannon, taken on notice, which was simply “Can you give us an example of another country where tax cuts have resulted in wage rises?” As Crikey’s Bernard Keane wrote [$] on Friday, it was extraordinary that the BCA could not answer this question after two years of debate. It was particularly surprising, because another member of the inquiry, Senator Kristina Keneally, had asked King the same thing the previous year when she was a commentator for Sky News, and he’d stumbled on it.

Another question from Keneally was dodged. First, Keneally asked whether Westacott had had any meetings with Cambridge Analytica. Westacott answered: “We met with Cambridge Analytica in the US more out of curiosity of what they were doing. We just had a discussion with them in Washington. It had nothing to do with the enterprise tax plan. Mr King and I met with them around September last year, but we have not used them at all in terms of the enterprise tax plan.” So far so good.

Then Keneally asked whether Andrew Bragg, the former Liberal Party federal director engaged by the BCA, had ever met with Cambridge Analytica:

Westacott: I don’t know. I would have to ask him.

King: He wasn’t there when we met with them. I don’t know the answer to that question.

Keneally: Does the BCA have any relationship with Cambridge Analytica?

Westacott: No.

Keneally: And you didn’t use them in the recent South Australian election?

Westacott: No.

Now the BCA is ramping up its campaign, raising a hefty $26 million at $200,000 each from 130 members, as we learnt in this debut report from the ABC’s Laura Tingle on 7.30 last night, explained in this Westacott op-ed [$] in The Australian.

Deputy Labor leader Tanya Plibersek laughed off the prospect of a BCA campaign this morning, saying: “I don’t think anybody is going to be fooled by a campaign by rich companies saying rich companies deserve a tax cut … It’s actually not called grassroots campaigning when you’re a big rich company paying other people to campaign for you – it’s called astroturfing.”

Astroturfing is exactly what the BCA appears to be engaged in, as Keneally made clear in a tweet-storm, which you should read. The summary version is that Labor has accused the BCA is using a front group called Centre Ground, of which Bragg is a director, to run its political campaign.

The BCA did not respond to queries from The Monthly Today by deadline. Talk about dark arts. We have gone beyond the kind of anti-mining tax campaign that helped topple Prime Minster Kevin Rudd in 2010, or even the Woolworths and gambling industry–funded effort that bought the Liberals victory in Tasmania earlier this year.

Westacott’s op-ed talks about the importance of facts, but the BCA seems incapable of marshalling the evidence to win the argument over company tax cuts. In its follow-up submission, the BCA cites a study of 55,000 companies in nine European countries between 1996 and 2003, which concluded that a rise of $1 in corporate tax would reduce wages by 49 cents. Then the BCA writes: “This implies a 49 cent gain in wages for a $1 reduction in corporate tax”. Keneally tells The Monthly Today that the argument doesn’t follow at all. “That they’re bad at politics is not surprising. That they’re bad at economics is stunning.”

Westacott’s op-ed today also claims that the BCA would lose credibility if it were too partisan. That’s not how Labor sees it. “The BCA has chosen to be openly political and has cast their lot clearly and squarely with the Liberal Party,” says Keneally. This election is going to be a doozy.

since this morning

Cardinal George Pell will be the most senior Catholic leader to face a jury after being committed to stand trial on multiple historical sexual assault charges. Magistrate Belinda Wallington struck out a series of serious charges, finding there was insufficient evidence for him to be convicted by a jury, but committed the 76-year-old on charges involving alleged sexual offending at a swimming pool in the 1970s in Ballarat, where he was then working as a priest, and at St Patrick’s Cathedral in Melbourne in the 1990s, when he was the Archbishop of Melbourne. When asked to enter a plea, Pell said in a loud, clear voice: “Not guilty.”

Treasurer Scott Morrison has said he expects Commonwealth Bank board members and executives to resign after a damning report by the Australian Prudential Regulation Authority found the board of the bank had “inadequate oversight” of non-financial risks and a “culture of complacency” following a series of money laundering and terrorism financing scandals.

In the latest instalment of a series on Australia’s Top 40 tax dodgers, Michaelwest.com.au reports the holding company for Japanese conglomerate Mitsubishi’s coal investments in Australia has come in at number four.

in case you missed it

The Turnbull government is threatening [$] to use the Racial Discrimination Act in an attempt to overturn a revived tree-clearing crackdown in Queensland that is expected to be passed into law this week. Federal Minister for Resources and Northern Australia Matthew Canavan confirmed that advice was being sought to possibly intervene in the High Court over the state laws.

Analysis by The Australian’s Anthony Klan shows [$] that, on average, the more a person pays for experts to manage their superannuation savings the worse the investments perform.

Melbourne’s water supply is at risk because decades of logging and forest loss from large bushfires have triggered the imminent collapse of the mountain ash forests in Victoria’s central highlands, ecologists have said.

The Age reports that more than 130 Victorian state schools will share in a record $483 million for much-needed repairs, renovations and upgrades to be announced in today’s budget. Economics editor Peter Martin asks, Where are the billions coming from? In part, from property.

The shadow foreign affairs minister, Penny Wong, says a Labor government would beef up international approaches to combating climate change, including with work in the Pacific and with ASEAN countries, in an effort to restore lost credibility as a consequence of repealing the carbon price.

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Paddy Manning

Paddy Manning is contributing editor (politics) at The Monthly and has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Inside the Greens and the unauthorised biography of Malcolm Turnbull, Born To Rule?


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