Warning to TurnBULL on proposed gifts to filthy rich

Fifty prominent Australians, including the former governor of the Reserve Bank of Australia and the president of the Australian Council of Trade Unions, have written an open letter to Malcolm Turnbull asking him not to cut company tax and to make fairness the cornerstone of the upcoming federal budget.

“Cutting programs which support needy Australians to give more tax benefits to companies is not fair,” the letter, which appeared in newspapers on Wednesday, read. “A serious tax reform package designed to be fair should address as a priority the current generous tax concessions to the top end of town.”

“The pursuit of equity and fairness must lie at the heart of our national goals,” it said. “Collecting more tax, more equitably, will make Australia a better place to live and work.”

“Proponents of a cut to the company tax rate continue to promote claims of long-term, trickle-down benefits without identifying the immediate impact to revenue and in-turn essential services,” he said. “In fact, a five point cut in the company tax rate would deliver a projected $27 billion windfall over ten years for the four major banks alone. This simply makes no economic sense and would put Australia’s revenue base at risk.”

Former governor of the RBA Bernie Fraser told ABC Radio the “trickle down” theory of tax cuts is “discredited”.

“It doesn’t work and history shows it doesn’t work that way,” he said. “It’s even more untrue and unfair if those company tax cuts, if they were to be made, were made at the expense of cutting back on some necessary service spending. That would be the unkindest cut of all.”

He pointed to the lowering of company tax over the last few decades, saying it has not had an impact on making society more equitable.

“What it’s done is increase the profit share, and that’s increased over this period, at the expense of the income share,” Fraser said.