Monday, 11 September 2023
Private Members' Business
Taxation: Corporate Profits
What a pleasure to get an economics lesson from the Greens! We had an explanation that apparently the superprofits of Australian corporations are 'robbing Australians, causing inflation and preventing us from investing in pensions, dental and many other virtues'. And off he goes because he does not want to hear the error of all of his statistics. He referred to the superprofits tax that he would put onto Coles. This is going to fund the pensions and this is going to fund dental in Australia. When you have a superprofits tax, that superprofits tax sits above profits made at five per cent plus the long-term bond rates. The long-term bond rate is around four per cent, so that would be a nine per cent profit margin. What right now in the latest accounts is Coles profit margin? How far above nine per cent is it? What would be the enormous amount of revenue that the genius member from the Greens would reap through his superprofits tax on Coles? Well, Coles EBIT margins are 5.3 per cent, so less than the threshold—in fact, nearly half the threshold that would qualify for a superprofits tax. The tax that he proposes to put on Coles would not raise a cent, although Coles is apparently robbing Australians through a 5.3 per cent margin.
What about Woolworths, the second company that he identified in his speech about superprofits? Again, he has absolutely no idea what the level of profits are in either of these companies. Woolworths most recent profit margin was six per cent, also below any rate that would qualify for any superprofits tax at any level that has ever been contemplated. Coles and Woolworths are the two companies he identified in his speech, both apparently robbing Australians, one receiving a 5.3 per cent profit margin and the other achieving a six per cent margin, but neither would raise a cent under the superprofits tax that he is proposing. And to suggest that these companies are causing inflation, that an increase in Coles and Woolworths profit margins of less than 100 basis points is causing Australian inflation, is absolutely ridiculous. The maths do not add up.
What we are seeing here is the rollout of the Greens agenda, and this is an agenda to reposition the Greens party as a party that is focused on economics as well as environmentalism. Unfortunately, they are bringing their brand of grandstanding on environmentalism—a brand of policy without real solutions and policies that don't add up—into the economic sphere. I had the misfortune to watch the Greens in action on the most important set of environmental policies that this nation has put forward over the last two decades. In 2009 the Greens opposed the Carbon Pollution Reduction Scheme. They caused that scheme to go down and began the climate wars that we have lived with ever since. That was an example of the Greens modus operandi, and that modus operandi is not to solve problems because solving problems does not help their political interests. Their modus operandi is to exacerbate those problems in order to fuel the politics of grievance. That is why they opposed the CPRS and that's why they made the perfect the enemy of the good. Unfortunately, now in economics we are seeing a facsimile of that policy approach. We are seeing the Greens take that same politics of grievance and apply it to economics.
We are seeing that right now with the Housing Australia Future Fund, where the Greens are opposing a good policy that will make a real difference on the ground because they don't want to solve the problem; they want to fuel the politics of grievance. We are seeing that right throughout their policy suite in this area. They are proposing policies that they know will never be implemented. They are opposing policies that are ready to be implemented because they have no interest in actually solving the economic challenges of our nation. They only want to stir grievance and seek to promote their political interests. We have seen this in every single one of the policy areas that they have rolled out in economics, whether it be housing, inflation, budget or fiscal policy. Each time they propose a policy, it becomes more and more ridiculous so that they can create more and more distance between themselves and the government, suggesting policies that they know will never be implemented. The most recent one, their plan for a freeze on rents, was rejected by the Governor of the RBA but is still Greens policy because they're not trying to propose real solutions; they're just trying to promote grievance.