Wednesday, 21 March 2018
Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017; Second Reading
I think Labor's position on the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017 is clear and unequivocal. We will not support tax cuts of $65 billion for big business while this government continues to attack the poor people in this country.
We've always opposed this significant structural deterioration to the budget. We've had this government argue about budget deficits. Do you ever hear them argue about budget deficits now? This will be a significant structural deterioration, and we will not support it. This is a hit to the budget that shows the rank hypocrisy of a government which lectures the Australian people about the need for budget repair. They used to talk about a debt and deficit disaster and a budget emergency but what's the situation now? The deficit for this year has blown out by eight times. It was $2.8 billion in their first budget and it's now $23.6 billion. Net debt has more than doubled since they took office: $175 billion in September 2013 and $353 billion in January 2018. Gross debt has crashed through the half-trillion dollar mark for the first time and it's set to get to $684 billion in 2027-28. So, given all these statistics, it's ironic to think that what the government has on the table is a $65 billion hit to the budget. The components that we are debating today alone cost $600 million over the forward estimates and $36.5 billion over the medium term.
Now, they claim that there are economic benefits, but we've been clear since the plan was first introduced about highlighting the extremely minimal economic benefits as a result of the full plan, let alone the parts that the government managed to get through: one per cent of economic growth in 20 years time and a $2-a-day increase in wages in 20 years time. We hear all these arguments about the great benefits of these $65 billion tax cuts, but the government's own figures show that it's one per cent economic growth in 20 years and a $2-a-day increase in wages in 20 years time. This is at a time when wage growth is at record lows. Private sector wages growth has flatlined in the last year, being equal to inflation. Australian families are facing a nasty cocktail of rising costs in electricity prices, stalling wages growth and record high underemployment, and this government has nothing to offer—absolutely nothing to offer.
Labor has long held concerns about low wage growth. The dwindling bargaining power of workers and their representatives has played a central role in stagnating wages growth and rising inequality. And what's the government's solution? Cut wages and raise income taxes. The government has also supported penalty rate cuts from 1 July this year, and they seek to raise income taxes on over seven million Australians with incomes between $21,000 and $87,000 from 1 July next year. They're coming after working-class Australians while they want to give massive cuts to the banks and massive cuts to overseas corporations. What is wrong with this government?
A worker on $55,000 will pay $275 a year and someone on $80,000 will pay an extra $400 a year. So the battlers in the community out there, who are doing it tough day in day out, are the ones that will get hit by this bill, and the big end of town will walk away with big smiles on their faces. And Senator Cormann can go and crack a Havana cigar with them, because that's what he's doing: giving a gift to the big end of town.
Labor opposes both of these measures. It goes to this government's approach and their misguided priorities that their answer for flat wage growth is a cut to pay and higher income taxes. We hear those who support it saying that it's needed to drive investment. But it was only a few years ago that we had the biggest investment boom Australia has seen, with a headline corporate tax rate of 30 per cent. The United States Congressional Budget Office put out a paper earlier this year saying that the statutory corporate tax rate is only one of the many features of the tax system that influence corporate behaviour, and that:
Because of their broader scope, average and effective corporate tax rates are better indicators of a company's incentives to invest in a particular country than is the statutory corporate tax rate.
The paper points out that at a headline rate of 30 per cent in 2012 the average rate for Australia was 17 per cent and that there was an effective tax rate of 10.4 per cent.
Budgets are all about priorities, and this government quite simply has its priorities wrong. Big business tax cuts are priority No. 1. Priority No. 2: high income earners get a tax cut. The battlers, the working class, get tax increases, and high-income earners get a tax cut. Workers earning above $21,000 will have their tax increased, and penalty rates will be cut. That's what you get from this government.
We've got our priorities—ensuring that we deal with inequality. We want to deal with inequality in this country. That means properly funding our schools, and proper investments in infrastructure. It also means a fairer tax system, further dealing with superannuation tax concessions, levelling the playing field for first home buyers through reforms to negative gearing and capital gains tax, and capping to $3,000 the deductions people can obtain for managing their tax affairs, as well as our plan to impose a minimum 30 per cent tax on discretionary trusts to deal with the issue of income splitting and deal with something that has been in the too-hard basket for too long. And we are proposing reforms to dividend imputation, where Labor is making hard decisions to make sure that essential services are properly funded to improve our schools and hospitals and provide tax relief for middle- and working-class people. Labor is about looking after working people in this country. The coalition have eyes only for the big end of town, only for big business, only for the people who put money into their election funds. We care about ordinary Australians. We care about making sure that people in this country have a decent life—completely the opposite to this government.
We also want to deal with this issue of intergenerational equity, making sure that we've got the policy settings in place for further generations of Australians—their kids and their grandkids. They're the ones we want to look after, because if we don't we won't have the revenue to pay for essential services, such as schools and Medicare; we won't level the playing field for first home buyers through reforms to negative gearing and capital gains tax; we won't properly fund our schools, our TAFEs or our universities; we won't have the money to adequately fund important infrastructure; and we won't have the proper policies to deal with climate change.
There is nothing fair about what this government is proposing. The issues that we believe are important will not be afforded under this government. This government is hopeless in their position on ordinary working-class people. We've got a better alternative. We always hear the government saying that Labor has no policies for growth, nothing for jobs or wages. So let me remind the Senate of what Labor is actually providing. We're investing in human capital. We're investing in the greatest resource we have: the people of this country. We're investing $17 billion extra into Australian schools so that schools are properly funded—not some rort that the government puts together to pretend it's dealing with schools. We will remove cuts to skills and to the TAFE system, which has been ravaged under this government and state governments. We believe that TAFE is important to make sure that working families can get their kids into vocational education and give them a decent job for the future. We'll invest in physical capital. We will have lots of commitments in national and local infrastructure, such as the Gladstone Port Access Road, the Ellenbrook rail, the Townsville Port channel widening project, the Mackay Port Access Road—all policies aimed at economic growth and job creation.
Further to these policies, Labor has announced the Australian Investment Guarantee. This guarantee will kickstart new investment, support jobs and build the long-term capacity of our economy. Unlike the government's company tax cuts, the Australian Investment Guarantee will guarantee that every dollar spent underpins new investment. We are guaranteeing the investment that will create jobs for the future. This is well targeted and affordable. Our policy will allow all businesses to immediately expend 20 per cent of the value of eligible depreciable assets in the first year of all new investments, with the balance depreciated in line with normal depreciation schedules for the first year.
The Australian investment guarantee is a permanent accelerated-depreciation scheme, and it will operate indefinitely. It will apply only to eligible investments valued at over $20,000, with no pooling of assets allowed, to ensure it's well targeted at productivity-enhancing investments. The Australian investment guarantee is a pro-growth, pro-jobs reform that rewards businesses making new investments in Australia. Only companies that make the decision to invest in Australia will benefit from this tax relief, while up to 60 per cent of the government's company tax cut handouts goes directly to foreign shareholders. We want to make sure the incentive is there for Australian businesses to invest, not just to give a boost of profits to overseas investors.
There has been lots of support for this policy. The Chief Executive of the Ai Group, Innes Willox, said:
The Investment Guarantee would provide a significant boost for businesses to invest particularly for longer-lived investments.
The proposed measure comes at a time when business investment, and particularly non-mining investment, has been slow to recover in recent years.
As a measure designed to lift investment, the Investment Guarantee would increase the stock of invested capital, boost the quantity of capital per worker, raise productivity and underwrite an acceleration of real wage growth.
The Chief Executive Officer of the Australian Chamber of Commerce and Industry, James Pearson, said:
Business welcomes this commitment from the Opposition – it’s good policy.
What’s particularly positive is the proposal to make this a permanent feature.
This is important as policy certainty and policy consistency is critical for business.
The Energy Efficiency Council said:
A new Federal Labor policy that gives an immediate tax deduction to businesses that invest in energy saving equipment would help slash energy bills.
The Chief Executive of the Property Council, Ken Morrison, said:
… the Australian Investment Guarantee would be a powerful tool for accelerating energy efficiency gains across different industries, but especially in the built environment.
… … …
We welcome Federal Labor's announcement of this policy and the potential it has to help reduce costs for consumers.
The chief executive of COSBOA, the small-business group, Peter Strong, said:
Labor's announcement is a welcome one as it would make it easier for Australian businesses to invest and grow. The fact that this measure is available to all businesses, big and small, is also very positive as it will help small businesses directly as well as encouraging larger businesses to invest in the products sold by small business.
The CEO of the Australian Food and Grocery Council, Tanya Barden, said:
This initiative will go a long way to encouraging investment in high tech and high skilled projects to enhance efficiency and increase scale.
We are particularly supportive of the Australian Investment Guarantee’s inclusiveness across the industry sector. The opportunity to use this Investment Guarantee towards energy saving projects is also very important.”
As I stated before, Labor will not be supporting this bill. It sums up the completely wrong stance that this government is taking of giving away $65 billion on a hope and a prayer that there will be investment. Labor, instead, has a superior policy offering. We've put out a significant policy agenda to date and will have more to say between now and the next election. And if you hear this argument about the credibility of the coalition and their economic policies, just laugh, because Malcolm Turnbull, the current Prime Minister, has no economic credibility. Where have they been on economic issues? They wanted to increase the GST. I think that lasted a week. They wanted to let taxing powers go back to the states. I think that lasted a couple of days. And now they're on the trickle-down approach with $65 billion of tax cuts, much of which will end up overseas. Remember, this is a government that continues to argue to maintain dividend imputation and give tax cuts back to people who are not paying any tax.
We hear the government arguing that this is about pensioners. It's not about pensioners; it's about wealthy self-funded superannuation recipients getting money that no-one else in the community gets. It's an absolute nonsense. When this government first came to power, it wanted to reduce indexation for the pension. We know who the friends of the pensioners are. It's not this government. It's not Malcolm Turnbull. The friends of the pensioners are the Labor Party. We will look after pensioners—real pensioners, not rich people that don't need money given back to them for nothing.
This is a government that wanted to reduce the indexation for pensions and reduce the pension. This is a government that wanted to freeze the asset income tax threshold for pensioners for three years. This is a government that wanted to reset the income test for single pensioners and pensioner couples combined. It wanted to increase the qualifying age for the pension to 70—the highest anywhere in the world. This is a government that wanted to abolish the senior supplement and make the seniors health card harder to achieve. It wanted to cut support for the states and territories for seniors concession cards. It wanted to abolish the mature-age worker tax offset. The government also abolished the pensioner education supplement. And the government will cease paying current aged care payroll tax supplements for aged-care providers. This is a government that doesn't care about pensioners. This is a government that only cares about the big end of town, handing money to the rich and the wealthy at the expense of working class Australians. This is a disgrace of a government; a rabble of a government. The sooner its tenure comes to a finish, the better for Australia and all workers. (Time expired)
The Greens believe that all Australians, no matter who they are, should pay their fair share of tax. We believe it's fundamentally unfair for us in this place to be legislating for a tax cut for big, wealthy, greedy companies, some of the most profitable companies in the world—many of them multinational companies—who currently aren't paying their fair share of tax. If we do legislate for a tax cut for the big end of town, then the burden is going to fall on other Australians to make up the difference, and that's fundamentally unfair.
Let me be completely unambiguous and totally clear. The Greens will not support tax cuts for big, wealthy corporations—not in this government, not ever. It is not in our DNA—unlike the Labor Party, who have come in here today and said that they won't support tax cuts for big corporations by this government but have said very clearly, through Mr Chris Bowen, that they will support tax cuts for big corporations if they form a future government and if the budget allows them to do so. Mr Bowen has made it very clear that his personal philosophy in his book is that he's not against tax cuts for big wealthy corporations. Well the Greens are, and let me tell you why. They don't work, except for returning profits to shareholders and bumping up fat cat CEOs' pay packets. That is all they're good for. There's no evidence that the benefits will trickle down to others in the economy. In fact, we are 100 per cent confident that the burden will fall on the most vulnerable Australians to pick up the slack. And I'm going to give you some really, really good reasons why I believe that is the case.
You will never get tax cuts from the Greens for big wealthy corporations. We were the ones who initiated the first Senate inquiry, which broke a lot of ground in this place four years ago, into multinational tax avoidance. We've got a long way to go but we've managed to achieve a lot already. People don't understand; there's always a lot of spin in politics—I get that—but the only thing we've heard about in this debate is headline tax rates. We haven't talked about effective tax rates, which are tax rates after the various deductions—of which many are very generous and provided by the government for big corporations—or average tax rates. Australia actually has some of the lowest effective and average tax rates in the OECD—not the highest, as Senator Cormann and the government will tell you, but some of the lowest.
Only a few years ago in this place we were told that we had a budget emergency. We used to be told relentlessly that the country was going broke and that we urgently needed cuts to spending, including cuts to the most vulnerable—to single parents, to the unemployed, to students—and here we are just a few years later about to give tens of billions of dollars in essentially handouts in corporate welfare to some of the biggest, wealthiest companies in the world. So the budget emergency apparently is gone. I'll bet you it comes back at some stage in the near future, once this tax cut has gone through.
Let me give reasons why I don't believe that a tax cut for wealthy corporations will benefit Australia and average Australians. Trump's tax cuts have been in this debate ad nauseam and, basically, we're following, as we often do, the US, following one of Trump's key policies here. But what have we seen in the US? We've seen a very clear trend towards big corporations buying back their shares, and increasing payouts to CEOs and to shareholders. Morgan Stanley recently published a survey of some of the biggest companies on the New York Stock Exchange and 44 per cent of them said that they were going to use the funds from their tax cut to support share buybacks and give back money to shareholders.
For those who actually understand finance and how markets work, there's a lot more to this than there seems in this debate. This is not just about the fact that companies are choosing to buy back their own shares or give money to shareholders over workers, which is something I'll get to in a minute, but there are no guarantees at all that we're going to get the much-needed tax cuts going into wage rises in this country. There is no evidence at all that that's going to be the case. The reason companies are doing this, the reason any company buys back its shares or returns money to shareholders, is that they don't have a better return on investment. That's a fundamental principle of finance, which means that they're not going to spend that money by investing that money in their business to get a better return—the best short-term returns being giving the money to shareholders, their own CEOs or buying back their shares.
The whole basis of the argument that we've heard from Senator Cormann and the Treasury for the tax cuts, how the simple logic goes—for those students in the gallery today—is: we give companies tax cuts, they take that money and they invest it back in their business; that investment leads to productivity growth and, because they get productivity growth, we get increased wages and more jobs for workers. If you want a clearer signal that that is total and utter rubbish, just look at what CEOs and companies are doing in the US. They are not investing this money back into their business. You invest in your business only when you see, for example, an opportunity to increase demand for your products or lower your costs. Most of these corporations are highly efficient as they stand now. They are in very competitive environments and have their business models locked away.
What are they doing with this handout from governments and the Australian taxpayer? They are buying back their shares and returning the money to shareholders. Apart from the fact that workers are missing out, it also means the entire logic behind this tax cut is a lie. It is a mistruth. It is false. Companies do not agree with the Treasury secretary or Senator Cormann that they'll reinvest this tax cut into their businesses, increasing productivity and ultimately hiring more people—the so-called trickle-down effect. The evidence is simply not there to support this. When you lower tax on a corporation and they buy back shares, it enhances their potential net profits after tax, their returns on assets and ultimately—guess what—the valuations of their shares. This makes sense to anyone who understands finance. Who benefits the most when a share's valuation and therefore the share price improves? Those CEOs who are paid tens of millions of dollars with all their share packages, and shareholders; that's who. This is a rort for big businesses.
Why are big businesses around the world and in Australia arguing for tax cuts? Let me tell the Senate and those students listening in the chamber today how the system is gamed to the advantage of multinational corporations. These companies are called multinational or transnational because they have operations in countries all around the world. Does that make sense? They go into a country and lobby for a tax cut. What happens after that? When one country goes ahead and cuts their corporate tax rate, other countries then say, 'Wait a second, we're going to miss out on investment and business here, because money will flow to where businesses get the best return,'—the same argument that Senator Cormann has been progressing throughout this debate—and then another country cuts their corporate tax rate, and so on and so forth. This is a race to the bottom. The IMF has warned about a race to the bottom on corporate tax cuts. These multinational corporations are gaming the system. They are going around the world and lobbying to get tax cuts in different countries, and then other countries have to do the same thing in order to remain competitive and stay ahead of the curve,. My question to the Senate is: where does it end? We are going to drop our headline corporate rate to 25 per cent, which is in line with the OECD average; Mr Trump is going to drop his to 20 per cent or 15 per cent. Who knows where it stops?
Who benefits? It is companies with operations in different countries, because they will arbitrage and leverage direct foreign investment based on tax rate. They are running this show, this government and many governments around the world. They donate to political systems. We're all aware of the special interest effect, which is so on display in multilateral trade negotiations like the Trans-Pacific Partnership Agreement, where rules are being written for us—our democracies, our parliaments—by multinational corporations through shady negotiations that lack transparency, including allowing corporations to sue us if they don't like the sovereign decisions of parliaments. This is the world we live in. You cannot ignore the reality that this tax cut today has come about because Mr Trump dropped his corporate tax rate, as have other countries in this race to the bottom. Now, to remain competitive, we are doing exactly the same thing. Where will it end? We need corporations to not only pay competitive and fair headline rates but also pay their tax in the first place. Many of these corporations already know how to rig and game the system by not paying tax at all.
So what about wage rises? Will we get any guarantee from the big business lobbies, from Senator Cormann and the Liberal government—or from a Labor government, if they form government—that their big business tax cuts will lead to workers' wages rising? I asked questions of the Treasury secretary and the Treasury officials during estimates, and they gave us a figure of one per cent over time, which works out at $750 a year. Now that is not a step $750 increase every year; that is a level $750 a year. But let me tell you: if—'if'—we ever get to $750, it relies on the economic logic that I've just described, that companies will reinvest the windfalls from a tax cut back into their businesses, increase investment, increase productivity and have more money and more jobs for workers. That's what it relies on, and I'm telling you that that is a false assumption that underpins the model of our Treasury. This is not to mention the fact that when corporations do reinvest back into their own businesses, often it's in labour-saving technology, to cut their costs, and not in giving workers more jobs or giving workers pay rises. That is also not what the evidence bears. So the whole fundamental premise behind us supporting this corporate tax cut to somehow magically, like a magic pudding, create jobs and create higher wages for workers is a false story. It is not the case, and the Senate should not be supporting this.
Since I've been in this place, I've always wanted to be not just oppositional, but to be propositional.
Senator Ian Macdonald interjecting—
You may laugh, Senator Macdonald, but my record will show that I've contributed a lot more than you have in this place towards economic debate in this country. So let me tell you what the Greens propose. We propose the best way to get wage rises—and even Senator Macdonald doesn't disagree that we have a problem with wage rises in this country. The Treasury secretary has acknowledged it; Senator Cormann has acknowledged it. Wage growth has been sluggish for too long. We've put forward very good policies for stimulating wage rises in this country.
For three years, we've also run with a platform of investing in infrastructure in Australia—exactly what we need to enhance productivity and grow long-term jobs. That is exactly what we need to do. Funnily enough, some of the world's top economists have actually criticised the whole tax cuts debate and said that the best way to enhance productivity and ultimately create more jobs and higher wages is investing in long-term productivity-enhancing infrastructure. I'm proud that my party took to the last election not only a comprehensive package on how much investment is needed in this country in infrastructure and what kinds of infrastructure are needed but also the best way to finance it, including the establishment of an infrastructure bank. As Senator Williams would know, much of that infrastructure is needed in rural and regional Australia. I chaired a select committee into exactly this thing. It went around the country collecting this evidence. So we have a plan for stimulating jobs, sustainable growth and productivity that will help workers. The government's policy is not the right path.
So I've talked a bit about the policy, but what about the politics of this? I'll talk about that in the last four minutes that I've got left. We know that One Nation, behind closed doors, are close to cutting a deal with the government, if they haven't already, to support this. No doubt this has been brought to the chamber because they've already cut a deal. I would hope that One Nation have thought long and hard about what they're going to get in return for supporting what is the key piece of legislation in the economic space for this government in its term of government. It is a bad policy; it is a policy that we shouldn't be supporting. I will say it again: the Greens are the only party in this place who are unambiguously saying, 'We do not support corporate tax cuts for big wealthy corporations.' Labor, as usual, want to have their cake and eat it. Mr Bowen has been out there saying he's not averse to the principle of supporting tax cuts for big corporations. I noticed that, in the last contribution from Senator Cameron on this policy, he was very careful to say that he wouldn't support it from this government while the budget wasn't being balanced, while we had a budget crisis on our hands. But they're not ruling out that Labor will support big tax cuts for big wealthy corporation if they get into government.
So let's be very clear about this. The only party that is ruling it out is the Greens, because we see a different future, a different vision for this country—a vision that runs an inequality lens over every single policy we enact in this parliament. Asking corporations to do less and asking poorer Australians to do more is not going to help inequality in this country. There is so much more we need to do. We can raise revenue by tackling structural problems in our tax system. We can tackle problems of unfairness in our property market by removing negative gearing and capital gains tax concessions. We can fix the rort that is petroleum resource rent tax.
There's so much more we can do, and I'm very proud to say to you, Senator Macdonald—through you, Chair—that the Greens lead on these issues and Labor and sometimes even the Liberals follow. Since I've been in this place, we have consistently put forward good economic policies—not that it's often acknowledged. We've still got our work to do to get that acknowledged, but we have consistently always put forward good economic policies to make Australia a fairer place—I'm very proud of our track record—and we will continue to do so, and I'm not at all bothered if other parties adopt our policies. I see that as our role in this place: to push other parties as a change agent, to get what we need in this country to move towards fairness.
Supporting tax cuts for corporations, the big end of town, who already don't pay their fair share of tax and already get generous tax deduction concessions so they have low effective and average tax rates, is madness. What we should be doing is actually asking them to pay the full amount of tax. We should be cutting down on rorts and reductions that allow them to continually pay no tax. We should be looking at an overhaul of our tax system, and we should be looking at ways of raising revenue that allow us to pay for our social safety net and support our most vulnerable, including our students. We should also be looking at ways to make the country fairer at the same time, and I think that blueprint is out there for everyone to see, but it just takes political courage. It takes political courage to stand in this place and make those decisions. Once again, I'm proud to be part of a party that does have the political courage to come in here and state a very strong position on important matters relating to inequality and fairness in this country. That's why we've been elected to parliament by the people who voted for us.
I look forward to hearing the high level of debate from other senators—including you, Senator Macdonald, up next—on why the evidence suggests we should be cutting tax for some of the world's wealthiest corporations, who are going to use this money to buy back their shares, pump up their valuations and pay their CEOs more money, and have made no guarantee they're going to invest this tax cut back into industry, investment and jobs in this country.
This is a debate, so can I start by referring to the previous speaker, and can I say that, in my long years in the Senate, never have I seen a government of the Liberal and National parties ever adopt an economic policy of the Greens political party. At least Senator Rhiannon, who's just been tossed off the Greens ticket, acknowledges this. She is an advocate of the communist philosophy and policy, and I have to say, most of the Greens political party are people who follow the ultra-left-wing socialist approach to economics, and such is their right. But, of course, world history has shown that it simply does not work. Just have a look at Russia and the communist philosophy there. It didn't work. They got rid of it. Have a look at China. It is allegedly still a communist country, but all of their economic policies are pro-market, pro-capital policies, because the socialist policy that the Greens political party always espouse simply does not work.
I will go through and expose a number of the myths that you've just heard from Senator Whish-Wilson—myths that the Greens political party keep trying to propagate and keep trying to scare the schoolchildren with. And you did scare them, Senator Whish-Wilson—they left the chamber!
Those myths are just that—myths—and I intend to expose just those that I have time to do.
First of all, can I set the scene? In Australia—we're a relatively new Western country; we've only been going a couple of hundred years—every investment that has made Australia the great country it is has effectively been a foreign investment, one way or the other. There is money circulating around the world. Companies around the world, people with money, look around the world and say, 'Where can we invest our money?' Fortunately, over the years, particularly in the fifties and sixties under the Menzies Liberal government, a lot of people invested their money in Australia, as a result of which we built new factories, we built dams and we built new businesses, and all of that new activity created jobs and prosperity for Australians. We got to the stage where Australia's standard of living was amongst the highest in the world. We got there because of our economic activity, because of good government in the Menzies years and because people with money overseas, who wanted to invest, invested in Australia, building Australia and creating jobs.
You don't have to be terribly clever to work out that if you've got money to invest in Australia then you look around—you look up all the banks; you perhaps ring your stockbroker or financial adviser—and say, 'Where can I invest my money so that I will get the best return for my money?' Of course you do that. We all do that. Why wouldn't you do that? That's what people with money around the world do; they look around and say, 'Where will we invest our money so that we can get the best return for us?' They say: 'In Australia you pay corporate tax rates of 30 per cent, but if you go to France you can get tax rates of about 20 per cent and falling. If we invested in the United States we'd get tax rates of 15 per cent. So why would we bother investing our hard-earned money in a country which is going to tax us more than anyone else?' It's a matter of simple common sense that people who invest, and invest in productivity, are going to go where they get the best return. The communist philosophy doesn't like that because the communist principle is that all business is bad and capital is bad. But we've seen what's happened with the communist philosophy in the past: it simply does not work. People with money want to invest where they get a return. People don't have a particular penchant for Australia. They will go where they get the best return, and of course that is where the corporate tax rate is the most relevant and the best from their point of view. It's a matter of common sense. I can't understand why people are even concerned about this.
I will quote a prominent Australian—I was going to say 'distinguished', but that's not right—who said this about tax rates:
Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.
That's a quote. Let me ask you, Madam Deputy President: was it perhaps from Malcolm Turnbull? No. You're wrong if you said that. That quote came from Mr Bill Shorten in the House of Representatives on Tuesday, 23 August 2011. I'll repeat it. This was Mr Shorten:
Cutting the company income tax rate increases domestic productivity and domestic investment.
Correct, Mr Shorten! You were once right. He went on to say:
More capital means higher productivity and economic growth and leads to more jobs and higher wages.
Right, Mr Shorten! You were right a second time. I assume that, because of that, Mr Shorten and his team opposite us will be supporting this proposal from the current government, which does exactly what Mr Shorten was advocating.
Here's another quote, if I could just take the time of the Senate:
Lowering the corporate rate for smaller businesses only [as the Greens propose] creates an artificial incentive for Australian businesses to downsize—
that is, go down—
In worse case scenarios some businesses might actually lay people off to get smaller—and the size-based different tax treatment would create a glass ceiling on business workforce growth. Instead we want a level playing field regardless of the size of the company.
Again, I could ask 20 questions: was that Scott Morrison, was it Malcolm Turnbull or was it Senator Cormann who said that? No, you'd be wrong. That was said by none other than the Leader of the Opposition, Mr Bill Shorten, in a speech to ACOSS in Melbourne on 30 March 2011. If you needed any evidence, any argument, those two quotations from Mr Shorten actually sum it all up.
Can I just digress a fraction. I was recently involved in the Senate Select Committee on the Future of Work and Workers. In a one-line explanation, this committee's inquiring into what will happen in Australia in 10, 20 or 30 years time. A lot of the jobs which we currently have in Australia are now done, effectively—this is my terminology, not the technical terminology—by robots. So, what are the rest of us going to do in the not-too-distant future?
I was absolutely blown away by the evidence of Mr Michael Cannon-Brookes, who leads a company called Atlassian. He was talking about other things, but what impressed me about Mr Cannon-Brookes's evidence to the committee was how global we are all are the moment. The jobs in Australia are the jobs anywhere else, and we can do them in Australia, given the right scenario. This is a company which started not long ago with a couple of people—a couple of innovators. They were young people who had an idea and started this business in Australia. Mr Cannon-Brookes said to us that the company manufactures software and helps teams collaborate and communicate better in their workplaces. He said:
We currently have 110,000 enterprise customers in over 160 different countries—
This is an Australian born and bred company, and, remember, a couple of years back they started with just the two of them. He went on:
We employ 2½ thousand staff in 10 different offices, more than a thousand of which are in our Sydney headquarters, and have won 'Best place to work in Australia' two years running
Mr Cannon-Brookes was not particularly talking about tax cuts, but his evidence to the committee indicates just how tough it is to do business in Australia if we have rules and regulations that make us worse off than our competitors.
In this instance he was talking about skilled migration, but the same applies to the tax rate, so I'll just read a couple of words from what Mr Cannon-Brookes said:
So let's talk about skilled immigration. The lack of access to experienced global talent is the single biggest factor constraining the growth of the tech industry in Australia. From my view, we think about skilled immigration completely backwards. We focus on overseas workers taking jobs from Australians, and, in high export industries like mine, it's just not the case. Highly skilled experienced migrants are job multipliers at Atlassian. For every one senior person we import, we can hire many, many more around them. Their experience spreads to tens of other employees close to them in the organisation. It is absolutely invaluable to me.
He then went on to complain about some of the recent changes to the 457 visas, and that's a matter that the government should look at. I know the government's been pushed into 457 arrangements that aren't quite suitable because of demands from the unions and the Labor Party. We haven't got it right. He goes on to say:
Our future success depends on our ability to attract the world’s best tech talent … today. To unlock the huge job-creating potential of tech companies in Australia, we need to change the way we think about skilled migration. The government should be helping local companies attract world-class employees, not close the door in their faces.
As I say, this is not actually germane to this bill but it gives an idea of how an innovative company like this understands that we have to compete with the world and of the sort of rhetoric you get from the Greens political party about immigration taking away Australian jobs. You can see from a guy who's at the coalface that that is simply not the case.
It's the same with corporate tax. Sure, every country in the world would like to tax corporate profits by 50 per cent or perhaps even 100 per cent. But you have to be real. In fact, Senator Whish-Wilson rightly says that Australians ignore reality. I'm afraid he ignores reality. To remain competitive we have to be competitive in the tax rate that we charge corporations. I did want to go through all of the myths that Senator Whish-Wilson and Senator Cameron before him had spoken to the Senate, but I'm going to run out of time. Let me just deal with the first one, which was that Australia cannot afford company tax reform. This is just plain wrong, and contrary to the facts. Our business tax reform is fully costed and it is reflected in the government's budget forecast and projections, which show that the budget will return to surplus in 2021 and will remain in surplus over the medium term.
For members of the Labor Party, and for members of the Greens political party who supported them through those horrible Rudd-Gillard-Rudd years, I should pause a minute to explain what a budget surplus is. Within six years, Labor, supported by the Greens political party, took Australia's bank account from effectively $60 billion in credit—that is what the Howard government left when it left office in 2007—to something like $250 billion in deficit and heading towards $700 billion in deficit. The Labor Party and the Greens' great economic policies—the same as the old communist regime—took Australia from having $60 billion in the bank, in the kitty, to a deficit approaching $700 billion. It was borrowed from foreign lenders, to whom who we had to pay interest equivalent to the cost of a new hospital every day. This is the economic credibility of the Greens political party and the Labor Party!
We are heading towards a surplus. These are Treasury figures, and we know that will happen. The budget is forecast to be in surplus by the time the company rate under this proposal is reduced to 27.5 per cent for companies with a turnover below $250 million, and is projected to have been in surplus for six years before the company tax rate eventually reaches 25 per cent for all companies. In response to the claim by Senator Whish-Wilson and Senator Cameron that Australia can't afford this, these reductions come in over the next five to 10 years. In that time, the surplus will be real. The Australian budget will actually be in surplus so, yes, we can afford it. We're only bringing ours down to 25 per cent at this stage. It's still not competitive with America and France and Britain. In fact, all of the other developed countries of the world and many undeveloped countries of the world have a tax rate that will be even lower than that. But at least it's heading in the right direction, and it will make investors think seriously about investments in Australia.
The opposition, the Labor Party, are proposing to save the cost of the company tax cuts if they are not proceeded with. But they've already committed the entire fiscal cost of those company tax cuts, and more, to increases in expenditure. So Labor say we can't afford these tax cuts, and yet they've already announced that they're going to spend more than those tax cuts would have cost on other expenditure—which socialist governments like the Labor Party and the Greens are always prone to doing. It's easy to give away someone else's money—it's not their money; it's the taxpayers of Australia's money. It is very easy to rock up to some place and say, 'Yeah, we're going to give you a pocketful of money,' and people say, 'Gee, isn't that good.' But someone has to pay for it. And who pays for it? The ordinary taxpayers of Australia—the hard workers who go to work every day, work diligently and pay their tax, which the Labor Party and the Greens then just want to give away for anything that might increase their vote. It's not the way to run a country. It's not the way to run an economy.
It's a matter of record that, at the 2016 election, the Labor Party promised a worse budget bottom line than the coalition over the following seven years, despite locking in a higher tax rate of 30 per cent for all businesses with a turnover of $2 million or more. That, as a matter of logic and simple arithmetic, is just wrong. The opposition cannot simultaneously direct tax cuts towards other priorities on the spending side of the budget and argue that they are unaffordable. That's the illogical argument that you're getting from Senator Cameron, and no doubt other Labor speakers.
There are other myths that have been created by Senator Cameron and Senator Whish-Wilson that I would like to have time to dispel, but I'm sure my colleagues who follow me in this debate will do so. Can I simply conclude by again quoting a prominent Australian on these figures—and I repeat these words because they are so germane and so accurate:
Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.
Would you believe—you do know, because I've said this before, but you'd struggle to believe—that those words came from Mr Bill Shorten, the Leader of the Opposition. I certainly hope that he and his colleagues follow those words now.
This is a pleasant surprise. I was expecting to speak later in the order but it seems some other senators who were listed in the speaking order have not been able to find their way to the chamber on time to take up their allotted slot in the speaking order, so I've happily stepped into the breach.
Thank you for your advice. I'll take your advice. It is a guide that we can normally reply upon and that is normally a very good guide to what happens in the chamber, but this morning, perhaps for some other reason, senators who were scheduled to speak in the normal order have decided not to. As it happens, I was just sitting at my desk in my office writing the speech on company taxes that I was due to deliver here, but, fortunately for me, this is an issue that we have all canvassed very widely in this chamber over the last few months, so I'm sure I'll be able to make a contribution without having a speech here in front of me.
I'm really pleased to have the opportunity to again make the case in this chamber for why Australia's company tax rate must be cut, why it must be reduced. There are many compelling reasons for this, which we will hear throughout this debate, but I want to take this opportunity to address some of the arguments that have been made so far in this debate that I find less compelling. One of them was made earlier in the chamber by Senator Whish-Wilson. He concluded his contribution to this debate by saying that what was lacking in this debate and what was lacking on the part of the government was courage, and if only the government had more courage it would have taken a different approach to company taxes: instead of advocating for a reduction in company tax rates—as the government is—the government would seek to find more revenue from companies, to raise higher tax revenue from companies in this country. I would respond to Senator Whish-Wilson, through you, Chair, by noting that there is nothing courageous at all, politically or otherwise, in bashing big business and saying you're going to take more revenue from them. In fact, it's the least courageous thing you can do in Australian politics, it's the easiest thing you can do in Australian politics, because what you are doing is appealing to the base political instincts and ignorance of some people in the community, and some people who have deliberately sought to whip up ignorance in the community, by portraying big business as somehow evil, as somehow noncontributors to our society and as somehow evading their obligations to pay a fair amount of tax in this country. It's very popular and very easy to make this argument, and that is what the Greens do. I think it lacks political courage, in fact, to make these arguments. So, I don't share Senator Whish-Wilson's view that the courageous thing to do would be to raise more revenue.
The truth is that Senator Whish-Wilson and the Liberal Party and I just bring different philosophical approaches to this issue. The Greens are in favour of big government. They think government knows best and they think that more money here in Canberra would be a good thing and that less money in the pockets of Australians, including Australian businesses, would be a good thing. That is fair enough. We have different philosophical world views. They take their approach and we take ours, but let's not pretend that this is a question, somehow, of courage.
It's almost a year ago that the Senate passed the first part of the government's Ten Year Enterprise Tax Plan. I want to congratulate and thank crossbench senators, who, at that time, did the right thing by supporting tax cuts for small businesses with up to $50 million in revenue. But now the crossbench has a different task, and that is to help the government finish the job—to legislate the rest of the enterprise tax plan. The case for finishing the job of the enterprise tax plan and passing the rest of the tax cuts is even stronger now than it was 12 months ago. All of the same arguments made then about stimulating increased investment and the flow-on benefits that would accrue to employment and wages, of course, remain exactly the same.
Today, there are two significant additional arguments that I hope crossbench senators, in particular, carefully consider. I want to thank them for so far engaging constructively with the government on these issues. In my view, it's to the great credit of senators Leyonhjelm, Anning and Bernardi that they've already agreed to support the government's full package. It's also a credit to the One Nation senators, as well as Senator Hinch and our new colleague from South Australia, Senator Storer, that they remain open-minded and that they are willing to negotiate. But, coming back to these two new pieces of evidence that we have now that we didn't have 12 months ago, I wrote an article for the Financial Review earlier this month remarking on one of these, which is that if the Senate stops now, if the parliament stops now, and leaves in place only the tax cuts legislated for small business, rather than finishing the job and legislating the rest of the tax cuts for all other businesses, then what we will be perhaps inadvertently doing is leaving in place an inefficient and distorting two-tiered company tax system. It will put in place a series of perverse incentives and it will vastly limit the benefits of the tax cut passage.
I understand the political dynamic here. It is much easier to be seen to be supporting tax cuts for small business. After all, who hates small business? Not even the Greens, I believe, hate small business. A different tax rate for larger businesses would effectively create a discriminatory company tax system that will punish businesses for their success. It's not what we should be doing; we should instead be encouraging businesses to grow. It is a very good thing when a small business becomes a large business. A two-tiered company tax system will do the opposite. It will hit companies with a five per cent tax increase as soon as they pass a turnover of $50 million, regardless of how profitable they may be. It will discourage innovation and create a perverse incentive for companies on the margin to limit their growth or to artificially structure their affairs to avoid crossing this threshold and paying more tax. It will inevitably impact business investment, economic growth and job creation. A two-tiered company tax system will seriously dampen the benefits that we could otherwise count on from cutting Australia's company tax rates. The truth is that the biggest bang for buck in economic terms will come from lowering taxes on our largest businesses.
Saul Eslake, an economist, has noted that the greatest growth in private sector employment in recent years has in fact come from big companies. If we want to see more of some of the record 403,000 jobs created in the last 12 months, it is not going to come by penalising big business. I doubt that any of those 400,000 people, many of whom got jobs in large businesses in the last year, want their employer to be penalised for their success.
ABS surveys on innovation also show that large businesses are the most likely to adopt new and innovative practices. Despite all of the propaganda that you hear about corporate tax avoidance, the reality is that it is big business that pays the overwhelming share of company tax in this country. That means that it's big business who is most likely to respond to the incentive provided by a reduction in the company tax rate.
These are the facts: according to the latest figures from the Australian Taxation Office, Australia's 2,475 biggest companies—that is, the top 0.2 per cent of companies—pay almost 64 per cent of all company tax in Australia. Sixty-four per cent of company tax in Australia is paid by the top tiny proportion of Australia's largest businesses. They are paying their fair share.
The Labor Party has also been running an inherently contradictory argument here. They say that big business pays no tax, or avoids paying the right rate of tax, and therefore we shouldn't cut their rate of tax. But, if a business doesn't pay any tax, then how would it benefit from a reduction in the rate of tax? If they pay zero dollars tax at 30 per cent because they make no net profit, then they will still pay zero dollars tax when that rate is reduced to 25 per cent.
It's the companies who already pay billions of tax that will benefit from a lower tax rate and will respond to a lower tax rate with increased investment. The international capital flows that a lower corporate tax rate is designed to attract overwhelmingly go to big business. If we want to attract more of that investment, we need to ensure that the return on that investment is competitive. It won't be if we continue to fall behind our competitors by having a higher corporate tax rate. One dollar of profit in a jurisdiction with a 25 per cent corporate tax rate is more attractive for an investor than $1 of profit in a jurisdiction with a 30 per cent tax rate.
Economists disagree about the exact share of where the company tax burden falls. Is it on shareholders through lower returns? Is it on employees through lower wages? Or is it on customers through higher prices? They disagree about the proportion of the burden that falls on those three groups but they all agree that it's a shared burden. All of those three groups bear the burden of company taxes and it's a burden which is ultimately borne by people. Ultimately, the cost of company taxes is paid by individuals. It doesn't matter whether they are customers, whether they are employees or whether they are shareholders, they all ultimately pay company taxes. And I think the shareholders, employees and customers of large businesses are no less deserving of being relieved of that burden than small businesses. We all interact with large businesses every single day. Ironically, it was perhaps Leader of the Opposition Bill Shorten who made the most cogent argument against a two-tiered tax system. When he was Assistant Treasurer in 2011, he said:
… lowering the corporate rate for smaller businesses only (as the Greens propose) creates an artificial incentive for Australian businesses to downsize.
In worse case scenarios some businesses might actually lay people off to get smaller—and the size based different tax treatment would create a glass ceiling on business workforce growth.
Instead we want a level playing field regardless of the size of the company.
Senator Whish-Wilson objects, but I encourage him to take up his objection with the Leader of the Opposition, Bill Shorten, because I'm only quoting his words. In his view, a differential tax rate between large and small businesses could lead to businesses laying off workers, and I don't think that's what we want to see. I think Bill Shorten was right in 2011 when he said we want to see 'a level playing field regardless of the size of the company'.
Leaving in place a differential rate of company tax also runs the risk that the company tax system will become even more progressive over time. I'm sure that's in fact exactly what the Greens would propose. We could see in this country more thresholds and higher rates imposed on larger businesses to resemble the personal income tax system. This would even further compound the inefficiencies that we already may see from this differential rate. And it is not hard, sadly, to foresee a future government succumbing to this economic populism, but, the truth is, we would all be poorer for it.
Clearly, there is only one way to fix this dilemma. Unless the Senate crossbench and those opposite propose to vote for increasing taxes on small business—and one would hope no-one in their right mind would propose doing that—then the alternative, if we want to see a 'level playing field', if we want to see a consistent tax system, is to help the government finish what it started and pass the rest of the company tax cuts.
I mentioned at the beginning of my speech that there were two new pieces of information we have today that we did not have 12 months ago. The second new piece of information that we have today is of course the success in the United States of President Trump's sweeping tax reforms which passed the US Congress in December. They lowered the US corporate tax rate from 35 per cent to 21 per cent, with a range of other cuts to US taxes to make the system more competitive. In previous debates, I and other senators have talked about the remarkable investments that these changes have encouraged. I have read out the names of dozens and dozens and dozens of companies who have increased the wages of their employees, who have announced new investments in their domestic businesses or who will be delivering higher returns to their shareholders as a result of the passage of the Trump tax cuts. I won't do that again today because we already all know about the positive impact the tax cuts have had on the US economy. I should point out that that's an economy which already had a lower unemployment rate than Australia and a stock market at near record highs—that is before the effects of these tax cuts.
What I do want to talk about is, in fact, the negative impact that the Trump tax cuts could have on the Australian economy. It sounds strange that another country reducing its taxes could in some way harm Australia, but the truth is that it will if we fail to respond. Australia has relied on foreign investment since the First Fleet, and we remain dependent on it today. It has massively enriched our country for over 200 years and, if we continue to attract it, it will continue to do so. Australia would be unimaginable without the foreign investment that we have enjoyed in that time. But there is not a limitless amount of international capital available for that foreign investment here in Australia. It's scarce. There is no guarantee that that investment will come here to Australia. If the returns are better in other countries, that is where the investment will go. We can't force people to come and invest here in Australia.
America is not just a competitor nation in the fight for scarce international capital; it is our No. 1 source of foreign investment. In 2016, Americans invested $860 million in Australia, or 27 per cent of our total foreign investment. But in 2016, when an American investor was contemplating investing either at home in the US or abroad in Australia, they faced a comparative tax rate of 35 per cent in the US and 30 per cent in Australia, so it made quite good sense for an American investor, contemplating investment between those two countries—assuming that the investment was the same—to make that investment in Australia. That investor was going to get a better return on investment only due to the fact that the Australian company tax rate was five per cent lower at that time than the United States rate. But the same investor making that same decision today faces a very different playing field. That investor is contemplating a 21 per cent corporate tax rate at home in the United States or a 30 per cent tax rate here in Australia. What would you do if you were that investor, particularly if you wanted to invest in a large business in Australia, which still faces a 30 per cent tax rate? Would you invest at home—where it's probably, to be clear, going to be more straightforward, simple and easy to do and has a lower corporate tax rate—or would you invest overseas in Australia, where you're going to face a higher tax rate? If the investments were comparable, of course you would invest at home. It's simpler, it's easier and you get a better return on investment.
The only way that you would continue to invest in Australia with our higher corporate tax rate is if the returns in Australia were so much better that they were enough to compensate for that much higher corporate tax rate. I hope that's the case. I hope the returns in Australia are always so generous and so strong that investors choose to disregard our higher corporate tax rate and invest here anyway, or perhaps sentiment will rule the day and they really like our weather or our cuisine and they choose to invest here. But I think all of us can acknowledge that the truth is that that won't continue to happen. We will have investment returns comparable to any other nation, and if we have a tax rate higher than most other nations then that investment will start up to dry up, including from the United States, our largest source of foreign investment.
As we know, the United States is not the only country in the world cutting its corporate tax rate. Our second biggest foreign investor is the United Kingdom. In 2016, they invested $515 million, or 16 per cent of our total foreign investment. Today, the UK corporate tax rate is 19 per cent. They have been cutting their corporate tax rate for a decade. Back in 2010, it was comparable to Australia's at 28 per cent. Incidentally, in their corporate tax reform in the UK, they didn't just reduce the rates of tax paid for all their businesses; they abolished the previous differential rate that they used to have for small business because they recognise, as Bill Shorten does, that it's inefficient to have two different rates of tax depending on the size of the business. So, in lowering their corporate tax rate overall, they abolished their different tax rate for small businesses. Now they just have one tax rate of 19 per cent, significantly lower than Australia's, and it's forecast to continue to fall.
Nations across the world are following suit. Corporate tax rates are continuing to come down. According to the Tax Foundation in Washington, DC, in 2017 the average global corporate tax rate was just 22.96 per cent, a full seven percentage points lower than in Australia. We are now in the handful of top corporate taxing nations in the OECD, and to be honest—let's be clear—the OECD is really a club of high-taxing nations, so it is a particularly bad statistic to be a high-taxing nation within a club of high-taxing nations. The truth is that Australia is increasingly out of step with the rest of the world. Our corporate tax rate is higher than those of the rest of the world now, and it will get higher still if we refuse to act. It would be inefficient for us to leave in place a rate differential between our small businesses and our large businesses. We are falling behind the rest of the world. If we don't act we will pay for this. If we don't act we will all regret this week, when the Senate decided not to support this tax package.
I hope that the crossbench continue their productive conversations with the government. I hope they continue to show an open mind about this plan. I can even hope, perhaps, for a miracle and that those opposite will come to their senses and revert to the view they used to hold only a few years ago, which I suspect the Leader of the Opposition, Mr Shorten, still holds deep down but perhaps doesn't have the confidence to argue for within his caucus. Perhaps a miracle will happen and they will return to the view they all held back in 2011.
As anybody who spends some time in this chamber will know, the Greens have steadfastly opposed the Treasury Laws Amendment (Enterprise Tax Plan No. 2) Bill 2017. There has been absolutely no question about our opposition. Our opposition is not conditional. We haven't been flip-flopping. There's no umming or ahing or sending conflicting messages. It's not our view that company tax cuts are affordable in any environment. Unlike Mr Bowen, who believes that there may be a set of circumstances under which these company tax cuts are justified, we are straight up opposed to tax cuts for big corporations, because they are bad policy. They would be terrible for our country and they would further exacerbate the intergenerational divide that is growing within Australia.
Company tax cuts are just another means of rigging the economy in favour of the big end of town. They're part of the same old, outdated neoliberal agenda that told us that if only we privatised anything that wasn't nailed down, if only we deregulated and attacked unions—if only we did all those things—then wealth would magically trickle down to everybody. Well, it is a failed agenda. The verdict is in: the Australian people just don't buy it. And nor should they buy it. The evidence is everywhere. We're seeing massive inequality, we are seeing wages flatlining, we are seeing skyrocketing corporate profits, we are seeing CEOs cream it with bonuses, and all the while ordinary Australians are being left behind.
We know from recent ABC reporting—the same reporting that the Prime Minister tried to shut down—that hundreds of corporations with an income in excess of $100 million are paying no tax, yet the government is still arguing the case for a tax cut. When it comes to corporations, the problem we have in Australia right now is that they are not paying their fair share. Let's fix that problem before we start a debate about what it means to have an effective corporate tax rate. We think it's time the companies finally paid their fair share so that governments can invest in what we do know is going to boost productivity in this country, so that we can invest money in infrastructure and services that we need—things like quality health and education systems, schools and hospitals, and a world-class National Broadband Network. That's productivity-boosting infrastructure. We need investment in our outdated electricity and transport systems so that we can make the transition to 100 per cent renewable energy, create jobs, ensure we've got reliability and bring down prices for consumers. Instead, what we have is a $65 billion handout—I'll say that again: a $65 billion handout—to the big end of town in some magical hope that they will pass this on to their employees. It is wishful thinking at its worst. We have to stop pretending that corporations are a vehicle for social change. They're not. Corporations exist for one reason only.