The head of the Australian Strategic Policy Institute says he has never seen an administration “so deeply beset with problems in its first 100 days as the Trump White House”.
ASPI [ Australian Strategic Policy Institute .. https://www.aspi.org.au/ ] executive director Peter Jennings and Australian Industry Group chief executive Innes Willox will deliver speeches at the National Press Club today, providing their outlooks on the “Trump Phenomena”.
Mr Jennings will call for Malcolm Turnbull to urgently meet with President Donald Trump at his Mar-a-Lago resort in Florida to discuss Australia’s role in an increasingly unstable global climate dominated by a more assertive China and the North Korean nuclear threat.
“When it comes to our alliance relationship with the US, we are the masters of our own destiny,” Mr Jennings will say. “We shouldn’t sit back and wait for President Trump to grade our homework. It’s often been the case that Australia has led in shaping new alliance co-operation.”
Mr Willox will warn local politicians that Mr Trump’s election underlined the urgency of addressing energy affordability, saying the US President’s plan to slash company tax rates would have an impact on the Australian economy. “It is interesting to bear in mind that the US industrial heartland proved to be a critical swing factor in the US election,” Mr Willox will say.
“This fact alone should add urgency to those considering the energy security and affordability questions that are hanging like the sword of Damocles over key parts of our own manufacturing sector.”
In his speech, Mr Willox will discuss the impact of Mr Trump’s plan to reduce the US company tax rate from 35 per cent (which in some states rises to 39 per cent because of state taxes) to 15 per cent. The pro-business move would see the US go from having the highest rate in the OECD to one of the lowest, effectively turning the US into a “tax haven”.
---- [ INSERT: Does the U.S. have the highest corporate tax rate in the free world? .. Mostly True
But whereas the statutory rate is relatively straightforward and uncontroversial, different, reputable organizations have published very different estimates of the effective tax rate that corporations pay.
The most recent estimate comes from the World Bank and International Finance Commission, which put the United States’ effective rate for 2014 at 27.9 percent. That’s second-highest behind New Zealand among OECD countries and 15th-highest among the 189 countries measured.
In 2011, the Tax Foundation published a survey of 13 prior estimates of the United States’ effective tax rate from 2005 to 2011. All 13 studies pegged the U.S.’s rate as above average, but none had the U.S. rate first overall.
While lowering the company tax rate would underwrite higher productivity for both the global and US economies, which would benefit Australia, the tax cuts would also divert investment to the US from other countries such as Australia, Mr Willox will say.
He will say that the Australian Senate’s passage last week of tax cuts for companies with turnover of less than $50 million would help lessen the impact of a 15 per cent US company tax rate, but Australia would still become less competitive. The US accounts for 28 per cent, $860 billion, of foreign direct investment in Australia.
Mr Willox will also warn of negative consequences for the Australian and global economies of any resurgence in US protectionism, describing the blockage of the Trans-Pacific Partnership as “a strong candidate for the greatest own goal in the history of trade relations.”
Why Malcolm Turnbull needs to learn how to play golf Malcolm Farr, news.com.au April 5, 2017 2:46pm MALCOLM Turnbull should get to Mar-el-Lago – in his golf gear if necessary – as quickly as possible and join the line of national leaders testing their personal chemistry with Donald Trump.
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