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The Forum > General Discussion > What is the role of a public broadcaster?

What is the role of a public broadcaster?

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So it's objectional and a rant only if you don't agree with it but if it's misdirection and disinformation spoken quietly by a corporate representative or anybody else with an agenda then it's OK.

There are plenty of ranters in the (so-called) free-to-air media but it only seems to be the ABC that gets called out.

Is censoring Alberici when her statements have been widely agreed with by other prominent economists an example of left-wing bias or toeing the government line?
Posted by rache, Thursday, 22 February 2018 11:59:58 AM
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Aidan,

I think the problem with the article is that while it appear superficially detailed and correct, it has holes that you could drive a bus through, and seems to be mainly focused around labor's talking points. This is not entirely surprising considering that Emma is an economic lightweight, and left leaning. That the ABC felt the need to withdraw the article and apologize for its breaching the ABC code shows how bad it was.

The main flaws are that EA failed to recognize that taxes are paid on profit and not income, and that even headline profits NBIT do not take into account interest paid, depreciation on assets, and losses carried forward from previous years which are genuine deductions recognized in nearly every country.

Thus the effect of these deductions is the actual final taxable profit is highly reduced and in some cases zero, and there are no taxes to be paid on zero income.

Secondly nearly every major economic center is in firm agreement that reducing corporate taxes increases investment which eventually leads to higher wages. What is not always clear is that whether the increased taxes paid on the new investments and higher wages compensates from the taxes lost.
Posted by Shadow Minister, Thursday, 22 February 2018 1:40:37 PM
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@shadow minister "Secondly nearly every major economic center is in firm agreement that reducing corporate taxes increases investment which eventually leads to higher wages"

Two things Firstly it is false. Read Piketty's Capital or Stiglitz, or Sen - two Nobel Laureates who disagree.
Secondly even it were true you need to show that there are facts that back up this assertion. What tends to happen is that when the higher wages do not eventuate the claim is made that the tax reductions have not been large enough.
A critique is not a matter of saying that things are not right as they are. It is a matter of pointing out on what kinds of assumptions, what kinds of familiar, unchallenged, unconsidered modes of thought the practices that we accept rest.
Posted by BAYGON, Thursday, 22 February 2018 8:44:19 PM
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Shadow,
>The main flaws are that EA failed to recognize that taxes are paid on profit and not income,
I'm generally puzzled as to how anyone reading that article could reach that conclusion. Did you read it properly?

>and that even headline profits NBIT do not take into account interest paid, depreciation on assets, and losses carried forward from previous years which are genuine deductions recognized in nearly every country.

Then why did she say "Adding to this debate is the issue of average and effective tax rates. Effective tax rates are said to drive investment decisions and take account of what companies actually pay once deductions, depreciation and other tax minimisation strategies are considered"?

>Thus the effect of these deductions is the actual final taxable profit is highly reduced and in some cases zero, and there are no taxes to be paid on zero income.
Hence the section following the (admittedly slightly misleading) heading "Tax rates don’t matter if you’re not paying tax"

Importantly she made the point that "According to a report published last year by the US Congressional Budget Office, Australia’s effective tax rate, at 10.4 per cent, is among the lowest in the world."

>Secondly nearly every major economic center is in firm agreement that reducing corporate taxes increases investment which eventually leads to higher wages.

If all other things were equal, that would be true. But all other things are not equal. You could just as easily say cutting interest rates increases investment which eventually leads to higher wages.

Corporate tax cuts are one way of growing the economy, but they have an enormous opportunity cost. Wouldn't it be better to concentrate on more efficient ways of growing the economy first?
Posted by Aidan, Thursday, 22 February 2018 9:50:02 PM
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Baygon,
I used the word "nearly" and citing two avowedly socialist economists does not challenge my statement in any way.

Wages growth is driven by competition for labour, which is driven by low unemployment which is driven by investment. The high wages growth under Howard was driven by record external investment in Aus, which as a % has halved.

The decision to invest is driven by market opportunities, the cost of labor, power etc and tax rates. Presently Aus has the highest tax rates, the highest cost of labour, the highest power prices etc which is why in spite of the global economy improving, investors are going elsewhere.

Aidan,

The article's headline is:

"EMMA ALBERICI. There’s no case for a corporate tax cut when one in five of Australia’s top companies don’t pay it."

This is straight out of Labor's talking points, as it implies that 20% of companies are cheating on their taxes by not paying tax on their profits, when in reality their taxable profit is zero.

As for the "effective" tax rates that she quotes, this is a theoretical initial tax paid after costs write down on equipment etc, and not an actual tax rate on profits and in the context that EA used it is highly misleading.

Australia allows a rate of depreciation of assets that is faster than most other countries, which means that the initial tax paid is lower, but as the total depreciation is the same for all, over an extended period the same tax write offs occur in all countries and so the net taxable profit is the same over the medium term. I.e. In Aus one can write off 20% over 5 years or in another country one writes off 10% over 10 years, but the write off is eventually the same.

Finally, cutting interest rates does improve investment, employment and wages, which is why the RBA did exactly that in the downturn.
Posted by Shadow Minister, Friday, 23 February 2018 5:07:05 AM
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Shadow,
Whinging about the headline again? I refer you to my previous comment:
Try reading the article rather than just the headline, and you'll find it dispels far more ignorance than it displays!

AIUI it is common journalistic practice for the headlines to be written by the editors rather than the authors.

>As for the "effective" tax rates that she quotes, this is a theoretical initial tax paid after costs write down on equipment etc, and not an actual tax rate on profits and in the context that EA used it is highly misleading.

Highly misleading? So you're saying corporate investment decisions ignore the cost writedowns on equipment etc, and merely focus on the tax on profits? That's a counterintuitive claim - do you have any evidence for it? Or any explanation of why that would be?

>Finally, cutting interest rates does improve investment, employment and wages, which is why the RBA did exactly that in the downturn.

Finally you're beginning to understand. Next question: can you see how government spending also has that effect?
Posted by Aidan, Friday, 23 February 2018 8:55:10 AM
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