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2011-01-26

Businesses versus labour and residents' interests

Comments on Judith Sloan “Regulation and red-tape compliance a huge burden on companies”, 26/01/2011, http://www.theaustralian.com.au/business/opinion/regulation-and-red-tape-compliance-a-huge-burden-on-boards/story-e6frg9if-1225994486336

The debate on population growth and especially immigration has always been dominated by businesses and their lobbies, mostly at the expenses of existing residents, because the latter normally don't have representations as strong as businesses. A rational and muture debate should include assessment on the impact on existing residents, their wages and pay, their working and living environments, because that is what government should do, to look after their constituents and the nation's.

In terms of business taxes, of course it would be better to have lower taxes, but that principle of lower taxes should also be applied to personal taxes too.

A main problem with the balance of business taxes and personal taxes is that now it is easier to argue for a lower business tax, but harder to argue for personal taxes, given the split between lower and higher income earners.

The Productivity Commission, though generally very respectable in its work, is too much leaned to so called efficiency at the expenses of other equally if not more important issues. For example, it may focus more on total economic growth when immigration is concerned. Equally when business taxes are concerned, it may focus too much when simple international comparisons of business tax rates or burdens, but ignore other issues.

As far as carbon pricing is concerned, businesses should live with political uncertainties and price in based on the probability of future costs of emissions when making investment decisions just as they do with other uncertainties. It is unreasonable to have the government as the sole undertakers of future risks on this.

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