Construction union calling for super profits tax
The construction union has launched its campaign for a 'super profits' tax for the richest companies to help fund affordable homes. The CFMEU boss Zach Smith says an economy-wide tax could raise 290-billion dollars over the next decade - comfortably funding the investment required to close the social and affordable housing gap. Union-commissioned analysis shows more than half a trillion dollars is needed to meet demand.
Transcript
00:00 The super profits tax modelled by Oxford Economics is assumed to be a permanent 40% tax on excess
00:09 profits.
00:10 And what are excess profits?
00:12 Excess profits are defined on a company by company basis by taking the shareholder equity
00:17 multiplied by 5% plus the long term bond rate.
00:20 This is a pretty well established as a return that shareholders might reasonably expect
00:25 from their investment.
00:28 Whatever is excess to this is defined as a super profit and eligible for the 40% tax.
00:36 In addition, the tax is designed such that it only kicks in for businesses with a turnover
00:41 of $100 million or more.
00:44 This means it would likely only apply to 0.3% of companies in Australia.
00:51 Under our model, companies would be able to carry forward losses like any current corporate
00:55 income taxation.
00:57 But even with those allowances, it would still raise significant revenue.
01:04 Now, I can already hear the howls of outrage from the usual quarters.
01:12 Because whilst a super profits tax would only affect 0.3% of businesses in Australia, they
01:17 are a very powerful, very noisy 0.3% of businesses.
01:23 And they're backed, let's be honest, by a pretty potent crew of supporters in politics
01:27 and the media.
01:29 But a responsible government should be prepared to stare them down.
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