Boosting public education delivers greater benefits to Australian living standards than company tax cuts, according to progressive think tank The Australia Institute (TAI).
A report released by the group last week reviewing OECD data found no relationship between company tax rates and general living standards.
On the other hand, there is a positive correlation between public education spending and living standards, it finds.
In his briefing notes on the report, Senior Research Fellow for TAI, David Richardson concludes that: “The data presented here clearly suggest that if there were a choice between funding company tax cuts or more education spending, governments would be well-advised to concentrate on the latter”.
The information arrived at a critical time during the final weeks of the Federal Election campaign, with the Turnbull Coalition focusing on promising tax cuts over Labor’s ongoing support for fully funding the Gonski education reforms.
SBS News reports Opposition Leader Bill Shorten said the TAI report ‘blew Prime Minister Malcolm Turnbull’s economic plan to pieces’.
“Wages are flat-lining and living standards are falling, and Mr Turnbull’s only solution is to give more taxpayer money to big business and the banks.
“Labor wants to invest in people, and the Liberals want to blow up the budget with a $50 billion giveaway to big business.”
In contrast, a spokesman for Treasurer Scott Morrison told News.com.au the study had only “observed the obvious point that when countries have higher GDP they can spend more on education because their economy is growing”.
“This report does nothing to counter the overwhelming body of evidence, including the previous support of the Australian Labor Party, for the economic benefits of lower tax rates on business that enable them to invest and grow.
“If we have uncompetitive tax rates compared to our regional trading partners then investment will flow to those countries and not Australia. That will result in fewer jobs and lower standard of living.”