The state of the economy at the street level

[SirRumpole]

I feel as though the argument around tax cuts for businesses is not black and white.....surely if businesses get to retain a bigger proportion of their profits, that will lead to more employees.

Not if they can spend it on machines or software instead.

If you give Woolworths a tax cut are they likely to spend it on checkout chicks or self serve atms ?

You can't really tell.

 

[Junior]

Not if they can spend it on machines or software instead.

If you give Woolworths a tax cut are they likely to spend it on checkout chicks or self serve atms ?

You can't really tell.

Yes. If you cut their tax bill, they will be more likely to expand as retained profits will be greater. For Woolworth expanding generally means rolling out more stores and therefore more staff.

I'm not saying every business would hire more staff. I'm saying on average, across the entire economy, if businesses are able to retain more of their profits, some of this extra capital will be used to expand, which often involves more workers.

Looking at the reverse....if the Govn't were to hike company taxes, many businesses would immediately consider if they can lay off workers, to protect profits.

 

[SirRumpole]

Yes. If you cut their tax bill, they will be more likely to expand as retained profits will be greater. For Woolworth expanding generally means rolling out more stores and therefore more staff.

That depends on whether the consumer demand exists and what the competition is doing.

Supply doesn't create demand.

 

[basilio]

150,000 people protesting in Melbourne over low pay.
Wages aren't keeping up with inflation.
https://www.theage.com.au/business/...to-fight-against-low-pay-20181022-p50b5g.html

 

[luutzu]

Yes. If you cut their tax bill, they will be more likely to expand as retained profits will be greater. For Woolworth expanding generally means rolling out more stores and therefore more staff.

I'm not saying every business would hire more staff. I'm saying on average, across the entire economy, if businesses are able to retain more of their profits, some of this extra capital will be used to expand, which often involves more workers.

Looking at the reverse....if the Govn't were to hike company taxes, many businesses would immediately consider if they can lay off workers, to protect profits.

Would giving corporate tax cuts be a sort of Russian Roulette? Hit or miss in terms of job creation or not?

If job creation is the aim, just give tax cuts or gov't rebate to consumers. They'll spend it. Spending create demand, create jobs. It also increase sales and profit to businesses too.

 

[luutzu]

That depends on whether the consumer demand exists and what the competition is doing.

Supply doesn't create demand.

Yea, it's gonna be pretty hard to sell to people who doesn't have much money.

 

[sptrawler]

I feel as though the argument around tax cuts for businesses is not black and white.....surely if businesses get to retain a bigger proportion of their profits, that will lead to more employees. Of course it depends on the industry and particular business, but on average, overall, more profit = increased ability to expand = more jobs.

I think you are spot on Junior, if there is a tax cut to to small business, every business gets 100% of the boost.
If it were just given as a pay rise, only certain sectors receive the boost, essentials, gaming etc. Yet all the small businesses have to pay the extra wages.
It should have a much larger effect across the broader economy.

 

[SirRumpole]

I think you are spot on Junior, if there is a tax cut to to small business, every business gets 100% of the boost.
If it were just given as a pay rise, only certain sectors receive the boost, essentials, gaming etc. Yet all the small businesses have to pay the extra wages.
It should have a much larger effect across the broader economy.

Small business are getting the tax cut aren't they ? Bipartisan support.

https://www.crn.com.au/news/labor-throws-support-behind-earlier-small-business-tax-cuts-513868

 

[luutzu]

I think you are spot on Junior, if there is a tax cut to to small business, every business gets 100% of the boost.
If it were just given as a pay rise, only certain sectors receive the boost, essentials, gaming etc. Yet all the small businesses have to pay the extra wages.
It should have a much larger effect across the broader economy.

You could argue that tax cuts to the plebs is a form of wage increase. So business got subsidised and there's little need for a pay increase.

Tax cuts to the business owners and they can hire, or as SirR said, get a few more robots in; or maybe a well earned holiday and Lexus upgrade.

If there's a demand, the cash will follow to the more competitive, more value-added businesses. That's capitalism and the free-market.

To hand over to businesses, saying that without the extra cash business wouldn't keep the doors open or hire... that's not free or fair market, that's corporate welfare.

But then it's a capitalist society. Labourers were well warned of where the gravy train is headed.

 

[sptrawler]

You could argue that tax cuts to the plebs is a form of wage increase. So business got subsidised and there's little need for a pay increase.

Tax cuts to the business owners and they can hire, or as SirR said, get a few more robots in; or maybe a well earned holiday and Lexus upgrade.

If there's a demand, the cash will follow to the more competitive, more value-added businesses. That's capitalism and the free-market.

To hand over to businesses, saying that without the extra cash business wouldn't keep the doors open or hire... that's not free or fair market, that's corporate welfare.

But then it's a capitalist society. Labourers were well warned of where the gravy train is headed.

Yes I know, in your eyes all workers are poor, and need a wage rise and all small business people are rich and drive a Lexus.

 

[luutzu]

Yes I know, in your eyes all workers are poor, and need a wage rise and all small business people are rich and drive a Lexus.

Well, some preferred BMW and Mercedes. Weren't meant to be literal.

You know workers who are rich do you? Yea... I know a few who aren't poor and does quite well. Not really rich though.

 

[sptrawler]

Well, some preferred BMW and Mercedes. Weren't meant to be literal.

You know workers who are rich do you? Yea... I know a few who aren't poor and does quite well. Not really rich though.

I know a lot more small business people who have gone broke, than people who work for wages.
I only know a couple of small business people who have done well, but most of the people I know have done o.k working for wages.
You will never be rich, but you will get holiday's, super, sickies etc, that's why I always worked for wages.
I knew I would have to do without, to save money, but I knew I wasn't going to lose the shirt off my back.

 

[luutzu]

I know a lot more small business people who have gone broke, than people who work for wages.
I only know a couple of small business people who have done well, but most of the people I know have done o.k working for wages.
You will never be rich, but you will get holiday's, super, sickies etc, that's why I always worked for wages.
I knew I would have to do without, to save money, but I knew I wasn't going to lose the shirt off my back.

Hence, tax cuts to the working poor so they'd spent more around the local area.

 

[Darc Knight]

According to the The Commonwealth Bank Business Sales Indicator (BSI), a measure of economy-wide spending, rose by 0.2 per cent in trend terms in September – the weakest growth since May 2017

 

[sptrawler]

Hence, tax cuts to the working poor so they'd spent more around the local area.

You don't give tax cuts to the working poor, they don't pay any effective tax, after offsets.

You give them pay rises, until they reach a level, that they actually contribute something.
Mean while they loose their job, because the small business they work for folds, because it can't afford the wages bill.

 

[Ann]

You will never be rich, but you will get holiday's, super, sickies etc, that's why I always worked for wages.
I knew I would have to do without, to save money, but I knew I wasn't going to lose the shirt off my back.

........Unless you get retrenched a few times sptrawler, you can lose more than the shirt off your back if that happens to you. If you are a contract worker for an agency you get no holiday pay and no sickies. If you are still working beyond retirement age you get no super either.

 

[Smurf1976]

........Unless you get retrenched a few times sptrawler, you can lose more than the shirt off your back if that happens to you.

If you're an employee and made redundant then you'll get some sort of payout unless the employer has actually gone broke.

I don't see how someone can really lose in that situation. Lose the income they would have had yes but not lose as in actually go backwards. Worst case they get the payout and after x months end up on the dole.

 

[sptrawler]

........Unless you get retrenched a few times sptrawler, you can lose more than the shirt off your back if that happens to you. If you are a contract worker for an agency you get no holiday pay and no sickies. If you are still working beyond retirement age you get no super either.

I never did the contract agency gig, a mate did, earned great money when he worked.
But ended up working for a salary in the end. lol

I did try working construction once, worked 3 months, then had an 8 week strike, went back for 4 weeks, then a 9 week strike.
I said "stuff this for a lark", wife and two young kids, I pulled up stumps and got a 'normal' job.
All part of life's rich pageant.

 

[luutzu]

I never did the contract agency gig, a mate did, earned great money when he worked.
But ended up working for a salary in the end. lol

I did try working construction once, worked 3 months, then had an 8 week strike, went back for 4 weeks, then a 9 week strike.
I said "stuff this for a lark", wife and two young kids, I pulled up stumps and got a 'normal' job.
All part of life's rich pageant.

A "normal" job now is pretty much like contract work anyway.

Management can just call you in and off you go. Depends on how long you've been there, you might get a couple months redundancy but it's quite brutal. Not that it was any less before, being fired. Just now, it's more common. Or that's what it seem to me and people I know.

Group firing is also a trend. Just call a team in, have a couple of guards outside the door and off you go, outside the building within ten minutes.

 

[sptrawler]

A "normal" job now is pretty much like contract work anyway.

Management can just call you in and off you go. Depends on how long you've been there, you might get a couple months redundancy but it's quite brutal. Not that it was any less before, being fired. Just now, it's more common. Or that's what it seem to me and people I know.

Group firing is also a trend. Just call a team in, have a couple of guards outside the door and off you go, outside the building within ten minutes.

Yes gone are the days, when the owner fronted up to Centre Link the same day as the employee, those were the days.
When everyone went down with a sinking business, when the workers worked on just to keep the business going and the owner put the family into St Vincent de Paul to keep the business going.
Just so the workers, didn't have to join him and his family in the community doss house, yes those days are behind us.
Jeez mate, you should get a gig on 'have you been listening', your full of craic.