Kevin Hogan (Page, National Party) Share this | Hansard source

Furthermore, it says that, as the rate of company tax has fallen—get this: this is important too; I would love the academic to get this bit—the proportion of company tax as a share of total government revenue has risen. Who would have thought? I would have thought that, hopefully, an academic would have got that. Revenue from company tax rose from $8.6 billion in 1987-1988—and, just for the history lesson, you were in government then—to $12.7 billion in 1988-1990 after a 10-point cut in the rate, while the company tax as a share of government revenue rose from 11.4 per cent to a 14 per cent increase.

That is what we are talking about. It would be lovely, if we lived in a closed world. If we lived in a closed world, we could do and tax what we like. But we live in a very open and global trading economy and, whether we like it or not, we have to be competitive. We also have to be competitive in company tax rates. But, to go on, revenue rose from $26 billion in 1999-2000 to $35 billion in 2002-2003—again after a one percentage point as a share of revenue after the coalition cut the tax rate from 36 to 30 per cent. That is what history tells us.

We have other international history lessons. Ireland—Ireland cut its tax rate. Ireland was going broke in the eighties. They had a corporate tax rate of 60 per cent, which they lowered to 10 per cent, and, within three years, they were collecting more at 10 than at 60 per cent. But that has been a standard belief of both sides of politics for 25 years. We are— (Time expired)

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