Stupid is as stupid says. How far the BCA has fallen.

In the pantheon of idiotic policy ides, the one proposed by Bran Black, CEO of the BCA, The Business Council of Australia, must sit right up then. He may as well start the rebrand to Bran’s Clown Association.

Not satisfied at being the 2nd or 3rd choice for the CEO role, good old Bran now wants to propogate second and third rate ideas.

So what does doofus propose:

Pay states to slash payroll tax on jobs

A National Reform Fund could use federal funds to incentivise states and territories to align their policies.

Idiot! Stupid! Idiot!

Ok. For those not aware, who is Bran? He’s not a breakfast cereal. He is the former Chief of Staff to the former Premier of NSW. Note the double use of “former” because both are outa there. Possibly because of Bran’s dumb advice. However, writes Bran:

For the uninitiated, payroll tax is a state or territory tax on businesses levied on how much they pay their employees. When they hire more, or pay their existing employees more, that tax hit gets bigger – often to the tune of many millions of dollars.

No dear Bran. No.

You are the uninitiated. Payroll tax is income tax colected by the states. Exactly like income tax, it is collected by the employer and reduces how much employees earn. The only difference is the collection agent … the states and territories or the feds.

So what does Bran propose? That the feds increase income taxes so that the states can collect less income tax. Who’s better off? Big government and big business. Let me explain why.

1 - the Commonwealth already collects over 81% of all taxes in Australia. This gives them the resources to meddle in and stuff up all sort of policy areas and piss money away. Think education policy … Gonski. Think health policy. Think school halls.

2 - according to Bran Muffin, payroll taxes account for around 30% of State and Territory taxes. So by the use of mathematics, follow me here Bran-damaged, that would result in the Commonwealth collecting (30% of 19% = 6% + 81%=) over 87% of all taxes in Australia. Not a good thing. Extra meddling resources.

3 - the more the Commonwealth collects, the more it likes to redistribute for political purposes. This is code for states/territories that are economic basket cases but still have lots of senators. Think Tasmania. Think ACT. Think Northern Territory. Think South Australia. These transfers come at the expense of the larger productive states. Think NSW. Think Western Australia. Why reform at the state level when all the incentives are to piss it up and buy reelection. Think Victoria. Think Queensland.

4 - by standardising and centralising (the reflex of the big government statist) it eliminates, you know, competition. And it is competition from where comes innovation which drives productivity. The states used to complete on alcohol taxes, tobacco taxes, but not any more. They used to compete on sales taxes before the desicated coconut implemented the GST with the part that no-one remembers - horizontal fiscal equalisation (thanks also for that gift Jeff Kennett).

5 - Stamp duty on the trade of shares was eliminated because of tax competition between the states. Death duties were eliminated because of tax competition between the states. Since their centralisation, tobacco and alcohol taxes have only gone up and up.

6 - not doubt Brandage Bear also supports the Commonwealth buying off the states to eliminate stamp duty, another idiotic policy to give the Commonwealth even more and more tax revenue and control. To kill off what little remains of federalism in Australia.

But this is what Bran and his big business backers want. To eliminate the states. It makes their lives easier. They have the lobbying forces to influence policy while massively increasing the distance of the small business to the bureacracy in Canberra.

No Brando. This is not economic reform. This is economic terrorism. And if this is the quality of economic advocacy coming from the Business Council of Australia, we aren’t just doomed. We are fl*cked. So fl*cked.

If you want a reduction in payroll taxes, get the states to spend less money. Howabout a productivity idea on that front.

You are an idiot Bran. Go and shake your tin cup on another corner.