When the Turnbull Government borrows $50 billion to give to big business, it will cost Australians around $4 billion in extra interest charges, new calculations reveal.
This equates to around $162 for every single man, woman and child in the entire country.
People will be disgusted to learn that the Turnbull Government expects Australians on low and middle incomes to pay the interest on billions of dollars handed to the big banks and multinationals.
A conservative analysis of the Parliamentary Budget Office’s costings has found big company tax cuts would cost around $3.95 billion in extra interest up to 2026-27.
The total interest bill will hit over half-a-billion dollars in 2021-22 before blowing out beyond $1 billion in 2023-24 and getting worse from there.
These figures rely on the fact that the cost of the tax cut and additional interest will be funded from raising debt – or not paying down debt – and are calculated using the rate of future issuance of 2.7 per cent, as published in last year’s MYEFO (p. 94).
This doesn’t even factor in an expected increase in the interest rate.
Asking ordinary Australians to foot the interest bill on a tax cut they don’t support just adds insult to injury and really hammers home just how messed up Malcolm Turnbull and Scott Morrison’s priorities are.
They want to give a $50 billion tax cut to big multinationals and the banks at the same time as they rip money from Medicare, schools and hospitals.
Their unaffordable big business tax handout is already putting Australia’s prized AAA credit rating at risk.
If Malcolm Turnbull and Scott Morrison lose our AAA rating, this $4 billion interest bill is likely to blow out even further.
The Turnbull Government must immediately ditch this unfair and unaffordable ram raid on the Budget.
Note: Calculations based on PBO’s 2016 post-election report, ALP027
Interest is paid for the full year on the start of year debt (Interest on stock).
To fund the annual cost of the tax cut, debt will be progressively issued through the year in equal amounts. Interest is paid after debt is issued (Interest through year).
