Back in the 2016, when Credlin Keneally was a thing, I interviewed the chair of the Business Council of Australia, Grant King, on Sky News. The topic? The Turnbull government’s proposed corporate tax cuts.

“What countries have used trickle down economics to great effect?” I asked.

King said: “I’m not going to pretend to be an economic expert.”

I tried again: “Where in the world does this kind of trickle down theory produce growth in jobs and real wages?”

He said that it was all about competitiveness, and that “it may be hard to prove in the fact” that cutting tax rates would lead to growth.

Fast forward to 2018. I’m now a Labor senator. King is still the chair of the BCA, which has voluntarily provided a “Commitment to the Senate” promising that 10 of their member companies will “invest more” if we vote for the Turnbull government’s tax cut for big businesses.

Given that $65bn of revenue is at stake, some senators were curious to find out what “invest more” means in terms of specifics, and called for an inquiry.

King and BCA chief executive, Jennifer Westacott, and some (but not all) of the companies who signed the commitment fronted up for two days of hearings.

On the first day, Labor senator Chris Ketter and I were unable to get a specific, measurable commitment from the BCA or the companies present to a particular investment, project, job or wage rise that would result from a company tax cut.

Not one.

There was lots of jargonistic language about the cost of capital and hurdle rates. We heard appeals to the laws of economics, as if they operated with the same certainty as the laws of gravity. We heard that international evidence showed that cutting corporate taxes led to marvellous outcomes for economic growth and investment.

Then Greens senator Lee Rhiannon asked the $65bn question: “Can you give us an example of another country where tax cuts have resulted in wage rises?”

I held my breath. Truth be told, I was glad Rhiannon asked the question. I was sure that Grant King would be ready this time with a few examples.

“Ah, we will take that on notice,” said Westacott.

You’ve got to be kidding.

Coalition senators, and some folks on Twitter, tried to help the BCA out by pointing to the USA after the Trump tax cuts. But recent wage data from the US Bureau of Labor indicates Americans are set to receive an average wage increase this year of $323, a figure in line with wage growth over the last two years. It is also less than one-tenth of the most conservative figures offered by the President Trump’s Council of Economic Advisors: they said average wages would increase over $4,000 per annum.

No wonder US Republican senator Marco Rubio said that, after the Trump tax cut, corporations “bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”

Another answer the BCA could have offered is Australia of the 1980s and 1990s. Corporate tax rates were cut as part of the Hawke Keating reforms. Wages did rise. But as Paul Keating points out, his corporate tax cut was part of an overall program of significant tax reform that broadened the tax base. It was also part of a major economy-wide reform package that included lower tariffs, labour market reforms, improved social wages and encouraging private savings.

There’s no big reform package on the table today from the Turnbull government. It is only a big, big tax cut for big business.

Not only did the BCA not have an answer to an obvious question, they made the situation worse by tabling a document on the second day of the hearing – a document that King said showed there is international evidence that countries who cut corporate tax rates see a corresponding rise in wages.

Except it didn’t show that at all.

economics is not physics. There is not an equal and opposite reaction to every action.

The BCA document cited a number of OECD studies that showed that nations that raised corporate taxes saw a decline in wages. For example, they cited a study of 55,000 companies in nine European countries between 1996 and 2003, which concluded that a rise of $1 in corporate tax would reduce wages by 49 cents.

Then the BCA asserted that, “This implies 49 cent gain in wages for a $1 reduction in corporate tax”.

No, it doesn’t.

First of all, the studies the BCA cites look at what happens if the corporate tax is raised. There is no proposal from either side of politics to raise the corporate taxes above the current rate.

Secondly, economics is not physics. There is not an equal and opposite reaction to every action.

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Most evidence does show that if corporate tax rates go up then wages go down. It makes sense. If business suddenly has less money available because it has to pay more tax, then the business will look to replace that money. Given that a business exists to make a profit for its shareholders, that business is unlikely to claw the money back by reducing dividends to shareholders. It will look first to reduce costs, like wages. Tax goes up, wages go down.

But there is no evidence to show that if corporate tax rates go down then wages go up. This makes sense too. If a business suddenly has more money available because it is paying less tax, then the business will have to decide what to do with the extra funds. Because a business exists to give a profit to shareholders, a business that has more money available to it is likely to respond by increasing dividends or investing to grow future profits.

The BCA should know this anyway – a survey of their own corporate members in January told them that fewer than one in five would use a corporate tax cut to fund higher wages or increase employment, with the rest preferring instead to boost returns to shareholders or invest in the company.

It’s time for the BCA to face reality. As this analysis by Alan Austin demonstrates, or this analysis by Josh Bivens shows, there is not one country on earth the BCA can point to where wages rose as a result of cut in the corporate tax rate. That’s something you can prove in fact.