Yet all that Professor Laffer had really said is that beyond a certain point the burden of taxation would cut investment and thus reduce, if not halt, economic growth. No sound economist ever denied this proposition. Furthermore, the proposition was underlined by the shipbuilding companies threat to relocate to low taxing, business oriented Asia. Yet it is at the higher stage of production that investment needs to be made if real wages for everyone are to be continually raised. This is the kind simplistic nonsense one expects from journalists and politicians.
Investment requires capital and capital comes from savings.
And savings is what Australia has very little of. Moreover, it is savings in the form of venture capital that most entrepreneurs need to promote invention and innovation. Yet we savage capital gains and interest returns in the name of equity and social justice while burdening business with more regulations and so-called social responsibilities. This is why, for example, Britain suffered a brain drain and a loss of so many inventions and innovations. The same thing is happening to Australia.