Push for a broader tax cut before the next election

Push for a broader tax cut before the next election
The Business Council of Australia believes tax cuts for firms with a turnover up to $50 million is just the first step to broader cuts for all businesses.

Business Council of Australia chief executive Jennifer Westacott told Sky News yesterday she was “pretty confident” an across the board tax cut would be next after the Senate passed the tax cut legislation late on Friday.

“The big economic benefits will come from the whole economy being included, down to 25 percent, and we’ll continue to argue for that,” Ms Westacott said.

She said a two tier tax system wouldn’t work as it would see businesses carving off bits of their companies rather than growing as they approached the $50 million threshold.

The Treasurer Scott Morrison said a broader tax cut was still on the table. Delivering a tax rate of 27.5 per cent for businesses up to $50 million was “stage one of the plan”.

He said the government was still planning to deliver an eventual tax rate of 25 per cent in a decade’s time for all businesses.

He said the next phase would see the broader package put to the Senate when the government believes the legislation will pass.

“We will present the further phase of our Enterprise Tax Plan to the Senate when we are in a position to believe we can pass that,” Mr Morrison told the ABC’s Insiders program.

“We haven’t moved away from this at all.

“We remain absolutely committed to this plan because this plan is what is going to attract investment.”

“If the Senate is in the position to look at this before the next election, we will be more than happy to bring these things forward.”

He said next month’s budget will be built around economic growth, disciplined spending and tackling housing affordability.

“It is all about growth to support the jobs and higher wages we want Australians to have and it is about continuing on the disciplined path of managing the budget,” Mr Morrison said.

He would not answer when asked if there would be tax increases in the budget.

“That will all be addressed in the budget. You wouldn’t expect me to speculate on measures as you have invited me to do at this point,” he said.

Opposition treasury spokesman Andrew Leigh refused to rule out reversing the cuts were Labor to win the next election.

“We’ll have those conversations as we come into the next election. Certainly we’ll be looking at the impact this has on our AAA credit rating and that’s probably a bigger concern to many businesses than a company tax cut,” Mr Leigh told Sky News’ Sunday Agenda.

“When Labor makes economic policy, we don’t do it to get a vote from Pauline Hanson or to suddenly strike a deal with Nick Xenophon in the Senate. We do it in a considered way.

“In a perfect world you would bring down the company tax rate but since the Coalition came to office in 2013 they’ve nearly doubled net debt.”

 



An award winning author and journalist, commentator, lecturer, and speaker, Leon is a freelance business journalist who covers a range of areas including politics, strategy, globalization, leadership and all the big trends ahead. His main skill is summing up all the news that’s around. For the last 30 years, his main focus has been on management issues. He also produces two podcasts for RMIT University, Talking Business and Talking Technology. Leon has worked for Fairfax, News Limited, AAP and the Herald and Weekly Times.