Turnbull flags tax cuts

Turnbull flags tax cuts
The Prime Minister Malcolm Turnbull has foreshadowed the prospect of tax cuts in the next Federal budget in May next year.

These would come ahead of the federal election due either towards the end of next year or in early 2019.

In a speech to the Business Council of Australia, the Prime Minister said the government was already working on tax cuts for middle income earners in addition to the remainder of the company tax cuts that were still being pursued.

This would not jeopardise the planned return to Budget surplus in 2020-21.

“Just because we are in challenging fiscal times does not mean we should raise the white flag on making the tax system work better,” Mr Turnbull said.

“You know our plans on corporate tax. In the personal income tax space, I am actively working with the Treasurer and my Cabinet colleagues to ease the burden on middle-income Australians, while also meeting our commitment to return the budget to surplus.”

Tax cuts would add to reforms to childcare, energy, private health insurance and housing aimed at easing cost of living pressures.

“Another way of putting more money into people’s pockets is by increasing their disposable income through lower taxes,” Mr Turnbull said.

He said bracket creep was a “constant challenge that needs to be addressed.”

At the same time, he said the government would still pursue tax cuts for all business.

Parliament has passed tax relief only for firms with annual turnovers of up to $50 million.

“If we don’t reduce our corporate rate to 25 per cent as planned over the coming decade, the only advanced nations that will exceed Australia are Japan and Malta,” he said.

The focus on corporate tax cuts comes at a time when the United States has brought in legislation to cut its federal rate from 35 per cent to 20 per cent and the United Kingdom has already cut its rate to 19 per cent. France and Belgium are also looking to cut company taxes.

Mr Turnbull’s speech clearly sets up a clash with the ALP in the lead up to the next election. If elected to government, Labor plans to abolish the remainder of the company tax cuts and restore the deficit levy taking the top tax rate to almost 50 per cent.

 



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.


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