Big business is likely to still be charged a levy from July 1 even though the Abbott government's more generous paid parental leave scheme has been shelved.
Business groups had hoped that the end of the PPL would also spell the end of the levy.
But Prime Minister Tony Abbott says money that was due to be invested in a better PPL will be invested in child care instead.
The introduction of the 1.5 per cent levy on the nation's 3400 biggest companies was due to coincide with a 1.5 per cent cut in the corporate tax rate to 28.5 per cent.
"What we have always wanted to do here is to essentially ensure that big business doesn't pay more tax but that small business gets a tax cut," Mr Abbott told reporters at a Sydney childcare centre on Tuesday.
Treasurer Joe Hockey said the new package still had to be paid for, promising more details closer to the May budget.
Shadow treasurer Chris Bowen said it appears that even though the government has scrapped its PPL scheme the tax remains.
He said Mr Abbott needs to be up front with the Australian people and Australian businesses as to what his plans are, because businesses will pass the levy on to consumers.
Small Business Minister Bruce Billson declined to say how much the tax cut would cost the budget bottom line even though it has been calculated by the government.
"The loss from revenue we think is entirely manageable," he told ABC television.
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