A senior Liberal has suggested the Turnbull government is leaning towards company tax cuts rather than lowering personal income taxes.
Cabinet Secretary Arthur Sinodinos says cutting personal income taxes encourages hard work and boosts spending but cutting the corporate tax rate has positive effects on the whole economy.
He says there are a lot of studies that show it can encourage investment, higher productivity, more investment from overseas, and stronger economic growth.
"At least 50 per cent of the impact of cutting company taxes goes in higher wages for workers and higher employment," Senator Sinodinos told ABC television on Sunday.
The corporate tax rate for large businesses is 30 per cent, while it was cut to 28.5 per cent for small business in the last budget.
Education Minister Simon Birmingham declined to comment on whether the government is considering an across the board 28.5 per cent company tax rate.
"The government's considering a range of things in relation to tax reform and I'm not going to speculate," he told reporters in Adelaide.
Treasurer Scott Morrison indicated last week that immediate personal income tax cuts are unlikely to be included in the government's tax reform package.
He told parliament the government would reduce the tax burden "wherever we can".
However, Mr Morrison did confirm that the two per cent deficit levy imposed on high income earners by former treasurer Joe Hockey would be removed in 2017.
Labor frontbencher Kate Ellis said Mr Morrison had promised to address bracket creep that will push middle income earners into the second highest tax bracket in the next few years just through wage inflation with income tax cuts, but that plan has been abandoned.
"The only people who will be seeing any tax relief from the Turnbull government are those high income earners on over $180,000," she told reporters in Adelaide.
She said income tax cuts for low and middle income families were just another "Morrison thought bubble".
Greens Leader Richard Di Natale wants the government to make the deficit levy permanent.
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