Coalition plan for corporate tax cut

The federal Coalition says it's determined to ensure that Australian businesses remain competitive, to ensure jobs growth in a strong economy.

Coalition plan for corporate tax cutCoalition plan for corporate tax cut

Coalition plan for corporate tax cut

It's promising that in government, it would lower the 30 per cent company tax rate for about 750,000 businesses.

 

Coalition leader Tony Abbott took his tax policy to the 2010 election and he says he's taking it to this one because it's very important to give business a clear pathway to certainty.

 

Business groups have been pushing for a cut to the company tax rate to be made an economic and election priority.

At 30 per cent Mr Abbott says Australia's tax rate sits about six percentage points above the average of the Organisation for Economic Co-operation and Development.

 

He says a Coalition government would cut the company tax rate, to 28.5 per cent, from July 2015.

 

Mr Abbott says for big businesses, this would offset his plan for a 1.5 per cent levy to pay for the Coalition's paid parental leave scheme.

 

But he says hundreds of thousands of smaller businesses, which wouldn't be liable for the levy, would get the full benefit of the tax cut.

 

"There are some 750 thousand companies in Australia. Three thousand of them will pay no increase in tax. They will have no net change in their tax burden. And almost 750 thousand of them will enjoy the benefit of this tax cut. And that's good for investment and good for jobs."

 

The Coalition Treasury spokesman Joe Hockey says cutting the company tax would help Australia be competitive with the rest of the world.

 

Mr Hockey says it would also help stimulate the domestic economy.

 

"One of the challenges for small and medium sized enterprises at the moment is working capital. And if we can reduce the company tax rate and show there is a path to reducing the company tax rate and deliver on that path, and that it is funded then business will start will start to see they have the working capital to make further investments."

 

The Australian Greens want to cut corporate tax rates harder and faster than the Coalition - but only for small businesses.

Leader Christine Milne says the Greens want to cut the tax rate to 28 per cent - but only for businesses with an annual turnover under two million dollars.

 

She says the Coalition plan would reduce government tax revenue by $5-billion, but the Greens' plan would benefit 610,000 small business while reducing revenue by less than $2-billion.

 

Treasurer Chris Bowen says Labor won't be matching the Coalition's policy.

 

He says a past attempt by Labor to cut the corporate tax rate was blocked by the Coalition and the Greens.

 

Mr Bowen has told the ABC it's a hugely expensive policy.

 

"Well Labor did try and introduce a corporate tax cut and the Liberal Party opposed it, and are now promising it as a great step forward. So I think that goes to some of the negativity we've seen in the Liberal Party of recent years. Of course everybody would like to see a corporate tax cut but the key question here is how they are going to pay for it? What cuts are they going to make? What announcements are they going to make in order to fund this promise?"

 

Mr Hockey says the Coalition has already identified $15-billion in potential savings in the budget, with more to come.

 

He says this would more than cover the loss in revenue from the proposed cut in corporate tax.

 


Share

4 min read

Published

Updated


Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world