World Economy

Australia Gov’t Committed to Corporate Tax Cuts

Scott MorrisonScott Morrison

Australia Treasurer Scott Morrison says the government remains committed to implementing promised tax cuts for big business despite the senate striking out the relief for larger companies.

The treasurer has also refused to rule out tax increases in the May budget when asked about the housing affordability crisis amid speculation the government may consider changes to the capital gains tax discount, AAP reported.

“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,” Morrison told ABC TV on Sunday.

The budget, to be delivered on May 9, is projected to return to balance in 2021, “and that remains a difficult challenge”, he said.

Labor frontbencher Andrew Leigh said company tax shouldn’t be a priority in Australia at the moment.

“In a perfect world you would bring down the company tax rate, but since the coalition came to office they’ve nearly doubled net debt,” Leigh told Sky News. “There are a range of esteemed economists saying you need to look beyond this narrow debate over company taxes.”

However, the head of the lobby group representing big business is confident of eventual across the board corporate tax cuts.

Business Council of Australia chief executive Jennifer Westacott says Friday’s agreement is a long way from where things stood three months ago and she is “pretty confident” of tax cut across the economy.

She warned on Sky News on Sunday that the problem with having a two-tier tax system is that businesses approaching a $50 million turnover will start planning for their taxes, possibly carving off bits of their companies rather than growing.

“We really need an across the economy tax cut, and we certainly don’t need in perpetuity a two-tier tax system for big and small businesses.

“What was really good this week was an acceptance that a tax cut relates to giving people higher incomes and more jobs,” Westacott said.

Shadow treasurer Chris Bowen said while the government was gloating that they got some of their corporate tax cuts through the parliament, the treasurer couldn’t rule out increasing other taxes. “We know these tax cuts will have to paid for,” Bowen told reporters in Sydney.

“Will we see the budget deficit blow-out further under this treasurer’s watch or will we see further harsh cuts on middle-income earners and tax rises on working Australians?”

The treasurer didn’t rule out changes to tax concessions, including exploration concessions in the petroleum resources rent tax.

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