Union campaign against company tax cuts to put pressure on Labor

Andrew Cummings
April 5, 2017

"That's been borne out in every release of data we see".

Finance Minister Mathias Cormann signalled the government would use the prospect of a company tax rise to fight Labor at the next poll, asking: "Are they going to support it now, or are they going to increase taxes for business if they are successful at the next election?"

The tax rate will fall over time to 27.5 per cent, at a cost to the budget of $5.2 billion over the next four years, and eventually to 25 per cent over the medium term.

A Fairfax-Ipsos poll published on Monday showed his government trailed the opposition Labor Party by a 10 percent margin, 55 to 45 percent in a two-party preferred vote.

The Government last week secured tax cuts for businesses with a turnover of up to $50 million, after prolonged negotiations with the Senate crossbench.

"Our modelling was done on the entire tax package", he said.

"I was encouraged by the progress we were able to make", the Treasurer said in a television interview with the Australian Broadcasting Corp.

As the government turns its collective focus to the May budget, Mr Morrison said growth and fiscal responsibility would remain the government's primary objective.

"That negative gearing, as the most generous property tax concession in the world, combined with the capital gains tax discount, is making housing affordability worse, [is] a drain on the budget, and is a key source of financial risk in our economy".

Third parties which support curbing CGT concessions include the Reserve Bank, David Murray, the Property Council of Australia, the Business Council of Australia, and the Australian Institute of Company Directors.

Dr Leigh also questioned how much a benefit the cuts would deliver to 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.

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

"We must be open to new ideas such as around the Trump tax agenda to both compete and complement the US.to sit back and not respond to developments occurring in our most diverse trading partner would be national folly". And supply, conveniently, is the responsibility of the cash-starved states, who are unable to cope with the mass immigration policies of the federal government!

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

As debate about the economy-wide benefits of the company tax cuts continues, Australian Industry Group chief executive Innes Willox will warn at the National Press Club on Wednesday that if the Trump administration cuts the corporate tax rate, it would effectively turn the USA into a tax haven. "And we'll continue to argue for that".

"The Government doesn't need to be convinced about the need to give small and medium-sized businesses a tax cut".

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