Morrison to fast-track company tax cuts

Irving Hamilton
October 14, 2018

But after dumping a widely unpopular plan to cut all corporate taxes by 2.5 per cent, Mr Morrison said his government will now accelerate its plan.

The tax rate for companies with a turnover of up to $50 million has already been reduced from 30 to 27.5 per cent and is scheduled to drop to 25 per cent by 2026/27.

Under the plan, announced on Thursday, the government will lower the tax rate for businesses with an annual turnover of less than $50m from 27.5% to 25% by 2021-22 rather than from 2026-27 as now legislated.

"What they want to do is cut in half the $144-billion personal income tax cuts that we've legislated".

"Similar timing changes will apply to the roll out of the 16 per cent tax discount for unincorporated businesses".

The legislation that delivers this additional tax relief will be a major test for Bill Shorten - does he support Australian businesses, Australian workers and Australian jobs?

But by Friday Labor had matched Morrrison's commitment. "Having said that we will keep our minds open".

Treasurer Josh Frydenberg says the move is a challenge for Labor which has said it wants to keep the rate at 27.5%.

"In other cases they invested more in their businesses, because small and medium-sized businesses that's what they do".

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To be introduced in the next session of Parliament that begins on Monday, the promise will cost $3.2 billion over the Budget's forward estimates and cements small business policy as a Federal election battleground.

Minister for Small and Famiy Business Michaelia Cash has travelled across the country visiting businesses and told 2GB the government wants to simplify regulation.

"We will introduce legislation during the next session of Parliament, fast-tracking our business tax relief for more than three million businesses that employ almost seven million Australians", the two said in a joint statement.

Business Council chief executive Jennifer Westacott said the cuts would breathe life into businesses in cities, towns and regions.

"This decision will increase confidence in the future for those who write business plans and invest their money in that future", he tells SmartCompany.

Australian Industry Group chief executive Innes Willox urged Labor to support the cuts.

Speaking on ABC's AM on Thursday morning, Morrison said it would be "up to small- and medium-sized businesses" what impact the tax cut would have on workers' wages, declining to quantify the benefit to employees.

"Three million Australian businesses, employing around 7 million people will pay less tax and see the benefits sooner as a result of this announcement", he said.

Opposition Leader Bill Shorten says Labor will consider the proposal but would prefer to see more of the tax cuts go towards individuals rather than businesses.

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