Federal election 2019: Labor business policy hands tax breaks to big business and multinationals
Labor’s attack on the “big end of town” has been dealt a blow with a key plank in Bill Shorten’s policy for business handing the vast majority of $13.2 billion in tax breaks to big business and multinationals.
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A key plank in Labor’s policy for business will mostly hand tax breaks to big business and multinationals, undermining Bill Shorten’s pitch that he is cracking down on the top end of town.
The government will today seize on its own parliamentary budget office (PBO) modelling, which shows just a fraction of the multi-billion dollar tax cut will go to small and medium-sized businesses.
Finance Minister Mathias Cormann will use it to mount a case that Labor’s “Australian investment guarantee” will hand a massive tax cut to big businesses and multinationals.
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The government says the modelling undermines Labor’s election pitch of going after the “big end of town”.
“Through their investment guarantee, Bill Shorten is the only one this election who is giving a massive tax cut to big business and multinationals,” Mr Cormann said. “Bill Shorten’s class war rhetoric that he is somehow targeting the ‘top end of town’ and cracking down on multinationals is just another Labor con job.”
The “Australian investment guarantee” is Labor’s policy to allow all businesses who invest in Australia to immediately deduct 20 per cent off a new asset worth more than $20,000.
Eligible assets include machinery, plant and equipment, as well as non-tangible assets such as patents and copyrights.
Modelling of an almost identical policy conducted for the government showed that 98.5 per cent of the $13.2 billion tax cut expected will go to big business. This means that small and medium businesses with a turnover of up to $50 million will only get 1.5 per cent, or $200 million, of the savings. The costings also show that about 25 per cent of the tax cut will go to businesses owned by foreign investors, including multinationals.
A government spokesman said a backbencher had requested the PBO cost the “exact policy specifications of Labor’s investment guarantee” but used a different start date.
Labor’s policy has been reported to be worth about $10 billion. The Daily Telegraph understands the policy was costed by Senator James Paterson last year. Labor pointed out that the policy modelled was not theirs and had a different start date, but did not explain what the impact would be of a 2021 start date rather than 2019, as modelled by the PBO.
Shadow Treasurer Chris Bowen said: “Labor’s policy gives business a tax break when they invest in Australia and Australian jobs.
“This shows how out of touch the Liberals are. They are against letting businesses small, medium and large write off 20 per cent of their investments upfront.
“The Liberals opposing this pro-investment policy shows they talk a big game for small business but don’t follow it up. We want more investment, more jobs and more growth. The AIG will deliver that.”
Mr Bowen also again raised Labor’s fear campaign that Mr Morrison will conspire with Clive Palmer to push through an $80 billion tax cut for big business — a prospect that Mr Morrison has explicitly ruled out.