Passing tax cuts is just good business: Experts
MAJOR reform in the US, France and Belgium means Australia is on the brink of becoming the country with the “second highest company tax rate” in the developed world.
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MAJOR reform in the US, France and Belgium means Australia is on the brink of becoming the country with the “second highest company tax rate” in the developed world.
An internal Business Council briefing obtained by The Daily Telegraph warns unless something is done urgently, a massive amount of jobs and money will go offshore.
It comes as iron ore boss Nev Power, chief executive of Fortescue, joined a growing list of business heavyhitters demanding tax reform to “encourage business investment and employment, which will build stronger communities, lead to economic growth and enhance the wellbeing of all Australians”.
Treasurer Scott Morrison reiterated his concerns yesterday, telling The Daily Telegraph businesses would be “stranded” and jobs and wages would “go offshore” if taxes were not cut.
“We’ve already seen big names in the US like Walmart promising more jobs and higher wages as a result of the Trump tax cuts,” he said.
“Now Australian companies are saying they’ll do the same if they also get access to tax cuts.”
Company tax cuts are at the centre of political debate after Donald Trump sliced US corporate taxes from 35 per cent to 21 per cent.
Mr Morrison is pushing to cut the corporate tax rate for large businesses from 30 per cent to 25 per cent after reaching a deal with Nick Xenophon last year to slash the rate for companies with revenues of less than $50 million. But Labor is opposed to the tax changes.
Other critics of Mr Morrison’s plan point to US Congressional Budget Office figures which show Australia had an average business tax rate, when state taxes were taken into account, of 17 per cent — below the US. The Business Council briefing paper warns that despite the world having “changed dramatically”, Australia’s company tax rate has “remained frozen” for nearly two decades. BCA boss Jennifer Westacott said passing the tax cuts was “a matter of protecting Australian jobs and living standards”.
“Businesses want to expand, to employ more workers in well-paid and meaningful jobs — they can only do that when Australia is a competitive location for international investment.”