Martin Ferguson says $8.3bn move to monthly tax was Swan's decision

A SENIOR Labor minister has flagged division within the government over Wayne Swan's move to make companies pay their tax monthly rather than quarterly.

SENIOR Labor minister Martin Ferguson has flagged division within the government over the decision to make companies pay their tax monthly rather than quarterly.

Wayne Swan revealed in the Mid Year Economic and Fiscal Outlook (MYEFO), delivered on Monday, the change would reap $8.3 billion in revenue over the next four years.

The move has angered corporate Australia as business leaders declared it would hurt companies' short-term cash flow at a time when earnings were already under pressure.

Mr Ferguson said he “supported the government’s decision” but flagged the change had been made by Mr Swan.

"The governments position is clear and it has given industry considerable time to prepare for this putting in place monthly changes," Mr Ferguson said on the sidelines of the Citigroup conference in Sydney.

"The Treasurer has clearly indicated the basis of his decision.

"I appreciate the announcement from the Treasurer in terms of bringing forward the monthly payments and on that basis he thinks it's appropriate and he has given industry plenty of notice."

However, Mr Ferguson refused to directly back the changes himself.

The switch from quarterly tax payments to monthly payments will hit business with turnover of more than $1bn from 2014. It will then be phased in for other businesses over the following two years.

Business has argued that the move artificially inflates revenue in the short term to help the government achieve its promised budget surpluses.