Turnbull’s tax cut drive for companies and workers

Malcolm Turnbull will today draw a point of difference with Bill Shorten’s tax-and-spend agenda, vowing to put money into family budgets through tax cuts.

Malcolm Turnbull visits students at Oatley West Public School in Sydney’s south yesterday. Picture: AAP

Malcolm Turnbull has linked corporate tax cuts to personal ­income tax relief for workers as part of a jobs and hip-pocket pitch the Prime Minister hopes will ­rebuild the government’s political fortunes.

In a speech to be delivered in regional Queensland today, Mr Turnbull will try to draw a clear point of difference with Bill Shorten’s tax-and-spend agenda, vowing to put money directly into the family budget through tax cuts and childcare reform.

He will also vow to push ahead with the next phase of the government’s ­unpopular company tax cuts when parliament resumes next week, in a challenge to the Senate that draws on US President ­Donald Trump’s success in ­reducing company tax for the world’s largest economy.

With Labor, the Greens and the crossbench refusing to support further tax relief for businesses, Mr Turnbull will make the case for a broader tax plan that delivers for families and workers as well as employers.

Extracts of the Prime Minister’s speech released yesterday flag an income tax cut package to be delivered in the May budget, with Mr Turnbull claiming that 2018 will deliver the “rewards” of difficult reforms of the past year.

These include: job growth from the first phase of company tax cuts by lowering the rate from 30 to 25 per cent for businesses with a turnover up to $50 million; a new schools funding model; changes to the childcare rebate favouring low-income families; and an energy policy aimed at curbing excessive power prices.

“We won’t compromise our return to surplus in 2020-21 but our next tax priority is further tax relief for middle-income earners,” Mr Turnbull will say. “Last year, we lifted the second-highest income tax threshold to $87,000, keeping about 500,000 Australians from moving into the second-highest tax bracket.

“The Treasurer and I have been working over the Christmas break on how we can provide more tax relief for hard-working middle-income Australian families — and at the same time meet our commitment to bring the budget back into balance.

“The stronger the budget ­becomes, the more we will be able to give back to hard-working ­Australians.”

Mr Turnbull said the first order of business for the government would be to forge ahead with the next phase of corporate tax cuts — reducing the current 30 per cent rate to 25 per cent for all com­panies — claiming it was now an imperative for the economy in light of the US company tax rate coming down to 21 per cent.

“When parliament resumes, we will again present legislation to reduce tax for all businesses, not just small and medium ones, to 25 per cent,” he will say.

“With the US cutting company tax to 21 per cent, the need to ­remain competitive is more ­intense than ever.

“We know that if you reduce business tax, you get more investment, and if you get more investment, you get more and ­better paid jobs.

“We know our plan is delivering for Australians. The challenge now is to stay the course and follow through in 2018 and beyond.”

While the Opposition Leader delivered his agenda-setting speech at the National Press Club in Canberra on Tuesday, Mr ­Turnbull will travel to Toowoomba in regional Queensland to make his pitch to a local community luncheon.

Mr Shorten this week outlined an agenda that would seek to redistribute wealth from high-­income earners to low-income workers and welfare recipients.

Mr Turnbull will argue that economic growth is the solution to ensuring funding for welfare ser­vices and delivering tax relief for all workers.

Ahead of Mr Turnbull’s speech, the Australian Electoral Commission will this morning publish the 2016-17 annual financial disclosure returns for political parties, which will include the Prime Minister’s $1.75 million donation to the Liberal Party.

Mr Turnbull will claim in his speech that his own business experience, which has earned him considerable wealth, underpinned his economic credentials.

“Everything I know about business, and creating jobs, comes from experience,” he will say.

“All our lives, Lucy and I have created businesses and hired ­people. We know what it means to invest money and try to build something.”