Scott Morrison turns the tax attack back on Labor

Scott Morrison has demanded Labor reveal its position on the $5.2bn in tax cuts passed through the Senate.

Treasurer Scott Morrison.

Scott Morrison has demanded Labor reveal its position on the $5.2 billion in tax cuts passed through the Senate, as the Treasurer vows to push ahead with the Coalition’s full corporate tax plan in this term of parliament.

Heaping pressure on Labor to outline its “plan B” for jobs and growth, Mr Morrison said the successful passage of tax cuts for 800,000 businesses on Friday had left Labor with a $4.3bn budget shortfall, taking its deficit to more than $20bn over the forward estimates unless it cut spending or sought to reverse the tax break.

“Labor must now explain whether they are going to increase taxes on small business or support the government to get expenditure under control,” the Treasurer told The Australian.

“At the last election Labor tried to have it both ways, campaigning against the government on issues like the school kids bonus and the pension assets test, only to backflip at the last moment, because they knew they couldn’t pay for it.”

Labor has previously backed tax cuts only for companies with a turnover of up to $2 million, pledging to block the remaining $48.7bn enterprise tax plan if it formed government.

Describing himself as an “optimist” who had been buoyed by the crossbench shifting its support from a $10m threshold to $50m, Mr Morrison said the government would push ahead with further cuts for big business, arguing it was the best way to attract investment and grow jobs.

“We haven’t moved away from this at all,” he told ABC’s Insiders program.

“If the Senate is in the position to look at this before the next election, we will be more than happy to bring those things forward.”

Under the first stage of the plan, companies with up to $10m in ­annual turnover will have their tax rate cut from 30c to 27.5c in the dollar this financial year, followed by companies with up to $25m turnover next year, and those up to $50m in 2018-19.

The rate will drop to 27 per cent for every company with up to $50m turnover in 2024, 26 per cent the following year and 25 per cent in 2026-27.

Opposition assistant treasury spokesman Andrew Leigh suggested Labor could claw back the first stage of the tax cuts for those businesses with turnover above the $2m threshold.

“In a perfect world you would bring down the company tax rate but since the Coalition came to ­office in 2013 they’ve nearly ­doubled net debt,” Mr Leigh told Sky News’ Sunday Agenda.

“We’ll have those conversations as we come into the next election. Certainly we’ll be looking at the impact this has on our AAA credit rating and that’s probably a bigger concern to many businesses than a company tax cut.”

Labor’s treasury spokesman Chris Bowen said: “You need a microscope to find the economic benefit from the tax cuts.”

Business Council of Australia chief executive Jennifer Westacott said she was hopeful the momentum stemming from the tax cut deal would bolster the campaign for all businesses to benefit, ­warning that a two-tiered system was bad for the economy.

She urged Labor to describe the tax cuts accurately and not as a “tax cut for big business”, as she attacked the opposition for characterising her members as “villains”.

“We’re in for the long game here. We’ve got to play that and play it properly, explain this to the community, put it in language they understand because this is ­absolutely vital economic reform and without it, I’m sorry, I can’t see what plan B is,” Ms Westacott told Sky News.

Additional reporting: Rosie Lewis