Scott Morrison says Coalition remains committed to company tax cuts

Scott Morrison says company tax cut policy has not changed despite pushes from Tony Abbott and other Coalition colleagues.

Federal Treasurer Scott Morrison says the Coalition took its corporate tax cuts to an election and they’ll continue to try to legislate them. Picture: AAP

Treasurer Scott Morrison says the government’s policy on company tax cuts has not changed and he remains committed to getting legislation through the Senate, despite calls from colleagues to dump or modify the plan.

Liberal backbencher Tony Pasin this morning said the time was not right to extend a cut from 30 per cent to 25 per cent to companies with turnover of more than $50 million, arguing the government has insufficient political capital.

Queensland marginal seat holder Luke Howarth yesterday called for the plan to be dropped following Saturday’s by-election losses, while former prime minister Tony Abbott declared there are “no votes in company tax cuts”.

Mr Morrison said it remained the government’s intention to legislate to reduce the corporate tax rate to 25 per cent for all companies by 2026-27, and nothing had changed as a result of the by-elections.

“That’s our policy,” Mr Morrison told Sky News.

“We put it in the 2016 budget, we took it to an election, we won the election, and we’ve sought to legislate that ever since, and we’ve had success in legislating it for companies up to $50m, and we will take that legislation to the Senate as we have all of our other measures, including the personal income tax cuts that we were successful in legislating before parliament rose in June, and we’ll work constructively with the Senate as we always have.”

Asked how he intended to deal with the Senate, given One Nation leader Pauline Hanson’s opposition to tax cuts for big business appears to have hardened, Mr Morrison said the government would continue to engage with senators respectfully.

“We’ll take it to the parliament as we have had it in the parliament. We were hoping to deal with it at the end of June and were unable to proceed with it at that point, and we’ll do that when parliament resumes in a couple of weeks’ time, and we’ll work with the Senate there, and that’s the next step in this process,” he said.

“We took it to the last election, we won that election, and we’ve continued to seek to legislate, and nothing has changed. We’re continuing to seek to legislate that plan, and that’s what will happen when the parliament comes back again.”

Asked what the government would do if a hostile senate prevented them from legislating, Mr Morrison said he would not “get into that”.

“We’ve shown steadfastly for more than two years now, that we have been committed to more competitive taxes for Australian businesses, and that hasn’t changed and that’s not going to change,” he said.

“That’s what we’ll continue to put forward from now and for as long as I’m a Liberal, which will be forever, I will be arguing that businesses, individuals, Australians, are not assisted by having to pay higher rates of tax. That’s the Labor Party’s policy. That’s not our policy.”

Asked whether the he would take the policy to the next election, Mr Morrison reiterated that it remained government policy.

“It’s our policy. It’s been our policy. We’ve continued to pursue this policy. We’ve never walked away from that,” he said.

“We’ve never erred from that, and I don’t see why there would be any suggestion about our commitment to this, and that’s what we’re taking into this next sitting of parliament.

“We want to see competitive tax rates for Australian businesses, and we’ll work with the Senate to that end.

Mr Morrison denied the government had failed to sell company tax cuts to the electorate.

“I only know from the published opinion surveys on this, which have shown us the longer we’ve made the case for this the support for these changes has only increased,” he said.

“As recently as just a month or so ago over 60 per cent of people were in favour of more competitive tax rates for Australian businesses.”

‘Insufficient political capital’

Tony Pasin has questioned whether it’s the right time for company tax cuts. Picture: Gary Ramage

Mr Pasin said a key lesson, particularly in the Queensland seat of Longman, was that the government needed to listen to voters.

“As for company tax cuts, that’s the right policy, but I wonder whether it’s the right time,” Mr Pasin told Sky News.

“Internationally competitive tax rates for big business is important, but I think that’s a conversation you need to have with the Australian people when you have surplus political capital, and I’m not sure we have that at the moment.”

Asked whether he wanted to see the government reach a compromise with the senate on a $200m or $500m turnover threshold or simply wanted to see the unlegislated policy dumped, Mr Pasin said the threshold needed to be discussed.

“I certainly would like to see this matter resolved, but at what threshold is something we need to do some more thinking about, but the major point here is the electors of Australia have sent us a strong message on the weekend, particularly in Longman, and we need to listen that, and as I said, this is not a conversation you can have with the Australian people unless you have surplus political capital,” he said.

Mr Pasin said damning banking royal commission evidence added a “further layer of complexity” to the company tax cut debate.

“At the very same time as you’re having this discussion around company tax cuts, we are bearing out some behaviour which quite frankly has disgusted a number of Australians, and so those things are building on themselves,” he said.

“Like I said, I think long term the policy is right, making sure company taxes in Australia are internationally competitive. The timing just isn’t right.”

.@TonyPasin: I want to see the company tax cuts issue resolved, but I think it’s something we need to do some more thinking about.

The electors of Australia have sent us a strong message, and we need to listen to that.

MORE: https://t.co/XyF6xDtkII #amagenda pic.twitter.com/p85eoyfJSB

— Sky News Australia (@SkyNewsAust) July 30, 2018

‘Corporate tax cuts were always a bad idea’: Shorten

Labor leader Bill Shorten said corporate tax cuts were always a bad idea.

“They were a bad idea on Friday, before the by-elections, and they’re still a bad idea the Tuesday afterwards,” Mr Shorten told ABC radio.

“They’re a bad idea because governments and nations have to make priorities. I think it’s more important to find money for hospitals and healthcare, more important to find money for schools and apprenticeships and university places, than it is to give big companies a tax cut.

“The economic case hasn’t been made out. It’s a dubious benefit. It smashes a giant hole in the budget, and to what end? We have to pay for these corporate tax cuts.

“This is something the government has been let off scot-free on, in terms of the analysis. If you take tens of millions of dollars out of the nation’s ATM, to give away to corporate tax cuts, something’s got to give.

“You have less money available for schools and hospitals, or you have to increase revenue elsewhere, or you pay greater interest payments on ballooning government debt.”

Asked whether he would be receptive to decreasing the current company tax rate of 27.5 per cent to 25 per cent, Mr Shorten said the question remained about where the government would get the money.

“If you’re going to decrease what’s in the nation’s budget, you’ve got to explain what is it you’re willing to cut,” he said.

“Which hospital do you want to cut? What waiting list for elective surgery do you want to see increase?

“The by-elections have convinced me that we need to talk more about creating a fairer society, tackling inequality.

“What I heard going around on the weekend, and indeed for the nine weeks beforehand, wasn’t about should there be a threshold that corporations under half a billion dollars are small business, or that sort of rubbish, the real issue I heard on the weekend, is people said, ‘why is everything going up except our wages?’

“Australians want a government who’s in touch with people, not a government who’s trying to always pull the wool over the eyes of the Australian people.”

‘Coalition will always stand for lower taxes’

Trade Minister Steven Ciobo said the Coalition would always stand for lower taxes and the government must do all it can to reduce the burden on companies.

“Reducing their tax rate is about making sure that we can see more money flowing back to mum and dad Australians, and the reason that happens, and we should never forget this, every single ordinary Australian, every average Australian that’s out there working, that’s got a superannuation account, they are owners of all of these businesses, and they own them through their superannuation funds,” Mr Ciobo told Sky News.

“Now if we can increase the profitability of these businesses, they can do two things: one, provide a higher return to the everyday mums and dads out there who own these businesses in their superannuation, and that provides for their retirement, but the second thing that it does, is it means that these businesses have more money to pay their workers, more money to invest in making their businesses bigger, so this is all a critical driver of economic growth, and economic growth drives jobs, and that’s why the Coalition has been successful at creating a record number of new jobs in Australia, and that’s why Labor’s approach will see less investment, less growth and less money for everyday mum and dads to be able to provide for their retirements in the future.

.@StevenCiobo on company tax cuts: Every Australian funds businesses through their superannuation account. If we can increase the profitability of these businesses, they can provide a higher return to everyday mum and dads.

MORE: https://t.co/p7RX5lum1B #amagenda pic.twitter.com/86JdV6eYDu

— Sky News Australia (@SkyNewsAust) July 30, 2018

Asked whether he wanted the Coalition to go to the next election proposing to cut company tax, Mr Ciobo said the Coalition should always approach an election having a lower tax profile than Labor.

“The Coalition is about fewer taxes and less tax overall, and that is the fundamental difference between the Coalition and Labor. Labor wants to tax its way to prosperity,” he said.

“The Coalition knows that it’s only by making sure we remain competitive that we are going to ensure that we have stronger growth in Australia, and more jobs for Australians.

“Ultimately though, whether the Senate agrees or disagrees, time will tell, but we’ll have to deal with those issues as they resolve themselves over the months and weeks ahead.”