Extract from The Guardian
Chris Bowen says Labor wants election to be ‘referendum’ on big business company tax cuts
Scott Morrison has revealed the full cost of the government’s
personal income tax cut package, setting the scene for a showdown when
Labor attempts to sever the $40bn third phase of cuts in the Senate.
After Labor spent the day pressing the Turnbull government to commit to taking the big business component of its company tax cuts to the next election, the treasurer revealed new details about the seven-year income tax cut package first announced in the 2018 budget.
After weeks of refusing to separate the cost of the plan into its constituent parts, Morrison told parliament the cost of the first and second stages of the tax plan would be $102.35bn over a decade.
Given the updated cost of $144bn for the full package, the statements suggest the third phase of the policy will cost about $40bn from its introduction in 2024 to the financial year 2028-29.
The third and most controversial phase of the income tax plan will abolish the 37% tax bracket in its entirety from July 2024, meaning all Australians earning from $41,000 up to $200,000 will pay a flat tax rate of 32.5%.
Labor attempted to remove both the increases to the tax bracket thresholds in the second phase and the controversial third stage from the bill on Wednesday.
Fearing it would be accused of rejecting the popular tax offsets worth up to $530 for low to middle-income voters in the first stage, Labor voted with the government in the lower house. It plans to regroup and demand amendments in the Senate.
Earlier, Labor sought to lock the government into commitments to take its company tax package to the election after One Nation’s reversal likely doomed the package to Senate defeat.
Labor is preparing to fight five byelections and possibly the next federal election pitting its higher social spending against what it calls a “giveaway” to big business.
Despite Malcolm Turnbull and the finance minister, Mathias Cormann, publicly committing on Tuesday to stick with the reduction in company tax to 25% for companies earning more than $50m a year, the Coalition’s line on Wednesday was more equivocal.
In question time Labor asked Morrison about reports the Coalition would reconsider the package, after Cormann conceded on Tuesday it “might well be” unable to pass it given One Nation’s opposition.
Asked if he would commit to take the “entire corporate tax cut to the next election”, Morrison replied that the Coalition believed that “Australian business needs more competitive taxes so they can stay ahead [and] employ more Australians.
“We are following some very important principles ... that the opposition used to believe in quite strongly.”
Morrison cited historical comments from the shadow treasurer, Chris Bowen, that it is “a Labor thing to reduce tax because it promotes investment, create jobs and drive growth”.
When asked if his backbench would force him to dump the signature policy, Turnbull replied “we believe in lower tax” and criticised Labor for its plan to impose “$200bn of new taxes”.
Turnbull pivoted in an answer that ranged from multinational tax avoidance to Labor’s former support for lower company tax to its plan to end cash rebates for excess franking credits but never once committed to the whole package.
On Tuesday Turnbull was asked if he stood by a commitment on 28 March to take the tax package to the next election and unequivocally replied “I do”.
Earlier on Wednesday, Bowen noted that commitment but prepared for any possible Coalition backsliding by asking “if he drops these cuts, what does Malcolm Turnbull stand for?”
“We have been very clear against them,” Bowen told Radio National. “We think that they are not the right priority for Australia at this moment but Malcolm Turnbull and Scott Morrison have said that they regard them as important for their agenda. So if they are true to their word, you would think that they would take them to the next election.”
The shadow treasurer said it would be “a good thing for the country” if the company tax cuts did not proceed but the Senate was a “mysterious beast” and he did not want to get ahead of himself by claiming victory.
“We’ve made it very clear we are happy for the next federal election to be a referendum on their priority of giving at least $80bn away in corporate tax cuts.”
Senator Derryn Hinch has called for the company tax cuts to apply to companies up to a $500m revenue threshold.
On Wednesday, Hinch said the virtue of this plan was that “no bank [would be] rewarded” and “70% of something is better than 100% of nothing”.
But Centre Alliance’s Stirling Griff told Guardian Australia his party’s concerns are about ensuring company tax cuts are offset by other increases in revenue such as a digital tax and petroleum resource rent rax.
He said his party would need to discuss any attempt to change the threshold at which the reduced company tax cut would apply but “I doubt we’d all support that” because Centre Alliance did not want revenues to fall and cause cuts to government services.
Hinch will meet Cormann next week, a meeting planned before One Nation pulled its support.
After Labor spent the day pressing the Turnbull government to commit to taking the big business component of its company tax cuts to the next election, the treasurer revealed new details about the seven-year income tax cut package first announced in the 2018 budget.
After weeks of refusing to separate the cost of the plan into its constituent parts, Morrison told parliament the cost of the first and second stages of the tax plan would be $102.35bn over a decade.
Given the updated cost of $144bn for the full package, the statements suggest the third phase of the policy will cost about $40bn from its introduction in 2024 to the financial year 2028-29.
The third and most controversial phase of the income tax plan will abolish the 37% tax bracket in its entirety from July 2024, meaning all Australians earning from $41,000 up to $200,000 will pay a flat tax rate of 32.5%.
Labor attempted to remove both the increases to the tax bracket thresholds in the second phase and the controversial third stage from the bill on Wednesday.
Fearing it would be accused of rejecting the popular tax offsets worth up to $530 for low to middle-income voters in the first stage, Labor voted with the government in the lower house. It plans to regroup and demand amendments in the Senate.
Earlier, Labor sought to lock the government into commitments to take its company tax package to the election after One Nation’s reversal likely doomed the package to Senate defeat.
Labor is preparing to fight five byelections and possibly the next federal election pitting its higher social spending against what it calls a “giveaway” to big business.
Despite Malcolm Turnbull and the finance minister, Mathias Cormann, publicly committing on Tuesday to stick with the reduction in company tax to 25% for companies earning more than $50m a year, the Coalition’s line on Wednesday was more equivocal.
In question time Labor asked Morrison about reports the Coalition would reconsider the package, after Cormann conceded on Tuesday it “might well be” unable to pass it given One Nation’s opposition.
Asked if he would commit to take the “entire corporate tax cut to the next election”, Morrison replied that the Coalition believed that “Australian business needs more competitive taxes so they can stay ahead [and] employ more Australians.
“We are following some very important principles ... that the opposition used to believe in quite strongly.”
Morrison cited historical comments from the shadow treasurer, Chris Bowen, that it is “a Labor thing to reduce tax because it promotes investment, create jobs and drive growth”.
When asked if his backbench would force him to dump the signature policy, Turnbull replied “we believe in lower tax” and criticised Labor for its plan to impose “$200bn of new taxes”.
Turnbull pivoted in an answer that ranged from multinational tax avoidance to Labor’s former support for lower company tax to its plan to end cash rebates for excess franking credits but never once committed to the whole package.
On Tuesday Turnbull was asked if he stood by a commitment on 28 March to take the tax package to the next election and unequivocally replied “I do”.
Earlier on Wednesday, Bowen noted that commitment but prepared for any possible Coalition backsliding by asking “if he drops these cuts, what does Malcolm Turnbull stand for?”
“We have been very clear against them,” Bowen told Radio National. “We think that they are not the right priority for Australia at this moment but Malcolm Turnbull and Scott Morrison have said that they regard them as important for their agenda. So if they are true to their word, you would think that they would take them to the next election.”
The shadow treasurer said it would be “a good thing for the country” if the company tax cuts did not proceed but the Senate was a “mysterious beast” and he did not want to get ahead of himself by claiming victory.
“We’ve made it very clear we are happy for the next federal election to be a referendum on their priority of giving at least $80bn away in corporate tax cuts.”
Senator Derryn Hinch has called for the company tax cuts to apply to companies up to a $500m revenue threshold.
On Wednesday, Hinch said the virtue of this plan was that “no bank [would be] rewarded” and “70% of something is better than 100% of nothing”.
But Centre Alliance’s Stirling Griff told Guardian Australia his party’s concerns are about ensuring company tax cuts are offset by other increases in revenue such as a digital tax and petroleum resource rent rax.
He said his party would need to discuss any attempt to change the threshold at which the reduced company tax cut would apply but “I doubt we’d all support that” because Centre Alliance did not want revenues to fall and cause cuts to government services.
Hinch will meet Cormann next week, a meeting planned before One Nation pulled its support.
No comments:
Post a Comment