Malcolm Turnbull says it’s “absurd” to call business tax cuts a handout, as he steps up the case for parliament to pass the rest of the government’s plan.
In April, the parliament agreed to a corporate tax rate of 27.5 per cent for businesses with a turnover of up to $50 million, to be phased in over the next three years.
However the government is aiming for a 25 per cent rate to apply to all sized businesses over 10 years.
The prime minister says he is committed to delivering the remainder of the plan, which would come to parliament “shortly”, and he expected would be debated in the Senate before the end of the year.
“We’ve already cut taxes for more than three million businesses that employ more than half of Australia’s workforce, and we will go back to the Senate to seek support for the rest of our tax plan,” Mr Turnbull told a business forum in Melbourne on Thursday.
Leaders at the G20 summit in Hamburg – “right across the political spectrum” – agreed on the need to reduce company taxes to boost investment and create jobs.
However, the opposition Labor Party continued to label the tax cut a “handout”, he said.
“What that means is that they believe that every dollar a business makes in profit belongs to the government and that anything that is left after tax, graciously, by the government, is a handout,” he said.
“Now, that is absurd. That is denying enterprise. It is discouraging investment. It is discouraging employment.”
Shadow treasurer Chris Bowen, who addressed the same forum, said the government’s corporate tax cut plan was a “very significant, long term, structural drag on the budget” costing $65 billion over the medium term and $14 billion a year in 10 years’ time.
In comparison, Mr Bowen said Labor’s reforms to negative gearing and capital gains would deliver an $8 billion boost to the budget bottom line every year by the end of the decade.