Coalition to push company tax changes without splitting off small business cuts
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Version 0 of 1. Scott Morrison has confirmed the Coalition will try to force its $48bn corporate tax cut package through parliament as a whole, rather than splitting it into two smaller packages. But he has declined to say if he will include the package in the upcoming budget if it fails to pass the Senate next week. During question time on Thursday, Morrison said the government had taken its 10-year enterprise tax cut plan – worth $48bn – to the election and won, and it was determined to implement the whole package. “We put it in the budget,” he said. “It’s coming into the parliament and we’re going to be voting for it. We’re going to be voting for it in this chamber and voting for it in [the Senate].” It effectively ended speculation the Coalition was considering splitting its tax package in two this week, to give itself a chance to at least pass its more politically-palatable small business tax cuts. The speculation had been kicked off by Senator Derryn Hinch on Thursday morning when he told Sky News it was his understanding that the big business tax cuts were “off the table for now.” “I’m saying they’ll split the bill to get something through this time and they’ll maybe go back to it,” Hinch said. “If they dump the top end part of it and just go to the $10m, yes I’ll support it, I’ll vote for it.” The government’s tax cut package is designed to reduce tax rates for all business to 25% by 2026-27. It firstly wants to cut the tax rate for small businesses with annual turnover of less than $10m to 27.5% for the 2016-17 financial year. It then wants to progressively extend that lower rate to all businesses by the 2023-24 financial year, and further reduce the corporate tax rate in stages so that by the 2026-27 financial year, the corporate tax rate for all businesses will be 25%. It does not have support in the Senate to cut the tax rate for big businesses from 30% to 25%. Last month, independent Senator Nick Xenophon said his three-person Senate team would support a tax cut for businesses with a turnover of $10m or less, but not for bigger businesses. “[The bill] needs to be split,” he said. “When you look at alternative approaches to this, the Australia Institute, in the report that it published yesterday, does put up the case to say that this isn’t necessarily the smartest thing to do in terms of economic impact,” he said last month. Labor has said it will only support tax cuts for businesses with an annual turnover of $2m or less. Morrison refused to clarify on Thursday if his tax cut package would still be included in his upcoming budget. “The enterprise tax plan, Mr Speaker, is in the budget,” he said, without specifying whether he met the current budget or the upcoming budget. Next week is the final week of parliament before Morrison delivers his new budget on 9 May. |