The federal Opposition has created confusion and will hurt business confidence with its decision today to wind back already legislated tax cuts and enshrine a two-tier company tax system, Business Council chief executive Jennifer Westacott said.
“It has failed to properly listen to the business community’s call to reverse its announcement earlier this week to repeal the tax cuts for business with a turnover of under $50 million.
“Freezing the threshold at 27.5 per cent for those businesses is actually a tax increase on the 25 per cent rate that has been passed by the Parliament.
“It will hurt all businesses and workers because small, medium and large businesses together generate $555 billion of economic activity a year and employ 10 million Australians.
“A vibrant and diverse business sector underpins Australia’s wellbeing, breathing life and jobs into towns and cities. It generates tax revenue that sustains government services, and returns profits to the nation’s shareholders and superannuation funds
“Leaving the rate at 30 per cent for the largest employers and the companies that make the biggest investment decisions is a reckless move that will impose one of the highest company tax rates in the developed world on Australian business.”
Just three months ago, the Shadow Treasurer said:
“Over the past five years, business investment in Australia has collapsed by 20 per cent. Despite strengthening global economic conditions, business investment in Australia has remained subdued – with the RBA commenting that non-mining business investment has been “disappointingly low” in recent years.”
“Labor knows business investment is needed to drive productivity but cannot bring themselves to accept the wisdom of this common-sense and fiscally responsible policy to gradually reduce the company tax rate by five percentage points over a decade to keep Australia a competitive economy,” Ms Westacott said.
“Despite arguing for a lower company tax rate when it was last in government, Labor’s rejection of a more competitive rate hands a competitive advantage to other countries that are taking action. It helps business and workers in other countries.”
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