A recent report from AAP via 9news.com.au reveals mixed support for lowering the company tax nominal rate.
The government is on slippery ground. With the range of critics stepping up to be heard, there are political headwinds.
From his initial response as a newly-promoted Treasurer, Minister Morrison’s zeal for tax reform has since devolved to a few (albeit important) budget-saving initiatives, but little in the way of true reform.
Nevertheless, an important feature of the policy framework going forward is the staged reduction of company tax cuts over a period of some 10 years. His essential argument is that lower company tax stimulates and enables more jobs for the masses.
Criticisms abound of the company tax policy, not least of which is coming from parliamentarians whose support the government needs to get the changes through parliament.
the government needs to convince the senate crossbenchers to pass the legislation. It seems the government hasn’t won over tax experts and economists with this policy, here’s some articles that explain why. – theconversation.com
Former Liberal treasurer Peter Costello believes more attention should be on personal tax rates, the Chartered Accountants Australia and New Zealand consider that GST reform should be part of the agenda, and then there’s the OECD weighing in with criticism of Australia’s failure to shift to more “efficient tax bases, such as the GST and land tax”.
As Prime Minister Malcolm Turnbull put it last year, an increase in the GST rate from 10 to 15 per cent would lift the economy “somewhere between nil and very small”.
Instead, the government is pursuing incremental business tax cuts worth $50 billion, which it argues will permanently lift economic growth by one per cent when the plan is fully implemented. Read more at www.9news.com.au
On the other hand, Orange councillor Jeff Whitton, the owner of a telecommunications company, reflecting similar concerns expressed by Chambers of Commerce, claims that the company tax cut measures are worth 1% in GDP growth, and critics would be better engaged in ensuring Google and others contribute their fair share. See Tax cuts good for growth: business leaders push for lower company tax
The Treasurer has gone on the offensive, leaping on statements from the Reserve Bank Governor which he contends support the government’s company tax reduction policies.
The RBA Governor makes it clear that our tax system is becoming uncompetitive and that we risk becoming stranded internationally and constrained in our efforts to increase investment in jobs and wages following the once in a lifetime mining boom. See the Treasurer’s Media Release
Sources and links:
- Unfinished reform beyond business tax cuts
- What economists and tax experts think of the company tax cut
- Promised 1.5% company tax cut should remain for all businesses
- ACCI Calls For Tax Cuts In Australian Budget
- Tax cuts good for growth: business leaders push for lower company tax
- Labor has run out of excuses on business tax cuts as RBA governor exposes their threat to jobs
- RBA governor Philip Lowe hits out at protectionism, urges investment in infrastructure
- (RBA governor Philip Lowe’s) Dinner Remarks to A50 Australian Economic Forum