Personal, not business
Budget will benefit middle class before companies
MIDDLE- INCOME Aussies will be in line for personal tax cuts before major companies, Treasurer Scott Morrison has promised.
Mr Morrison has seized on strong global growth forecasts on the back of US tax cuts to again build a case for tax relief for Australian businesses.
He again flagged that the May Budget would likely offer a concrete timetable of tax reductions which is likely to form the basis of its re-election campaign, expected sometime between late this year and late 2019.
“I can assure you of this: People will see personal income tax cuts before big companies will see company tax cuts,” he told ABC.
“What we will be doing is delivering medium income tax relief as soon as we can and we’ve got a Budget this year and I’ll have more to say about that between now and the Budget and beyond.
The Turnbull Government will again lean on the Senate to pass the higher end of its corporate tax plan when parliament resumes next month.
Mr Morrison has given no specifics on when the proposed reductions from a 30 per cent rate down to 25 per cent would come into effect.
But Labor’s finance spokesman Jim Chalmers said the nation would not see growth by giving the biggest tax breaks to those who need them least, while increasing taxes on middle Australia.
“We will only get the right kind of inclusive growth in this country if we invest in the productive capacity of our people, reward their effort, and ensure they have the means to spend, invest and keep up with the costs of living.”
It comes as an Australian Industry Group report released today reveals that CEOs are optimistic about the year.
But business leaders say strong job growth will mean modest wage growth would likely continue.
On top on more than half a million jobs created last year Australia could add more than 400,000 new jobs in 2018, the report found.
“An achievement of this magnitude would make critical inroads into both the rate of unemployment and the naggingly high rate of underemployment,” Ai Group Chief Executive, Innes Willox, said.
“The record jobs growth of 2017 and the ability to meet expectations of still higher jobs growth in 2018 are closely associated with the moderate wages outcomes of recent years and require the continuation of this pattern into 2018.”
Mr Willox said making Australia’s business tax system more competitive by lowering the company tax rate to 25 per cent would strengthen the incentives to invest and reinvest in the domestic economy.