Labor to unwind business tax cuts

LABOR will roll back tax cuts for small and medium businesses if it wins the next election in what the Federal Government says amounts to a $20 billion tax hike.

Opposition Leader Bill Shorten is promising to rescind tax cuts for businesses with turnover between $10 million and $50 million if Labor wins government.

Labor is still considering what it will do about tax cuts already in place for businesses with turnover between $2 million and $10 million.

“We said that we will support any Australian business with an under-$2 million turnover to get a tax reduction,” Mr Shorten told reporters after delivering a speech in Canberra.

“We think that small business can do with all of the assistance they can get.”

The tax decision did not go to Labor’s party room yesterday, prompting Treasurer Scott Morrison to label it Mr Shorten’s “captain’s call”. “This is terrible news for 1.5 million Australians who work in those businesses,” Mr Morrison said.

The treasurer said rolling back the tax rates would put $20 billion of taxes on about 20,000 businesses.

Parliament last year agreed to corporate tax cuts for businesses with a turnover up to $50 million.

Businesses with a turnover of up to $25 million are already enjoying a reduction to 27.5 per cent from 30 per cent, while businesses turning over up to $50 million see a reduction from July 1.

Under the Government’s plan, all companies will benefit from a corporate tax rate of 25 per cent by 2026/27.

But the Government’s efforts to get the necessary eight out of 10 crossbenchers to support tax cuts for larger businesses is looking increasingly unlikely.

Prime Minister Malcolm Turnbull had promised a vote on the package this week, but he has only convinced four of the 10 crossbench senators to back the tax cuts.