Business split on tax cut

ONLY half of businesses say a company tax cut would improve their fortunes, a new survey has found.

And one-in-five businesses say they do not think a tax cut is necessary to support their growth, a survey of more than 900 businesses by NAB has found.

In all, 52 per cent of businesses polled by the banking giant said cutting the rate of corporate income tax would help them prosper.

Some 20 per cent said a tax cut was not necessary to support their business outcomes, 14 per cent said they did not pay tax and 14 per cent said they did not know what impact a reduction would have on their prospects.

Business in Victoria, Tasmania and NSW were most in favour of cutting the tax rate.

The federal government is continuing to push to try to lower the company tax from 30 per cent to 25 per cent for all companies.

The NAB survey found businesses wanted the tax rate cut, on average, by 6.7 per cent — a bigger reduction than the 5 per cent being advocated by the government.

Smaller businesses backed bigger cuts.

Businesses with less than 100 employees wanted to see the tax rate cut by 7.4 per cent while those that employed more than 200 people backed a 6.1 per cent reduction.

Businesses operating in the manufacturing, mining and construction sectors suggested the largest cuts while service industries suggested smaller cuts.

Among business which said a tax cut would improve their outlook, 32 per cent said they would use the extra money to invest in expanding their operations.

Some 17 per cent said they would pay down debt, 14 per cent said they would hire more workers and 8 per cent said they would pay their workers more. A separate NAB survey found business conditions hit their highest level since before the global financial crisis.