ALP falls into line on early tax cut plan

The West Australian - - NEWS - Shane Wright Eco­nom­ics Ed­i­tor

Op­po­si­tion Leader Bill Shorten has headed off a po­ten­tially dam­ag­ing fight with small busi­ness, com­mit­ting the La­bor Party to the Fed­eral Govern­ment’s plan to bring for­ward tax cuts for small and medium-sized firms.

It could have been a de­bil­i­tat­ing po­lit­i­cal fight in the run-up to next week­end’s Went­worth by-elec­tion, but Mr Shorten said yes­ter­day that La­bor would sup­port the plan to slice the tax rate for com­pa­nies with a turnover of up to $50 mil­lion to 25 per cent from 2021-22.

The Govern­ment an­nounced this week it would bring for­ward the tax cuts af­ter fail­ing to get Sen­ate sup­port for its ini­tial plan to re­duce the tax rate for all firms over the com­ing decade.

Prime Min­is­ter Scott Mor­ri­son plans to in­tro­duce the fast-tracked tax cuts in Par­lia­ment when it re­sumes next week.

La­bor’s po­si­tion means the Bill will quickly pass both Houses.

Mr Shorten said he was pre­pared to make changes if it would help the coun­try.

“If the Govern­ment says that it has the view that . . . small busi­nesses want a slightly lower tax rate ear­lier than the Govern­ment was plan­ning, we are pre­pared to com­pro­mise in the na­tional in­ter­est,” he said.

La­bor will keep its own plan, to al­low firms to im­me­di­ately deduct 20 per cent of in­vest­ment in el­i­gi­ble de­pre­cia­ble as­sets over $20,000, but, if elected, will de­lay its in­tro­duc­tion by a year.

Shadow trea­surer Chris Bowen said this would save a La­bor govern­ment $2.8 bil­lion, giv­ing it the room to af­ford the ear­lier tax cuts and in­vest­ment al­lowance change.

The busi­ness com­mu­nity wel­comed La­bor’s move, say­ing it would give com­pa­nies cer­tainty about cor­po­rate tax poli­cies.

“Tak­ing on risk and start­ing a busi­ness is not easy, es­pe­cially as the costs of do­ing busi­ness con­tinue to rise sharply,” Aus­tralian Cham­ber of Com­merce and In­dus­try chief ex­ec­u­tive James Pear­son said. “A fairer tax rate is crit­i­cal if we want our small, medium and fam­ily busi­nesses to sur­vive and thrive.”

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