ALP falls into line on early tax cut plan
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.”