There is growing concern that if the Turnbull Government’s Enterprise Tax Plan is not passed by the Parliament then Australia risks falling behind other economies and becoming more uncompetitive in the global economy.
Even former Labor government adviser and economist Stephen Koukoulas warned yesterday that:
“They’re cutting company tax rates in the UK as well, so there’s this pressure going on outside Asia. We know that the Asian company tax rates are very, very low, and that’s where we’re trying to compete. The Trump company tax cuts, if they come to fruition, will at the margin be a problem for us. They are a problem for the multinationals setting their headquarters back in the US, where they’ll only pay 15 per cent versus our 30 per cent, or eventually 25 per cent when the Turnbull cuts come into force.”
Koukoulas warns that if we can’t match the rate in other economies, and companies make commercial decisions based on our higher tax rates, then “for us poor Aussies, we bleed revenue.”
However, the Leader of the Opposition Bill Shorten is continuing to play politics on these issues, refusing to acknowledge how the recent US election could put Australia further behind when Trump tax cuts come into effect, saying:
“Donald Trump’s election in the United States makes absolutely no difference in the case against corporate tax cuts in this country. It was a crazy plan when they brought it down in the Budget this year, it was a crazy plan during the election and it is still a crazy plan.”
But when Bill Shorten was the Assistant Treasurer he supported a lower tax rate for employers:
“The Government's tax reform agenda has a strong focus on ensuring that Australia remains an attractive place to invest…. Cutting the company tax rate is an important step along this road. This recognises the benefits to investment and growth from lower company tax rates and a trend to lower rates across the OECD over the past 30 years.” (Address to the Institute of Chartered Accountants – 6 April 2011)
And when Bill Shorten was Minister for Financial Services and Superannuation he said:
“Any student of Australian business and economic history since the mid-80s knows that part of Australia’s success was derived through the reduction in the company tax rate.” (Sky News - 13 March 2012)
When he was Assistant Treasurer Bill Shorten even stated that:
“Cutting the company income tax rate increases domestic productivity and domestic investment. More capital means higher productivity and economic growth and leads to more jobs and higher wages.” (House of Representatives, 2011)
The Turnbull Government’s economic plan, announced in the Budget and taken to the election, will stimulate growth in our economy, secure jobs and support the services that hardworking Australians rely on.
Our 10 year Enterprise Tax Plan backs businesses, which employ Australians, to keep up with their overseas competitors so they can grow and invest more in their businesses. This is the way we secure jobs and lift wages.
At this critical point in our transitioning economy it is vital that we get this right and put in place policies that will secure our economic future.
Australians deserve real leadership and honesty from the Parliament about the challenges we face and the solutions we need to grow our economy through this significant transition to drive jobs growth, boost wages and support the infrastructure, health and education services Australians rely on to maintain their standard of living in these anxious times.