Government Scraps Company Tax Cut in Budget Posted on October 9, 2018
Instead the money will be used to provide upfront payments to lower income families and create new tax breaks for small business. This is a shock move that is likely to
inflame relations between Labor and the big end of town.
Prior to the budget announcement Mr Swan had argued company tax cuts were the centrepiece of the government’s efforts to assist businesses in the economy’s slow lanes, such as the manufacturing and tourism industries.
But with the Opposition refusing to back the cut because it was tied to the mining tax, and the Greens also opposed. ”We wouldn’t have been able to get the legislation through,” Ms Gillard said. ”So, we have used that money instead to spread the benefits of the mining boom to Australian families who we know are struggling to make ends meet in many cases.”
The chief executive of the Australian Chamber of Commerce and Industry, Peter Anderson, said the decision was a “low blow” for the business community. “The business community is not concerned with pointing fingers or blame between politicians, but this looks like a decision that is dripping in politics,” Mr Anderson.
The abandoned tax cut would have taken effect from this July for small business, and from July 2013 for big business. Chief executive of the Australian Industry Group Innes Willox said abandoning the cut would erode the incentives to invest and innovate, and this would hit businesses in manufacturing especially hard.
New tax break for small business – What this means for you.
Ms Gillard said there were measures in the budget to help businesses in the slow lane of the economy, including an instant asset write-off.
Instant asset write off: small businesses will now be able to write-off all depreciable assets where the taxable purpose proportion is less than $6,500 in the income year in which they start to use the asset, or have it installed ready for use.
Still some hope for a tax cut
Mr Swan said company tax relief was still on the drawing board through the business tax working group, which he set up after last year’s tax forum.
The group will consider cutting company taxes before reporting to Mr Swan late this year, but the Treasurer has stressed any cut must be funded from within the business tax system.
“I remain ready, willing and able to work as closely as possible with the business community to bring about fundamental reform of company taxes,” he said.
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