The New Daily

Company tax cuts to benefit workers: Sinodinos

Minister says the cuts can encourage productivity and boost overseas investment, but Labor says the Coalition is all talk and no action.

Arthur Sinodinos

Arthur Sinodinos says corporate tax cuts have positive flow on effects. Photo: AAP

Federal Labor has called on the Coalition to reveal its plans on company tax, after a senior Turnbull government minister spelled out the case for reducing the burden on business.

The government has backed away from delivering personal tax relief in the May budget, but the option of corporate tax cuts remains.

Cabinet Secretary Arthur Sinodinos said cutting corporate taxation would benefit workers along with the economy.

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“Putting money into the hands of consumers obviously encourages more spending and disposable income and has good incentive effects. But cutting company taxes also has good effects,” Senator Sinodinos said.

“It can encourage investment, it can encourage higher productivity.

“There are lots of studies that show that that ultimately leads to higher GDP in the economy and higher wages for workers.”

Mr Morrison released his first document as Treasurer.

Scott Morrison is keen on cuts that address bracket creep. Photo: Getty

Companies with annual turnover of $2 million or more pay a 30 per cent company tax rate, while small businesses last year received a tax cut and now pay 28.5 per cent.

“Another day, another bit of talk, but as we’ve seen to date on tax, the Liberal Party is all talk and no action,” Shadow Treasurer Chris Bowen said.

“The Liberal Party has voted against company tax cuts previously and criticised Labor when talking about aspiring to bring down company tax further.”

Shadow Assistant Treasurer Andrew Leigh said Senator Sinodinos’ contribution was another thought bubble on tax from the Coalition.

“This government could open a bubble factory to amuse young children,” Dr Leigh said.

“But it can’t actually get its act together to clearly tell the Australian people what it’s going to do to provide the economic leadership that they promised but have failed to deliver.”

Treasurer Scott Morrison two months ago said he was “passionate” about addressing bracket creep, but this week said a surplus, strong growth or new taxes were needed before the Government provided income tax relief.

“It’s not like ’99 or 2000 where we had a major budget surplus, which allowed us to turbo-charge income tax cuts as we were making a major tax mix switch,” Senator Sinodinos said.

“So, today it’s much more of a hard graft of looking at tax concessions, whether they’re fit for purpose and whether the money from tax concessions can be better used in other ways. But the final results of that will be in the budget.”

-ABC

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  • Kris

    Sinodinis of all people with his record of self interest as shown in recent years at ICAC – cannot see his proposals as being in the national interest

  • Mrfunbro

    So much for Malcolm’s fair equitable and good for growth tax test. This only passes the good for LNP donors test. Good luck trying to sell this crock of shit.

  • RT

    Instead of tax cuts, Sinodinos should actually try to get some companies to actually pay tax. If a company pays no tax it doesn’t matter what the tax rate is.

  • Jack

    Company tax reduction will not help workers . This is just more propaganda by the LNP . Where is the modelling and assumptions to support this argument ? Not available of course . The Government is trying to con the voters but voters surely will see through this .

  • weeklycomment

    So we are to believe that wages go up when the company tax rate is reduced by 1.5%?
    C;mon.
    Where is the evidence?
    Did small businesss employee wages go up when the small business company tax rate was reduced from 30% to 28.5%?. Why not refer to any empirical evidence in this statement?
    Did any industry group say that its employer members were planning to increase wages?
    Was any union contacted by any employer group to renegotiate wages up?
    Get on with serious tax reform and stop wasting everyone’s time with lines like this,
    Bring on the election.

  • glennrob

    Of course this policy would be better for the worker. We just love doing all the lifting in this country. Wouldn’t want to see it any other way.
    As RT below says. The government would be better off getting their big donators to actually pay their fair share. This way maybe down the track we could afford to give both business and the workers of Australia a tax break.
    Not likely to happen with this mob, although now that we appear to be heading toward a Double Disillusion election the May budget, which has also been brought forward, may be more friendly than expected. But don’t count on it as the campaigning will be all about union corruption. Obviously the Financial Services or Banks issues will be brushed under the carpet as they are generous donors of the LNP.

  • Cheryl T

    Probably asking too much of the lazy voter. After all that takes research and interest in the countries future. Having to count more than “1” – here’s hoping……don’t think so.

  • Gympie

    That was Robert Maxwell’s party trick, from the top of the Mirror Building in London.
    He was a Labour MP, though.

    • Athinker

      Was he rich?

      • Gympie

        Yes, from plundering the pension funds of his employees.
        His papers supported Labour, though.

  • Kevin_Loughrey

    My dear mumbles. You are so extreme and lop-sided. I run three companies. My employees and colleagues are my good friends. My wife works in a fashion consultancy business owned by a lovely family in Melbourne and has done so for over 20 years.

    I am not alone in this situation nor the exception to the rule. Many of my friends run businesses also. Some of them are very successful. They are honest, hard-working people who give 6 days a week and late nights to their enterprises without complaint. We’ve mortgaged our houses and operate in situations of austerity in the hope we will do some good and make some money. None of my companies pay tax because they all carry a loss from year to year and everything the company earns is paid to employees or expended on things like telephones, electricity, stationery, car registration, insurance, etc in order to keep the company going. That’s what it is like for over 60% of this economy.

    But most of all we are free. It’s a great adventure and every day we are thankful for what we’ve got and the great country we live in.

    Truly, it is nowhere near as black as you paint it.

    • Cherie

      Gosh, we didn’t know Kev, such hard slog and with no complaint. You don’t mention tax breaks, etc., business gets from governments. But then you don’t pay tax. You must have a good accountant.

      Does it occur to you that not everyone can start their own business? And do you realise that all of us who do pay tax provide you with the essential services governments provide so people can live well? But I imagine you and your chums are “user pays” adherents so you don’t really need these services. We taxpayers also pay to help those who need assistance. Perhaps that might be why we get very upset when people doing it well don’t give to the community unless of course they chose to donate some of their hard earned cash when they feel like it.

  • May be for clarity, the word “Government” should be replaced by “jobs for the boys appointed Public Servants in High Office” there are too many of them champagned by foreign commercials/ salesmen and sometime PS even ask the main competitor for some advice about your innovation.
    Too often there is an unwritten code of conduct of never introducing any local technology into an Australian Government.

    To sell something in Australia
    1- you have to go overseas, rebadge your idea in the UK or the US, with a large multi, this way you win everytimes, make sure you never talk with the Australian based connections of a multi as well, it will save you a lot of pain.

    OR even better, the win win for you and the government:

    2 -you have a commercially viable innovation while in Australia, you obtain the contacts from an high office Australian PS about multis having large contracts in Australia that could be interested, then take the plane and go and visit them, it also works wonders, without even rebadging it(this option also works if you hold office as a PS yourself, with or without uni connections, generally the government will be helpful with Special Leave without pay to give your research or idea a try with large overseas companies),
    the advantages of that approach is that from my experience, the contacts I received saved me from knocking at a lot of doors overseas before getting to the right person.

  • Agreed specially when it comes to offshoring outsourcing but see my comment above fort the innovation side and Australian business alternatives and some public servants mentality which is redefining the word “Government”.
    The problem with Unions is that they want to reward effort but often are devaluating skills in the process when they over do it.

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