The Turnbull Government is backing South Australian businesses to grow and prosper because we know that stronger businesses will employ more South Australians, pay them higher wages and create the economic growth that will secure the state’s future.
The Enterprise Tax Plan we took to the election will back SA businesses and their employees by supporting them to invest more in their businesses. This is achieved by cutting the tax rate for businesses with turnovers of up to $50 million to 27.5 per cent over the next three years, as the first instalment of the plan.
This is in addition to changing the definition of a small business to allow businesses with turnover up to $10 million to access additional tax incentives to help their businesses grow.
South Australians know these businesses are not large multinationals. Instead they are typical of the businesses who employ them and that are critical to their financial security.
They are companies like the iconic family-run Haigh’s Chocolates, who employ hundreds of South Australians. They include Korvest, which employs over 200 workers in the supply of cable and pipe supports, industrial access and safety systems and galvanising services and Codan Limited who design and develop some of the world’s radios, metal detectors and tracking technology.
Today I will meet with representatives of many of these important local enterprises. These are businesses that want to stay in South Australia and our plan gives them a better incentive to do just that.
Instead of handing over more of their hard earned profits to Canberra bureaucrats, our tax cut will mean these businesses will have more room on their balance sheets to invest back into their employees through more shifts or higher wages. They will also have greater room to purchase extra equipment which they can use to expand and ultimately hire more South Australians.
The reduction in the tax rate will also boost SA businesses’ international competitiveness. Our current corporate tax rate of 30 per cent is high by international standards and well above the average for OECD countries and those in the Asian region.
Refusal by the Parliament to pass our tax cuts for businesses with turnovers of up to $50 million would mean a significant cost to the South Australian economy, as such businesses play a key role in the state.
And the investment our plan creates is especially critical to states like South Australia that are feeling the impact of the transition from the mining investment boom to a more diversified economy.
While our economic plan is delivering results, with 470,000 more jobs since Labor lost government and 160,000 new jobs in the last 12 months together with GDP growth of 3.3 per cent, we know that we need to do more to ensure our continued successful transition away from the mining boom.
That’s why the Turnbull Government will continue to work with the Parliament, to implement our national economic plan for jobs and growth that was endorsed at the last election.