The Turnbull Government will re-introduce the remaining elements of our Enterprise Tax Plan when the Parliament resumes for the Budget, building on the significant progress achieved in delivering our National Economic Plan for Jobs and Growth.
The Government is already reducing the corporate tax rate for companies with a turnover less than $50 million. The measures passed through the Senate in March mean 3.2 million Australian businesses will pay less tax. These businesses employ 6.5 million Australians.
These tax cuts help small and medium sized businesses to invest more, employ extra staff and pay higher wages. This puts more money in the pockets of hard-working Australians.
The Government understands the imperative of having an internationally competitive corporate tax rate. Unlike Bill Shorten, we won’t sell our future short through higher taxes on businesses.
Latest data analysed by the United Kingdom based Oxford Centre for Business Taxation found Australia’s corporate tax competitiveness on headline and effective tax rates was sixth worst out of 33 OECD countries studied and seventh worst on effective marginal tax rates.
Today’s announcement that the Trump Administration will lower the United States’ corporate tax rate to 15 per cent follows a host of actions by our competitors.
The United Kingdom is already at 19 per cent and is heading for 17 per cent. Singapore is already at 17 per cent. Rates are also already lower across most of Europe and French Presidential Candidate Emmanuel Macron has announced he intends to extend the planned French tax cut, which reduces the corporate tax rate to 28 per cent, to 25 per cent if he is elected.
More favourable tax rates in the United States, United Kingdom, Europe and Asia puts further pressure on our ability to attract investment and for our businesses to remain competitive.
Failure to maintain our tax competitiveness will cost jobs and see investment go offshore.
A lower company tax rate for all companies will raise the attractiveness of Australian investments. More business investment, such as upgrades to machinery and business expansions, would make Australian workers more productive and generate increases in real wages.
Treasury’s economy-wide modelling suggests a cut in the corporate tax rate to 25 per cent would generate a permanent increase in the level of GDP of just over 1 per cent, with the benefits to begin immediately. It’s good for jobs, good for wages and good for our economy.