Business and tax experts are urging the Senate to back the Turnbull government’s 10-year corporate tax plan after the lower house finally passed the legislation.
However, Opposition Leader Bill Shorten has vowed Labor will continue to fight the $50 billion “tax giveaway” that would eventually see a 25 per cent business tax rate, while support from crossbench senators is less than clear.
Pauline Hanson says her One Nation senators will vote against all government legislation until the prime minister sorts out a Queensland sugar dispute while Nick Xenophon, whose NXT party controls three votes in the senate, said the government needed to address Australia’s energy crisis first.
Senator Xenophon has repeatedly said his team will support tax cuts for businesses with a $10 million turnover, but he views rising energy prices as the bigger concern for businesses across the country.
Independent senator Jacqui Lambie said the government was too keenly focused on corporate tax when Australia’s most vulnerable were suffering from a number of budget cuts.
“They’re already getting enough bloody tax cuts, I can assure you of that much, and there’s 600 out of those 1500 biggest profit-makers out there that don’t pay any tax,” she said in Canberra on Monday.
Mr Shorten said his party still supports cuts for companies with a turnover of less than $2 million.
“This nation can’t afford to have $50 billion taken out of the national ATM and handed to big business because all big business will do is pocket the money,” he said.
Treasurer Scott Morrison wants the tax plan passed in full to ensure longer-term investment in the Australian economy to support growth, wages and jobs.
“That’s what the Labor Party used to say they supported … what a bunch of pathetic hypocrites,” he scoffed.
The latest Fairfax/Ipsos poll found 44 per cent of voters support the government’s plan, while 39 per cent of those surveyed oppose the legislation.
“Today we see that the Australian people on balance are more in favour of these changes than the alternative,” the treasurer said.
Australian Advanced Manufacturing Council chairman John Pollaers said company tax cuts were critical for manufacturing.
“Defining small enterprises as those with turnover under $2 million a year is seriously out of step with the rest of world and significantly limits Australia’s potential,” he said in a statement.
The first stage of the plan would reduce the tax rate to 27.5 per cent for businesses with a turnover of less than $10 million.
At the moment, the tax rate sits at 30 per cent for all companies, apart from small firms with a turnover of less than $2 million which pay 28.5 per cent.
Mark Molesworth, a tax partner at business consultants BDO, said having a single rate for small- and medium-sized enterprises will play into the jobs and growth agenda since the sector is the “job creation engine room of the economy”.
“However, our call for certainty for SMEs should not be seen as the single solution. Holistic tax reform is still required,” he told AAP.