Morrison closes in on votes needed to get business tax plan through Senate | Australia news


The Morrison government is on track for its first major legislative win, having won over the bulk of the crossbench on its plan to accelerate further tax cuts for small and medium businesses.

After admitting defeat on its company tax cut plan for businesses earning more than $50m, the Coalition returned with a new plan to accelerate its planned tax cuts for businesses earning under that threshold, which, if passed, would see a 25% tax rate introduced five years earlier, in July 2021.

Labor, which had supported the government’s first tranche of tax cuts bringing the rate down from 30.5% to 27.5% has said it will consider the proposal, set to cost $3.2bn over the next four years.

Privately, the government sees that as a win, with Labor now forced to set out where it stands on the 25% tax cut ahead of the election. The original plan would have seen the 27.5% tax rate cut to 26% in July 2025 and then cut again to 25% in July 2026, but there was nothing stopping future government’s from scrapping those tax cuts down the track.

But even without Labor’s support, the government, which plans on introducing legislation to enact the fast-tracked timetable in the next sitting, looks to have the support of the crossbench.

The Greens are against the plan. A spokesman for the party’s leader, Richard Di Natale, said his policy was tax cuts for businesses earning less than $10m, not $50m.

In the event Labor and the Greens vote against legislation in the Senate, the government needs to convince eight of the 10 crossbenchers.

On Thursday afternoon, Centre Alliance had given in-principle support, with Senator Rex Patrick telling Guardian Australia the party was “quite open to looking at the changes”.

“We are quite happy to look at something that is going to be a useful stimulus to the economy,” he said.

Patrick said he considered the difference between this proposal and the bigger corporate tax cuts was that smaller businesses were more likely to put savings back into staff, equipment and the economy at large.

That’s two votes.

Derryn Hinch is also in agreement, as is Brian Burston and David Leyonhjelm, who said “there’s no such thing as a bad tax cut”.

Cory Bernardi made six votes for the plan, saying he would look at seeing whether the 25% tax rate could be reached even earlier “if at all possible”.

One Nation, which supported the company tax cuts to small business on the original terms, may have a few caveats before supporting the accelerated timeframe and giving the government the final two votes it needs if Labor decides to oppose the plan.

“I will be discussing with Senator Georgiou my concerns with the government’s plans today,” Pauline Hanson said.

“I’m more inclined to see the government make arrangements with the states to roll back payroll taxes, which will offer businesses who employ staff, genuine tax cuts and generate further employment across the nation.”

Fraser Anning has previously voted with the government on these measures, while the sole independent, Tim Storer said he would “consider the legislation on the basis of its merits and the evidence available to me, as I have always done since entering parliament”.

However, the government expects Labor to support the measures, given the backlash that followed the short-lived “captain’s call” decision to repeal those corporate tax cuts already passed for businesses with a turnover between $10m and $50m earlier this year.

The Shorten decision, made in the midst of the big business tax cut debate, led to an almost immediate turn-around, after caucus and the shadow cabinet convinced the Labor leader to walk back his pledge.

Instead, Shorten said Labor would not repeal any tax cuts already in place, and committed to reducing the rate to 27.5% for all businesses earning under $50m.

On Thursday, Shorten said he would consider the new proposal.

“What I’m not going to do is engage in petty politics,” he said. “For me I’ve got two questions, does it mean handing on a better deal to families and workers and kids? And does it also mean that we can afford to look after our education system and our hospital system? If we can do those things, then we are open to having a constructive discussion with the government.

“We’ve got to study the numbers and I’ve got to consult my colleagues.”

The prime minister, Scott Morrison, who released the plan on Thursday as a way to take back the policy agenda from Labor, will continue spruiking the proposal on Friday, with a visit to the seat of Wentworth in a bid to woo voters in the byelection battleground.



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