Prime Minister Julia Gillard’s plan to cut the corporate tax rate for businesses with an annual revenue of more than A$2 billion ($2.1 billion) may be blocked in the upper house Senate, after the opposition coalition and Greens said they opposed the measure.
The government has proposed that proceeds from its levy on mining profits will be used to reduce the corporate tax rate to 29 percent from 30 percent. Liberal-National coalition leader Tony Abbott said today he opposes the plan, while the Greens, which hold the balance of power in the Senate, said they would only support a cut for small businesses.
“A tax cut that’s paid for by a tax increase is not a cut, it’s a con,” Abbott told reporters in Canberra.
Legislation for the mining levy on BHP Billiton Ltd. (BHP), Rio Tinto Group and other iron-ore and coal miners is due to be passed in the upper house by March 22 with the support of the Greens. Separate legislation to reduce the corporate tax rate will be introduced by the government in May, Gillard told reporters in Canberra today as the draft bill was released.
The government proposes cutting the corporate tax rate for all companies beginning in the 2013-14 income year, and for small businesses a year earlier, Treasurer Wayne Swan said in an e-mailed statement today.
“This will help up to 720,000 small business companies by allowing them to reinvest more of their profits to grow their businesses and employ more Australians,” he said. “Cutting the company tax rate will increase productivity, promote broad-based economic growth and encourage more investment and jobs across Australia’s entire economy.”
The Greens will support a cut for small businesses while blocking a proposed A$2.4 billion tax reduction for big businesses, Greens leader Bob Brown said yesterday.
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