Ten of Australia’s biggest companies have promised to “invest more in Australia” if the Turnbull government’s plans to cut the company tax rate are passed by the Senate.
In an open letter to the Senate today, The Business Council of Australia and the leaders of 10 corporations, including Woolworths boss Brad Banducci, Fortescue Metals chairman Andrew Forrest, BHP’s Andrew McKenzie, Energy Australia Managing Director Catherine Tanna, Rob Scott of Wesfarmers, Qantas CEO Alan Joyce, Woodside Energy’s Peter Coleman, Brent Eastwood of the country’s meat processor JBS Australia, and MYOB’s Tim Reed, along with BCA CEO Jennifer Westacott, have argued that increased investment from tax cuts will lead to higher employment and wage growth.
Here’s the BCA’s full statement:
“We believe that a reduction in the corporate tax rate, as proposed through the Government’s enterprise tax plan, is urgent and vital to keep Australia competitive.”
“If the Senate passes this important legislation we, as some of the nation’s largest employers, commit to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect.”
The pledge comes amid reports that the Turnbull government could be just one vote away from gaining Senate support for its plan to cut the company tax rate from the current 30% level to 25% by FY26-27.
While the plan is opposed by Labor, four crossbench senators have now agreed to back the government, including Tasmanian Jacqui Lambie’s replacement Steve Martin, along with South Australian Liberal defector Cory Bernardi, Queensland One Nation defector Fraser Anning and NSW Liberal Democrat David Leyonhjelm.
With the three member One Nation bloc and Victorian independent Derryn Hinch are also looking at backing the company tax cut, the government would need the support of either South Australian senator Tim Storer, who quit Nick Xenophon Team this week to become an independent, or one of the two remaining NXT senators.
The initial roll out of the tax cuts for small business have already been approved by the Senate, reducing the tax rate companies with annual turnover of less than $50 million to 27.5%.
The BCA’s view aligns with the Government’s argument that cutting the company tax rate will deliver more jobs and higher wages.
While the BCA has not yet made a submission to the Fair Work Commission’s Annual Wage Review, which sets the country’s minimum wage, Australia’s peak employer body, the Australian Industry Group, wants the minimum wage increased 1.8% this financial year, arguing inflation remains weak and that businesses are struggling with a recent rise in energy costs.
Such an increase would be near half the 3.3% increase awarded in the 2017/18 financial year and less than the current rate of inflation.
Employment jumped by more than 400,000 in 2017, the largest increase in a calendar year on record.
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