Labor will roll back tax cuts for small and medium businesses

Lisa Maree Williams/Getty ImagesLabor leader Bill Shorten

Opposition leader Bill Shorten has confirmed that Labor, if elected, will repeal company tax cuts that have already been legislated, a move which will affect at least 20,000 medium-sized businesses employing about 1.5 million workers.

Mr Shorten said on Tuesday morning that Labor was still to decide whether it would limit tax cuts to businesses with turnovers capped at $2 million or $10 million, but it would be repealing the current arrangement which gives relief to businesses with turnovers capped at $50 million.

Last year, the Senate passed laws giving company tax cuts to companies with turnovers capped at $50 million.

The lower tax rate of 27.5 per cent for businesses with turnovers between $25 million and $50 million starts on July 1 this year and phases down to 25 per cent by 2026-27.

The Australian Financial Review revealed earlier this year that Labor was considering cutting that turnover back to $10 million, a move which would increase the tax rate for 20,000 businesses employing 1.5 million people.

On Tuesday, Mr Shorten confirmed this. “We will support any Australian business with an under $2 million turnover to get a tax reduction. We think that small business can do with all of the assistance they can get,” he said.

“We are considering between $2 million and $10 million turnovers beyond that.”

Asked if that meant Labor would “repeal the tax cut between $10 and $50 million that’s already legislated”, Mr Shorten responded: “Yes”

“You have to look at priorities. I just don’t agree with Mr Turnbull that the four big banks deserve $17 billion in tax cut over the next 10 years,” he said.

“I would rather see that being put back into our schools. I don’t agree with Mr Turnbull that the multinationals should get a tax cut yet we are carrying out cuts to our hospital and healthcare systems.

“It is all down to values. He is for the top end of town. He’s made it clear how he feels. I am for education and health funding.”

Our agenda is about attracting more investment, stronger growth, more jobs & higher wages on the back of stronger competition for workers.

Bill Shorten again today pushing higher taxes on business, which would lead to less investment, lower growth, fewer jobs & lower wages.

“Bill Shorten has confirmed yet another giant, job-destroying tax on Australian businesses and the economy.”he said.

“Not only has Labor committed to ripping our personal income tax cut away from nine million Australians, they will now hit tens of thousands of businesses that employ 1.5 million Australians with high taxes.

“Labor has no plans to grow the economy, just plans to suffocate it with higher taxes, destroying jobs and stealing pay rises.”

The decision will be highly controversial and opposed by the small business sector.

On Tuesday, the Financial Review also revealed the four Senators likely to hold the balance of power after the election, would not permit a Labor government to do roll back the already-legislaed cuts.

These are Pauline Hanson, Cory Bernardi and the Centre Alliance’s Stirling Griff and Rex Patrick. All four voted for the tax cut last year for businesses with turnovers up to $50 million.

All are on six-year terms and will be there after the election.

“Nope, not a chance, we would be dead against it,” said Senator Griff, speaking for himself and colleague Senator Patrick.

“We’re not going to take it away from small and medium businesses, no, not at all.”

He said opponents of tax cuts confused turnover with profit and a $50 million turnover could be the local IGA.

A spokesman for One Nation leader Senator Hanson, said there was no way One Nation would allow the cuts to be unwound while Australian Conservatives and low tax advocate Senator Bernardi supports the entire corporate tax cut package and will not be rolling anything back.

This first appeared at the AFR.com. See the original here.

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