A $4 billion company tax cut will still be included in the federal budget despite the government’s efforts to find renewed savings.
The Australian says the company tax break will go ahead, even though the Abbott government has been forced to look for increased savings, given the backlash against its proposed “deficit levy”.
According to the report, cutting the company tax rate from 30 to 28.5 per cent will sacrifice around $4 billion in 2016-17, however the policy was put forward when the budget papers showed a small surplus in that year.
The deficit tax could now be scaled back, or even dumped, according to the report, which forces the government to find an extra $10 billion over four years.
That figure is the revenue forecast from a 1 per cent levy on earnings over $80,000 and a 2 per cent levy on earnings over $180,000 a year.
The confirmation of the company tax rate cut is also a good indication Tony Abbott’s paid parental leave scheme will go ahead on schedule.
The generous flagship policy — which pays women their full-wage for six months, capped at $100,000 — partially relies on a 1.5 per cent levy on the country’s 3000 biggest businesses.
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