The federal government’s company tax cuts will cost $48.2 billion over ten years, according to Treasury modelling.
Treasury secretary John Fraser revealed the ten year cost of the company tax cut to 25% during a Senate estimates hearing in Canberra today.
Fraser said the decision to release the figure was made by Scott Morrison late yesterday.
“On this occasion the treasurer has authorised me to provide to the committee the medium-term estimate of the cost to the budget,” Fraser said.
Fraser said he had only been permitted to release the costing of two of the 11 prongs of the plan and warned: “These costings have considerable uncertainty attached to them.”
When questioned by Labor MP Penny Wong, the head of Treasury’s tax analysis division, Roger Brake, said treasury had come to the 48 billion figure “some weeks before the budget”.
An estimate by Chris Richardson of Deloitte Access Economics previously estimated the cost of company tax changes would be “around $55 billion over the next decade”.
He added this was “pretty cheap given the growth dividend it will eventually deliver”.
Following Fraser’s announcement Morrison told the media from Queensland that the estimates were always going to be delivered today because it was in the public’s interest.
“It has never the practice to put ten year costings in the budget,” he said.
“Treasury has been outlining the sensitivities around that figure.
“The revenue changes have been accommodated in medium-term outlook,” he said adding that the treasury will continue to continue to calibrate the figure.
“We’re confident in estimates provided.”
He hit back at Shorten’s budget, delivered yesterday, criticising his lack of four-year estimates.
“You do need a ten year plan but you need framework for four years as well,” he said.
“His [Shorten’s] numbers don’t add up over four years… his plan is $100 billion in more taxes.”
More to come.
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