Opposition Leader Tony Abbott will today launch what is likely to be the biggest spending initiative of either major party in the electoral campaign.
In Adelaide today, Abbott will unveil a pledge to cut the 30 per cent company tax by 1.5 percentage points if elected, the Australian Financial Review reports.
That will cost the budget $5 billion over the next five years and $2.5 billion a year after that. The payoff for the nation’s biggest companies will be that they won’t have to pay extra for the Coalition’s paid parental leave scheme.
Mr Abbott promised he would similarly offset the cost of paid parental leave to some 3200 affected businesses before the last election, but backed away from his promise in the past 12 months.
Now he says he has “found the savings”.
“Lowering the company tax rate is part of our plan to build a strong, prosperous economy with more investment and more jobs,” Mr Abbott told the AFR.
“Our economic plan is: taxes down, productivity up, and growth up.
The Coalition’s paid parental leave scheme only affects business with an annual taxable income of more than $5 million.
For the 750,000 business operating under that line, the Coalition’s proposal will mean a company tax rate reduction to 28.5 per cent.