On day three of the official federal election campaign, Opposition Leader Tony Abbott will today announce a plan to cut the company tax rate by 1.5 per cent.
The cut would not be delivered until Abbott’s second year in the top job, delivering the cut from July 1, 2015.
The cut will come alongside a hefty price tag, costing a collation government $5 billion over the forward estimates.
The announcement also comes as a surprise announcement to the electorate and could be seen as a campaign sweetener. Late last month Shadow Assistant Treasurer Senator Mathias Corman told The Tax Institute’s tax debate, that the coalition would not be announcing the percentage it would cut from the company tax rate, until after the coalition took office.
The plan will be applicable to some 750,000 companies, and will lower the company tax rate from 30 per cent to 28.5 per cent.
The Government has labelled the coalition’s policy unaffordable, and said the cuts will result in harsh spending cuts or a hike in the GST.
Senator Penny Wong tweeted this morning: “Abbott refuses to rule out hiking up the GST to fund his company tax cut. Or will he make even more cuts to health, education and services?”.
Peter Anderson, CEO of Australian Chamber of Commerce and Industry (ACCI) said today that the coalition promise to reduce company tax rates is good news for jobs, confidence and the economy, should it be implemented.
“Reducing company tax will boost business confidence, attract new investment and take some pressure off the high cost of doing business. Each are objectives that must be at the heart of the next government’s economic plan,” Anderson said.
