Media & Speeches

Labor must support government's full tax plan

“The Labor Party should act in the interests of a stronger economy for all the community by not opposing the full package of reforms in the government’s 10-year tax plan,” Business Council Chief Executive Jennifer Westacott said today.

“To maximise the increased investment and jobs that the government’s tax plan offers, the parliament must approve the whole package and deliver more competitive taxes for large as well as small businesses,” Ms Westacott said.

“If the parliament only delivers one stage of the government’s plan it will have failed to understand that business – small, medium and large – drives the economy and businesses of all sizes are interdependent and it is their interaction together which creates a more prosperous economy.

“For the Labor Party to suggest we can create a more prosperous economy, with higher wages, and better living standards, and hold our own in the global economy by only supporting micro businesses with turnovers of less than $2 million is an insular, provincial, cottage industry view of the world.

“Debating whether or not to split the government’s Bill is academic and just playing politics – it is already a reform with very long, staged implementation which takes several years to deliver benefits to the biggest job-creating businesses in the economy.

“Large businesses have created more than half of all jobs in the past five years, so the competitiveness of large businesses really matters.

“There is more than $500 billion in economic activity between large and small business every year, so small business will benefit most if all businesses are more competitive.

“Small business needs the boost now, but large businesses need the certainty of a signal that investment and job creation will be more competitive in the future, and that is why the whole reform package needs to be passed.

“To not pass the whole package, with lower company tax for all businesses, will deny the community the maximum reform dividend of investment, jobs and a stronger economy for all.

“Delivering the tax plan in full means Australian workers would receive around two-thirds of the total gains from reducing the company tax rate to 25 per cent, because higher investment means more jobs and higher wages.

“Larger businesses would bring forward investments ahead of the actual tax cuts if they are confident future lower rates are secure once investments come on stream.

“Permanently locking in a two-tier enterprise tax system would actively discourage growth, investment and the creation of job opportunities by penalising successful companies with higher tax rates.

“By not supporting the Bill in its entirety the Labor Party would rob Australians and small businesses of the full jobs and wages gains from one of the most urgent reforms for our economy.

“Other countries are already reaping the rewards of lower business taxes. Last year the United Kingdom had a record year of inbound investment and 85,000 new jobs were created.

“If we are serious about prosperity in Australia we have to deliver reforms that will make Australians feel better off.

They will feel better off, and be better off, when their wages grow and when they have more and better-paid jobs. That’s what more competitive taxes for all businesses will provide,” Ms Westacott said.