The sweeping corporate tax cuts initiated by US President Donald Trump have the rest of the world watching.
And the Australian government is no exception.
The US rate is now down to 21%. This leaves larger companies in Australia at a distinct disadvantage, as they still pay 30%. And many argue that the higher tax rate will act against any future wage growth.
NSW Treasurer Dominic Perrottet just returned from the United States. And he says that Australian politicians can learn a lot from Trump and his company tax cuts.
Perrottet says Mr Trump’s business tax cuts are delivering for the US economy and Australian state and federal politicians could learn a lot from the reforms.
‘People can get distracted by personalities, but it’s interesting when you get over there and actually get into the policy that you see the changes and the effects of it,’ Mr Perrottet told AAP this week.
Mr Perrottet visited Washington, New York and San Francisco during his week-long trip, meeting with politicians, ratings agencies and fund managers.
Mr Trump in December signed into law a package that cut corporate income tax from 35% to 21%.
Hours later, he told friends at his private Florida club, ‘You all just got a lot richer,’ according to CBS News.
The federal government wants to lower the company tax rate in Australia from 30% to 25%, but its agenda is facing defeat in the upper house.
Mr Perrottet says with his commonwealth counterpart Scott Morrison advocating for the cuts, Opposition Leader Bill Shorten ‘should get out of the way and actually assist the government in delivering them’. He continued:
‘That results in pro-growth policies, which result in higher wages and incomes for families who across Australia are doing it tough and struggling to make ends meet.’
Asked if he would have voted for Mr Trump, Mr Perrottet said he always supported smaller government.
‘I’ll vote for the conservative party over here,’ the Liberal MP said.
‘I’ll always support governments who support a small government; economically liberal approach to public policy.’
Fresh off the back of Mr Trump’s whopping $1.5 trillion commitment to infrastructure development, Mr Perrottet met with one of the men responsible for delivering it, Infrastructure and Transport Committee chairman Bill Shuster.
Mr Perrottet said many US politicians were interested in the NSW government’s asset recycling scheme, which involves privatising government assets to bankroll infrastructure projects.
‘[Mr Shuster] had a very keen interest,’ Mr Perrottet said.
‘The key question over in the states right now is, “Well how are you going to fund that?”.
‘We can learn a lot from them, particularly on the tax and regulatory side, and they can learn a lot from us when it comes to asset recycling and infrastructure investment and delivery.’
The treasurer also met with ratings agencies in New York to reaffirm the state’s AAA credit rating and lectured at Stanford University about the NSW asset-recycling scheme.
The Australian Tribune with AAP