The federal government is pressing to get corporate tax cuts passed this week, in the final Parliamentary sitting before the May Budget.
With the agreement of just two more senators needed, it’s a tense time for Turnbull.
But the planned cuts have stalled in the senate, as the coalition struggles to negotiate with the Upper House crossbench.
Finance Minister Mathias Cormann, who is leading the government’s efforts to pass the legislation, is yet to secure support from both Victorian senator Derryn Hinch, and the South Australian Senator Tim Storer. This comes after Hanson’s withdrawal of support for the cuts which she expressed back in late March this year.
Pauline Hanson’s ‘One Nation’ is now determined to block the senate tax cut plans. She does not believe that giving Aussie companies a tax cut will result in the highly sought-after wage increase for our workers.
But it’s no secret that the One Nation’s history on economics is patchy at best.
For example, Senator Hanson previously produced a much-ridiculed plan to levy a flat 2% on tax levels of value adding production, which if passed would have destroyed some companies and awarded others massive tax cuts.
Why are corporate tax cuts necessary?
Meanwhile, senator Hinch has joined calls from One Nation to cut big banks out of proposed tax cuts, in the wake of damning evidence presented to the royal banking commission.
But Senator Storer, Hanson’s crossbench colleague — who previously voiced concerns about whether the proposed benefits of the company tax cuts have been exaggerated — isn’t won over by that argument. He told ABC Radio National Breakfast:
‘Obviously, the royal commission has thrown up some findings which are extremely disturbing and the public are certainly not agreeable to that sort of behaviour in general…But I think the issues are distinct and separate.’
And Storer agreed ‘company tax cuts are relevant to all companies, and as such I won’t be seeking a carve out of the banks as proposed by other senators’.
International tax experts have warned, Australia will soon lose investment and jobs to lower-taxed countries.
In a report prepared for the minerals council of Australia, the University of Calgary’s Jack Mintz revealed Australia’s rate was the ninth highest of the 43 countries he surveyed — tying with Mexico as the fourth highest in the OECD (The Organisation for Economic Co-operation and Development).
It also says that ‘lower company taxes allow higher compensation to be paid to workers and lower prices for consumer goods’, according to Minerals Councils interim chief executive, David Byers.
The federal government is arguing that cutting company tax from 30% to 25% by the 2026–27 financial year, would trigger jobs and wage growth.
Turnbull wants companies in Australia to be in a position where they could invest, create more jobs and offer better paid jobs. The Treasury analysis is said to give workers an average $750 more in wages.
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