CANBERRA: The Turnbull government has launched a new lobbying effort to pass its business tax cuts, distributing economic modelling to crossbenchers that shows Australia has shot up the list of the world’s highest average corporate tax rates.
Finance Minister Mathias Cormann ramped up the Coalition’s case for the full $65 billion plan on Wednesday, drawing the attention of resistant senators to Oxford University research that reveals Australia has rocketed to the 10th highest effective average tax rate over the past decade.But One Nation, the Nick Xenophon Team, the Greens and Labor have refused to budge on their resistance to the policy, describing it as an unaffordable hand out to big business at a time when workers are struggling with low wage growth. UK, which had an effective average tax rate of 27 per cent in 2001, now has an effective rate of 18 per cent, 9 per cent lower than Australia. Canada, which had a rate of 38 per cent in 2000 and 32 per cent in 2007, now has an effective rate of 23 per cent.
The report does not take into account the passage of US President Donald Trump’s reforms which will see the effective corporate tax rate fall below the top 10.
Treasury secretary John Fraser told a Senate estimates hearing on Wednesday the mere announcement of an agreement on a company tax would lead to a surge in business confidence, even if the full cut was phased in over many years. Under the government’s plan, the cut to the company tax rate from 30 to 25 cents in the dollar for companies with a turnover of more than $50 million would be phased in over a decade. “Investment projects are seldom planned over one or two years,” he said. “For mining companies it’s 10 to 15 years. If you have certainty about the framework going forward, you can have confidence in the decisions that you make.
