CANBERRA: The Australian Government’s proposed corporate tax cut appears dead after a key minor party ruled out supporting the reforms.
Pauline Hanson, leader of the right-wing One Nation Party, on Monday said Senators from her party would not support the cuts, denying the government the Senate majority necessary to pass the bill into law. Inspired by U.S. President Donald Trump slashing the corporate tax rate, Australian Prime Minister Malcolm Turnbull at the start of February introduced the Enterprise Tax Plan which would reduce the company tax rate from 30 to 25 percent for all companies by 2028.
However, with the Opposition Australian Labor Party (ALP) and Greens party refusing to back the proposal, Turnbull required the support of nine of 11 Senate crossbenchers to achieve the cuts, a feat which is impossible without One Nation’s support. In a column appearing on News Corp Australia publications on Monday, Hanson wrote that “One Nation will not be supporting” the plan, saying there was no guarantee it would boost investment while increasing government debt.
“The government persists in the false claim that company income tax rates drive business investment. This is ridiculous, all it does is undermine my confidence in the government and their advisers,” Hanson said. The government prays the savings will be used by companies to create well-paying jobs and a better standard of living across all parts of our community.
“If the government’s prayers are not answered, then a catastrophic tax collection will follow, which likely will be funded by debt we cannot afford.” The government has already legislated the first part of the Enterprise Tax Plan which delivered tax cuts for companies with turnovers of up to 50 million Australian dollars (39 million U.S. dollars).
If the second part is voted down by the Senate, it has been speculated that it will be re-introduced as part of a package that will also deliver personal tax cuts. Mathias Cormann, leader of the government in the Senate and acting Prime Minister while Turnbull is on an official visit to the U.S., on Sunday said it was essential that the full Enterprise Tax Plan be implemented. Forcing big businesses in Australia to compete with big businesses from other parts of the world who have the advantage of lower tax rates puts our Australian businesses at a disadvantage,” he said.
“It makes it harder for our big businesses to be successful and profitable into the future, which means less investment, lower growth, fewer jobs, lower returns for shareholders and less money to buy goods and services from other businesses.”
