WELLINGTON: Malcolm Turnbull was looking for some staunch moral support from Bill English for company tax cuts, but got a lukewarm reply.
The Australian government has made a 10-year cut to company taxes the centrepiece of its economic plan, with the prime minister arguing it would make the country more attractive for investors.
At a joint media conference with Mr English in Queenstown, Mr Turnbull put on his journalist hat to ask his NZ counterpart to comment on how important it was to have a competitive company tax rate.
We think it is really important to signal that we want reinvestment in businesses, because that is what grows the jobs and grows the capacity,’ Mr English said of his country’s 28 per cent rate – two points lower than Australia’s.
‘We had hoped it would attract a large number of Australian businesses across the Tasman, but that hasn’t quite happened yet. We might have to lower it again.’ Asked about the possibility of higher taxes in the May budget, Mr Turnbull told reporters: ‘We have no plans to increase tax.’ ‘All of our plans for tax were set out in the budget last year and they included a reduction in personal income tax … and reductions in business tax.’
Mr Turnbull praised Mr English’s many years of ‘successful stewardship’ of NZ’s finances and economy. ‘We’re looking forward to hearing from you and your colleagues about how you’ve made such a great success of the New Zealand economy,’ he said.
‘We’re all committed to free trade and open markets. We know that trade means jobs.’ Mr Turnbull said Australia wanted the economic relationship between both countries to be even closer.
‘It’s a great partnership and on that foundation we’ve built strong economic growth, more jobs and prosperity for Australians and New Zealanders over many years and many years to come.’ Finance Minister Mathias Cormann pointed out the coalition under Mr Abbott restored indexation on the fuel excise and a budget repair levy on high- income earners.
‘Our focus overwhelmingly both in the Abbott government and in the Turnbull government has been on repairing the budget by reducing expenditure,’ Senator Cormann told Sky News.
‘But in the end you do have to make decisions from time to time, without increasing the overall tax burden, on how you can raise the necessary revenue for government in a better way.’
Senator Cormann said he was relaxed about coalition MPs giving him ‘public and private advice’. Nationals MP Andrew Broad says the government should consider making investors wait longer before claiming capital gains tax concessions.
Senator Cormann said there were ‘no plans or intentions to reduce capital gains discounts’. ‘This is just typical pre-budget speculation. People put up kites, go on fishing expeditions,’ he said.
The two leaders have also signed a historic treaty on science, research and innovation, which will involve the creation of an innovation hub.
‘The creation of an innovation hub will have tremendous benefits for our communities, growing the economy and creating business opportunities and jobs in new and traditional sectors,’ Mr Turnbull said in a statement.
