Thursday, 8 August 2013

Tony Abbott-led Coalition government would cut company tax by 1.5%


More Reason to buy a property in a Company Trust 

Tony Abbott-led Coalition government would cut company tax by 1.5% 

From the Australian Chamber of Commerce and Industry: “Coalition promise to reduce company tax rates by 1.5 per cent from July 2015 is good news for jobs, confidence and the economy, were it implemented. 

Wow so lets all vote for him!!! Umm please don't kill me for jumping off the fence here. But I admit that I like what I hear in this policy.

reposted below from:
http://www.theaustralian.com.au/national-affairs/election-2013/tony-abbotts-5bn-company-tax-relief-soothes-the-parental-leave-sting/story-fn9qr68y-1226692434399

TONY Abbott has promised to cut the company tax rate by 1.5 percentage points for 750,000 companies at a cost of $5 billion to help stimulate the economy and offset his paid parental leave scheme.
In the Coalition's first major policy announcement of the election campaign, the Opposition Leader says the company tax cut from July 1, 2015, would help build a "prosperous economy".

Mr Abbott's $5bn PPL scheme, which is not fully funded by a 1.5 per cent levy on big companies, has been criticised as a "tax" on business that will force up retail prices for consumers and be a drag on business activity.
The start date for the company tax cut is designed to coincide with the introduction of the PPL scheme to ensure that the 37,500 businesses paying the levy - those with more than $5 million of revenue, or about one in 20 firms - will not face a net increase in corporate taxes. Smaller firms, which are not subject to the PPL levy, will get a tax cut.

In reaction to Kevin Rudd's election announcement on Sunday, Mr Abbott said the Coalition intended to provide a reasonable cut in company tax "when affordable". Last night he said the Coalition would remove the mining tax and the carbon tax from July next year and from July 1, 2015, the Coalition would "deliver a 1.5 per cent company tax cut to further help Australian businesses compete, grow and create jobs".

"This is a tax cut that will boost jobs and strengthen the economy," he said.
The Coalition had committed to only a "modest" cut in the company tax rate. Its proposed cut will take the corporate tax rate to 28.5c in the dollar - still above the average of OECD countries of 24 per cent.

In 2010, Labor promised a two-percentage-point cut in the corporate tax rate to 28 per cent, to be funded out of the resource super-profits tax. When the RSPT was remodelled as the minerals resource rent tax, Labor said it could afford only a one-percentage-point cut - a promise that was eventually abandoned by then treasurer Wayne Swan last year.

With the economy dominating the start of the campaign after the government's revision of the budget deficit to $30 billion and debt to more than $300bn on Friday and yesterday's official rate cut to 50-year lows, Mr Abbott has tried to deliver a major Coalition policy to get on the front foot.

"Lowering the company tax rate is part of our plan to build a strong, prosperous economy with more investment and more jobs. Our economic plan is: taxes down, productivity up, and growth up," Mr Abbott said last night. "From 1 July next year, the carbon tax and the mining tax will go.

"Only the Coalition will build a stronger Australia and deliver lower taxes to help all Australians to get ahead. Labor has talked and talked about cutting the company tax rate. We will actually do it."
Mr Abbott will be under intense pressure to provide the savings to pay for the shortfall in the PPL scheme, which is not fully covered by the 1.5 per cent levy on big business, and the new $5bn company tax cut. He has not yet revealed where the money is coming from but the plan has been costed by the independent Parliamentary Budget Office.

It is likely the savings will come from areas that the Labor government has not yet cut as part of its attempt to bring the budget back into surplus by 2016-17.

The Liberal Party's policy document on company tax cites the Henry tax review findings of 2010, which recommended a company tax reduction to be funded in part by a resources rent tax.
The Liberal policy says the Henry review "noted that a company tax cut would 'increase the level of business investment in Australia across all sectors, including foreign direct investment; promote more entrepreneurial activity; and reduce incentives for profit-shifting offshore' ".

Under the Coalition's PPL scheme, mothers will be eligible for 26 weeks' paid leave at their full salary up to $150,000, which means a maximum payment of $75,000. Labor's existing $1.4bn scheme provides 18 weeks' pay at the minimum wage, or about $11,000.