THE coalition is set to announce an Abbott government would cut the company tax rate by 1.5 per cent.
The measure, to be announced by the coalition on Wednesday, would begin in July 2015 and cost $5 billion, ABC’s Lateline program reports.
In its “Real Solutions” policy plan, the coalition has promised to deliver “a modest cut” in company tax, funded from savings in the budget, but at this stage it has offered no other details.
At the same time, Opposition Leader Tony Abbott also intends to put a levy on large companies to pay for its more generous paid parental leave scheme.
He’s said the coalition wants to introduce the paid parental leave scheme and cut company taxes at the same time, “so that no business should face a net increase in tax”.
Business groups have been pushing for a cut to the company tax rate to be made an economic and election priority.
At 30 per cent, Australia’s tax rate sits about six percentage points above the average of the Organisation for Economic Co-operation and Development.
In its federal election wish list, the Institute of Chartered Accounts Australia believes 25 per cent should be a medium-term goal, with 20 per cent a long-term aim.
The Henry Tax Review, released in 2010, recommended an objective of 25 per cent company tax rate over time.
The issue was raised in Chris Bowen’s recent book Hearts & Minds, with the treasurer noting government “should have the ambition” of lowering the company tax rate.
Confirmation has been sought from Mr Abbott’s office.