Chiefs of some of Australia’s top companies have made a last-minute appeal to Senate crossbenchers to pass the Turnbull government’s corporate tax cuts, saying economic benefits would be delivered “within months”.
The executives of such companies as BHP, Qantas, Wesfarmers, Origin and Commonwealth Bank were in Canberra for a Business Council of Australia meeting on Wednesday but took time out to hold a joint media conference.
BHP chief Andrew Mackenzie said his company believed in paying a fair rate of tax, but also cared about the tax system promoting economic growth.
“When we look around the world we have to say Australia is not attracting its fair share of international investment in capital and we need to do something about that,” Mr Mackenzie said.
“Without the change the government is proposing, it will remain uncompetitive and the economy will suffer not just for a few years but actually for decades to come as a result of the absence of capital in the economy that is driving productivity, driving jobs and driving growth.
“If these measures are to be passed in their entirety I think very quickly – in a matter of months – we’d start to see the dividend.”
Wesfarmers chief Richard Goyder said retirees who held shares would benefit from increased cash flows.
Business Council members have been knocking on the doors of crossbenchers in Canberra, convincing One Nation to support a $50 million threshold – up from its initial position of $10 million – for the tax cut for small businesses.
However, the coalition will need nine extra votes in the Senate to pass the bill.
Debate on the legislation was adjourned on Wednesday, when crossbench senator Nick Xenophon had to return home to South Australia to deal with a family bereavement.
As he won’t be returning on Thursday, the government is awaiting his decision on the tax cuts before it can allocate him a “pair” in the vote.
It is expected, but not yet confirmed, the government will bring in a new bill on Thursday which will only legislate the small business tax cut up to a threshold of $10 million turnover.
That bill is expected to get the support of nine crossbenchers including the Nick Xenophon Team and One Nation.
Treasurer Scott Morrison has repeatedly said he wants the 10-year package to incrementally lower the tax rate to 25 per cent dealt with before parliament rises on Thursday, the last scheduled sitting before the May 9 budget.
Labor is sticking to its opposition to a broad tax cut and limiting the reduction to 27.5 per cent for firms with a turnover of $2 million or less.
Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman, said the cut for businesses with a $10 million turnover will give 99 per cent of Australian businesses a reduction.
“(It) will provide a much-needed shot in the arm for the sector’s growth prospects, enhancing the ability of small businesses to employ,” she said.
The rate reduces to 27.5 per cent for firms with a $25 million turnover in 2017/18, $50 million in 2018/19 and $100 million in 2019/20.
By 2026/27 all businesses would pay 25 per cent.
At the moment, corporations pay 30 per cent apart from those with $2 million or less turnover, which pay 28.5 per cent.