The Turnbull government’s plan to cut company tax rates from 30 to 25 per cent over the next decade is one step close to becoming a reality.
This week the Business Council of Australia’s leadership and 10 chief executives of top Australian companies pledged they’d deliver wage rises and higher investment in Australia if the cuts are passed.
“We believe that a reduction in the corporate tax rate, as proposed through the government’s enterprise tax plan, is urgent and vital to keep Australia competitive,” the letter released on Wednesday said, Financial review reported.
“If the Senate passes this important legislation we, as some of the nation’s largest employers, commit to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect.”
Senators Pauline Hanson and Derryn Hinch had also said they would support the company tax cuts if they can be assured it will lead to increased wages, boosting hopes inside government it will win Senate backing for the remainder of its package by Easter.
Yesterday, Senator Hanson struck a deal with the Turnbull Government to support its company tax cuts in exchange for an apprenticeship pilot program targeting young Australians, the ABC reported.
Under a deal struck between the One Nation leader and the Government’s Senate leader Mathias Cormann, the Government will fund a pilot program for 1,000 taxpayer-funded apprentices in private business.
“I’m hoping that business will see the success of this and see the value of having young apprentices,” Hanson told the ABC.
It is understood that the apprentices would be 75 per cent taxpayer-funded in their first year, 50 per cent funded in their second, 25 per cent funded in the third and fully funded by the employer in the fourth.
Leader of the House Christopher Pyne said he expects the legislation to clear the Senate next week, in an interview with Today news this morning.
“We are getting there,” Pyne said. “I think next week we are hopeful of passing the company tax cuts through the Senate which will be great news for the economy.”
Labor has described the cuts as an unaffordable hand out to big business for as long as the budget is in deficit.
The Senate has already passed the first stages of the ten-year tax cut plan – a lower rate for businesses with an annual turnover of $50 million.