Wednesday, May 4, 2016
Big business to hold Government to tax cut promise, accepts lack of political appetite
Big business has signaled it will be ramping up its lobbying to ensure it receives a promised company tax cut within a decade.
While small and medium businesses turning over more than ten million dollars have won a tax cut to 27.5 percent from July 1, big business might have to wait as long as 2026 for tax relief.
Listen to my interview with BCA chief executive Jennifer Westacott
The Business Council of Australia, which represents the nation's top one hundred companies, is taking the news on the chin describing the Budget as "solid and responsible".
But chief executive Jennifer Westacott told AM big business will be keeping the government to its promise.
"We're obviously pressing very hard that it be delivered. People forget that large businesses are responsible for over 40 percent of economic output," Ms Westacott said.
"We would have liked to have been a shorter time frame but you've got to remember that what the government has put forward is probably the most comprehensive plan to reduce business taxes with everyone.
"But clearly it would be good if we brought it forward. There are risks the longer we take to make our total business tax system more competitive the more uncompetitive the economy is overall."
Ms Westacott described the Budget as "solid" and "responsible" while appearing to accept that tax cuts to big business or broader tax reform were unlikely in tight financial times.
"The government has got to do what it can do within the fiscal circumstances," Ms Westacott said.
"There isn't the political appetite so we have to get things that are pragmatic and actually doable.
"I think the Government has taken a very pragmatic approach to this and I think it will send the right signal."
But the Business Council expects the government or future governments to deliver broader tax reform over time.
"There is still a lot of work to be done on the structural spending reform and that just cannot happen overnight. That's got to be phased in over a decade really," Mr Westacott said.
While Australia's AAA credit rating is looking safe after the Budget, Ms Westacott agrees with warnings from major ratings agencies for budget repair.
"How do we preserve our AAA credit rating? Firstly we don't spend money we don't have and secondly we get our economy growing faster."