Treasurer Scott Morrison does not believe businesses will restructure to restrain their growth to enjoy the benefit of a lower company tax rate after the government’s 10-year tax plan was limited to firms with a turnover of up to $50 million.
Business Council of Australia chief executive Jennifer Westacott has warned having a two-tier tax system where some companies will eventually be paying a rate of 25 per cent and others 30 per cent could see businesses carving off bits of their firms for tax purposes to remain below the $50 million threshold.
She said the UK at one stage had a two-tier system that was ditched when it wasn’t working.
But Mr Morrison disagrees, saying Australian businesses want to grow.
“Australian businesses want to prosper, Australian businesses want to invest in the success of their businesses,” he told reporters in Sydney on Monday.
The government will continue to pursue the remainder of its 10-year tax plan which will eventually reduce the rate for all businesses to 25 per cent, he said.
“The only people standing in the way of that are the Labor Party,” he said.
The ACTU says it will campaign against the tax cuts, but Labor won’t say whether it would retain the tax cuts in government.
Shadow assistant treasurer Andrew Leigh reiterated Labor will have a “careful and considered” position on the tax cuts before the next election.
He told Sky News the opposition has held a consistent position on company tax cuts right through from the last budget which would limit any reduction to small firms with a $2 million turnover.
Mr Morrison said if Labor wants to increase taxes on business, “they should say so”.