Labor backs tax cut from 28.5% to 27.5% for businesses with a turnover under $2m but says it will oppose rest of company tax cuts

Malcolm Turnbull is intensifying his attack against Labor’s refusal to back his company tax cuts, saying the ALP is “declaring war on business” and taking a “thoroughly anti-business approach”.



As the ideological contest between tax cuts and higher education and infrastructure spending takes centre stage in the election campaign, Turnbull said Australia had always struck a balance between a progressive tax system and means-tested benefits, and the policies needed for economic growth.

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“You have to strike a balance so that you grow the pie and everyone gets a fair share of it. You have to be very careful that in your efforts ... you don’t end up shrinking the whole pie,” he said.

“He [Shorten] has got this view that you can increase taxes on investment ... you can refuse to give small and medium businesses a tax cut, let alone large ones, and that that will have no effect. He’s kidding himself. The truth is governments need to provide incentives for growth and we’ve done that.”

Labor has backed the proposed tax cut from 28.5% to 27.5% for businesses with a turnover under $2m but says it will oppose the rest of the government’s $48bn in company tax cuts that extend that lower rate to businesses with a turnover under $10m and, over time, to all companies. It argues that education and infrastructure spending will drive both economic growth and employment.

But as economists predict Wednesday’s crucial growth figure showing the economy slowing, Turnbull claimed this amounted to Shorten having “no plan for economic growth at all”.

“He is declaring war on business,” he said. “He is trying to suggest that somehow or other there is a conflict between a strong economy and successful businesses who are paying tax, and spending money on health and schools where in fact you can’t do one without the other – every Australian understands that.

“He’s taking a thoroughly anti-business approach and that can only lead to slower economic growth, a weaker economy, weaker revenues for the government, tax revenues for the government and less money to spend on schools and hospitals.”

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The Turnbull attack echoes claims by peak business groups and chief executives but it came after the treasurer, Scott Morrison, told the West Australian newspaper that the government could have to “recalibrate” its plans to boost the economy if small and medium-sized firms didn’t respond as hoped to the company tax cut.

Morrison said that if there continued to be sluggishness across the economy then the government would look to “recalibrate” its policy mix.

The shadow treasurer, Chris Bowen, claimed this was an “an extraordinary development”.

“This is the centrepiece of their election policy,” he said. “We’re told this is a plan for jobs and growth and Scott Morrison says if it doesn’t work, we will change it. If you want to get a mandate to do something, if he is going to change it, tell the Australian people what it is.

“Labor won’t recalibrate our plans for the schools, or the NBN or infrastructure which is our plan for jobs and growth. We won’t recalibrate our plans for tourism in northern Australia, which Bill Shorten has announced today.”