Finance minister digs in behind big business cuts despite lacking parliamentary support for the change

This article is more than 2 years old

This article is more than 2 years old

Tax cuts for Australia’s biggest corporations are “the most important tax cuts of them all” according to the finance minister, who insists they will not be a “zombie” measure in next Tuesday’s budget.



Mathias Cormann used an interview on Sky News on Friday to dig in behind the politically unpopular tax cuts, which have become even harder for the government to land since the damaging revelations in the banking royal commission.

Despite lacking parliamentary support for the change, next week’s budget will continue to factor in the big business tax cut as well as delivering personal income tax cuts to voters, bankrolled by a surge in revenue collections.

Cormann, who has been dogged in duchessing Senate crossbenchers to round up the required votes, insisted the proposal remained live. “It’s not a zombie measure,” he said on Friday.

“It’s an incredibly important measure for our future economic prosperity and for future opportunities for families to get ahead. I put my hand up to be part of a government because I want to do the right thing by Australia and by our long-term future.

“If we continue to disadvantage business in Australia by imposing higher taxes here than faced by their competitors elsewhere, we will lose investment and jobs to other parts of the world.

“In many ways tax cuts for big business are the most important tax cuts of them all, because big businesses are the most exposed on the frontline of global competition.”

Personal income tax cuts will be the focal point of next Tuesday’s budget, which is being treated as a deck-clearing economic statement, given the likelihood that it will be the last budget before voters go to the polls.

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The hip-pocket relief will be funded by a significant rebound in revenue collections and the government is also refusing to guarantee that it will in fact run budget surpluses of at least 1% of GDP, which is set down in its own fiscal strategy.

Underscoring the effort to put itself on an pre-election footing, the government has also been on an infrastructure-spending blitz, rolling out projects in the major cities and in marginal electorates.

The Coalition confirmed a couple of other budget measures on Friday. It will provide a leg up for craft brewers and distillers by increasing the amount beverage companies can claim back on their excise, and it will extend the concessional draught beer excise rate to smaller kegs, typically used by craft brewers.

It also confirmed that $140m would be set aside from 2019-20 for a location incentive to attract blockbuster films for production in facilities on the Gold Cast.

The budget proposal will increase the location offset rate from 16.5% to 30% for eligible large budget international productions that film in Australia from 1 July 2018.