Axed company tax cut is all of Labor's fault, says Abbott

10/05/2012 - The federal government cannot blame the coalition for its controversial decision to drop the proposed cut to the company tax rate which has angered business, Opposition Leader Tony Abbott says.

Find related suppliers

In Tuesday's budget, Treasurer Wayne Swan revealed the surprise decision to drop Labor's promised one percentage point company tax cut, saying it would not have made it through parliament because the opposition and the Greens were against it.

Instead, the money for the cut - which would have been funded by the minerals resource rent tax - will be given to low- and middle-income earners in extra payments.

Business groups have described the decision as a low blow and politically motivated.

Abbott is standing by his decision to oppose the promised company tax cut. He says if the government had really wanted it, it should have got the Greens onside.

"I've always said a tax cut funded by a tax increase is not a cut but a con," he told the Nine Network on Wednesday.

"So if the treasurer was so committed to the particular company tax cut he should have declared it was a matter of confidence and forced his Green alliance partners to support it in the parliament."

Prime Minister Julia Gillard defended the decision and said the government would now work in good faith with business to re-gear the tax system so company tax can be reduced.

"I am very determined to deliver a company tax cut," she told ABC Radio.

"I wanted to legislate one in this parliament and, of course, Mr Abbott with his usual negativity was going to vote no."

Gillard said there were measures in the budget to help businesses in the slow lane of the economy, including an instant asset write-off and the loss carry-back scheme.

Giving more support to low- and middle-income families and the poor also was good for business.

Australian Greens leader Christine Milne is pleased the government is not giving big business a tax cut, but says she would have preferred the near $5 billion in savings be spent on "systemic change", including implementation of the Gonski review into education and a Denticare scheme.

"These things are underfunded in the long term," she told ABC Radio.

Senator Milne said the Greens would have supported a tax cut for small business.

Swan has forecast a return to surplus in September next year, which he said was important to protect the Australian economy.

The government has denied the budget was designed to improve Labor's poor showing in opinion polls, or to appease people worried about the impact the incoming carbon tax will have on the cost of living.

"This budget is not about the next election or the opinion polls or anything like that," Swan told ABC Radio.

"It is about doing the right thing by the country - getting the economic fundamentals right to maximise the prosperity which will flow to this country from the Asian century and to make this the Australian century in Asia."

Abbott said the forecast surplus was a charade and Swan had failed to mention in his budget speech that the commonwealth had increased its debt ceiling to $300 billion.

"Obviously the treasurer is deeply sceptical about his own surplus because if the surplus was really there they wouldn't need to borrow more," he said.

"Yes it's necessary for us to get to a surplus, but I don't think anyone would say that is really what this treasurer has delivered."

Shadow treasurer Joe Hockey slammed the SchoolKids Bonus - which provides low- and middle-income families with payments of up to $820 for each child at school - as very bad policy.

"We won't support it."

Legislation is being introduced to parliament on Wednesday.

Source: AAP

Browse the IndustrySearch directory: Business Finance & Insurance

Have your say...

dave d | 10/05/2012 09:57 1

This is why 70% of the country have branded Ju-liars mob as liars ""This budget is not about the next election or the opinion polls or anything like that," Swan told ABC Radio" What a downright lie that only a idiot like Swan would treat the voter with this kind of contempt.

dave d | 10/05/2012 10:27 2

Prime Minister Julia Gillard defended the decision and said the government would now work in good faith with business to re-gear the tax system so company tax can be reduced. And how do you propose to do this Juliar now the budget has been set ?? - Another hidden Tax on the Taxpayers ???? Maybe you can start taxing the air we breath - but only in the states you & Swan dislike and only non unionists and only non greenies, Ju-liar you really are a piece of work aren't you !!

ross | 10/05/2012 11:08 3

Seriously Julia, you had the perfect opportunity to help business with the proposed company tax cut in this budget. But you took the gutless option, which only reinforces the fact that you never were really going through with it. And the line "the government would now work in good faith with business to re-gear the tax system so company tax can be reduced" only shows that your promise to reduce company tax was a blatant lie (another one) because you now don't have to address this until the next budget in a year's time. Your thinking being that you probably won't be in power by then or, if you are, the punters are that dumb they will have forgotten, or just play your old line "I wanted to give it to business, but Tony wouldn't let me". How much worse and incompetent can this government get? And as for that Treasurer, who you wouldn't have running your corner milk bar, well that's a whole other story.

We welcome thoughtful comments from readers Comment Guidelines The approval of your comment is at the discretion of this article's publisher. Write your comment with the following in mind to ensure the highest likelihood of it being approved: - No promotional undertones - No use of profanity - Good spelling, grammar and layout - Check punctuation, language and missing words - No use of aggression - No unsubstantiated claims We reserve the right to remove comments at our discretion. Your name is used alongside Comments.
Name:
Email: