Cutting business tax rate an 'absolute top priority': PM

14/06/2012 - Prime Minister Julia Gillard has made a cut in the company tax rate and improving worker mobility the two key priorities for Labor coming out of a federal government economic forum. Colin Brinsden

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Closing the gathering of more than 100 delegates in Brisbane on Wednesday, Gillard said she had heard the business community "loud and clear" when it came to company tax rates.

"Let's be very clear, from today I want to see achieving this company tax rate reduction as the absolute top priority of the business tax working group," she said.

"I want it dealt with before the other business tax issues in the working group's in-tray."

The group was formed after last year's tax forum and tasked with finding ways of making savings through the business tax system.

Gillard also made a commitment to the delegates from business, unions and the community to improve labour mobility through better incentives for employment services providers that would put people into jobs wherever they were in the country.

"It's our collective task for everyone in this room as a matter of good economic management and good social policy that we do our absolute best to match the demand for labour with those who seek employment," she said.

Opposition Leader Tony Abbott labelled the forum a PR stunt.

"It takes a floundering prime minister to go and beg business to talk up her government. That's essentially what she's done," Abbott told reporters in Adelaide.

But business welcomed the prime minister's renewed commitment to a cut in the 30 per cent corporate tax rate, after a promised reduction was shelved in the May budget.

"A reduction in the company tax rate will help create a globally competitive tax system," Master Builders Australia CEO Wilhelm Harnisch said in a statement.

"It would help stimulate investment and boost investor confidence."

The Australian Chamber of Commerce and Industry said the cut should be in the next budget.

Earlier, Reserve Bank of Australia governor Glenn Stevens told the forum the only way for local businesses to cope with negative effects of the high Australian dollar was to meet the challenge by increasing productivity.

A low exchange rate shouldn't be wished for, because consumers are benefiting from cheaper petrol, durable and clothing goods, and overseas travel through a high currency.

"The exchange rate is the device that is imparting the high wealth that the mining boom brings," Stevens said.

Treasurer Wayne Swan told the forum the way the economy adapted to the high dollar would determine the future success of a number of industries.

But he was optimistic, saying talks at the largely closed-door discussions on productivity had been constructive.

"I think everybody agrees what we need to do is to be quite focused on the areas we will get the biggest bang for our buck," Swan told ABC television outside the conference venue.

Stevens said there was a long list of ways to boost productivity, in terms of increasing output and efficiency, which had been suggested by the Productivity Commission.

"My answer to what we can do about productivity is go and get the list and do them," he said.

Source: AAP

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Have your say...

Pat | 14/06/2012 09:48 1

Juliar,,,,,how many times have we heard that. Stop talking and start doing. All you and Wayne Swan seem determined to do is bash business for your own political point scoring. All you seem to be achieving is dividing the fabric of this country into ever increasing circles of enmity. BE A LEADER,,,not a liar. AND be prepared to listen to Australians outside of the closetted, cossetted, rarified atmosphere of Canberra.

Trevor | 14/06/2012 12:07 2

This government is totally out of touch with Australians in general. A tax cut of 1% is irrelevent to small business as you have to be paying tax to benefit from an alusive tax cut. There are many other ways to assist small business such as making larger companies we all work for pay their bills on time instead of months later. Remember, small business in the largest employer in Australia. The Labour party needs to wake up and see that if we take mining out of the equation then our cuntry is not as well off as Labour seem to think it is. We are all in dire straits and if something is not done soon, we will all suffer even more. We need some long term leadership, not so called leaders who can only see to the next election.

dave d | 14/06/2012 16:27 3

I gather we will never find out from Goose and Ju-liar why if it so important to our economy why this was shelved from the May budget but is now " absolute top priority " this woman couldn't lie straight in bed !!!

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