Greens and Labor stand-off over corporate business tax
22/03/2012 - The federal government is in a stand-off with the Greens over tax cuts for big business, with the minor party threatening to reject the legislation unless Labor can find a solution.
So far the government has put pressure on the opposition to support the measure, which is tied to its mining tax laws and also includes a tax cut for small business, when it comes before the parliament.
Under Labor's plan, the 30 per cent minerals resource rent tax (MRRT) on large coal and iron ore profits will help fund a one percentage point tax cut for small businesses from July 1.
The same relief will follow for large corporations in 2013.
But while the MRRT laws are about to become law, the tax-cut legislation won't be introduced until the second week of May.
The Greens party room decided on Tuesday to vote against the legislation if the two tax cuts are wrapped together in one bill, despite favouring a cut for small business.
Treasurer Wayne Swan says the government will not accept a two-tier system of company tax cuts.
He said the government could deliver the cuts if Opposition Leader Tony Abbott backed the legislation.
"We'll do everything we possibly can to get our package through the Senate," Swan told Sky News.
"The reason this is an issue is that Abbott and the Liberals are seeking to wreck this vital economic reform."
Greens MP Adam Bandt said his party could not support a tax cut for big business that would cost $16 billion over the next decade "as a matter of fairness".
There was no justification for the big four banks and miners BHP Billiton and Rio Tinto receiving almost a third of that $16 billion.
"If the government bowls up legislation and forces us to make an all-or-nothing choice, then it's nothing," Bandt told reporters in Canberra.
"The ball is now in the government's court. We stand ready to support a tax cut for small businesses."
Greens leader Bob Brown said the party still backed extra support for struggling small businesses and manufacturers and was waiting for the report of a working group on small business.
"We have said repeatedly that we want to consider (tax breaks for) businesses which are in the manufacturing and small-business sector," Senator Brown said.
"We will be looking very carefully at the working group report when it comes down."
The Greens party room had made it clear that if the government was to properly fund education, dental health, a national disability insurance scheme and transport, it could not give tax cuts across the board to all businesses, Senator Brown said.
Meanwhile, Greens deputy leader Christine Milne said the government should also consider cutting fossil fuel subsidies for big mining companies.
About 40 per cent of the $5 billion a year spent on subsidising diesel fuel goes to mining companies.
"That's something we would like to see in the budget," she said.
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