Scott Morrison softens stance on $14bn company tax cuts

The Australian

22 March 2017

David Crowe

Scott Morrison has softened his defence of the government’s $47.8 billion company tax cut after receiving a backbench warning that the policy is dragging the Coalition down in its fight with Labor.

Following a report in The Australian yesterday about the doubts over the enterprise tax plan, Malcolm Turnbull and the Treasurer avoided any commitment to the policy when Labor challenged them on the issue in parliament.

Their lukewarm remarks came after Victorian Liberal MP Russell Broadbent yesterday warned the Coalition partyroom that voters saw the tax cut as unfair when it came at the same time as cuts to pensions, superannuation and penalty rates.

Mr Broadbent told the meeting that the principle of fairness was “woven through the tapestry” of the entire country, making it difficult to persuade voters to accept the company tax cut.

This moment in the partyroom represents the first significant questioning of the tax plan at a time when the government appears to be backing away from the policy.

Labor Treasury spokesman Chris Bowen asked Mr Morrison yesterday if his tax policy was “in tatters” but received no assurance the company tax cut would be kept as policy in the budget.

“The government is absolutely committed to our comprehensive economic plan to support jobs in this country,” Mr Morrison said.

When Bill Shorten challenged Mr Turnbull, the Prime Minister rejected the Opposition Leader’s claim that he had called it his “greatest achievement” but avoided any pledge to proceed with the policy.

The budget measure costs $47.8bn over a decade by cutting the company tax rate from 30c to 27.5c in the dollar for small companies over the next few years before gradually lowering the rate to 25c for all companies by 2026.