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Category: Federal Government / Government and Politics / Tax / Business, Economics and Finance

Company tax cuts to benefit workers, economy: Sinodinos

Sunday, 20 Mar 2016 09:04:48 | Dan Conifer

Arthur Sinodinos says cutting corporate taxes has positive flow-on effects. (AAP: Daniel Munoz)

A senior Turnbull Government minister has laid out the case for company tax cuts, arguing they would benefit workers along with the economy.

Key points:

  • Arthur Sinodinos says cutting corporate taxes has positive flow on effects
  • He says it encourages investment from overseas
  • He maintains it leads to higher wages for workers, higher employment

The Government has backed away from tax cuts for individuals in the May budget, despite the Treasurer Scott Morrison being "passionate" about delivering tax cuts to address bracket creep just two months ago.

Cabinet Secretary Arthur Sinodinos said while cutting personal tax was an incentive for workers, cutting corporate taxes also had positive flow on effects.

"Putting money into the hands of consumers obviously encourages more spending and disposable income and has good incentive effects. But cutting company taxes also has good effects," Senator Sinodinos said.

"It can encourage investment, it can encourage higher productivity, it can encourage more investment from overseas.

"And that ultimately there are lots of studies that show that that ultimately leads to higher GDP in the economy and higher wages for workers.

"At least 50 per cent of the impact of cutting company taxes goes in higher wages for workers. And higher employment."

Companies with annual turnover of $2 million or more pay a 30 per cent company tax rate, while small businesses last year received a tax cut and pay 28.5 per cent.

Senator Sinodinos echoed the Treasurer, who earlier this week said a surplus, strong growth or new taxes were needed before the Government provided income tax relief.

"It's not like [19]99 or 2000 where we had a major budget surplus, which allowed us to turbocharger income tax cuts as we were making a major tax mix switch," he said.

"So, today it's much more of a hard graft of looking at tax concessions, whether they're fit for purpose and whether the money from tax concessions can be better used in other ways. But the final results of that will be in the budget."

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