Businesses promise to invest after tax cut

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Colin Brinsden and Angus Livingston
(Australian Associated Press)

 

Some of Australia’s largest businesses are promising to “invest” and therefore lift wages if crossbench senators agree to pass company tax cuts.

Independent senator Steve Martin revealed on Wednesday he would back the government’s planned corporate tax cuts, but Pauline Hanson and Derryn Hinch want businesses to promise wage growth.

So the Business Council of Australia on Wednesday released a joint statement with the heads of large companies calling for the Senate to act.

“If the Senate passes this important legislation we, as some of the nation’s largest employers, commit to invest more in Australia which will lead to employing more Australians and therefore stronger wage growth as the tax cut takes effect,” the statement said.

But on Twitter, Senator Hinch said the promise – from the heads of BHP, Qantas, Fortescue, Wesfarmers and EnergyAustralia among others – wasn’t enough to secure his vote.

The government is trying to get the crossbench numbers it needs to pass the bill, which will reduce the company tax rate incrementally over the next decade to 25 per cent for all businesses.

Prime Minister Malcolm Turnbull insisted the “vitally important” tax cuts would provide the incentive for businesses to invest and employ.

“The US have gone to 21 per cent – we have to have a competitive company tax,” he told reporters in Port Macquarie.

Senator Martin said his decision to back the cuts achieved the best deal for Tasmania, strengthening its global export markets, bolstering job creation and wages growth.

Finance Minister Mathias Cormann tweeted his thanks to Senator Martin.

“Your vote will help all Australian businesses to successfully compete, to grow, to hire more Australians and pay them better wages,” he said.

But research commissioned by lobby group GetUp! found 37 per cent of the corporate tax cut would immediately flow offshore.

GetUp! says at least $1.96 billion of the $5.2 billion annual value of the corporate tax cut will flow directly offshore each year.

The government needs support from nine of the 11 crossbenchers to pass the bill, with Labor and the Greens restating their opposition to the $65 billion package during the early stages of the debate.

Labor senator Murray Watt said the debate is happening in the same week the government is taking money from low-income people through its welfare reforms.

“How on earth can any of those crossbenchers be voting for a $65 billion tax cut for big business?” he told reporters in Canberra.

While Senator Hinch and Senator Hanson want guarantees from companies, Workplace Minister Craig Laundy is no fan of government telling businesses what they can or cannot do.

“I can’t see how (requiring a wages guarantee) would be practical and enforceable and measurable,” he told ABC radio.

Debate is expected to continue in the Senate on Wednesday night.

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