Australian businesses with turnovers of up to $50 million will still be the beneficiaries of proposed tax cuts, despite the Turnbull government’s decision to axe its broader tax plan.
At a joint press conference held on Wednesday (22 August), the federal government announced that it would drop its enterprise tax plan, designed to reduce company tax beginning with small and medium-sized businesses and extending to all businesses over time.
However, plans for tax cuts for roughly 3.3 million SMEs with a turnover of up to $50 million will still be pushed forward by the government, which would see the company tax rate drop from 27.5 per cent to 25 per cent.
Speaking at the press conference, Prime Minister Malcolm Turnbull conceded that the government’s plan to reduce tax cuts for larger businesses was no longer possible.
“By 2020, in the absence of further reform, we’ll have the highest company tax rate in the OECD other than Portugal,” Mr Turnbull said.
“Having said that, we have to recognise in all of this the iron laws of arithmetic, and we have not been able to secure the support of the Senate.
“So, we will not be taking tax cuts for larger companies to the next election.”
Mr Turnbull confirmed the government’s commitment to continue seeking tax cuts for SMEs.
“We are going to review our enterprise tax plan in so far as it applies to small and medium businesses and focus on how we can provide enhanced support, or perhaps an acceleration of the tax cuts for the small and medium businesses,” the PM said.
However, uncertainty over the government’s proposal remains, with Mr Turnbull’s prime ministership set to be contested shortly in a Liberal Party leadership spill.
Following an initial leadership ballot held on Tuesday (21 August), which saw Mr Turnbull defeat former Minister for Home Affairs Peter Dutton by 48 votes to 35, reports of a second challenge have emerged.
Speaking to the media following continued speculation of a second Liberal Party leadership spill, Prime Minister Turnbull confirmed that a party room meeting would be held at midday (24 August) upon his receipt of a signed petition from more than half of his colleagues that suggests a “vote of no confidence” in his prime ministership.
“The [House of Representatives] has been adjourned at the request of Mr Dutton, and so I now await a letter with the signatures of a majority of the party room,” the PM said.
“If I receive that, then I will convene a new party room meeting.”
Mr Turnbull added: “In terms of my own intentions, when the party room meeting is called, I will invite a spill motion to be moved.
“If the motion is carried, I will treat that as a vote of no confidence and I will not stand as a candidate in the ballot.”
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