Greens warn against combined tax cuts for business

The Greens have warned the government not to tie together big business and small business tax cuts, to avoid the risk of both being rejected in the Senate.

The Greens support a tax cut only for small businesses, while the Coalition says it will not support any corporate tax cut while there is a carbon tax.

The government is hoping to force through a 1% cut for all businesses – beginning on July 1 for small businesses, and a year later for their larger counterparts. All businesses in Australia currently pay a 30% corporate tax rate.

“We will continue to fight for this in the Senate and I think the business community is going to put pressure on Tony Abbott,” Treasurer Wayne Swan told ABC Radio today.

Greens leader Bob Brown told the Australian Financial Review: “In the coming couple of months, the company tax cut is going to be widely debated. There’s going to be a stoush between Labor and the Opposition and we are making the point that our position has been consistent.”

The Coalition has repeatedly stated it does not consider the proposal a real business tax cut as the carbon tax will result in a net increase in big businesses taxes.

Yesterday Gillard attempted to pile pressure on the opposition. “We will bring these tax cuts to the Parliament,” she said.

“Tony Abbott can answer to the Australian people for voting to deny those tax cuts. That means he can answer to the 2.7 million small businesses around the country. He can answer to all of the businesses around the country he seeks to deny a tax cut to.”

For the purposes of the cuts, small business is defined as having an annual turnover of $2 million or less.

The United Kingdom has a two-tiered corporate tax regime with a 20% rate for annual profits under 300,000 pounds (about $A 454,000) and a 25% rate for higher profits.