Abbott claims company tax rise won’t hurt all businesses: Midday roundup

Opposition Leader Tony Abbott has said businesses may even benefit from a small increase in the company tax rate because they won’t have to pay their own maternity leave schemes.

Abbott told The Australian Financial Review his plan to increase tax on the largest 3200 companies would be a benefit as this would fund a government maternity leave scheme and negate those provided by businesses.

“This is not just a family policy, this is an economic policy, this is a productivity policy, this is a participation policy,” he said.

“Many of those larger businesses will actually save some money as well because many of them already have a form of paid parental leave,” he said.

But Abbott also declined to go into detail about the proposed company tax cut rate. While the federal opposition had previously proposed a cut for smaller businesses, this has been abandoned.

“We are committed to a modest reduction in company tax. The precise quantum and the precise timing will be revealed close to the election,” he said.

ACCC to allow Virgin’s Tiger buy

The Australian Competition and Consumer Commission said this morning it will not oppose a move on behalf of Virgin Australia to take a majority stake in Tiger Airways.

“Essential to reaching this view was the ACCC’s assessment, made after thorough and extensive testing of the issue, that Tiger Australia would be highly unlikely to remain in the local market if the proposed acquisition didn’t proceed,” ACCC chairman Rod Sims said.

Sims said if this wasn’t the case, the acquisition may not have been allowed.

Reject Shop shares in trading halt

Discount group the Reject Shop has entered a trading halt ahead of a $40 million capital raising in order to fund an aggressive expansion plan.

“While the company could fund the accelerated rollout from cashflow and by expanding current financing facilities, we believe the proposed capital raising will create a sound financial platform to support the accelerated store opening program for the next financial year and beyond,” managing director Chris Bryce said in a statement.

Shares rise despite modest lead

The Australian sharemarket has opened higher this morning, following an announcement by mining group Woodside regarding a special dividend.

The benchmark S&P/ASX200 index was up 52.8 points or 1.1% to 5,019.4 at 12.00 AEST, while in the United States the Dow Jones Industrial Average rose 19.7 points or 0.1% to 14,567.2.