ScoMo rules out GST changes
SPRUIKING his accelerated tax cuts for small and medium businesses, Prime Minister Scott Morrison has also ruled out any changes to the GST if his government is returned after the next election.
Speaking on Sky News this morning, the Prime Minister was asked whether he was considering increasing the rate of the GST or broadening its base - moves he proposed when he was Treasurer in 2016 - but he ruled out both options.
"We're not doing that. If you do something like that you'd have to take it to an election and that's not what we're doing," he said.
The Prime Minister argued that Australia would continue to be an attractive destination for big business, despite the government dumping its earlier plans to cut the corporate tax rate.
"People who invest in Australia are getting their money back because of the strength of our economy," he said.
Dumping the corporate tax cut for big business also enabled the government to proceed with its tax cut for small and medium enterprises, he said.
Under the plan, companies with annual turnovers below $50 million will have their tax rate cut to 26 per cent in 2020/21, then 25 per cent the following year.
The Prime Minister announced yesterday that the legislation for the small and medium sized businesses would be introduced to parliament next week.
Mr Morrison is confident of winning support for the plan, which would bring the cuts forward five years at a cost of $3.2 billion.
Labor leader Bill Shorten isn't ruling out supporting the proposal.
"We will keep an open mind on this question as we examine the numbers, but the other criteria we have is that our first priority is to properly fund our schools, to properly fund our hospitals," he told reporters in Brisbane.
Businesses turning over up to $50 million had their tax cut from 30 to 27.5 per cent last year.
The government had initially planned to implement further rounds of tax cuts in 2024/25 and 2025/26, but now wants to fast-track the plan.
Mr Morrison believes key crossbench senators who rejected the coalition's plans to slash tax for big businesses in August will back the step. The prime minister said the change won't affect the government's plan to return the budget to balance by 2019/20, followed by a more hefty surplus the following year.
Shadow treasurer Chris Bowen is worried about the total cost to the budget. "They are so desperate to throw cash at issues, whether it be small business tax cuts or other issues for their political purposes that they have thrown out their own budget rules," he said.
Australian Chamber of Commerce and Industry chief executive James Pearson said the move would be a major boost for small businesses.
Business Council chief executive Jennifer Westacott said the cuts would breathe life into businesses in cities, towns and regions.