The government has received demands from the country’s business lobby to not surrender on company tax cuts, and warned that the nation is in danger of becoming non-competitive if it doesn’t reinstate them. In 2018, social welfare groups and the Senate crossbench voiced scepticism that company tax rate cuts – from 30 to 25 per cent – for all businesses led to higher wages for employees. The government then abandoned the cuts.
The Business Council of Australia (BCA) has written in their annual budget report that the country cannot remain stagnant while other nations are competing for investment. They stated that 13 countries slashed their company tax rates last year, and argued that Australia needs to do the same. In a recently released annual tax transparency report from the Australian Taxation Office, which used data from 1,520 companies, it was found that the average tax paid on revenue over $100 million was 27.4 per cent. This value, after factoring in losses and other deductions, is below the statutory rate of 30 per cent.
The BCA have also put forth a submission which states that the government should retain a buffer in order to maintain economic growth.
According to figures shown by the Australian Bureau of Statistics, the annual GDP increased to 1.7 per cent during the three months to September 30th, 2019. However, this is far less than what is required by the Reserve Bank of Australia to reduce unemployment and increase wages.