Bill Shorten will head off a potential political wedge from Scott Morrison, revealing today the ALP will back the Government’s plan to fast-track tax cuts to small businesses.
The Opposition leader said this morning Labor would support the new plan that the Government announced earlier this week.
Labor immediately came under pressure from the Government over the move which will see the tax rate for firms with a turnover of up to $50 million put in place by 2021-22.
But Mr Shorten said Labor would back the proposal which is set to sail through Parliament next week.
“Labor has always been the friend of small business,” Mr Shorten said in a statement with shadow treasurer Chris Bowen
“With a Shorten Labor Government 99 per cent of businesses will receive a tax cut, no business will have their tax rate increased, and all businesses will be able to plan and invest with confidence and certainty.
“Supporting this measure provides certainty to small business ahead of the next election.
“Labor will deliver the same tax relief for small business as the coalition, but we’ll do it without cutting schools or hospitals, or increasing national debt.”
The move will cost the Budget $3.2 billion over the forward estimates and almost $30 billion over the next 10 years.
Mr Shorten said Labor would afford the change in policy by delaying its planned introduction of the Australian Investment Guarantee by 12 months.
That policy, which has been backed by businesses, would enable firms to immediately deduct 20 per cent of investment in eligible depreciable assets over $20,000.
“Labor has taken difficult decisions to be able to fund its policy commitments – such as making multinationals pay their fair share, reforming negative gearing, the capital gains tax discount, the tax treatment of trusts, managing tax affairs and dividend imputation,” he and Mr Bowen said.
“Only Labor has a plan to hand over a better deal to the next generation – by fixing schools and hospitals, easing pressure on family budgets, standing up for workers, and building a strong economy that works for all Australians.”