Minerals Council of Australia chief Brendan Pearson has defended the Coalition’s proposed company tax cut, saying the tax break for companies will amount to just 4.3% of total collections over the next decade.
New analysis conducted by Deloitte on behalf of the minerals council shows company tax collections will reach $1.114 trillion over the next decade.
Pearson says the massive figures show the proposed company tax cut – which has been criticised by the Opposition – is “both reasonable and proportionate”.
“It also underscores the substantial contribution to national revenue made through company tax,” he said.
“It reflects the fact that Australia’s reliance on company tax is amongst the highest in the developed world and significantly higher than some regional competitors.”
Pearson said that while Australia’s company tax has been frozen for 15 years, other nations have progressively lowered their rates.
“Australia now has the fourth-highest tax burden on capital investment amongst the 34 developed country members of the OECD,” he said.
“Claims by the Opposition leader Bill Shorten that the company tax cut would be ‘useless and hopeless’ and deliver ‘very little economic gain’ have been contradicted by the Treasury, the Organisation for Economic Co-operation and Development, the International Monetary Fund and by the actions and sentiments of former Labor Governments.”
The Minerals Council formally joined the push for a lower company tax rate in March, when Pearson cited a study by Dr Jack Mintz from the School of Public Policy at Canada’s University of Calgary.
Dr Mintz’ analysis – also commissioned by the Minerals Council of Australia – showed Australia’s company tax competitiveness proposes a move from the current 30% tax rate to a 25% rate, and says the government should also consider an eventual move to 20%, like that of the United Kingdom.