Gillard vows to cut company tax, sometime
Prime Minister Julia Gillard says she remains determined to give business a tax cut even though the government scrapped a promise to do so in the budget.
The government had promised to use revenue from its new mining tax to drop the corporate tax rate from 30 per cent to 29 per cent from July 1.
Instead the money will be used to provide upfront payments to lower income families and create new tax breaks for small business.
The decision has angered business groups.
Ms Gillard said the government will now work in good faith with business to re-gear the tax system so company tax can be reduced.
‘‘I am very determined to deliver a company tax cut,’’ she told ABC Radio today. ‘‘I wanted to legislate one in this parliament and, of course, Mr Abbott with his usual negativity was going to vote no.’’
The Australian Greens had also indicated they would not support a tax cut to big business.
‘‘Which meant we wouldn’t have been able to get that legislation through,’’ Ms Gillard said. ‘‘So, we have used that money instead to spread the benefits of the mining boom to Australian families who we know are struggling to make ends meet in many cases.’’
Ms Gillard said there were measures in the budget to help businesses in the slow lane of the economy, including an instant asset write-off and the loss carry-back scheme.
Giving more support to low- and middle-income families and the poor also was good for business.
‘‘People will go to the shops, they will use that money for things like school uniforms and books and school shoes and all the rest and that will flow through as a benefit for businesses,’’ the Prime Minister said.
She rejected suggestions Labor’s traditional support bases had stopped listening to the government. Many families around the nation understood the economy was strong and there was a resources boom, but they weren’t getting a share.
‘‘Now we can say to those families, we are spreading the benefits of the boom to you,’’ Ms Gillard said.
Ms Gillard defended the $210-a-year increase in the Newstart allowance for the unemployed.
Welfare groups said that was just enough for one cup of coffee a week.
‘‘We will keep working with them with all the determination we have shown across the life of this government to create jobs and give people a work opportunity,’’ the Prime Minister said.
Ms Gillard said more money would go into foreign aid next year.
‘‘We have already doubled our expenditure on foreign aid and we are in the process of doubling it again to more than $8 billion,’’ she said.