Finance Minister Mathias Cormann has ruled out exempting banks from company tax cuts in a bid to win crossbench support.
Independent senator Derryn Hinch insists he won’t reward the big banks with a tax cut while they are being investigated by a royal commission.
He is willing to support tax relief for businesses with turnovers of up to $500 million, but says reductions for larger firms, such as the banks, should be taken to the next federal election.
However, Senator Cormann is not willing to budge.
‘We need to legislate business tax cuts for all businesses in order to ensure that our businesses can be globally competitive,’ he told Sky News from Washington on Friday.
He said there were many non-banking businesses with turnovers exceeding $500 million, and banks were already slapped with a levy in last year’s federal budget.
‘We’ve got to ensure that all of our businesses, including and in particular the biggest businesses in Australia that are on the front line when it comes to global competition, are not disadvantaged with the businesses they compete with in other parts of the world,’ Senator Cormann said.
The minister said big businesses not only employed many Australians directly, but also bought their goods and services by small and medium sized companies.
‘If big businesses are at a disadvantage because we forced them to be less competitive than businesses in other parts of the world, we will lose investment, we will lose jobs right across the economy, and we will end up with lower wages on the back of higher unemployment.’
Senator Hinch and fellow crossbencher Tim Storer proved the stumbling blocks for the Turnbull government trying to get the remainder of its 10-year business tax plan through the Senate before Easter, joining Labor, the Greens and Nick Xenophon’s team in opposing the reduction.
So far, only a corporate tax rate cut to 25 per cent has been legislated for businesses with a turnover of up to $50 million.
Senator Hinch can’t see why tax reductions for firms with up to $500 million can’t be passed now and the government take the cut for big business to the next election, if it has ‘got the guts’.
‘You can’t have the big banks being investigated by a royal commission into their tawdry, disgusting behaviour towards working men and women and then reward them with a five per cent tax cut,’ he said earlier this week.