Australian Prime Minister Julia Gillard hinted on Tuesday night of lower corporate tax rates after the federal government scrapped the proposal. She said lower corporate tax rates would benefit workers and the community in terms of more jobs available and better pay over time.
The reduction of corporate tax rate to 29 per cent from the current 30 per cent would be funded by proceeds from the mining tax. Ms Gillard cited the lack of parliamentary support for the previous plan to reduce the corporate tax rate as the reason why the Gillard government scrapped it, which was criticised by business.
Coalition leader Tony Abbott was against the cut and the Greens were in favour of a tax cut only for small enterprises.
"I've got no doubt the company tax rate should be lower, and no doubt the revenue base has to be maintained as well," Bloomberg quoted Ms Gillard's speech before 130 business, union and community leaders in Brisbane who are participating in a two-day business summit. .
The mining tax and the carbon tax will be collected by the Gillard government beginning July 1. The government expects to raise A$6.5 billion over two years through the mining tax and A$24.7 billion over four years for the carbon tax.
Ms Gillard's hint of lower corporate tax rate prompted the Australian Industry Group (AIG) to call on all political parties to commit to significant tax reforms, including reducing corporate tax rates to 25 per cent.
"There are big challenges still before us and the job for tonight and tomorrow is as simple as this - to follow through on our investments and reforms to lift productivity, to do more to sustain and spread growth," the prime minister said.
"Workforce is one of the real hubs of the economic discussion in Australia. We're doing structural adjustment at a time of employment growth, and that's a good thing, but it doesn't make the fact of a business closing its doors any easier," Ms Gillard said.
At the same time, Ms Gillard asked business and union leaders to have their voices heard on behalf of the Australian economy to drown out bad news from overseas.
"The bad news from overseas is making more noise at the moment than hailstones on a tin roof. Those of us who know how strong our economy overall really is do have to speak up to be heard. We know it's in the interest of business that confidence grows, we know it's in the interest of working people that confidence grows too," The Telegraph quoted Ms Gillard.
To contact the editor, e-mail: