Mr Turnbull made a fresh pitch for the government’s embattled proposal to cut company tax and highlighted the Government’s proposed childcare reforms and their accompanying savings, saying discussions with the Senate crossbench have been “constructive”.
The Government’s tax cut proposals are expected to be the subject of intense negotiations with the Senate cross-bench over coming weeks with key cross-bencher Senator Nick Xenophon indicating he was likely to agree to the proposed cuts for companies up to $10 million turnover but not above.
However this does not guarantee passage of the legislation. With the Senate’s present depleted numbers the Government needs the support of nine of the 10 Senate cross-benchers (Family First’s Bob Day and One Nation’s Rod Culleton have been disqualified and former Liberal Cory Bernardi is now an independent).
The Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 containing the tax cut, which was introduced after the July election s is still before the House of Representatives, with negotiations continuing. Debate on the Bill resumed briefly in the House on Thursday 9 February and was again adjourned while negotiations continue.
As it currently stands the Bill:
Amends the: Income Tax Rates Act 1986 to: reduce the corporate tax rate for small businesses with an aggregated turnover of less than $10 million to 27.5 per cent for the 2016-17 financial year and progressively extend that lower rate to all corporate tax entities by the 2023-24 financial year; and further reduce the corporate tax rate in stages so that by the 2026-27 financial year, the corporate tax rate for all entities will be 25 per cent; Income Tax Assessment Act 1997 to: increase the small business income tax offset to 16 per cent of an eligible individual’s basic income tax liability that relates to their total net small business income from the 2026-27 financial year; and enable small businesses with an aggregated turnover of less than $10 million to access most small business tax concessions, and small businesses with an aggregated turnover of less than $5 million to access the small business income tax offset; and Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997 to make consequential amendments.
However, it is likely to be modified before passing.
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