longweekend58 wrote on Aug 7^th, 2013 at 9:53am:


Not when the tax cut is being offset by a "levy" to fund an unnecessay increase in government expenditure.

Abbott has only done one thing, increased government expenditure in the form of paid parental leave over and above the existing scheme.

Verge wrote on Aug 7^th, 2013 at 10:41am:


no company will be worse off and most will be better off.  I find it hard to see that as a negative particularly when the intention is to reduced company tax rates further.  This is just the first step.  AS a company owner, I am pleased.  Of course I need to make a profit first 

Coalition pressed on how it will pay for company tax cut

    by: Ben Packham
    From: The Australian
    August 07, 2013 1


LABOR has refused to match Tony Abbott's promised 1.5 per cent cut in company tax and demanded to know where the Coalition will find the money to pay for it.

The Coalition says the proposed tax cut would apply to about 750,000 companies at a cost of $5 billion, helping to stimulate the economy and offset its paid parental leave scheme.      

Kevin Rudd today questioned the credibility of the promise.

“This mob run around saying, `We need another tax cut, without saying where the money will come from',” he said.      

“This is not being done thoroughly.”    



Opposition treasury spokesman Joe Hockey said: “This is money that will be recovered by increasing the growth in the Australian economy.


“We will also obviously be announcing, as soon as the pre-election fiscal outlook is released ... further savings on top of the more than $15 billion in savings we have already announced.”

However, Mr Hockey also confirmed the Coalition would not announce a final surplus or deficit position as part of its pre-election costings, because it does not trust Treasury's figures.

But he said the net effect of all Coalition policies would be clear by election day.

Treasurer Chris Bowen said the Coalition's numbers could not be believed.      

“What rigour will be around that analysis. Who will do the costings? Will it be Treasury? Will it be the Department of Finance, or will it be some accounting firm which they have used in the past, and has been fined for misconduct because of the poor quality of their costings?”

Mr Bowen said Labor would not pledge its own company tax cut.

“A reduction in the company tax rate , in and of itself, is a fine ambition to have,” he told the ABC.

“But it has got to be done in a fiscally responsible way. You have to outline how you are going to pay for it.”

Mr Abbott's $5bn PPL scheme, which is not fully funded by a 1.5 per cent levy on big companies, has been criticised as a “tax” on business that will force up retail prices for consumers and be a drag on business activity.

The start date for the company tax cut is designed to coincide with the introduction of the PPL scheme to ensure that the 37,500 businesses paying the levy - those with more than $5 million of revenue, or about one in 20 firms - will not face a net increase in corporate taxes. Smaller firms, which are not subject to the PPL levy, will get a tax cut.

Mr Hockey says the tax cut would make Australian firms more competitive.

“It gives business that certainty, that stability that they're crying out for which means they'll have confidence to create jobs, to have a go and grow the economy,” he told the Nine Network.

He said the Australian company tax rate was five per cent above the global average.

Finance Minister Penny Wong said the only way the opposition could pay for a company tax cut was to cut services or increase the GST.      

“This is a company tax cut that can only be funded by more cuts, more cuts to services, jobs, health, education for Australian families or alternatively an increase in goods and services tax,” she told the Seven Network.   

“It's kind of funny they're putting up company tax and putting it down as well to pay for the rolled gold paid parental leave scheme that Tony Abbott wants to put in place.”      

Bobby. wrote on Aug 7^th, 2013 at 12:49am:



Bump to the Libbos.

longweekend58 wrote on Aug 7^th, 2013 at 9:53am:



Would be more logical to cut taxes for the workers since they spend more of their cash in the retail sector.

There again this tax cut is to balance Lib's baby breeding tax for business and not for the betterment of the economy.

It's abbott juggling deck chairs on the titanic.

longweekend58 wrote on Aug 7^th, 2013 at 11:06am:


The benefit to small business will be one that will be enjoyed, but it is a bit double edged for the following reason;
Eg
Longy Pty Ltd makes a profit for the year of $150,000, and a tax bill of $45,000.  Director Longy decides that since he had a good year, and to get the profits out of the company he pays himself a dividend of $50,000.  This dividend comes with a franking credit of $15,000.

Under the coalition proposal on the same circumstances Longy pays only $42,750, but what that means is the franking credits will reduce by the same percentage as well.

So when you lodge your own personal return you wont have the extra franking credits when then means the tax payable by the individual shareholder becomes more.

The objective of a small business company that makes profits is to ultimatley have all those profits returned to the shareholders (usually mum and dad).  The lower tax means lower franking credits so there is no nett benefit as Mum and Dad have had less of their personal tax bill picked up by the company.

For big business the nett effect will be zero, but the shareholders will receive less of a benefit, as our franking credits have been cut by 1.5% but the government gets to keep all of its 1.5% levy.

The relationship between private capital and the working class is broken forever in this country, the state should stop subsidizing this filth, we will not collaborate with them.  Its time for the Government to nurture social ownership, because that is the only work environment acceptable.

Quote:



How would you fund all your demands for increases and lower prices?