Prime Minister Julia Gillard says she is still determined to give business a tax cut.
The Government had promised to use revenue from the mining tax to drop the corporate tax rate from 30% to 29% from July 1 for businesses with turnovers of under $2 million, and July 1 next year for bigger businesses.
The decision not to go ahead with the cut has angered business groups.
Gillard says 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,” Gillard told ABC Radio.
“I wanted to legislate one in this Parliament and, of course, Mr Abbott with his usual negativity was going to vote no,” she said.
Treasurer Wayne Swan told the Nine Network; “We have argued for a company tax cut but (Opposition leader) Mr Abbott has opposed it, and it is opposed by the Greens. It will not pass through the Parliament”.
The Greens told LeadingCompany this week they would support a tax cut to small business this year, but would vote against a tax cut to big business which was due to come into effect next year.
“Which meant we wouldn’t have been able to get that legislation through,” Gillard said.
Gillard said there were still measures in the budget to help businesses, including an instant asset write-off and the loss carry-back scheme.
The Prime Minister said giving more support to low, middle-income families and the poor was also 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,” Gillard said.