Federal opposition leader Bill Shorten used his budget reply speech last night to declare his party’s support for tax relief for small business – and its vehement opposition to corporate tax cuts for the big end of town.
In a bid to paint the 2016 federal budget as one that is “for big business over battlers”, Shorten said Malcolm Turnbull and Scott Morrison’s first budget looks after high-income earners at the expense of families and “ordinary Australians”.
“If there’s one fact that defines this budget, this Prime Minister and this government, it is this: A working Mum on $65,000 with two kids in high-school will be over $4,700 a year worse off,” Shorten said.
“And someone on a million dollars, will be almost $17,000 better off every year.”
Shorten claimed Labor would save $71 billion over a ten-year period from its alternative policies, including placing restrictions on negative gearing, not supporting company tax cuts for businesses turning over more than $2 million annually, and repealing the Coalition’s climate change Direct Action policy.
Here are five key takeaways from Shorten’s budget reply speech
1. Labor won’t support tax cuts for all companies
While the Labor Party will support cutting the company tax rate from 30% to 27.5% for small businesses turning over up to $2 million annually, Shorten said his party will not support the government’s proposed 10-year plan to reduce the company tax rate for all companies, starting with those turning over up to $10 million.
“Last year … I invited the government to co-operate on cutting the tax rate for Australian small businesses to 25 percent,” Shorten said.
“We meant it then – we stand by it now.
“Labor will support a tax cut for small businesses with a turnover of less than $2 million per year because that’s what a small business is.”
“We will deliver tax relief for the small businesses representing 83 percent of all Australian companies. But billion-dollar businesses are not small businesses. Never have been – never will be.”
While Shorten said large corporates are important to the Australian economy, he says they “don’t need a taxpayer subsidy which Australia cannot afford to pay”.
“Coles is not a small business. The Commonwealth Bank is not a small business. Goldman Sachs is not a small business,” he said.
2. Labor will save $6 billion over 10 years by cracking down on vocational training providers if elected
Shorten said a Labor government would “restore integrity” to the vocational education system by “cleaning out the dodgy private colleges who have been ripping Australians off”.
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The opposition leader claimed the “pendulum was swung too far to private providers” and in response, Labor will support the public TAFE system “all the way”.
Labor proposes to cap federal government vocational education loans at $8,000 per student per year, a measure it says will save $6 billion over 10 years.
“We will cut this wasteful spending,” he said.
3. The opposition will support the personal income change for workers earning more than $80,000
Shorten said the opposition will support the government’s “modest measures on bracket creep”, which will involve lifting the 37% personal income tax threshold from $80,000 to $87,000.
Despite this, Shorten said Labor believes “in the face of continuing deficits, now is not the time to give the richest 3 percent of Australians another tax cut on top of this”.
“Now is not the time to reduce the marginal rate for individuals who earn more than $180,000 a year,” he said.
4. But it has “very grave concerns” about the some of the proposed superannuation changes applying retrospectively
While Shorten welcomed the government’s push to “close the unsustainably generous superannuation loopholes at the very top end”, he took issue with the fact that some of the government’s proposed super changes will be applied retrospectively, saying Labor has “very grave concerns”.