Federal Finance Minister Penny Wong is refusing to guarantee the July 1 start date for Labor’s company tax cuts, but Trade Minister Craig Emerson insists the measure will be in the May 8 budget.
The government has promised a 1% tax cut from July for small business, with larger businesses set to receive the same cut in 2013-14.
The cut will be funded by the Minerals Resource Rent Tax, which is expected to pass through Parliament next week, but legislation for the tax cut is yet to be considered by Parliament.
Wong said while the government will “obviously bring forward” the legislation, she will not commit the government to the promised start date.
“We want to give small business a tax cut. But we first want to get the minerals tax through,” she told ABC Radio.
Wong said she would not play “word games” when asked to guarantee the tax cut to small business by July 1, and a planned 1% cut for big business in July 2013.
According to Wong, the government will wait for a report from its tax working group before proceeding with legislation. However, Emerson insists the measure will be in the May 8 budget.
Meanwhile, the Greens say while they are prepared to grant a tax cut to some medium-sized businesses – in addition to small business – they refuse to support tax cuts for larger firms.
According to Greens MP Adam Bandt, the Greens are prepared to negotiate on the $2 million threshold, which is defined as the boundary between a small and medium-sized business.
“Perhaps $2 million isn’t the right figure and that’s something that perhaps in the lead-up to the budget can be looked at, and we think should be looked at,” Bandt said.
However, the Greens are refusing to negotiate on allowing Labor’s proposed company tax cuts for big business.
Wong said while she accepts the Greens’ position because “they are not the party that claims to be the party of business,” the Liberal Party’s opposition to the tax cuts is “extraordinary”.
The Liberals are refusing to give their support to the company tax cuts because they will be funded by the mining tax, which the Liberals remain vehemently opposed to.
“What we have is a Liberal leader who is so addicted to saying no he is going to say no to tax cuts to small business,” Wong said.
“Last year, he (Tony Abbott) was saying he wanted a corporate tax cut – he was prepared to support tax cuts for the business community – but now he is saying no.”
“The only reason the Greens are relevant, for purposes of a broader tax cut for business, is because Tony Abbott is saying no.”