JOINT PRESS RELEASE

THE HON. TONY ABBOTT MHR, LEADER OF THE OPPOSITION THE HON. JOE HOCKEY MHR, SHADOW TREASURER THE COALITION WILL CUT COMPANY TAX RATE BY 1.5 PER CENT AND STRENGTHEN THE ECONOMY
The Coalition will cut the company tax rate by 1.5 per cent from 1 July 2015. The new company tax rate of 28.5 per cent will encourage investment in Australian businesses and jobs during a time of economic uncertainty. Lowering the company tax rate is part of our Plan to build a strong, prosperous economy with more investment and more jobs. This is a tax cut that will boost jobs and strengthen the economy. Our company tax cut is part of our Real Solutions Plan to create one million new jobs within five years. Along with our company tax cut, the Coalition will, if elected, scrap the carbon tax, scrap the mining tax, cut $1 billion in red tape costs, establish a one-stop-shop for environmental approvals, restore the ABCC, and not proceed with Labors $1.8 billion FBT hit on cars. While the Henry Review into Tax noted that a company tax cut will not only result in higher growth but is also likely to result in higher wages, Labor broke its promise to cut the company tax rate. For six years Mr Rudd and Labor have talked about a company tax cut but have not delivered. The Coalition understands the clear connection between taxation policy and investment, jobs and increasing wages. That is why we have consistently opposed the carbon tax and the mining tax it is also why we will cut company tax. The cut to the company tax rate is part of the Coalitions significant tax reform agenda to be delivered within the first term. This includes: abolishing Labors carbon tax, which, on the Governments own figures, will cost the average family more than $550 in 2014-15; keeping the current tax thresholds and fortnightly pension and benefit increases, introduced as part of the carbon tax package, so that these become genuine tax cuts and cost-of-living relief rather than partial compensation for a damaging tax; scrapping Labors failed mining tax, which added to sovereign risk and to the costs of many mining companies, especially smaller miners, while raising only a tiny fraction of the promised revenue; and
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reversing Labors damaging and ill-considered change to fringe benefit tax on motor vehicles, announced in July this year without consultation and which caused chaos and job losses across the industry.

When it comes to tax, Mr Rudd offers just more talk. Mr Rudd and Labor have introduced over 40 new or increased taxes. With unemployment already at the highest level in 14 years and set to surge further to nearly 800,000 on the Governments own forecasts cutting tax is crucial to strengthening the economy and creating the right environment for jobs. The Coalitions cut to the company tax rate will cost $5 billion over the forward estimates. This reflects the direct costs to revenue from the tax reduction. We are confident that the company tax cut will deliver some partially offsetting benefits to the Budget bottom line over the medium term. 7 August 2013