Introduction
1.1
The Coalition members of the Senate Economics References Committee (‘the
Committee’) consider the Committee’s Final Report on the Inquiry into the
‘Commitment to the Senate’ issued by the Business Council of Australia (‘the
Inquiry’) to be inaccurate and do not support its conclusions. The Report does
not reflect a balanced view of the evidence provided to the committee and fails
to provide sufficient evidence for its recommendations.
1.2
Coalition Senators wish to reiterate their remarks from this inquiry’s
dissenting interim report.
Political motivation of
the inquiry
1.3
Coalition Senators wish to emphasise that initiation of the inquiry was
politically motivated and designed to re-litigate the Senate Economics Legislation
Committee's inquiry into the Treasury Laws Amendment (Enterprise Tax Plan) Bill
2016 (“ETP”).
1.4
Coalition Senators note that this inquiry was unnecessary, and that the
expensive conduct of two public hearings was a disgraceful abuse of taxpayer funds.
1.5
As was noted by submitters, businesses regularly write to the Senate, or
the parliament as a whole, and none of those letters become the subject of a
frivolous Senate committee inquiry.
1.6
Never before has the Senate conducted an inquiry merely on the back of a
written commitment made by a stakeholder, let alone one that simply stated the
plainly obvious: that lower company tax rates will allow business to invest,
grow, create jobs, and increase wages.
Acceleration of tax cuts
for small and medium businesses
1.7
Coalition Senators welcome the Government’s decision to bring forward
the changes to the corporate tax rate for small and medium businesses (“SMEs”).
The changes will mean that important tax relief is delivered five years earlier
than planned.
1.8
Coalition Senators believe that delivering tax relief for SMEs will
quickly provide demonstrable benefits for the economy, with increased growth,
employment and wages.
1.9
Coalition Senators also welcome the Government’s decision to accelerate
the increased tax discount for unincorporated businesses.
1.10
Coalition Senators wish to note that the acceleration of these two
important tax measures by the government will improve the fortunes of the 3
million Australian SMEs, and the nearly 7 million people in their employ.
ASX continuous disclosure
laws
1.11
The Committee’s report is intentionally misleading in its assertion that
“many of the corporations that signed the BCA Commitment and attended the
public hearings could not readily give examples of actual investments that would
potentially go ahead with the reduced corporate tax rate”. Public companies,
which made up the vast majority of those who signed the BCA Commitment, are
prevented by ASX’s continuous disclosure laws from discussing concrete examples
of possible investments, which are highly commercially sensitive.
1.12
All members of the committee were provided with an abridged guide of the
ASX’s Continuous Disclosure Rules, and yet the majority report continued to
berate witnesses for failing to give concrete examples of possible investments,
despite knowing that ASX rules prevented these witnesses from doing so.
Investors
1.13
While wishing to stress the importance of corporate tax rates on
investment decisions, Coalition Senators acknowledge that companies and
potential investors assess a wide range of factors when making investment
decisions.
1.14
However, the Committee’s report is intentionally misleading where it
notes that “a variety of other factors – including a developed economy, stable
government and educated workforce – were also considered when large
multinationals make investment decisions between options in difference
countries”. While Australia does indeed have a developed economy, an educated
workforce, and stable government, so do all the other countries with whom we compete
for investment.
1.15
Coalition Senators believe that Australia must lower its corporate tax
rate to remain internationally competitive alongside other developed economies
that have lowered their corporate tax rate in recent years.
Conclusion
1.16
Coalition Senators believe that Australia must reduce its corporate tax
rate to remain internationally competitive to encourage businesses to invest
more, employ more workers and pay higher wages.
1.17
The Committee heard significant and compelling evidence that supports
the conclusion that the best possible way to ensure future job security and
wages growth for working Australians is for the Parliament to back corporate
tax rates for SMEs.
1.18
Coalition Senators acknowledge that the 45th Parliament, as currently
constituted, does not support the passage of corporate tax cuts for businesses
with turnover greater than $50 million.
1.19
However, the Coalition members of the Committee note that the
45th Parliament has supported the Coalition Government’s plan to fast track tax
cuts for small and medium businesses in order to grow the Australian economy.
Senator Jane Hume Senator
Amanda Stoker
Deputy Chair Senator
for Queensland
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