If Labor wins the next federal election it will keep in place the 27.5 per cent corporate tax rate for companies between $10 million and $50 million turnover.
But a Shorten Labor government would repeal all other company tax scale reductions above this if they are not already in place.
The move will save $2 billion over the next four years and $62 billion over the decade, which Labor says is better spent on schools, roads and hospitals and paying down debt.
The Opposition Leader said his party had realised – after being attacked over his “captain’s call” earlier in the week to scrap the cut – that the decision would have caused “confusion” for small businesses.
“I accept the argument … that for companies who already have a lower tax rate already in, we do not want to create uncertainty,” Shorten told reporters in Sydney today.
The Coalition government has legislated future cuts that drop the corporate tax cut even further to 25 per cent in 2026/27, but that will be repealed if Labor wins the next federal election.
Shorten is also promising to repeal any tax cuts for businesses with turnovers above $50 million.
Labor says 99.8 per cent of businesses will pay the same or less tax under a Shorten government.
Finance Minister Mathias Cormann said Labor was now backing $30 billion worth of the government’s $65 billion company tax cuts.
“What makes smaller businesses stronger would make all businesses stronger,” he tweeted on Friday.
“Any incentive for business to downsize would lead to job losses. We need incentives for all businesses to keep growing and hire more.”
Earlier in the day, Prime Minister Malcolm Turnbull said Labor’s plan would hurt workers and employers.
“He is assaulting family-owned businesses, wanting to put up their taxes,” Turnbull told reporters in Adelaide.
“He’s assaulting them, and he’s assaulting the jobs they’re creating.”
The Coalition also shrugged off claims it has done a deal with Pauline Hanson to delay a vote on further tax cuts for big businesses until after the by-elections.
The government wants to cut the tax rate for businesses with a turnover of more than $50 million a year from 30 per cent to 25 per cent by 2026/27.
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