Labor’s “dark vision” that valued “envy and populism” over growth would suffocate Australia’s economy, Treasurer Scott Morrison has said, claiming an ALP government would bring a A$164 billion tax slug for households and businesses over ten years.
This would be “dumped straight on top of an economy that is getting back on its feet and moving towards better days ahead”, he said, stressing that the economy was shifting gears, entering a new chapter of growth.
In a speech to the Australian Chamber of Industry and Commerce, Morrison also challenged Bill Shorten to announce before the Bennelong byelection what a Labor government would do about the already-legislated company tax cuts.
Morrison released Treasury costings he has had done of ALP tax policies. He said Labor’s extra taxes “will smash through our tax speed limit of 23.9% for taxes as a share of our economy that Labor has already said they will abolish”. The Labor policies would bring the level closer to 26%, he said.
The list included $20 billion through abolishing negative gearing for established homes; $13 billion from halving the capital gains discount; $1.5 billion from the cap on claims for tax management; $22 billion from the reintroduction of the deficit levy; $22 billion from changes related to discretionary trusts, and $25 billion from new superannuation arrangements.
Labor’s plan to reverse the government’s tax enterprise plan would mean $59 billion in higher tax, he said.
“There is no question Bill Shorten will not proceed with our full enterprise tax plan for businesses with a turnover greater than $50 million,” he said.
“But what they continue to deceive Australians about is reversing the tax cuts we have already legislated for the 3.2 million businesses with a turnover less than $50 million.”
The opposition has yet to say how much of these legislated cuts it would retain.
Morrison said that “not implementing the balance of the enterprise tax plan for businesses with a turnover of over $50 million hits those businesses with a $35 billion tax bill.
"Labor’s policy at the last election and included in their election costing, was to only allow tax cuts for companies with a turnover of up to $2 million. That policy remains unchanged by Labor.
"Reversing the legislated tax cuts for firms with turnovers between $2 million and $50 million will impose a $25 billion tax bill on those businesses – impacting their growth and the jobs and wages that depend on that growth: 3.3 million Australians work in those businesses”.
He said Labor was relying on this $25 billion to pay for commitments it had made already.
“Labor have to fess up, tell Australian small and medium sized businesses that you are going to reverse their tax cuts, tell the Australian people that you can’t afford your promises or tell them that you are going to increase the debt and deficit even beyond the higher levels you have already confessed to,” he said.
Morrison said there were almost 18,000 small businesses in Bennelong waiting for Bill Shorten’s answer before the December 16 byelection.
“If he fails to tell them, then he will confirm once again why Australians cannot and do not trust Bill Shorten, because he’s shifty as.”
Some in the audience thought it was too much of an election-type speech, rather than setting out a vision for what the government would do and saying more about business.
Shadow Treasurer Chris Bowen accused Morrison of “an outrageous politicisation of the Treasury”. Bowen said this was Morrison’s “latest fumble” on tax.
“It takes a series of guesses at Labor policy assumptions including on company tax, fails to include Labor not proceeding with Morrison’s Medicare levy increase, and hilariously, the treasurer seems to assume an early 2018 election to get the July 1, 2018, start date in these numbers.
"Morrison talks tax but no mention of the PM’s income tax cuts! What happened to them?”