GRACosway Weekly Wrap Up: Company Tax Cuts Stalled in Senate
- Newspoll results have continued to favor the Opposition.
- The Government’s proposed company tax cuts are stuck in the Senate, after the Government failed to win enough crossbench support to pass the legislation.
- In response to criticism, Labor has amended its policy to abolish cash refunds from excess dividend imputation credits.
- Australia has expelled two Russian diplomats, amid increasing international tension following a chemical attack in the UK.
- The final report of the Scientific Inquiry into Hydraulic Fracturing in the Northern Territory was released this week.
In the final sitting week before the May Budget, Prime Minister Malcolm Turnbull has faced his 29th consecutive Newspoll loss, with results revealing an unchanged two-party preferred vote of 47 per cent for the Coalition, compared with 53 per cent for Labor. The Opposition improved its primary vote by one point to 39, with the Coalition remaining steady on 37. Deflecting questions about his Party’s string of Newspoll losses, Mr Turnbull instead emphasised the number of jobs the Government has created, saying “that’s the number we are focused on”.
Company Tax Debate Dominates
The Government has suffered a setback in the Senate, failing to secure the necessary crossbench support to pass its proposed company tax cuts through the Upper House ahead of the May Budget. Senators Derryn Hinch and Tim Storer are the two holdouts, with Senator Storer questioning the value of the “narrowly cast” package in the absence of wider reform. Finance Minister Mathias Cormann is positive about the Government’s progress in securing 37 of the 39 votes required to pass the legislation, and confirmed the Government is willing to engage in broader discussions about tax reform. The Government has postponed putting the legislation to a vote until Parliament resumes after the Budget.
Industry Advocacy Intensifies
Meanwhile, the Business Council of Australia (BCA) has launched a national advertising campaign to inspire public “faith and trust” in industry and promote the positive impact of business on jobs and economic growth, in support of the proposed company tax cuts. The campaign comes amid controversy over a BCA survey reportedly undertaken earlier this year, which asked leading CEOs to share their likely response to a lower company tax rate. More than 80 per cent of respondents are believed to have said they would use the proceeds to boost returns to shareholders or invest in the company, rather than increase wages or employ extra staff.
Labor’s Take on Tax
Meanwhile, Opposition Leader Bill Shorten has declared the next election a referendum on tax, pledging that Labor will not only repeal the company tax legislation, should it pass, but in fact increase company tax, if elected. Following two weeks of criticism, Labor has also amended its policy to abolish cash refunds from excess dividend imputation credits to ensure pensioners will be exempt from the policy.
Russian Diplomats Dismissed
Together with the PM, Foreign Minister Julie Bishop has announced the expulsion of two Russian diplomats from Australian soil in response to the 4 March nerve agent attack in the UK. 23 other countries are reportedly taking similar action. Mr Turnbull described the 4 March incident as “an attack on the sovereignty of every nation that respects the rule of law” and confirmed the two Russian diplomats will be “directed to depart Australia within seven days”.
Fracking in the NT
The Scientific Inquiry into Hydraulic Fracturing in the Northern Territory has delivered its final report to the Territory Government this week, articulating 135 recommendations on how to reduce the risks associated with onshore shale gas development, should the present moratorium on fracking be lifted. NT Opposition Leader Gary Higgins has urged the Government to lift the ban, which has been in place since September 2016.
Looking Ahead