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Nick Xenophon 'more cautious than the PM' about childcare package Nick Xenophon 'more cautious than the PM' about childcare package
(about 1 hour later)
Nick Xenophon says negotiations over the Turnbull government’s childcare package are going more slowly than the prime minister has suggested.Nick Xenophon says negotiations over the Turnbull government’s childcare package are going more slowly than the prime minister has suggested.
The Independent senator said the Coalition’s controversial $48bn company tax cut plan would also need to be split in two when introduced to the Senate because he was “yet to be convinced” about the need for big-business tax cuts, although he supported cuts for small businesses.The Independent senator said the Coalition’s controversial $48bn company tax cut plan would also need to be split in two when introduced to the Senate because he was “yet to be convinced” about the need for big-business tax cuts, although he supported cuts for small businesses.
The prime minister, Malcolm Turnbull, will use a major speech on Wednesday at the National Press Club to push ahead assertively with childcare reforms when parliament resumes next week. The prime minister, Malcolm Turnbull, used a major speech on Wednesday at the National Press Club to push ahead assertively with childcare reforms when parliament resumes next week.
In an effort to pressure the Senate to end the deadlock over the package, his government will bring forward a bill combining the childcare measures with the savings required to fund them.In an effort to pressure the Senate to end the deadlock over the package, his government will bring forward a bill combining the childcare measures with the savings required to fund them.
According to an excerpt of the speech circulated by his office, Turnbull will also continue to champion his government’s company tax cuts, which the Coalition will push in the coming parliamentary session, despite only having crossbench support to implement a tax cut for firms with a turnover of $10m. Turnbull said he would also continue to champion his government’s company tax cuts, which the Coalition will push in the coming parliamentary session, despite only having crossbench support to implement a tax cut for firms with a turnover of $10m.
Turnbull has said talks with the crossbench about his childcare package have been constructive. But Xenophon, speaking on ABC radio on Wednesday, said he was “more cautious than the PM” on that front.Turnbull has said talks with the crossbench about his childcare package have been constructive. But Xenophon, speaking on ABC radio on Wednesday, said he was “more cautious than the PM” on that front.
“The childcare boost is contingent on cuts to family tax benefits and there are some aspects of that that we’re concerned about,” Xenophon said.“The childcare boost is contingent on cuts to family tax benefits and there are some aspects of that that we’re concerned about,” Xenophon said.
He said he wanted to know how the cuts to family tax benefits would impact low-income families, particularly single-income, sole-parent families.He said he wanted to know how the cuts to family tax benefits would impact low-income families, particularly single-income, sole-parent families.
“We’ll keep talking with the government to see whether we can come to any agreement on that but I am more cautious than the PM in relation to that,” he said.“We’ll keep talking with the government to see whether we can come to any agreement on that but I am more cautious than the PM in relation to that,” he said.
On the company tax cut plan, Xenophon said his three-person Senate team would support a tax cut for businesses with a turnover of $10m or less, but beyond that “we remain to be convinced”.On the company tax cut plan, Xenophon said his three-person Senate team would support a tax cut for businesses with a turnover of $10m or less, but beyond that “we remain to be convinced”.
“[The bill] needs to be split,” he said. “When you look at alternative approaches to this, the Australia Institute, in the report that it published yesterday, does put up the case to say that this isn’t necessarily the smartest thing to do in terms of economic impact,” he said.“[The bill] needs to be split,” he said. “When you look at alternative approaches to this, the Australia Institute, in the report that it published yesterday, does put up the case to say that this isn’t necessarily the smartest thing to do in terms of economic impact,” he said.
“The analysis … is worth reading because it does indicate that foreign investment isn’t predicated necessarily on lower tax rates. There are a whole range of other factors.“The analysis … is worth reading because it does indicate that foreign investment isn’t predicated necessarily on lower tax rates. There are a whole range of other factors.
“We saw when company tax rates were much higher that when [they] dropped in the 1990s and in the last decade or so there wasn’t necessarily a big boost in foreign investment, the two don’t necessarily follow.”“We saw when company tax rates were much higher that when [they] dropped in the 1990s and in the last decade or so there wasn’t necessarily a big boost in foreign investment, the two don’t necessarily follow.”
David Richardson from the Australia Institute said the treasurer, Scott Morrison, had suggested there was a “fight” to attract foreign capital and that company tax was the weapon, so the Australia Institute wanted to test the proposition.David Richardson from the Australia Institute said the treasurer, Scott Morrison, had suggested there was a “fight” to attract foreign capital and that company tax was the weapon, so the Australia Institute wanted to test the proposition.
He said analysis showed Australia’s stock of foreign investment was dominated by 13 countries, and 71% of foreign investment applications came from countries with company tax rates lower than Australia’s rate.He said analysis showed Australia’s stock of foreign investment was dominated by 13 countries, and 71% of foreign investment applications came from countries with company tax rates lower than Australia’s rate.
“All of this raises the question – if Australia is already successful at attracting foreign investment, why would we give tax cuts to foreigners?” he said.“All of this raises the question – if Australia is already successful at attracting foreign investment, why would we give tax cuts to foreigners?” he said.
Business groups have now split over the Coalition’s tax cut plan, with the Australian Industry Group proposing a compromise that would see the tax cuts for small businesses locked in now and the tax cuts for big business delayed until after the next federal election.Business groups have now split over the Coalition’s tax cut plan, with the Australian Industry Group proposing a compromise that would see the tax cuts for small businesses locked in now and the tax cuts for big business delayed until after the next federal election.
The chief executive of the AIG, Innes Willox, writing in the Australian Financial Review, said this would give the government time to re-prosecute the case for its big business tax cuts – implying the government was losing the argument.The chief executive of the AIG, Innes Willox, writing in the Australian Financial Review, said this would give the government time to re-prosecute the case for its big business tax cuts – implying the government was losing the argument.
“By lowering the [company] tax per dollar of profit, we would more successfully compete with the overwhelming majority of countries that do not tax investment as heavily as we do in Australia,” Willox wrote.“By lowering the [company] tax per dollar of profit, we would more successfully compete with the overwhelming majority of countries that do not tax investment as heavily as we do in Australia,” Willox wrote.
“Despite the strength of this argument and the favourable impact on new foreign investment and future growth, opponents nevertheless still portray the company tax cut as nothing more than a windfall to non-resident investors who were content to make their existing investments on the basis of the 30% company tax rate.“Despite the strength of this argument and the favourable impact on new foreign investment and future growth, opponents nevertheless still portray the company tax cut as nothing more than a windfall to non-resident investors who were content to make their existing investments on the basis of the 30% company tax rate.
“It would be better to compromise and lock in an achievable near-term goal while setting in train a more substantial evaluation of how we can build a more competitive tax system.“It would be better to compromise and lock in an achievable near-term goal while setting in train a more substantial evaluation of how we can build a more competitive tax system.
“The government and other advocates would need to re-prosecute the case ahead of the next election and, if successful, re-present the remainder of the enterprise tax plan to the next parliament,” he said.“The government and other advocates would need to re-prosecute the case ahead of the next election and, if successful, re-present the remainder of the enterprise tax plan to the next parliament,” he said.
The Coalition’s business tax cut plan was the centrepiece of its election campaign. It wants to gradually cut the company tax rate from 30% to 25% over the next decade, adding 1% to economic growth when fully implemented.The Coalition’s business tax cut plan was the centrepiece of its election campaign. It wants to gradually cut the company tax rate from 30% to 25% over the next decade, adding 1% to economic growth when fully implemented.
The government had hoped to put the entire plan to a Senate vote by the end of March. The government hopes to put the entire plan to a Senate vote by the end of March.