🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Australian treasurer defends company tax cuts after central bank warning

Published 18/02/2018, 05:57 pm
© Reuters.  Australian treasurer defends company tax cuts after central bank warning

By Alison Bevege

SYDNEY, Feb 18 (Reuters) - Australian Treasurer Scott Morrison has defended his plan to reduce company taxes after the central bank warned the proposed cuts could scuttle plans to get the national budget back into surplus by 2021.

Morrison said in a television interview on Sunday that no government tax measure would jeopardise getting the budget into surplus by 2021, a promise that has been made in the last five annual budget statements.

The treasurer noted that besides the United States, which has already cut taxes, France, Germany and Britain were all considering company tax cuts and that Australia had to keep up.

"If we don't, jobs and investment go offshore which is bad for people's wages, it's bad for people's jobs and its bad for growth in the economy," he said.

When pressed on the risk of rising global interest rates making it harder for the government to service its debt, Morrison stressed the importance of keeping Australia's AAA credit rating.

The government is trying to pass legislation to lower the tax rate to 25 percent from 30 percent on companies with a turnover of more than A$50 million ($40 million).

Reserve Bank of Australia Governor Philip Lowe told the parliamentary economics committee on Friday that it would be a "big mistake" to pay for corporate tax cuts with a higher deficit.

He said the benefits of tax cuts would be short-lived if every country joined a race to the bottom.

Lowe has said the outlook for the rising U.S. budget deficit is "very problematic". said on Sunday that unlike the United States, Australia would cut taxes within a budget that was still projected to come into balance in 2021.

($1 = 1.2641 Australian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.