Australia’s leading business lobby says the government has a simple choice.
Make moderate cuts to spending now…. or let the budget blow out further, and hike taxes to pay for it later on.
Jennifer Westacott is the chief executive of the Business Council of Australia.
She says the Senate crossbench should stop playing politics and pass the Turnbull government’s cuts to welfare contained in the omnibus bill.
“We do not seem to have an agreed parliamentary strategy for a systematic improvement of the budget. We’ve got the omnibus bill stuck, we’ve got no willingness, I think, on the opposition side or on the cross benches to work constructively with the government for how we actually slow the rate of growth. There’s only one way of turning that around: we increase taxes, we cut services or we move a whole lot of people into a higher tax bracket. And that’s just unacceptable.”
The Business Council doesn’t just want taxes to stay where they are: it says tax on businesses should be lowered to promote competition.
The government announced a ten-year plan to cut company tax for big and small businesses as the centrepiece of last year’s budget, but is still trying to get cross-bench support for that as well.
Jennifer Westacott again.
“One of the big issues that faces our economy is business investment. It is very low. It is the thing that drives productivity. Productivity is what drives income growth. And we have the lowest business investment since the 1990s recession. We need to make our businesses more competitive.”
Opposition leader Bill Shorten says it’s hypocritical of the Business Council to simultaneously advocate cuts to spending and the company tax cut, estimated to cost the government $50 billion in lost revenue over a decade.
“I say to the Business Council of Australia — we can find $50 billion of improvements to the Budget bottom line which don’t mean harming the vulnerable and the working class and the middle class and the less well-off in society. Drop the tax cuts.”
Mr Shorten found further ammunition against the company tax cuts as news broke that two of Australia’s so-called ‘big four’ banks were raising their mortgage rates after a decision by the United States Federal Reserve.
Westpac and the National Australia Bank both raised rates for owner-occupiers and property investors.
It is unusual for Australian banks to follow the U-S Federal Reserve, rather than the Reserve Bank of Australia.
Mr Shorten says the move proves the need for a Royal Commission into banking malpractice.
“The banks have made record profits, and here they are again, charging mortgage-holders even more for the cost of their mortgages and, unlike Mr Turnbull, I do have a view. Unlike Mr Turnbull, I wouldn’t give the banks a massive tax cut. I would give them a Royal Commission.”
Prime Minister Malcolm Turnbull did describe the interest rate rises as unwelcome.
But he says customers always have the option of switching their mortgage to another lender.
“It’s easy for a politician to say ‘well it’s not justified’ or ‘it is justified’. It’s the banks’ business. I’ve required them to come before the parliament regularly and defend themselves. And they’ve got to explain it. But if they don’t explain it then customers, NAB customers, will go somewhere else and I’d encourage them to do so.”