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Australian Treasurer Scott Morrison has said that the Labor Party's refusal to support company tax cuts will leave the economy "stranded."
In a speech to the Australasian Finance and Banking Conference, Morrison argued that reducing the company tax rate to 25 percent as part of the Government's 10-Year Enterprise Tax Plan "will raise productivity, increase GDP, and over time raise real wages and living standards."
He said that economic modelling by the Treasury had found that cutting the rate could "permanently lift GDP by just over one percent in the long term," while "half of the gain from a company tax cut is expected to flow to Australian workers as permanent increases in wages."
Morrison accused the Labor Party of taking economic growth for granted and of wanting to increase taxes. He stressed that the Government will continue to seek support for its tax plan, and cautioned that "an Australian company tax rate that is higher than other comparable countries deters foreign investment."
Morrison noted that Australia's 30 percent company tax rate is above the OECD average of 25 percent. He added: "We know that the [US] Trump administration will be bringing down tax cuts for companies to 15 percent. We know that the [UK] May Government already has this rate heading to 17 percent and is prepared to go even further when it comes to reducing the tax burden on businesses so they can support jobs, support investment, and support growth."
Morrison later reiterated his plea to Labor in a doorstep interview in Sydney. He said: "I'm not going to let the Labor Party off the hook on the Enterprise Tax Plan."
He urged Labor to reflect on its "very reckless position" over the summer, and to work with the Government in the New Year to "ensure that we can encourage investment into this country."
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