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Abbott promises to cut business tax rate

Coalition announces it will cut the business tax rate from 30 percent to 28.5 percent if it is elected

By Brad Gardner | July 28, 2010

The Coalition will cut the business tax rate by 1.5 percent if it wins government, trumping Labor’s commitment to reduce the rate from 30 to 29 percent.

Announcing the Coalition’s business policy today, Opposition leader Tony Abbott says the rate will be lowered to 28.5 percent from July 1, 2013.

Abbott says the cut will deliver lower prices for consumers and reduce business costs.

The measure is tipped to cost $2.55 billion over five years, but Abbott says it will be funded from savings identified by the Coalition over the forward estimates.

“The Coalition believes in lower, fairer and simpler taxes,” says Abbott, who will also impose a tax on big business to fund a paid parental leave scheme if elected.

Prime Minister Julia Gillard will only cut the company rate if the resource mining tax is introduced.

The tax will also fund an increase to superannuation and establish a fund to build infrastructure in resource rich states such as Queensland and Western Australia.

Abbott also announced an extension of unfair contract provisions from consumers to the small business, while also pledging improvements to ensure the sector is paid on time.

“The Coalition will ensure departments and agencies pay small business bills on time by adopting a ‘pay on time or pay interest’ basis,” Abbott says.

Interest will be applied to a bill at the same rate as the general interest charge if an account is not settled within 30 days.

The announcement follows Abbott’s promise earlier this month to establish as small business ombudsman to ensure the sector’s concerns are listened to and acted upon.

Abbott has also listed greater consultation will small businesses as a hallmark of his policy.

“We will ensure genuine consultation with the small business sector about changes in government-imposed fees and charges to ensure that any change is implemented in a proportionate and equitable way,” he says.

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