Scrap tax cut for banks to fund 5% company tax cut for SMEs: Greens

A 5% reduction in the company tax rate for small business could easily be funded by denying the big four banks a 1% company tax cut, the Greens say, as the Government readies to introduce its mining tax to Parliament next week.

Speaking as the National Australia Bank reported a $5.5 billion full-year profit yesterday, Greens leader Bob Brown said yesterday that “small businesses are not finding it so easy” but “the big four banks made over $20 billion in profits last year and are expecting even greater profits this year.”

”Their four CEOs are raking in salaries between $7 and $16 million,” Brown is quoted as saying, referring to ANZ Banking Group boss Mike Smith, Cameron Clyne of National Australia Bank, Westpac’s Gail Kelly and outgoing CommBank boss Ralph Norris.

Brown’s office this morning said scrapping the 1% cut to for big business in favour of a 5% cut for small business is revenue neutral, and removing cuts to banks alone would free up $4 billion for small business tax cuts.

An announcement on the bank-exclusion plan is expected later today, so Brown’s office declined to give further details on its amendments.

The Greens say its definitions of small and large businesses mirror those used by the Government; that being the case, only incorporated organisations would quality for the 25% rate, unlike partnerships and sole traders.

The comments come as the Government spruiks the benefits of its Mining Resource Rent Tax, saying household and small business would be “big beneficiaries” from the plans to put a 22.5% levy on coal and iron ore from July next year.

It says the tax would boost the super savings of Australians by $500 billion by 2035, referring to plans to boost compulsory super levels to 12% from 9% over the next nine years.

Alongside reducing the company tax cut by 1% and increasing super contributions, the expected proceeds of $11 billion over three years will also be used for infrastructure spending and changes to depreciation for small business.

The tax was watered down from original plans for an effective 40% rate. The Government says earnings from energy and mineral exports set a new record of $175 billion in 2010-11, up 27% from the year before, and there is a $430 billion pipeline of projects underway or on the drawing board in the sector.

But the fate of the MRRT is not yet secure, with cross-bencher Tony Windsor saying revenue should also be earmarked for bioregional assessments to assess coal gas exploration projects – otherwise he won’t support the package. Windsor told The Age the Government “needed to get off its arse” on the issue.

Meanwhile, the Australian Chamber of Commerce and Industry has fired a broadside at the Greens.

According to The Australian, ACCI chief Peter Anderson will tell an audience today that the Greens are seen by most in business as having forced the so-called bastards [politicians] to be dishonest, by demanding Labor introduce a carbon tax despite Prime Minister Julia Gillard earlier promising she would not if re-elected.