Coalition promises to take axe to Rudd Government promises, including business tax cuts

Opposition Treasury spokesman Joe Hockey has unveiled a plan he says will save the Federal Budget $46.7 billion, but will also reverse the Rudd Government’s plan to cut the corporate tax rate and deliver immediate asset write-offs for small businesses.

Hockey says the Opposition will also take the axe to a number of other Rudd Government promises previously lauded by business, including the National Broadband Network and the new $467 million e-Health initiative.

The Coalition would also sell off Medicare Private, raising $4 billion to cut down debt, and would also promise to review Australia’s competition laws and act on small business concerns about the growing power of bigger companies.

“There are hard decisions there – we like tax cuts and we like savings but we can only deliver what we can afford,” Hockey told the National Press Club.

But the Government immediately questioned Hockey’s figures, arguing much of the savings would be reinvested into other Coalition programs, while other savings – such as the sale of Medicare Private – would actually be used to pay off debt, not pumped back into the budget.

But is the Coalition’s decision to oppose the Resources Super Profit Tax that remains at the forefront of the public debate.

Scrapping the tax will cost the Federal Budget $12 billion, and will mean that a number of Rudd Government promises to small business – including the reduction in the corporate tax rate from 30% to 28% and the immediate asset write-off for assets under $5,000 – would also be scrapped.

That is likely to leave groups including the Council of Small Business of Australia unimpressed. Chief executive Jaye Radisich said last week it would be disappointing to see tax support for small businesses wiped out.

The call for a review of competition law has also been met with lukewarm support. While competition expert Frank Zumbo from the University of Sydney welcomes the move, the Australian Chamber of Commerce and Industry says a number of recent competition reforms are still working their way through the system and needed to be bedded down.