Government pushes on with company tax cuts

Vincent Carr
May 19, 2017

"I believe though that we are now moving towards the end of this hard period".

"It is naive and misguided and has already sent the wrong signals to global financial markets about the strength and stability of our banking sector".

But Australian Bankers' Association chief executive Anna Bligh criticised the new tax, which Morrison warned banks against passing on to consumers.

Mervyn Tang, director of Asia-Pacific sovereigns at Fitch Ratings, said the new revenue measures in the budget implied a faster reduction in the government deficit.

He also urged customers to shop around if they felt they were not getting a good deal pointing out that smaller regional banks were not affected by the levy.

The government takes on the banks at their peril.

But he has accepted shareholders and superannuants may be affected as a result of the impact on the big four banks, plus Macquarie, which now face a tax on nearly 5 per cent of their net profits.

"This government will not rest until we have successfully fought to implement a company tax framework that sets Australia up to have more and better-paid jobs in the future and for future generations".

"Are you going to turn around and say in a few years" time to parents of disabled kids, "sorry, there's no money in the till'?" he said on ABC radio.

Mr Morrison has not said whether he still intends to return to surplus by 2021, a key pledge he made previous year. There will be a drug testing trial for 5,000 new welfare recipients.

But his real epiphany came when he and the prime minister reflected on the low rate of wages growth and its impact on families.

Defence spending will hit two per cent of GDP by 2020/21.

But it was also Morrison who watched the coalition deliver a series of budgets that fanned Senate antipathy and turned a thumping parliamentary majority into a one-seat tightrope walk. It's a sign of how much damage the Labor campaign on health and Medicare did to the Coalition.

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The tax will reportedly raise $6 billion over four years.

There'll be an extra $115 million for mental health and an extra $1.4 billion for health research, including $65.9 million specifically for research into childhood cancers.

The Turnbull Government announced the end of the troublesome Medicare rebate freeze which has been forcing up the cost of GP visits and threatening the spread of bulk billing.

That amounts to $2.2 billion over the next four years.

About $2.9 billion was allocated to build Western Sydney, with an additional $1.5 billion in funding and a $2 billion concessional loan committed to WestConnex. The surpluses projected are not enough to pay back debt.

Growth this year is expected to be 2.5 per cent.

The government will set up a National Housing Infrastructure Facility worth $1 billion and based on a similar United Kingdom model to help local governments assist with developing new homes and apartment blocks.

The hard work is done for now; it's time for them to begin the hard sell.

Budget 2017-18 - Leaving the ghosts of Budgets past behind.

"It just doesn't make sense", Ms Westacott said.

The contributions will receive the tax advantages of superannuation, with contributions and earnings taxed at 15% rather than marginal rates.

But first home buyers will only be able to withdraw what they contribute, rather than access their retirement savings.Negative gearing and capital gains tax will remain untouched.

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