THE ALP will strongly resist any proposed cuts to company taxes after Labor's national conference yesterday adopted a resolution demanding that tax reform focus on low-income earners rather than businesses.
Subscribe now for unlimited access.
or signup to continue reading
The Left-backed resolution is a shot across the Government's bows before the review of tax policy headed by the Treasury secretary, Ken Henry. It is expected to recommend measures to ensure the tax system does not deter capital investment in Australia.
The resolution calls for the Henry report, due at the end of the year, to strike a balance between business taxation, indirect taxation and personal tax ''while ensuring government has sufficient resources to build a good society''.
It said the Government's decisions on tax changes proposed by the Henry panel ''must meet the needs of society and not the ideologically based demands for lower business taxation. There should be no reduction in company income tax revenues as the consequence of this would be cuts to public services or higher tax payments by individuals.
''Accordingly, in the event the Henry review recommends a cut in company tax rates the Government response will be at least revenue-neutral.''
The resolution was moved by the head of the Construction Forestry Mining and Energy Union, John Sutton, and the national secretary of the Community and Public Sector Union Stephen Jones. It was backed by Labor's national Left faction.
Mr Sutton told the conference ''the dogs are barking that the Henry review may well recommend a cut in the corporate tax rate … we as a party do not want to see the basket of corporate taxes in totality reduced if there is to be some reduction in the headline rate.''
The Prime Minister, Kevin Rudd, indicated this month that the corporate and capital taxation systems needed reforms to ensure Australia attracted the investment it would need to recover from the global financial crisis.
In his essay on the economic outlook, Mr Rudd said: ''As a capital importing country, we need to be mindful of the impact domestic tax laws have on global investment decisions and our ability to attract investment and international business.''
The Right faction has a majority of the votes on the floor of the conference but did not resist the Left's tax resolution. It passed without opposition.
A senior minister, who did not want to be named, said conference resolutions were not binding on the Government.
''What matters is what is in the [party] platform, not what's in a resolution,'' the minister said.
The conference's first day was marked by a lack of debate over economic policy. There was no opposition to several resolutions and platform amendments moved by delegates from the Left faction.
These included motions calling on the government to:
❏Ensure the rich paid a fairer share of taxes;
❏Introduce caps on executive salaries and payouts;
❏Ensure free trade agreements did not prevent the government from pursuing industry development policies.
