Small business tax should be cut by 5%: Shorten

Opposition leader Bill Shorten has called for a bipartisan push to reduce the company tax rate for small business from the budget’s promised 28.5% to 25%.

In his budget reply Shorten also announced initiatives in education and to encourage investment in new ideas.

The total spending he unveiled is costed at A$350 million over the forward estimates.

To improve science, maths and IT teaching, a Labor government would boost the skills of 25,000 current primary and secondary teachers and train 25,000 new teachers who were science and technology graduates.

Students that have just completed a STEM degree, or graduated within five years, would be able to apply for a $15,000 incentive payment to become teachers, $5000 of which would be paid at the start of the course of study.

Labor would provide a financial incentive for students to enrol in and complete a STEM undergraduate degree.

It would offer 20,000 STEM award degrees every year for five years with the HECS-HELP debt written off at graduation.

Labor would also make sure more women studied, taught and worked in these fields.

A Labor government would work with the states and the national curriculum authority to have digital technologies, computer science and coding – the language of computers and technologies - taught in every primary and secondary school in Australia.

Shorten told Parliament the ALP would create a $500 million Smart Investment Fund to partner with venture capitalists and fund managers to co-invest in early stage and high potential companies to help them compete on the world stage. Supporting documents said this would provide a Commonwealth investment of up to 50 per cent of the start-up capital needed to help Australian companies commercialise their smart ideas and innovations.

Labor would work with the banks and finance industry to establish a partial guarantee scheme, StartUp, to help micro businesses convert ideas into businesses.

“Australia must get smarter – or we will get poorer. I believe Australia can be the science, start-up and technology capital of our region: attracting the best minds, supporting great institutions and bringing home our great expats.

“We should aspire together: universities, industry, parliament and people - to devote 3 % of GDP to research and development by the end of the next decade. I want more Australians researchers making breakthroughs and adapting technology here in Australia.”

Shorten attacked the budget as “a cosmetic job by a very desperate make up artist”, which was silent on “the big picture, the next decade, the long run”. The government had dropped the ball on reform, change and fiscal sense.

A “trifecta of indecencies” underpinned the budget, he said. It repackaged last year’s unfairness in cuts to hospitals, schools, universities and family support; it relied on bracket creep to increase taxation by stealth; and it made an “unconscionable attack on the states”.

“It’s a bad budget. In every respect this budget is a hoax,” he said. “This is last year’s budget – rebranded, reheated and repackaged for an opinion poll. The same broken promises, the same unfair, extreme ideology, wrapped in trickery.”

Shorten reaffirmed that the opposition would never support the government’s university changes, winning a burst in applause from the public gallery. Nor would it support the budget’s revamped – and much reduced – qualifying period for unemployment benefits for young people.

It would back the spending on national security, drought relief for famers and the help for small business.

But the latter did not go far enough, Shorten said.

He said to the government: “I invite you to work with me on a fair and fiscally responsible plan to reduce the tax rate for Australian small business from 30% to 25% . Not a 1.5% cut, a 5% cut. He understood this was not easy and might take longer than the life of one parliament.

“This is why it must be bipartisan and part of a more comprehensive approach” that addressed bracket creep and the tax rates for ordinary Australians. Bracket creep was “the invisible hand in the pocket of every Australian worker”.

Shorten said this was the first budget in living memory with “not one significant infrastructure project funded”.

Labor would put Infrastructure Australia at the centre of capital investment, having it play a more active role in getting projects properly financed – “to act as a broker, bringing together construction companies, long term investors like super funds and most importantly state governments to get projects underway”. Labor would provide $18.5 million to IA to strengthen its role as “a pivotal economic body”.

A Labor government would consult with the opposition on every appointment to the Infrastructure Australia Board.

Shorten said in this budget Tony Abbott had only changed his tactics not his mind. If this budget was confirmed “he will, by ricochet, inflict last year’s unfairness this year”.

Listen to Michelle’s podcast coverage of the budget, with interviews with Finance Minister Mathias Cormann, Labor’s finance spokesman Tony Burke and BCA chief Jennifer Westacott, here or on iTunes.

Michelle Grattan does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.