CANBERRA — International businesses will leave Australia in the wake of sweeping US tax cuts, the nation’s Treasurer warned on Friday.
Scott Morrison said that while Australians are at the beach in January, international corporations will be making decisions on whether they will stay in Australia or move elsewhere.
“They will be considering their investment plans over their winter, our summer,” Morrison told Fairfax Media.
“While many Australians will be at the beach the investment chiefs in major companies will be at work.”
He said that he is so alarmed by Australia’s company tax rate of 30 percent being too high that he fears that it will be too late by the time parliament returns in February.
Morrison has previously flagged his preference to reduce the company tax rate to 25 percent but such a move would be impossible for the government without the support of the opposition Australian Labor Party (ALP).
Key crossbenchers that the government would need if they cannot secure the support of the ALP have already said that they would not support a tax cut in any circumstances.
Morrison’s comments came after US President Donald Trump successfully slashed the country’s corporate tax rate from 35 percent to 21 percent on Friday.
Andrew Leigh, the ALP’s shadow assistant treasurer, said that Australia’s corporate tax rate was the ninth highest among G20 nations, right “in the middle of the pack.”
“Effectively, the argument that’s being made by the Liberal National Party is that we should follow Donald Trump wherever he leads,” Leigh said.
“We have seen wages stagnate and yet the Liberals’ answer to Australia’s economic challenges has been a budget-busting corporate tax cut for big multinationals paid for by raising taxes in middle Australia.”