Alan Joyce insists corporate rate slashing to 25% would allow Australian companies to compete internationally and boost the domestic economy.
If the senate passes the proposed corporate tax rate cut, Alan Joyce says the Qantas Group will create huge employment growth through reinvestment.
The Turnbull Government signalled its intention over the weekend to again push for the tax rate slash for all business from 30% to 25%.
And while its rate cut for companies with turnovers of up to $50 million was given the green light last March, the government has a much tougher task convincing the upper house to support this plan, which was only reintroduced late last year.
Morrison says the US is already being rewarded for rubber-stamping the Republican tax reform bill last December, with the likes of Walmart and Apple reinvesting domestically, and Australia risks falling further behind.
“We are already seeing the dramatic impacts in the US of the changes to their tax rates for businesses in America,” he said.
“We have the opportunity now to catch up… We had the opportunity before to get ahead and as a result of the obstruction from the Labor Party we were unable to do that.”
Joyce is one of a throng of CEOs lobbying in favour of the tax overhaul.
“A reduction in the corporate tax rate would directly increase our free cash flow and therefore increase the amount of surplus capital identified under our financial framework,” he said.
“Increased investment by Qantas Group for growth has the potential to open up more routes and directly result in increased employment.
“Likewise, investment in innovation within the Qantas Group creates opportunities for employment growth in emerging areas of digital innovation and data analytics.”
He says it is crucial to Australia’s largest airline competing internationally.
“It will also allow us to compete on a more level playing field as our main international competitors either have tax rates lower than ours, don’t pay tax at all or have more favourable tax depreciation regimes,” Joyce added.
It will also allow us to compete on a more level playing field as our main international competitors either have tax rates lower than ours, don’t pay tax at all or have more favourable tax depreciation regimes.
The legislation would apply a rate of 27% to all businesses from 2024-25, then be slashed again to 26% the next year, before hitting the 25% low in 2026-27.
Rio Tinto’s Australia head, Joanne Farrell, says the improved cash flow is needed in the mining sector to compete for scarce capital.
“In a sector like mining, if you miss an investment window, aligned to growth cycles in Asia for example, you miss it. Scarce capital gets allocated. Once allocated, it doesn’t come back,” she said.
Meanwhile, Labor has slammed Morrison’s move, with spokesman Jim Chalmers saying the government was living on an “entirely different planet” if they thought a $65 billion “gift” to the big players would see ordinary Australians benefit.
“We think that is an extraordinary waste of money,” he said. “These characters are so out of touch that they want the Australian people to believe that if you give more tax breaks to millionaires to multinationals that somehow we’ll get economic growth in this country.”