Albanese open to reform but Chalmers shuts down talk of corporate tax cuts

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Prime Minister Anthony Albanese has told company chief executives he wants to set up a “structured dialogue” with business to canvass future economic reforms, hours after the federal government dismissed calls for a cut to the company tax rate.

Albanese named migration and skills as two examples of policies where the government could work closely with business, while he played down the tensions on workplace relations reform during a speech to the Business Council of Australia in Sydney on Wednesday night.

Prime Minister Anthony Albanese addresses the Business Council of Australia 2023 Annual Dinner.Credit: Wolter Peeters

The speech came shortly after Treasurer Jim Chalmers warned of the spending pressures on the federal budget over the decades ahead and told the ABC’s 730 program the country could not afford to cut the company tax rate despite the council’s calls for the change

Albanese attended the Sydney dinner with Chalmers, Finance Minister Katy Gallagher, Trade Minister Don Farrell, Competition Minister Andrew Leigh and Assistant Treasurer Stephen Jones, while using his speech to emphasise common ground between Labor and business.

In a key message at the beginning of his remarks, Albanese thanked the BCA for its support for the Indigenous Voice and singling out BCA president Tim Reed and chief executive Jennifer Westacott for praise.

Reed welcomed the prime minister by confirming the BCA’s support for the Voice.

“At its core, the BCA is an advocate for prosperity, and we believe the Voice will move our nation closer to a future where prosperity is enjoyed by all,” he said.

Business Council of Australia CEO Bran Black and chairman Tim Reed with outgoing boss Jennifer Westacott.Credit: Wolter Peeters

The prime minister said his government “has been focused on working with employers and job creators and leaders across a whole range of policies. This is where the government will work with the business community in a structured way going forward, with a regular forum for dialogue and constructive discussion – something I’ve been discussing with Jennifer and Tim for a while.”

Albanese said this meant “putting in a structured dialogue instead of the ad hoc dialogue” that had operated in the past.

ACTU president Michele O’Neil and national secretary Sally McManus also attended the dinner.

On migration, Albanese thanked the BCA for arguing in favour of skilled migration when Australia needed more workers.

“From our first days in government, we’ve been working together, with business and unions, to move away from a system that treats skilled migration as a temporary stop-gap and instead as one which focuses on providing a pathway to citizenship,” he said.

“Just as there is a global competition for capital, there is a global competition for labour, and we need to be part of that.”

The government is preparing to set out its agenda on the economy, labour and migration after it releases the Intergenerational Report on Thursday, with an employment white paper and a migration review likely to be issued together in the weeks ahead.

While the BCA has called for an increase in the GST and a cut to company tax rate, Chalmers said this was not on the government’s agenda.

“I’m not considering changes to the headline company tax rate for a range of reasons,” the treasurer told the ABC.

“First of all, the pressures on the budget are intensifying rather than easing. As I said, I don’t have an ideological aversion to changing headline company tax rates, but it’s not something that the budget can afford right now.”

Asked whether this meant he might consider a company tax cut one day in the future, Chalmers said the change was not on his agenda.

“It’s not something that I’ve been considering. It’s not something that I’ve been working up,” he said.

“Who knows what future governments might contemplate when it comes to the headline company tax rate? It’s not on my agenda. And part of the reason for that is because I understand it hasn’t been an impediment to investment in our economy.”

The BCA has warned that investment in Australia is too low and could be higher if the company tax rate was changed, putting the business group at odds with Chalmers on a fundamental point.

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