The Australian business community has pledged to increase their employees’ wages and invest more in the Australian economy if proposed legislation takes effect. The bill has since seen one additional vote. In a letter addressed to the Senate, the business community said that a reduced burden regarding taxes would help keep the State competitive. On the other hand, if the tax cut legislation came into effect, the institutions would have more money at their disposal. The extra money would find use job creation and therefore, realizing a higher wage growth.
However, among the group of senators, One Nation and Derryn Hinch were not swayed by the letter. They sought guarantees embedded in the legislation that the tax cuts would result in increased wages for the employees. However, the argument was met with reservation from a section of the government and business community as the reduced tax cuts were not to take effect until 2026. On the same day that the letter reached the Senate, the ACTU launched attacks on corporations for paying lower wages. The negotiations received a booster from Senator Steve Martin who pledged to back the legislation citing the need to boost businesses in Tasmania.
However, with reservations from three One Nation’s Senators, the legislation is a vote short. The pressure now lies on one senator, Tim Storer who has been in office for the last two days. If the bill is to pass, the government requires nine votes out of the 11. Voting is due for Wednesday next week. The legislation, if voted for, will see the reduction of taxes by a margin of five percent between 2026 and 2027. According to Steve Martin, the bill will ensure that the Tasmanian businesses remain competitive in the global markets. On the other hand, it will enhance global exports. Consequently, more income will translate to higher wages and more jobs.
The Prime Minister, Malcolm Turnbull said that it was paramount that they provided a conducive environment for businesses to thrive. Additionally, he said that the country had realized growth in employment rates due to entrepreneurship. Institutions making a turnover of $50 million and below will secure tax reduction. While comparing the country with the US, U.S.A offered a much lower cut rate averaging at 21 percent. As a result, it was paramount for them to have a competitive tax rate. Reducing tax rate would go further in attracting investment and spurring growth.