COMPANY tax comes from business earnings and they should be free to reinvest more of it to grow and boost jobs, according to Orange business leaders.
Orange councillor Jeff Whitton, who also heads a telecommunications company, said he was worried by opposition in recent days to dropping the company tax rate from 30 per cent to 25 per cent during the next 10 years.
The move would add 1 per cent to national economic growth.
He said cutting the rate would promote growth and the federal government would make the difference back in the money employees paid in GST.
“It will allow them to put back into their businesses to generate work,” he said.
“A lot of people get confused when you talk about company tax – [the government is] not actually giving companies money, it is the company’s money.”
Cr Whitton said businesses already carried a heavy tax burden covering payroll tax, GST, heavy bank fees and freight and export taxes depending on the industry and it was not good enough to assume Australia could ride on the back of gold and iron ore.
“Most government officials will tell you the reason why manufacturers close is because the cost of wages is too high, that’s bunkum – it’s the costs associated with running a business,” he said.
“The reason why Google doesn’t pay tax in Australia is because they get incentives to be in another country.”
He believed tax rates should be further lowered for regional businesses or businesses looking to relocate regionally because most of them were small and just made enough to pay the bills and themselves.
“The only way to run this country is to think like a business,” he said.
Orange Business Chamber president Mark Madigan said if a business made $100,000 in profit, even $5000 extra would make a difference, whether it be to hire casual staff or reinvest in other ways.
“It could go as far as replacing a piece of equipment that might be aged, it might be paying incentives to staff, it might be putting in a new piece of equipment,” he said.
“It’s huge – every little tax dollar allows for the ability to enhance a small business.”
He said he was a strong believer in incentives for regional businesses and it was a matter to raise with the NSW Business Chamber.
Prime Minister Malcolm Turnbull said a reduction in company tax could raise the average salary by $750 a year.