A deep cut in the company tax rate will be beyond either side of politics unless they slash politically sensitive handouts to businesses and ordinary people.
Figures released under a Freedom of Information law request by _The West Australian _ show Treasury estimates that reducing the company tax rate to 25 per cent would cost $11 billion a year.
The 25 per cent rate was identified by the Henry tax review as a level that would deliver increased international competition to Australian businesses. It also argued that a reduced company tax rate would lift the wages of all workers.
Both the Government and the coalition have pledged support for reducing the corporate tax rate.
But the Treasury figures - dated May 18 - show the sheer financial scale of cutting company taxes.
Even a one per cent cut in the company rate would cost $2 billion a year.
Deloitte Access Economics director Chris Richardson said though cutting the tax rate to 25 per cent was not impossible, it would require some difficult choices.
Doubling the tax on superannuation contributions, dramatically lifting the rate of capital gains or axing both private insurance support and the childcare subsidy would all deliver the necessary cash to cover the cost of a deep cut in the company tax rate.
"We've got everyone wanting likes, like Gonski, like dental, like company tax cuts, but you have to pay for them," Mr Richardson said. "China is no longer waving its magic wand over commodity prices and that means those rivers of gold aren't flowing. Tough decisions have to be made."The Government has pledged to find fresh Budget savings to cover the costs associated with its new dental scheme, its response to the Gonski report and the National Disability Insurance Scheme. But it has yet to outline those savings.
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