Business say parent leave levy must be dumped
The Federal Government is under pressure from the business community to ditch a planned levy on big firms after Tony Abbott finally abandoned his "signature" paid parental leave policy yesterday.
Business groups said that with the policy now shelved, there was no justification for the levy on more than 3000 of the nation's biggest employers.
_The West Australian _understands a final decision by Cabinet on the fate of the levy has yet to be made.
The 1.5 per cent levy would raise about $4 billion in a full year of operation. It was supposed to cover the cost of the parental leave policy expansion that Mr Abbott took to both the 2010 and 2013 elections.
But Mr Abbott said his proposal was now "off the table".
Instead, the Government will focus on a family package that will have at its centrepiece a major expansion of child care.
With no extra cash to pay for childcare changes, the 1.5 per cent levy would deliver the money needed to avoid deep cuts in other parts of the Budget.
Mr Abbott also pledged that small businesses would likely get a further cut in their company tax rate on top of the 1.5 per cent that is slated to start from the middle of the year.
While welcoming a cut to company taxes, the business community moved quickly to demand the levy also go the way of the parental leave policy.
Australian Industry Group chief executive Innes Willox said the levy had to go.
"It is critical that the Government confirms that the associated PPL levy on larger businesses will be scrapped," he said.
"This would allow a full realisation of the benefits of promised reductions in the company tax rate."
The Australian Mines and Metals Association said it was not a "sound approach" to fund the family package with a levy.
Australian Chamber of Commerce and Industry chief Kate Carnell said there was no logic to keeping the levy.
"To follow the Prime Minister's own economic logic, lower company tax rates for large businesses will, as it will for small business, allow for more investment and growth for business," she said.
Mr Abbott also made clear that despite the Government's own Tax White Paper, there would be no change to the GST.
He said apart from some minor administrative changes, any overhaul of the GST would require support from Opposition Leader Bill Shorten and State Labor premiers.
It suggests that plans to reduce the threshold at which the GST is imposed on imported goods have also been quashed.
On his parental leave scheme, Mr Abbott said what was desirable was not always doable, especially when times were tough.
But Labor said the decision was the Prime Minister's biggest broken promise of all.
"Australian families now know that Tony Abbott's word means nothing," shadow families minister Jenny Macklin said.
