Chalmers, Taylor duel over company tax breaks in heated business debate

A testy exchange over corporate tax rate cuts caught the attention of small business owners on Wednesday, as Treasurer Jim Chalmers pressed Shadow Treasurer Angus Taylor over the Coalition's post-election plans.

Appearing in Melbourne for the final economic debate before the May 3 federal election, Taylor said a Dutton Coalition government would not impose new taxes on Australian businesses.

"Look, our plan is to reduce taxes for businesses like yours in this room," he said.

When asked by debate moderator Laura Jayes if that meant a Coalition government would cut the corporate tax rate, Taylor reflected on small business tax cuts enacted under the former Morrison government.

Chalmers interjected, asking Taylor, "you've just said you're going to cut company taxes, will it be in your costings?"

"I've already said the answer to that, mate... what you will see in our costings is lower taxes for businesses," the Shadow Treasurer replied.

Jayes asked again if the Coalition would, in fact, cut the company tax rate, in a "surprise" announcement just over a week before polling day.

Taylor demurred, instead reflecting on the Opposition's plan to extend the instant asset write-off and make it permanent.

A Dutton government would also enact tax breaks for early-stage businesses and provide bonus deductions on technology upgrades, he continued.

"They are tax breaks for small businesses, Jim," Taylor said.

"Because we need small business investment, we need small business growth, and we need businesses succeeding in this country," he added.

The debate was co-hosted by the Business Council of Australia, and the Council of Small Business Organisations Australia, which in its own election wishlist, argued a 5% reduction of the small business tax rate to 20% would improve SME cashflow and spark productivity.

Productivity central to business policies

The eyebrow-raising moment came at the midpoint of a debate focused on how to lift Australia's flagging productivity rate, for the good of its people and the businesses populating the economy.

Chalmers used the opportunity to outline federal Labor's plan to ban non-compete clauses for hundreds of thousands of workers, tweak occupational licensing for electricians, and task the Productivity Commission with creating five reports on the 'pillars' of productivity.

"So we've made a lot of progress together, rolling out reform, providing relief and repairing our budget, but we know that there's a lot more work to do," Chalmers told the audience of small business owners and high-powered executives.

"And we want to work with you in the usual, considered, methodical way, listening to your views even when we don't necessarily share them."

However, Taylor argued "hope is fading" in the Australian economy, before describing renewed business investment as something close to a patriotic duty.

"You are investing in your business, you are investing in your communities, and you are investing in this country," he told the audience.

"And that's what we need to do."

Investment could grow further if red tape is cut and approval processes are streamlined, Taylor continued, decrying "unnecessary red tape" and regulatory "overreach".

"We can get the decisions right, as we did when we were last in government, for those really critical projects and that will get investment moving," he continued.

"And we know investment is the key to getting labour productivity back to where it absolutely needs to be."

Later, Chalmers claimed the Coalition's plans to speed up approvals would be hamstrung by Opposition Leader Peter Dutton's plans to shrink the public service.

"I think if Angus really wants faster approval times, then sacking 41,000 people, some of whom are responsible for processing approvals, would be a pretty strange way to go about it," Chalmers said.

Common ground over artificial intelligence

After an hour of back-and-forth debate -- where Chalmers described Taylor's policy statement as a "Year Nine economics assignment," and Taylor repeatedly waved away Chalmers' nuclear plant costing criticisms -- both men found common ground on artificial intelligence.

AI poses a "huge opportunity" for Australia, said Chalmers, describing it as "a game changer for our economy and for the global economy".

Despite AI earning precious little mention in Labor's March budget, Chalmers referenced the government's AI capability plan, which is overseen by Minister for Industry and Science Ed Husic.

"The most important part of this is the opportunity, not just the guardrails, and so that's the approach that we are taking," he said.

Harnessing AI could help Australia reverse its flagging productivity, said Taylor, if the right settings are in place.

"The starting point though, for me, is probably different from Jim," he said.

"It's not about bigger government, but about government getting out of the way when businesses invest... Of course there will, over time, need to be sensible regulation, but the starting point should be that businesses get on with it, and encourage them to do it," he added.

Local gas capacity and new nuclear power generation could power the necessary domestic data centres, he continued, leading to another dispute over the final cost of the Coalition's nuclear ambitions.

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