Assistant Treasurer, Minister Assisting for Financial Services & Superannuation and Minister for Competition Policy & Consumer Affairs
5 March 2012 - 18 September 2013
Cormann needs to come clean on withholding Tax
Opposition revenue spokesperson Senator Mathias Cormann needs to put his money where his mouth is if his position on withholding tax is to have any credibility, said Assistant Treasurer David Bradbury.
“When Senator Cormann was last in Government, the rate of withholding tax for managed investment trusts was double the rate proposed in the Budget,” said Mr Bradbury.
“It was a Labor Government that slashed the Howard Government’s high withholding tax rate and encouraged investment in Australia.
“Senator Cormann now says he will oppose the government’s changes to the withholding tax rate, but he won’t commit to introducing the lower rate if he was in office.
“Senator Cormann can’t have it both ways. If he is genuinely opposed to the 15 per cent withholding tax rate then he should commit to reversing it in office and come clean about which payments and frontline services the Coalition will cut to pay for it.”
“Senator Cormann should also explain why he didn’t call on the Howard Government to cut its 30 per cent withholding tax rate and why he and his Coalition colleagues opposed Labor’s reduction in the tax rate.”
In 2007, when Labor first proposed cutting the rate in half, from 30 per cent to 15 per cent, then-Treasurer Peter Costello called it ‘a tax cut for foreigners’:
“Apparently [Labor] would rather give tax relief to foreigners than to Australians and I think that is a misguided priority.”
(Doorstop, 10 May 2007)
When the reduction in the withholding tax rate was brought to the Parliament, a string of Coalition MPs and Senators spoke against the measure, saying it was unnecessary.
“I do not see a reason for going below 15 per cent.”
(Andrew Laming MP, House of Representatives, 18 June 2008)
“The question is: do we need to go over the top in giving tax breaks to foreign investors? I say we do not. “
(Judi Moylan MP, House of Representatives, 18 June 2008)
“It does not appear that this rate [30 per cent] of withholding tax was necessarily a barrier for investment.”
(Michael Keenan MP, House of Representatives, 18 June 2008)
“The Coalition has a shameful record when it comes to reforming the withholding tax rate and encouraging investment in Australia,” said Mr Bradbury.
“The Gillard Government has made sure that the 15 per cent withholding tax for managed investment trusts proposed in the 2012-13 Budget change brings us into line with or better than the US, Hong Kong and the UK and is still half the rate it was when we came to office in 2007.”