The CEO of the Council of Small Business Australia (COSBOA), Peter Strong, has called for tax cuts for small business to be extended to all businesses to support job creation and investment and repeated his calls for the Labor Party to abandon any plans to remove the already legislated tax cuts for small business.

“If we don’t extend the tax cut to all businesses, the reduction for small and medium sized businesses will eventually become meaningless,’’ Mr Strong said in an announcement. “Small business people cannot plan with confidence if they are unsure about the future.’’

The company tax reduction for small and medium sized businesses was legislated in 2017. For businesses with a turnover of up to $50 million a year, the tax rate will be reduced from 30 per cent to 25 per cent over 10 years.

At 30%, Australia’s top company tax rate is currently the fifth highest in the Organisation for Economic Co-operation and Development (OECD). The average company tax rate across the OECD is 24%, while in Asia the average company tax rate is 21%.

Currently, activity in Australia between businesses – small, medium and big – is worth around $555 billion a year. 

Mr Strong said small, medium and big businesses normally work well together and rely on each other. 

“We need larger businesses to invest in infrastructure and new products and they need a lot of smaller businesses to provide services and expertise,’’ he said.

However, a higher tax environment could lose investment dollars to lower taxing nations, which would inhibit innovation and have a negative impact on jobs and wages.

“If the boards of big business have to make the best decision for their shareholders that means the best investment. If our tax rate is higher than other jurisdictions than those decisions will be about making less investment in Australia with less opportunity for small business people. That means less ability to create jobs.’ he said.

Jennifer Westacott, Chief Executive of the Business Council of Australia, has also called for a more competitive company tax rate, which she says will drive more investment in sectors like mining, agriculture, energy and advanced manufacturing to create new businesses, expand existing business, export more, create new jobs and deliver higher incomes.

COSBOA represents about 400,000 small businesses throughout Australia.

More from The Business Conversation:

Get to know Leanne Pilkington, President of the Real Estate Institute of New South Wales

How do I know if my small business is financially viable?

Popular Brisbane CBD meeting place with modern gastro-pub menu