Growing the whole economy

Reducing the company tax rate

The company tax rate will be reduced to 29 per cent for the 2013‑14 income year and to 28 per cent from the 2014‑15 income year, in conjunction with the introduction of the Resource Super Profits Tax. This rebalancing of the corporate tax burden will have a number of benefits.

• It will improve the international competitiveness of Australia's tax rate.
• By remaining competitive with similar countries we can reinforce Australia's recognised advantages as an investment destination.

More investment

Over time, this will lead to an increase in investment, particularly from overseas. This in turn will flow through to higher real wages for Australians.

More investment will also mean more innovation and entrepreneurial activity.

An increase in investment will mean that companies have more capital. This will lead to higher productivity and economic growth, and therefore higher real wages.

By reducing the company tax rate we will encourage new industries and businesses to set up and new jobs to be created, growing the entire economy right around Australia.

By making sure our corporate sector continues to be productive and competitive, we can remain at the forefront of technology and knowledge generation.

The proceeds from the RSPT will be directed to building skills and infrastructure to sustain growth.

This will make Australia a more attractive place to invest.

The reduction in the company tax rate is expected to increase GDP by 0.4 per cent in the long run. Together with the resource tax reforms, this will lead to a long run increase in GDP of around 0.7 per cent and increase real after tax wages by 1.1 per cent.