The Coalition have been caught out relying on deeply flawed
modelling in their opposition to the Government's
proposed changes to managed investment trust withholding
tax, said Assistant Treasurer David Bradbury.
Senior Coalition frontbenchers Andrew Robb, Mathias Cormann
and Bob Baldwin have been quoting from an Allen Consulting
Group report that Treasury has found to be 'deeply
Treasury analysis of the report found the modelling
calculated an increase in the company tax rate across all
sectors of the economy rather than the proposed withholding
tax rate of 15 per cent for managed investment trusts.
"The Coalition have been caught out hiding behind
deeply flawed analysis commissioned by vested interests to
try and distract attention away from their shameful record
on withholding tax rates for managed investment
trusts," said Mr Bradbury.
"Under the former Howard Government the rate of
withholding tax for managed investment trusts was 30 per
cent - double the rate proposed in the Budget.
"It was this Labor Government that slashed the
Coalition's high rate of taxation to help encourage
"The Coalition have made it clear that if they had
their way, the 30 per cent withholding tax rate would never
have been reduced in the first place and they would have
rolled the shutters down on foreign investment."
When the withholding tax was first reduced by the Labor
Government, Liberal MPs lined up to oppose the move:
"It does not appear that this rate [30 per cent] of
withholding tax was necessarily a barrier for
(Michael Keenan MP, House of Representatives, 18 June 2008)
"The 15 per cent rate that is proposed in the Bill
currently before the Parliament is half the rate it was
when Tony Abbott and Joe Hockey were last in Government.
"It still ensures that Australia has a rate that is
equal to or better than most comparable nations and is in
line with the Henry Review's recommendations on
location specific rents.
"This measure will ensure that we remain attractive as
a destination for investment and that we deliver a fair
return for taxpayers.
The Liberals made it very clear previously that they did
not want a rate below 15 per cent.
"I do not see a reason for going below 15 per
(Andrew Laming MP, House of Representatives, 18 June 2008)
"If the Coalition are now genuinely opposed to the 15
per cent withholding tax rate then they should commit to
reversing it in office and come clean about which payments
and frontline services they will cut to pay for it."
25 June 2012