Bill Shorten’s embarrassing backdown.
Bill Shorten’s embarrassing backdown.

Shorten’s embarrassing backdown

LABOR leader Bill Shorten today junked a four-day old pledge to repeal tax cuts for medium-sized businesses in an embarrassing policy retreat.

The degree of embarrassment was underlined by the need for his senior colleagues to defend Mr Shorten after his unilateral declaration of the repeal earlier this week.

"I can assure you that Bill Shorten has my full support and will continue to do so," said shadow treasurer Chris Bowen, who with opposition finance spokesman Jim Chalmers stood with Mr Shorten at a press conference.

Last Tuesday the Opposition Leader told reporters a Labor Government would roll back legislated tax cuts for businesses with turnovers from $10 million to $50 million a year.

That surprise announcement was reversed today after complaints from businesses - the danger of political damage to Labor - and a shadow cabinet meeting today in Sydney.

But Labor will not support a full shift from 30 per cent to a 25 per cent rate.

"Where there is a legislated tax deduction to 27.5 per cent for companies that have a turnover of up to $50 million and the fact that is in place before the next Federal election, we will respect that," Mr Shorten told reporters.

"Because we do not want to create uncertainty."

He said Labor's policy for accelerated investment depreciation meant 99.8 per cent of businesses would be better off.

"I have listened to all of the debate instead, spoken to colleagues, listen to business," said Mr Shorten.

The three economic spokesmen said the repeal position had been endorsed by the appropriate shadow cabinet committee - although not a full shadow cabinet meeting.

They said it was altered because the Parliamentary Budget Office yesterday produced new calculations which showed the legislated cuts for medium sized businesses would not forego as much revenue as originally believed.

The Opposition Leader presented the change as a virtue.

"We have changed our position, we have amended our position because politicians who do not listen, politicians who just simply want to stick on one course of action regardless of all the facts, I do not think that helps anyone," he said.

He said: "Do rather than today? Yes, of course.

"However, the fact of the matter is we are here now."

Mr Bowen praised Mr Shorten for his consultation, reflecting the charge he had not consulted on the Tuesday announcement.

"No combination of leader and economic team has created more economical reform then Bill Shorten and his economic team, not in government not in opposition," he said.

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