The Claim
“Broke an election promise to cut the company tax rate by 1.5%.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The Promise:
During the 2013 federal election campaign, Tony Abbott and the Coalition explicitly promised to cut the company tax rate by 1.5 percentage points, from 30% to 28.5%, effective from July 1, 2015 [1]. The policy was announced on August 6, 2013, with an estimated cost of $5 billion over the forward estimates [2]. The Coalition stated this would "encourage investment in Australian businesses and jobs" and was "a key part of the Coalition's plan to deliver a stronger economy" [1].
The Broken Promise:
On April 15, 2015, Prime Minister Tony Abbott announced the 1.5 percentage point company tax cut would not proceed [1]. This was confirmed in ABC Fact Check's promise tracker, which classified the promise as "broken" [1]. The 2014-15 budget had already signaled uncertainty by leaving the company tax cut in the "contingency reserve" rather than including it as a fully costed measure [3].
Verification: This claim is TRUE. The Coalition explicitly promised the company tax cut during the election and subsequently abandoned it.
Missing Context
Budget Circumstances:
The decision to abandon the company tax cut came amid significant budget pressures. The 2014 budget faced a deteriorating revenue position and the government was seeking to address what it termed a "budget emergency" [3]. The $5 billion cost was deemed unaffordable given the fiscal constraints the government faced.
Alternative Measures:
While the broad company tax cut was abandoned, the government did implement alternative business tax measures. The 2015 budget introduced a small business tax cut (reduced to 28.5% for businesses with turnover under $2 million) and other business incentives [4]. This provided some of the intended benefit but only to a subset of businesses rather than all 750,000 companies originally promised.
The Paid Parental Leave Connection:
The original company tax cut promise was partially designed to offset a 1.5% levy on big businesses to fund the Coalition's paid parental leave scheme [2]. When both policies were abandoned, the tax cut became fiscally unjustifiable on its own.
Source Credibility Assessment
The original source is ABC News Fact Check, which is a reputable, independent fact-checking unit established by Australia's national public broadcaster. ABC Fact Check was established in 2013 specifically to monitor political promises and has a track record of rigorous, non-partisan analysis [1].
- Credibility: High - ABC is Australia's independent national broadcaster with statutory editorial independence
- Political Lean: None established - ABC maintains formal independence from government
- Methodology: ABC Fact Check uses transparent criteria for tracking promises (delivered/broken/in-progress)
- Reliability: The information is consistent across multiple ABC reports and government documents
Labor Comparison
Did Labor do something similar?
Labor's Company Tax Record:
Under the Rudd/Gillard governments (2007-2013), the company tax rate remained at 30% [5]. Labor did not promise a company tax cut during their period in government, though they did implement other business tax measures.
Labor's Own Broken Promises:
Labor has its own history of abandoned tax and spending promises. For example:
- The 2010 election promise to return the budget to surplus in 2012-13 was abandoned due to changed economic circumstances [6]
- Various spending commitments made during the 2007 campaign were modified or delayed when economic conditions changed
Comparative Context:
While Labor didn't make a specific company tax cut promise they later broke, both major parties have demonstrated a pattern of modifying or abandoning election commitments when fiscal circumstances change. The Coalition's abandonment of the company tax cut fits this broader pattern of Australian politics where budget realities often override campaign promises.
Key Distinction:
The difference is that Labor generally maintained the status quo on company tax (30%), while the Coalition actively promised a reduction they later abandoned. However, the Coalition subsequently pursued company tax cuts through later budgets (2016-2017), suggesting the policy intent remained but the fiscal capacity was lacking in 2015 [4].
Balanced Perspective
Legitimate Rationale:
The abandonment of the company tax cut was driven by legitimate fiscal concerns. The 2014 budget faced significant revenue write-downs and the government was attempting to establish a credible path back to surplus [3]. Treasury advice likely indicated the cut was unaffordable without deeper spending cuts or alternative revenue measures.
Economic Context:
In April 2015, Australia was facing:
- Falling commodity prices affecting revenue
- Below-trend economic growth
- Rising unemployment
- A budget deficit significantly larger than projected
Under these circumstances, delivering a $5 billion tax cut would have required either larger budget deficits or deeper spending cuts to essential services.
Subsequent Policy Evolution:
While the 1.5% universal company tax cut was abandoned, the Turnbull government later pursued company tax cuts through the Enterprise Tax Plan, which gradually reduced rates for small and medium businesses from 2016-2021 [4]. This suggests the policy objective remained valid, but the timeline and scope were adjusted to fiscal reality.
Normal Political Practice:
The abandonment of election promises due to changed circumstances is common across Australian governments of both persuasions. The Howard government modified several 1996 promises, the Rudd/Gillard government abandoned surplus commitments, and the Abbott government modified this and other commitments [6]. While politically embarrassing, such adjustments reflect responsible fiscal management when circumstances change.
TRUE
7.0
out of 10
The claim is factually accurate. The Coalition explicitly promised during the 2013 election campaign to cut the company tax rate by 1.5 percentage points from July 1, 2015, and subsequently abandoned this promise in April 2015. This is confirmed by ABC Fact Check's promise tracker and multiple government statements.
However, the context matters: the promise was broken due to deteriorating budget conditions and fiscal constraints that emerged after the election. While this constitutes a broken promise, it was arguably a responsible fiscal decision given the circumstances. The government later implemented alternative business tax relief measures for small businesses, showing the policy intent wasn't entirely abandoned.
Final Score
7.0
OUT OF 10
TRUE
The claim is factually accurate. The Coalition explicitly promised during the 2013 election campaign to cut the company tax rate by 1.5 percentage points from July 1, 2015, and subsequently abandoned this promise in April 2015. This is confirmed by ABC Fact Check's promise tracker and multiple government statements.
However, the context matters: the promise was broken due to deteriorating budget conditions and fiscal constraints that emerged after the election. While this constitutes a broken promise, it was arguably a responsible fiscal decision given the circumstances. The government later implemented alternative business tax relief measures for small businesses, showing the policy intent wasn't entirely abandoned.
📚 SOURCES & CITATIONS (1)
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.