BCA Response to the 2007–08 Commonwealth Budget

9 May 2007: Coverage of the BCA’s response to the 2007–08 Commonwealth Budget as reported in various newspapers.  

“It’s not what you would call a business budget. There are very few aspects of it that relate to business. In summary, we’re disappointed it’s not more strategic. It’s notable that, of the revenue growth that’s occurred over the past year, 6 per cent has been from company tax as funding, a quarter of total revenue. It’s time for a complete review because the corporate tax burden in Australia is pretty high and can affect our international competitiveness. Personal tax cuts could be of benefit to business in terms of their effect on consumer demand and increasing the tax-free threshold to $30,000 may have an effect on participation levels and that would be a positive for us. Over time, it’s essential that Australian corporate tax arrangements are effective and competitive.”

‘Business Reaction’ feature, The Australian, 9 May 2007, p. 11.

Business Council of Australia president Michael Chaney said: “We’re disappointed it’s not more strategic, specifically in looking at business taxes and a commitment to examining them and reforming them.”

‘Anger as Corporate Take Pays for Personal Cuts’ by Scott Murdoch & Tracy Ong, The Australian, 9 May 2007, p. 27.

Business Council of Australia boss Michael Chaney said business taxes and compliance costs were still too high, despite a further, $6 billion surge in revenue from last year’s budget resulting in corporate taxes now accounting for a quarter of all revenues. “We need our tax system, in particular our business tax structures, to remain competitive to provide revenue security over the longer terms so governments can continue to offer tax relief and other spending measures,” Mr Chaney said.  

‘Bosses Praise Education Moves But Miss Tax Reforms in Budget’ by Richard Gluyas, Kevin Andrusiak & Michael Sainsbury, The Australian, 9 May 2007, p. 27.

The Business Council of Australia boasted in its budget submission about picking up the tab, reminding Mr Howard that taxes paid by business “helped to underwrite the ability of the federal government to fund tax cuts and spending initiatives”. The submission effectively said government revenue comes from business’ pocket, suggesting the kinder the regulation, the higher corporate revenues, and the more money business will hand over come tax time.  

‘Business Onside, Howard Splashes Cash Elsewhere’ by Marc Moncrief, The Age, 9 May 2007, p. 10.

In an election year the government wasn't about to waste money on medium or big businesses – it had already delivered them industrial relations reforms. The Business Council of Australia had long lobbied for investment in infrastructure and education, and this was the budget in which the council received it.  

‘Builders and Miners to Benefit’ by Elizabeth Knight, The Sydney Morning Herald, 9 May 2007, p. 9.

The Business Council of Australia said it was “disappointed” the government had failed to reform the tax system. “Unfortunately, again, the Budget does little to advance this key area of economic reform,” BCA president Michael Chaney said.  

‘Companies Pay for Treasurer’s Largesse’ by Mandi Zonneveldt & George Lekakis, Herald Sun, 9 May 2007, p. 35.

“We are again disappointed that despite a robust economy, reflected in another surge in business taxes … planning for and investing in a competitive tax system has not been achieved”.

‘What the Experts Say’, Herald Sun, 9 May 2007, p. 38.

Business Council of Australia president Michael Chaney: “Business tax costs and compliance are still too high. We need our tax system – in particular our business tax structures – to remain competitive to provide revenue security over the longer term.”

‘Budget ’07’ feature, The Advertiser, 9 May 2007, p. 61.

The case for viewing education spending as an investment rather than a cost has now been endorsed by a chorus of influential groups, from the Business Council of Australia to the Australian Chamber of Commerce and Industry and the Productivity Commission. It is probably their intervention, coinciding with the new challenge of Rudd’s Labor, which made the difference.

‘It’s Clever Politics and Good Sense, Too’ by Catherine Armitage, The Australian, 9 May 2007, p. 1.

Business Council of Australia president Michael Chaney said spending initiatives in important areas such as education and infrastructure were welcome, and in line with reforms the council considered necessary to promote Australia’s living standards.   “Despite targeted tax relief that would assist many on low and middle incomes, this year's budget again did not outline a plan for strategic tax reform,” Mr Chaney said.  Business tax and compliance costs were still too high, Mr Chaney said.  

‘Costello Cuts Taxes Again, Some Believe It’s A Gamble’, by Colin Brinsden, Australian Associated Press.