Australian businesses risk being unable to compete with the rest of the world, unless Parliament moves quickly to give the nation a more competitive company tax rate, Business Council of Australia chief executive Jennifer Westacott warned today.
“Our company tax rate at 30 per cent is one of the highest in the world. We’re at risk of having the second highest company tax in the OECD if the Senate doesn’t act.
“The average company tax rate in Asia is 21 per cent. The US has a federal company tax rate of 21 per cent. The UK is moving towards a rate of 17 per cent and France is moving to 25 per cent over time.
“The simple truth is our regions depend on thriving businesses, which can keep investment ticking up, so they can support local jobs. We are kidding ourselves if we think Australia will remain a competitive place for investment with an increasingly uncompetitive tax rate.
“Every company tax reduction overseas is equivalent to a tax increase in Australia.
“Our global competitors are leading the way by cutting their rates, unless we do the same we risk falling to the back of the pack.
“Businesses in Australia employ 10 million people, or five out of every six Australian workers. A strong business sector is vital to a strong Australia.
“Without a globally competitive tax rate Australian businesses will fall behind and miss out on attracting the extra investment we so desperately need to create more jobs and drive higher incomes.
“The government’s modest plan to lower Australia’s top company tax rate to 25 per cent over 10 years has become vitally important.
“We need to get in front again in the tough global race to boost jobs and wages.
“Our regions are crying out for the well-paid and meaningful jobs and wages growth that only growing investment can deliver. The Senate could give these communities the hand up they need by passing company tax cuts.
“By 2021-22 business will be paying $100 billion a year in company tax and over the next decade this will reach a cumulative $1 trillion – even if the Senate passes the full plan to reduce the company tax rate.”
Business Council media team: 02 8224 9214