“The Federal Government’s tax discussion paper highlights serious structural flaws in Australia’s tax system that are undermining national competitiveness,” BCA President Catherine Livingstone said.
“The paper underscores that the challenges facing Australia’s tax system are profound, including pressures on the tax base from digitisation of the global economy.
“It shows that Australia’s current tax system will impede the nation’s capacity to drive growth, create the jobs or foster the innovation and productivity that Australia needs to underpin living standards in the decades to come.
“Australia’s company tax rate is internationally uncompetitive: corporate taxes comprise 19 per cent of all taxation, the second highest share among OECD countries and more than double the OECD average of nine per cent.
“If we want Australia to be an attractive place to do business, invest and create jobs in a global economy, the system is unsustainable.
“Government should use the tax reform white paper process to map out a plan for significantly reducing the company tax rate to a more competitive rate for all companies. Countries around the world have been lowering their company tax rates for some time because the evidence is clear that doing so leads to more jobs and higher wages.
“The discussion paper also underscores that bracket creep – where wages growth over time is pushing people into higher tax brackets – is a disincentive to participation and cannot go unchecked.
“Comments by the government that it will only pursue change to the GST if all the states and parties agree puts a very high hurdle on improving Australia’s major indirect tax.
“What’s important now is that there is a proper process where all options for a better tax system for the future can be considered. Modernising our tax system requires an open, constructive and inclusive approach from all political parties and across the community, as occurred in the 1980s.
“The BCA will do all it can to facilitate this process, including continuing to work alongside the Australian Council of Social Service and other groups to identify and build common ground on how tax reform can contribute to achieving our shared national interest objectives.”
For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2664 • Mobile 0403 241 128