“The Treasurer Joe Hockey’s comprehensive arguments for a more competitive personal tax system are an encouraging next step towards creating a tax system that works for everyone,” Business Council of Australia Chief Executive Jennifer Westacott said.
“As the Business Council said in its submission to the tax white paper process, lowering personal income taxes to better encourage and reward effort, participation, risk-taking, entrepreneurship and innovation is a key to overhauling the tax system,” Ms Westacott said.
“Mr Hockey is right that we have to deal with the pernicious effect of bracket creep, which affects people on lower incomes the most. This also means looking at the interactions between the tax and transfer system, which can significantly discourage workforce participation.
“A person earning $150,000 a year will be paying 11 per cent more tax in three years if nothing is done about bracket creep, but a person earning $40,000 will be paying one quarter more tax in that time, so this is a problem which must be addressed for all taxpayers.
“The reality is that the case for comprehensive tax reform is compelling because Australia is falling behind the world on competitiveness and productivity, and the tax system is not adequately supporting a growing economy or keeping up with the challenges of the 21st century.
“As well as lower personal income taxes there must be lower company taxes to make us internationally competitive and support greater investment, which creates jobs and wealth, and removal of inefficient state taxes and a greater reliance on indirect taxes such as the GST.
“All options should be kept on the table as the tax white paper process debate continues. Reform of the personal tax system is just one element of a comprehensive tax reform package that supports a growing economy and rising living standards,” she said.
For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2664 • Mobile 0403 241 128