Business Looking to University and International Tax Reform in Federal Budget

Australia’s corporate sector said today it was looking forward to significant reforms to international tax arrangements and higher education as part of the federal Budget handed down next week.

Business Council of Australia President, Dr John Schubert, said both areas were critical to Australia’s competitiveness in the global economy and to ensure it remained one of the fastest-growing economies in the world.

Dr Schubert said the BCA and its Members had been advocating for some time changes to the international tax regime which was hindering Australian companies from attracting overseas investment and being able to compete globally.

He said business was specifically looking for the removal of some of these hurdles, as well as an end to the double-taxing of overseas earnings by Australian-based companies.

“These changes would represent a significant step to removing the barriers to Australia’s participation in the international economy,” Dr Schubert said.

“They would also help Australia to attract higher levels of foreign investment and assist our companies to compete globally, reducing the pressure to relocate offshore.”

In terms of university reform, the BCA was looking for new initiatives to improve the flexibility in the financing of higher education, as well as more streamlined administration of universities.

Initiatives were also needed to ensure that education services exported overseas by our universities continued to be of one of Australia’s biggest export industries.

“The emphasis placed on the importance of higher education in making Australia a leader in the knowledge economy cannot be underestimated,” he said.

“The BCA also strongly believes that Australia’s universities need governance processes that enhance strategic and commercial decision-making, particularly in their efforts to support innovation, research and development and partnerships with business.

“We also look forward to initiatives to encourage cooperation between universities that allow for greater effectiveness in the use of resources and expertise.”

From an overall budget perspective, Dr Schubert said it was reasonable to expect that with the economies of Australia’s major trading partners still weak or weaker than predicted six months ago, combined with the impacts of drought, war in Iraq and more recently SARS, economic forecasts in the Budget were set to moderate.

“It is unrealistic to expect that this environment will not have some impact on Australia’s economic outlook over the coming year,” he said.

“All of this suggests that we should expect some downward revisions to some of the key budget forecasts, including GDP, although we still expect Australia to outperform the rest of the world.”