All Australians stand to gain from bold tax reform that includes lower business tax, Business Council of Australia President Greig Gailey says.
Mr Gailey said tax reforms to attract more investment and international business would be critical in coming years to boosting prosperity for all Australians.
“In the tougher economic environment of the next decade, we must use the opportunity provided by the Henry tax review to support reforms that will attract a larger piece of the global investment pie.
“The BCA has laid out clearly the evidence on tax reform. It shows that lowering business tax and tax on local savings will boost investment, productivity and economic competitiveness. These reforms are the best way to underpin stronger economic growth and higher living standards.
“Prime Minister Kevin Rudd wrote in his recent essay that we should be mindful of the impact of our tax laws on our ability to attract investment and international business,” Mr Gailey said. “He is right.”
“Major reforms that include lowering business tax and tax on local savings will be the best way for the government to respond to calls at the Labor Party conference for the tax system to support economic recovery,” Mr Gailey said.
Mr Gailey said the BCA submission to the Henry review – Unrealised Gains: The Competitive Possibilities of Tax Reform – calls for a tax system that maximises community wealth.
“It will be harder to grow our economy and provide jobs in the years ahead than many people realise,” Mr Gailey said. “Finding new ways to generate growth will be important to raise living standards and to pay down government debt.”
“It is not well understood that reshaping the tax system can drive faster economic growth.
“Independent studies show that lower tax on companies can help boost investment and underpin growth for all Australians,” he said. “We must not lose the opportunity to examine the growth benefits that various options for major tax reform offer.”
The Henry review provides an opportunity for all sections of the community to engage in the debate and to help shape the development of policy options.
The BCA’s submission to the Henry review calls for government to do further modelling to clarify the scope for growth from tax reform.
The BCA looks forward to playing a role in the promotion of structural reforms to the tax system which will make Australia a better place to live, learn and do business.