Australia’s corporate sector said personal tax cuts and family spending outlined in tonight’s federal Budget were a welcome boost for ordinary Australians but attention should now be directed to Australia’s corporate tax system which has effectively funded a primary share of these benefits.
BCA President, Mr Hugh Morgan, said the growth of corporate tax receipts from $27 billion to $36 billion over the last 2 years was the major reason for the Budget remaining in surplus.
However, the BCA was concerned the Budget contained no significant recognition of the contribution of the corporate sector and its capacity to sustain this sort of performance into the future.
“Corporate taxes have increased significantly in recent years, and are projected to grow to nearly $39 billion in 12 months,” Mr Morgan said.
“This is because corporate Australia is performing extremely well. However, there are some worrying trends in the corporate tax system which, if not addressed, will impact on the contribution large business makes over the longer term.
“They include the diminished competitiveness of Australia’s corporate tax rates compared to other countries which are actively reducing their rates, as well as increasing government regulation and tax rules that discourage long-term investment.
“The benefits that have flowed to the Australian community from the increased corporate tax receipts to government again demonstrates the central need to ensure corporate Australia stays competitive
“That needs to be enhanced, not taken for granted.”
At the same time, the BCA welcomed new and increased spending in education and innovation and acknowledged the rationale for increasing work and family payments to reduce disincentives for people entering or returning to the workforce.
“We are pleased with the focus the government has put on encouraging greater participation in the workforce and helping Australians to provide for their retirement,” he said.
“These issues are complex and need sustained policy attention over the longer term.”