“Treasury tax reform analysis reported in today’s media proves that doing nothing to alleviate the burden of income taxes is not an option as it will be a serious drag on economic growth,” BCA Chief Executive Jennifer Westacott said.
“The analysis confirms what the Business Council has been saying for some time, that not only is there a growth dividend from lowering income taxes, but that doing nothing will hold back growth and Australian living standards,” Ms Westacott said.
“While there is clearly a modest growth dividend from addressing the impact of bracket creep on workers’ wages, what the analysis doesn’t cover is the larger growth dividend and benefit to jobs and household incomes from lowering business income tax to globally competitive levels.
“Real economic growth will come from the combination of lower business and personal income taxes to spur investment, expansion, job creation and higher wages, as well as giving individuals a better reward for their work and greater choice in how they spend their money.
“The tax reform debate now has to refocus on the structural tax reforms which will support the real economic growth we need, and ensure the tax system is more competitive and better able to respond to the changing world we live in.
“The task is the same now as it always has been, which is to identify what is the most effective and fairest way to fund the significantly lower business and personal income taxes which will be required to generate the level of growth Australia needs to keep up with the rest of the world.
“We welcome Treasurer Scott Morrison acknowledging the need to lower business taxes to more competitive levels.
“For businesses to respond favourably with greater investment in Australia what will be important is that any commitment to lower business taxes over time is underpinned with legislation, so there is certainty around the long-term investment horizon,” Ms Westacott said.