All Australians stand to gain from tax reform which lowers the corporate tax rate, says Business Council of Australia President Graham Bradley.
Mr Bradley was speaking ahead of the delivery to the federal government of the report of the Australia’s Future Tax System Review, authored by a panel led by Dr Ken Henry.
The BCA submission to the Henry review – Unrealised Gains: The Competitive Possibilities of Tax Reform – has laid out the detailed independent research on the case for lower corporate taxes.
“The evidence shows clearly that lowering business tax will attract more investment and international business. It has the potential to boost investment, productivity, wages and economic competitiveness,” Mr Bradley said.
“Research shows that working Australians bear much of the burden of corporate taxes, because their wages are lower than they otherwise would be.
“Lowering corporate taxes will raise living standards for all Australians.
“It will give all Australians the biggest bang for our tax reform buck.”
Mr Bradley said the BCA submission to the Henry review calls for a tax system that maximises community prosperity. It recommends halving the corporate tax rate to 15 per cent over time.
The available evidence overwhelmingly supports the case that tax reform can best raise growth rates by shifting taxation away from mobile factors of production, such as capital.
In the wake of the global economic slowdown, governments will seek to revive growth to meet social and budgetary pressures, and to attract a larger share of scarce global capital.
“We must take every opportunity to grow our economy and provide jobs in the years ahead,” Mr Bradley said. “Finding new ways to generate growth will be important to raise living standards and to pay down government debt.”
“It will also help in achieving the government’s aim of promoting Australia as a regional financial hub.
“It is important for all parties in the debate to understand that the right choices on tax will drive the fastest growth in jobs, incomes, retirement savings and economic growth for all Australians.”
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.