Statement attributed to Business Council Chief Executive Bran Black:
These changes to CGT take some sting out of the tax bite for small businesses but the overall pain will remain for the broader economy when investment takes a hit.
Extending the small business CGT threshold to $10 million is a common sense and practical step.
Removing some ministerial discretions is also welcome and will give more individuals and business owners greater certainty about their future.
However, the broader issues with the reform remain.
At the commencement and conclusion of the Economic Reform Roundtable, we said any tax reform must increase business investment because this is the only way to sustainably lift productivity and raise living standards.
Put simply, tax reform must grow the pie.
This body of reform still does not meet that yardstick. Instead, it increases the tax burden, will reduce investment and therefore sets the nation back.
The BCA Global Investment Competitiveness Index found Australia already has one of the least competitive tax environments in the world, with settings here ranked 38th out of 42 countries. These changes diminish our overall investment attraction prospects.
We remain committed to working to get Australia’s tax settings right, because the stakes are too high – for investment, productivity and living standards – for us to get it wrong.
What is clear today is that there is still more work to do.