Tax Reform: A Much-Needed Investment for the Future

Mr Campbell Anderson, President of the Business Council of Australia, today urged Australians to keep their sights on the fundamental benefits of the reforms to our taxation system.

Addressing the Property Council of Australia’s Corporate Leaders’ Lunch in Sydney, Mr Anderson said “We have become accustomed in recent months to a generally negative perspective on tax changes as the media concentrates on the conflicts, the day-to-day traumas and the apparent embarrassments surrounding the reform process.”

“It is very easy in this context to lose sight of the bigger picture: to forget why business embraced this reform area vigorously and to overlook the longer-term benefits we can expect from tax reform.”

Mr Anderson listed what he described as “the substantial benefits of tax reform”. These include:

  • A much more robust indirect tax system that will provide the states and territories with a growing revenue base.
  • The removal of the counter-productive tax penalties we have been placing on our export and import competing industries since the 1930s.
  • Lower personal tax rates for the vast majority of Australian households – particularly the large numbers of people earning around average weekly earnings.
  • The under-appreciated overhaul of the family payments system that will provide families with children with large increases in disposable income and will slash the very high penalties lower and middle-income families currently face when they earn more income.
  • The improved incentives for investment through the lower company tax rate and the substantial reforms to capital gains taxation.
  • The greater integrity of the tax system to be brought about by the exposure of the cash economy and the elimination of a range of questionable practices.

Mr Anderson said “with all the concentration on the transitional inconveniences, many have lost sight of the why tax reform was necessary. The old system was broken. It was not raising the revenue we needed to fund the services we expect of our governments and it was forcing governments to push up taxes in a ways that were both unfair and damaging to our competitiveness.”

“There was simply no way we could have expected the creaky old tax system to cope with the big issues of the years ahead such as the ageing of the population and the greater need for higher levels of education. In contrast, the new tax system will mean that Australia will be positioned to cope with these issues with confidence and a sense of fiscal security that has been obviously absent for the past two decades.”