“Australia’s tax competitiveness is already woeful and our broader competitiveness ranking is mediocre at best. US company tax reductions of this magnitude will only push us further behind” said Business Council chief executive Jennifer Westacott after the Trump administration unveiled its tax reform plan overnight.
“Australia’s growth is languishing behind other major economies, while some political leaders continue to stymie business tax reform. Meanwhile the Trump Administration is planning to boost their economy further by cutting the company tax rate to 20 percent along with a host of other pro-investment measures.
“With historically low wages growth, business investment still stuck at its lowest share of GDP since 1993-94 and economic growth below 2 per cent, we simply cannot afford to see investment sucked out of Australia.
“Every company tax reduction overseas is a de facto tax increase in Australia and a disincentive for investors.
“The only way to get Australian wages growing strongly again is through productivity-enhancing investments – this is a tax reduction which primarily benefits workers and wages.
“There is no question that US tax reform will significantly change the arithmetic for global investors considering investing in Australia and that can only be bad news for Australian workers and businesses.
“On my recent trip to North America I was surprised by the relative bipartisanship on the need for tax code changes, and with senior Democrats pledging to work with the President, changes seem likely. Political leaders on both sides in the US understand the benefits of strong economic growth.
“It isn’t just the United States acting, other nations like France, are also moving towards more competitive company tax rates.
“Make no mistake, we are in the midst of a global fight to attract investment dollars and Australia is lagging badly.
“The recent economic data have showed some welcome improvements but we must act now to lock in positive trends. The Enterprise Tax Plan will go some of the way to restoring Australia’s competitiveness and boosting the economy.
“This announcement should be a wakeup call for the Senate – we cannot afford to stand still while the rest of the world forges ahead.
“Doing nothing is no longer an option. There is a modest proposal on the table which would improve Australia’s competitiveness. The Senate must pass the Enterprise Tax Plan in full, there is no time to delay.