The BCA today welcomed the federal Budget which contained a number of important initiatives and measures to address short-term priorities but has also cleared the way to continue with a comprehensive economic reform program.
BCA President, Mr Hugh Morgan, said the BCA particularly welcomed the government’s commitment to a comprehensive reform agenda including infrastructure, regulation and federal–state relations to ensure prosperity and sustainability for the future.
The BCA also welcomed measures supporting welfare-to-work transition; tax changes that promote exports and ease other business costs; and the abolition of the superannuation surcharge and business import duties – both of which were implemented as temporary measures – all as important first steps.
The council also welcomed the planned program of substantially reducing the income tax on individuals over four years.
However, Mr Morgan said the underlying issue of bracket creep and international competitiveness of the individual and business and tax regime remained on the agenda for further examination.
Between 2003–04 and 2005–06 the corporate tax take is projected to increase by about 30 per cent and reach a record level of over 5 per cent of GDP.
“The contribution from the corporate sector has continued to rise throughout the last five years and substantially funded many of the initiatives announced in this Budget, Mr Morgan said.
The BCA again calls for a review of corporate taxes to make sure Australia’s tax system is as competitive as possible and in line with the continued decrease in corporate tax rates within major markets. The government’s measures to treat temporary residents more fairly are welcomed. These measures are vital in an increasingly competitive global environment for skilled workers.
“Australia’s low unemployment and rising living standards are due to sustained levels of solid economic and productivity growth over a long period of time.
“These gains will be eroded unless the economy is re-positioned for sustained economic and productivity growth.”
Following the Budget, the BCA expects the government to commit to more significant reform, specifically:
- Substantial workplace relations reforms to be announced immediately following the Budget and implemented in the post-June federal Parliament.
- A commitment through the June COAG meeting to develop a comprehensive and collaborative state–federal approach to infrastructure planning and investment.
- Significant improvements in business regulation through more accountable government processes to ensure that any new business regulation is properly assessed in terms of costs, benefits and expected outcomes ahead of its implementation.