BCA talks its book on tax reform

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By Leith van Onselen

The Business Council of Australia (BCA) has called on the Turnbull Government to slash company taxes in a bid to boost productivity. From The AFR:

The corporate sector has urged Prime Minister Malcolm Turnbull to make cutting business taxes a priority…

Business Council of Australia president Catherine Livingstone used her speech to the council’s annual dinner on Thursday to lobby the Prime Minister to look after business…

“While absolutely recognising the critical importance of personal income tax reform, the experience of other countries has shown that nothing will stimulate innovation and growth more than a reduction in the tax rate for all businesses, as part of a broader tax reform agenda”…

Rather than indulging the BCA, Prime Minister Turnbull should focus on:

  1. broadening the tax base and shifting the burden of taxation away from ordinary wage and salary earners;
  2. closing the myriad of inequitable and inefficient higher income “tax shelters” like superannuation concessions, negative gearing and the 50% capital gains tax discount; and
  3. replacing inefficient taxes like stamp duties with efficient ones like land taxes.
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Whether raising/broadening the GST is part of this package, with compensation for the poor, is neither here nor there.

Any tax reform package that puts the interests of big business ahead of ordinary Australians will be widely viewed as unfair and doomed to fail. Tony Abbott experienced this phenomenon first hand, and so to will Prime Minister Malcolm Turnbull if he abandons his pledge to place “fairness” front-and-centre of tax reform.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.