Earlier this week, the Business Council of Australia (BCA) called on the federal government to introduce an broad-based investment allowance to help stimulate the economy.
Now, the BCA has received support from the Australia Institute. Ben Oquist, the executive director of the progressive think tank, says an investment allowance is preferable to a general cut in the company tax rate. The Institute believes any investment allowance should only apply to investment in Australia, while it should also be limited to new investment, not to investment that would proceed anyway. From The AFR:
“Given the weakness of the Australian economy, with interest rates heading towards zero and monetary policy effectively being exhausted, other measures to stimulate the economy deserve support,” Mr Oquist said.
