none

New tax reforms fall short of industry expectations

04-05-2010
by 
in 

The recent release of the Australia's Future Tax System (AFTS) Report and the Government's response has sparked mixed reaction from business and industry.

The AFTS Report involved some 138 recommendations and the Federal Government has addressed or ruled out around 30. 

Ai Group Chief Executive Heather Ridout said the report marks the beginning of what business hopes will be a longer-term process of significant tax reform.

Mrs Ridout said while some aspects of the Government's response will be welcomed by business, others either fall short or will be met with opposition.

“Clearly, while the Government's initial response falls short of bold or sweeping long-term tax reform, a pathway to tax reform now exists," she said.

The Resources Super Profits Tax (RSPT) is “broadly speaking”, a move in the right direction. 

“It is a more efficient method of levying tax than the current State-based royalties system. It has the potential to spread the gains from a once-in-a-generation mining boom more evenly, and ensure our economic growth is not overly reliant on resources. This includes through the proposal to invest in infrastructure.”

The Ai Group is looking forward to consultation with Government on the proposed tax reforms.

“The industry needs to be deeply engaged in shaping the design and implementation of the measure, Mrs Ridout said.

“We welcome the phased reduction in the company tax rate to 28 per cent but are disappointed that the Government has baulked at cutting the rate to 25 per cent as recommended in the AFTS Report. 

“We are encouraged the Government is open to further reductions and we strongly advocate this.”

Mrs Ridout said the proposed reductions in the company tax would help to improve Australia’s international competitiveness. 

“Amongst 24 comparable OECD economies, Australia currently has the third highest company tax rate, she said. “Under the Government's proposed changes we would have the ninth highest, which would knock us a little further into the middle of the pack. But a more ambitious cut to 25 per cent would put us into the top ten.”

Mrs Ridout said granting instant write-offs on the purchase of capital assets up to a value of $5000, together with the earlier access for small business to the reduction in the company tax rate, is a significant boost. 

“However, the write-off threshold is well below the $10,000 recommended in the AFTS Report, she said.

“Business has concerns about the mooted changes to superannuation including raising the Superannuation Guarantee to 12 per cent.  

“This represents a 33 per cent increase in the cost to many employers on the superannuation bill they already face.

“Many businesses will be looking for wage trade-offs similar to those that accompanied the introduction of compulsory superannuation in the early 1990s.

"There is also a substantial amount of tax reform work left undone.  This includes, for example, the removal of existing taxes, the tax treatment of business losses, and administrative reforms.”

Related news & editorials

  1. 21.02.2018
    21.02.2018
    by      In
    It is often held up as an engineering truth that simplest is best. And while improvements to any technology almost invariably produce improved solutions to engineering problems while making them more complex, there are still many applications where the old maxim still holds true.
    In cases where the... Read More
  2. 29.01.2018
    29.01.2018
    by      In
    Offering the reliability of ball bearings on the activation shaft, nickel plating on internal components and patented neutral-crown technology, Tecnomagnete MaxX magnetic lifters are designed to ensure that all the magnetic field is concentrated at the lifting face.
    Available from Serpent &... Read More
  3. mobile flexible screw conveyor
    10.01.2018
    10.01.2018
    by      In
    The latest Flexicon mobile flexible screw conveyor has a multipurpose hood that enables the dust-free transfer of material discharged from bulk bags and/or manually dumped from handheld sacks into elevated process equipment or storage vessels.
    The conveyor is mounted on a frame with locking castors... Read More
  4. Palift pallet leveller
    24.08.2017
    24.08.2017
    by      In
    Lindsay Wakefield provides an introduction to scissor lifts and associated products.
    WHY? Manual handling can expose workers to physical risk - excessive force, awkward postures, and repetitive motions that can lead to injuries, wasted energy, and wasted time. To prevent this it is important to... Read More