This paper argues that the need for comprehensive and considered tax reform is now urgent and profound in order to keep the economy growing, and to fund a strong social safety net.
Purpose of paper
This is the first in a series of papers that the Business Council of Australia will be releasing in the lead-up to the Commonwealth Government’s tax white paper reform process.
It presents a platform for discussion and for building a shared understanding of why tax reform matters, the problems we are seeking to address, and agreement on broad directions and processes on how Australia might embark on comprehensive tax reform.
The paper outlines:
- Why tax reform matters for Australia’s future prosperity.
- The characteristics of the current tax system, as a starting point for tax reform. Tax reform should seek to preserve some of the key strengths of Australia’s tax system and address its shortcomings.
- Some future directions for reform, based on this starting point, and some fundamental matters for the upcoming tax white paper process.
A purposeful approach to reform
- Tax reform should be mindful of the need to raise enough revenue.
- It should also take into consideration the possibility of a change in the tax mix that can lead to a more competitive tax system to foster investment and growth.
- We should aim for a tax system characterised by a broad base and with low rates.
- Reform must be comprehensive, with effective community engagement that is conducted in a consultative and transparent way.
- As a key player in the Australian economy, the business community has an important role to play in the national discussion on tax reform. As a starting point, business must accept its obligations and be transparent when complying with its taxpaying responsibilities.