25 November 1999

Mr Dick Warburton, Chairman of the Business Coalition for Tax Reform today welcomed the historic agreement between the Government and the Opposition to implement the business tax reform package.

“The agreement secures comprehensive tax reform that will deliver a modern, stable, fairer and more competitive tax system. Business tax reform was the last link. It is now up to everyone involved to get on with the implementation and the detailed consultations necessary to bed down the changes.”

Mr Warburton said, “It would have been very damaging if the uncertainty surrounding the implementation of the business tax measures had continued. The role played by the Opposition has been positive, constructive and welcomed by business. It sends a good message to overseas investors about the ability of our political system to deliver change that is in the national interest.”

Mr Warburton also released the findings of a report by Access Economics which confirms that the Government’s package of business tax measures is revenue neutral.

“We asked Access Economics to take a fresh and detailed look at the total revenue effects – their independent conclusion is that over the next six years, the package is demonstrably revenue positive.”

“This is in line with the Government’s estimates and that of the Ralph Committee. It is consistent with the stated objectives of the Government, the ALP and the Democrats – that the package must be revenue neutral.”

“Access Economics points out that the lower corporate tax rate and that the lower capital gains tax rate are more than paid for by the removal of accelerated depreciation and the raft of revenue integrity measures. If anything their estimates are conservative – they exclude additional revenue likely to accrue to the state and local government sector, compliance dividends from the greater tax certainty or dividends from the interaction of integrity measures relating to indirect and business tax reform.”

“While there is no absolute science with any modelling, Access Economics and Treasury are acknowledged experts in this area and their advice should inform our views. We have made the study available to all the political parties and this should dispel any lingering doubts on the revenue neutrality issue.”

Mr Warburton said, “we are now looking forward to the business of getting on with implementing tax reform and consultation with business so that we can achieve the best possible outcome. “

Contact:

Vicki Flannery 03 9610 4204 0418 332 272

David Buckingham 03 9610 4222 0419 004 200