Thursday 20 April 2006

Australia’s peak business tax forum, the Business Coalition for Tax Reform (BCTR), today welcomed the release of the International Comparison of Australia's taxes prepared by Dick Warburton and Peter Hendy.

Chairman John Stanhope said that if used correctly the report has the opportunity to make an important contribution to the ongoing tax reform debate, and also future government tax policy for Australia.

“For example, while the report ranks Australia favourably regarding personal taxes as a % of GDP it should not be construed as meaning the job of personal tax reform in Australia is ‘done and dusted’”, Mr Stanhope said.

There is still more work to be done to improve our personal tax regime as it currently impedes the incentive of many Australians to participate in the workforce, to invest, and to save for the future. In this regard the BCTR urge the government to establish a thorough and dedicated review process, to develop a clearly structured plan to reform Australia’s personal tax system.

The BCTR seeks to promote a more efficient and robust taxation system that benefits all Australians. A review process would allow thorough, reasoned and consultative debate regarding the personal income tax system

In the BCTR's discussion paper Personal Income Tax Reform, released on 2 February 2006, the BCTR canvassed three possible directions reform of Australia’s personal tax system might take and explores the degree of change that could be possible.

The three scenarios, referred to as ‘modest’, ‘midway’ and ‘major’, result in a reduction in overall personal income tax, and promote greater competitiveness and simplicity – albeit to differing degrees.

Mr Stanhope said the business community is fully behind personal income tax reform as it has become a business issue.

A copy of the BCTR PTR paper is available from http://www.bctr.org/default.asp?newsid=99605.

“The Warburton / Hendy report also conveys some significant messages about the level of tax on property in Australia”, Mr Stanhope said.

The report also shows that Australia relies more heavily on inefficient transaction taxes than other major OECD countries.

Transaction taxes in Australia account for a massive 1.6 per cent of GDP compared with an OECD average of 0.7 per cent.

Clearly the states and territories should re-commit to the full GST reform deal by agreeing to a timetable to remove all 9 inefficient transaction taxes.

About the BCTR

The Business Coalition for Tax Reform is a coalition of business groups seeking to promote a more efficient and robust taxation system for Australia. BCTR members share a common vision: to create and implement a tax system that enhances business competitiveness and fairness, and assists in creating a business climate conducive to investment, growth, job creation and private saving.

Contacts:

John Stanhope, Chair, BCTR through Stephen Morrison on (03) 9632 3701.

Paul Drum, Business Coalition for Tax Reform, Chair of Personal Tax Sub-Committee and Senior Tax Counsel, CPA Australia (03) 9606 9701.