Australian Bosses Call For Tax Cuts

by Mary Swire, Tax-News.com, Hong Kong

08 February 2005

An association of Australian chief executives has joined the growing chorus of voices calling for the government to reduce taxation and maintain national competitiveness, highlighting Australia's top rate of income tax, which compares unfavourably with other nations.

In its Federal Budget Submission, the Business Council of Australia has urged government to commit to a program of reform in four key areas, including tax, workplace relations, infrastructure and regulation-making systems.

“Reform in these areas of the economy will provide the basis for strong jobs growth and continuing rising wealth over the long term”, the Business Council stated in its submission, which added that these reforms “should commence now” in consideration of the long lead time before the benefits will be felt.

The BCA has announced that it will release major policy positions on each of these areas in the next three months "to provide objective and informed direction on the reform debate".

However, speaking to The Australian newspaper on Monday, BCA president Hugh Morgan revealed that the "remarkably high rate" of company tax was an area the group wants the government to address.

“This needs to be attended to”, commented Mr Morgan, who also pointed to the “ill-fitting” tax system, where the 47% top rate of personal income tax sits significantly higher than the 30% corporate income tax rate.

The country’s high marginal tax rate was also noted in the OECD’s latest assessment of the Australian economy, which observed that the disparity between personal and corporate tax “creates an incentive for a redefinition of personal income as company income”.

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