Corporate Tax Reduction Necessary, Says Honorary Australian Treasurer

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

31 May 2002

Speaking at the opening of the Standard & Poor's Financial Markets Conference in Sydney on Wednesday, Honorary Federal Treasurer of the Australian Liberal Party, Malcolm Turnbull warned that Australia's tax regime represents a disincentive to multinational companies and individual executives who would otherwise relocate there, and suggested that in order to become internationally competitive, Australia needs to reduce its tax levels to below those of the United States.

Giving a speech entitled 'Challenges and Opportunities Faced in a Globalising World', Mr Turnbull warned that: 'Our rates of personal income tax remain totally uncompetitive, and told delegates that: 'We must constantly review our taxation system to ensure that we are competitive with that of our major rivals, especially the US.'

Although the internet has, to a degree, alleviated the difficulties previously experienced by Australia in attracting international businesses due to its location, the Honorary Treasurer revealed, many global corporations still prefer to locate their headquarters in other countries, such as the United States.

He suggested that this is, at least in part, due to the disincentives for domestic companies wishing to invest overseas enshrined in the Australian tax code, and praised the Federal Government for its forthcoming review of the country's international tax regime.

'Australia has clearly been a net beneficiary from globalisation,' Mr Turnbull - a former head of Goldman Sachs Australia - was quoted by the AAP as observing on Wednesday. 'Whether we continue to benefit will depend on our ability to remain competitive and develop policies and attitudes that promote economic growth, entrepreneurship, the pursuit of excellence and the creation of wealth.

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