Tax And Competitiveness A Major Concern For Australian Business

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

27 April 2004

The level of taxation has been cited by Australian businesses as one of their top concerns in the run up to the government’s May budget, the results of a survey undertaken by the Australian Industry Group revealed on Saturday.

The survey, of some 786 firms with an annual turnover of $50 billion, was conducted during February and March. Companies were questioned on external factors impacting on their performance and asked to identify areas of government policy most in need of action.

According to the results, close to 40% of the firms that took part identified personal tax rates as a “critical issue”, and almost a third of businesses (31.8%) listed company tax as being of critical importance.

"The survey adds weight to Ai Group proposals for a comprehensive resetting of the tax scales that will address business concerns by reducing the impact of high marginal tax rates in the personal tax and income support systems,” noted Ai Group Chief Executive, Heather Ridout.

The Group’s ‘three-point plan’ which aims to remove the “punishing” effect of marginal taxation and build incentive includes the removal of the 42% tax bracket, the extension of the 30% tax bracket to cover income up to $75,000 and lowering the income test rate for family tax benefit.

Firms also cited a ‘temporary’ 3% tariff on imported industrial goods under the Tariff Concession Scheme as a “real drag on competitiveness.”

"The time is right to remove this tax on competitiveness and Ai Group calls on the government to rescind the 3% tariff in the coming budget,” Ridout asserted.

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