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Australian CEOs Urge Lawmakers To Approve Tax Cuts

by Mary Swire,, Hong Kong

21 November 2017

Four out of five Australian CEOs have said that their companies would increase investment spending if the company tax rate was reduced to 25 percent, according to a new survey by the Business Council of Australia (BCA).

CEOs said a more competitive company tax rate would result in higher employment growth and investment spending. 90 percent of CEOs opined that failing to do anything about Australia's declining competitiveness would harm the economy.

The survey found 73 percent believe their company's global competitiveness would be improved should the full Enterprise Tax Plan be passed by the Senate. 81 percent of respondents said that they would increase investment spending, and 70 percent said they would hire more staff if the Government was successful.

BCA Chief Executive Jennifer Westacott said: "This survey [of members] shows that businesses want to invest, to create more jobs, and boost our economic growth – but that we have to get the settings right. The business leaders we've surveyed know how investment decisions are made in boardrooms around the world. Their message is clear: we need a more competitive tax system to ensure that our economic potential is realized."

Earlier this year, the Government succeeded in passing legislation to phase in both reductions to the small business company tax rate and increases to the turnover threshold for accessing the rate. These changes affect the 2016-17 to 2018-19 tax years.

The Government was however unable to secure parliamentary agreement on its full Enterprise Tax Plan, which included further increases to the SME threshold each year to 2023-24 and a reduction in the tax rate to 25 percent for all businesses to 2026-27. It has reintroduced legislation to this effect, which is currently before the Senate.

Responding to the BCA's publication, Treasurer Scott Morrison said: "A survey of CEOs employing over one million Australian workers confirms the Turnbull Government's Enterprise Tax Plan will increase investment and generate more jobs, and that [opposition leader] Bill Shorten's alternative of higher taxes would saddle Australia with less jobs, lower investment, and lower economic growth."

"Modelling already confirms the Turnbull Government's fully funded Enterprise Tax Plan will lead to a permanent increase in the size of the economy and lift Australian wages. Today's CEO survey confirms employers will drive this economic activity with more investment and Australian jobs."

TAGS: tax | investment | small business | business | corporation tax | Australia | tax thresholds | ministry of finance | legislation | tax rates | tax reform | trade association | trade

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