Renewed talk on corporate tax reform welcomed by business, accounting groups
Minister Ed Husic’s comments on reforms to the corporate tax rate are a chance to reboot discussion around substantial tax reforms in Australia, say accounting and business groups.
MYOB chief executive Paul Robson said that business owners across Australia have welcomed renewed discussions around corporate tax reform by Minister Ed Husic.
“Company tax reforms will mean more available cash to these businesses, which leads to increased investment in their operations as well as driving critical innovation,” Robson said.
Last week, Minister Husic said cutting taxes on corporate profits would encourage AI and automation-based investment in advanced manufacturing.
Minister Husic said this could be done through a direct cut to the company tax rate or through an investment allowance.
Robson said any assistance to SMEs and the mid-market to enable them to scale and grow will lead to job creation, wage increases and a stronger economy for all Australians.
“Our recent MYOB Bi-Annual Business Monitor found 37 per cent of Australian SMEs and 29 per cent of mid-market respondents would like to see the company tax rate lowered,” said Robson.
Innes Willox, chief executive of national employer association AI Group, said Minister Husic's suggestion that Australia needs to consider corporate tax reform, and reportedly a lowering of the company tax rate, is a chance to reboot a substantive discussion on tax reform in Australia.
"It is welcome to hear cabinet members talking about corporate tax reform and we look forward to it becoming official government policy,” said Willox.
"Real tax reform needs to be achieved sooner rather than later. For productivity and competitiveness reasons, we cannot afford to wait long term.”
The chief executive said the future challenges facing Australia's current tax policy settings are well known.
“Improving flagging productivity, ensuring inter-generational equity, thriving through the energy transition and avoiding the prospect of structural budget deficits all require meaningful reforms to Australia's taxation system,” said Willox.
"Australian businesses and households are doing it tough, with recent budget forecasts indicating economic performance will be weak by historical standards for the next two years. Expectations for a major fall in the growth of business investment are especially worrying for our energy transition, housing and industrial development ambitions.
"Reforms to the tax system which help kick start growth in business investment are sorely and urgently needed.”
Willox said putting corporate tax settings on the table is important to ensuring Australia remains internationally competitive for the wave of energy investments the global net zero transition unleashes.
The Greens, however, slammed suggestions that the corporate tax rate should be lowered, with the party stating this was the “wrong priority” for the government.
"Ed Husic’s call for lower corporate taxes is massively out of touch, and ignores the struggles of millions of Australians facing rising costs and stagnant wages," Greens Senator Nick McKim said.
"One in three of Australia's biggest corporations pay no tax at all – this is where Mr Husic and his Labor colleagues should be focusing.”
Senator McKim said the Greens are fighting for a tax system where big corporations pay their fair share so we can fund essential public services like housing, healthcare and education.
"Instead of reducing corporate taxes, we should be introducing a super profits tax to make sure that the corporations who have driven inflation contribute to a fairer society,” he said.
"Lowering corporate taxes would also sabotage our climate efforts, rewarding industries that pollute our environment."
Treasurer Jim Chalmers has largely ruled out any reforms on corporate tax, stating that a large proportion of Labor’s Made in Australia package in the budget is related to company tax reform in the form of production tax credits.
