Tax and Fiscal Policy
Australia’s current taxation system was created for a different era and a different world. The system is holding back economic growth and, without action, the costs will build over time and affect living standards.
The focus of tax reform must be to create an overall tax mix which supports the behaviours that drive businesses to invest and grow, and individuals to invest, save and participate in the labour market.
Real tax reform must have a growth and jobs dividend, as well as funding government services. It must drive innovation, competitiveness and productivity which sit at the heart of job creation and wage growth.
In September 2014, we released The Future of Tax: Australia’s Current Tax System to contribute to the public debate in the lead-up to the federal government's tax white paper.
Our submission to the tax discussion paper, The Future of Tax: Tax White Paper Initial Submission, outlined the case for comprehensive tax reform as urgent and compelling.
We built on this in March 2016 with the release of Realising Our Full Potential: Tax Directions for a Transitioning Economy. This paper outlined a plan to make changes to the tax system that will encourage investment and innovation, create new jobs and be fair. It’s about creating a tax system that helps the economy make the transition to a highly competitive, globalised, digital world.
Tax is just one part of fiscal policy which takes in all government decisions on revenue and spending.
Fiscal policy is a key element of Australia's public policy architecture and plays an essential role in providing a policy buffer to protect Australia from major economic shocks.
Policy that delivers a stable and predictable macroeconomic environment contributes to economic growth. Disciplined fiscal policy helps underpin an attractive environment for businesses and allows firms to make investment decisions with greater confidence.
The budget is also an important tool which should be used to promote stronger growth, better services and increased value from government spending, with the ultimate goal of achieving higher community living standards.
The Business Council Budget Submission 2017–18: Better Services, Better Value calls for action to break the gridlock to get Australia’s budget back in order. The consequence of inaction will mean that households face blunt and unacceptable cuts in services, higher taxes and a weaker, less resilient economy.
The Tax Transparency Code is a voluntary initiative through which Australia's largest businesses are taking the lead in becoming more transparent and encouraging a more informed public debate about how company tax is paid.
The Business Council Secretariat contact for tax and fiscal policy issues is Adam Boyton, Chief Economist.