Date issued: 31 July 2009
Reductions in company tax rates are essential for Australia's long-term economic wellbeing, despite moves to the contrary at this week's ALP National Conference, CPA Australia has said.
CPA Australia policy and research general manager Paul Drum said cuts to company tax rates were critical to ensuring the international competitiveness of Australian businesses and jobs growth.
'A cut in the company tax rate is a critical component of a holistic approach to the issues that underpin Australia's sustainable economic growth, especially in job creation,' he said.
'As it stands, Australian businesses are at a competitive disadvantage to most of their international counterparts who operate on lower domestic taxation rates.
'Australian companies global competitiveness will be crucial to maintaining and growing domestic jobs.'
CPA Australia has called for an immediate reduction of the company tax rate from 30 to 25 per cent with a longer term target of 20 per cent in its submissions to the Henry Review of Australia's tax system.
Mr Drum said a clear headed, long term view was needed in the current domestic and global economic context.
'In the current economic environment, there's a strong temptation to act in haste but it's important not to throw out the company tax baby with the bathwater in this instance,' he said.
'Maintaining current rates of business tax will not automatically address the tax revenue issue, particularly if businesses struggle through a lack of global competitiveness.'
'It is important that these issues be considered in the context of a broad approach to addressing the economic challenges we face.'