“The changes to the legislated tax scales announced by the Government today once again demonstrate that the Government attaches little weight to addressing the problems created by Australia’s endemic low productivity growth,” Innes Willox, Chief Executive of the national employer association Ai Group said today.
“The Government’s new tax scales will barely touch the sides on improving incentives to invest, employ and save. As with its workplace relations changes, the new tax scale will detract from the productivity improvement imperative that features in the Government’s rhetoric but sadly not in its actions.
“The legislated complete removal of the 37 per cent tax rate, which has now been abandoned, would have provided a significant boost to productivity, living standards and the tax base.
“Further, sharply reducing the difference between the personal and company tax rates, as had been legislated, would have seen effort redirected towards business (and employment) expansion rather than on juggling between personal and business tax structures. This would have been particularly important for small and family-owned businesses and for the wealth they generate.
“The Government’s decision to walk away from its commitment to this important tax reform will undoubtedly undermine the ability to deliver on more fundamental tax reform in the future. As evident in the Government’s own 2023 Intergenerational Report, such reform is clearly needed if we are to successfully meet our growing fiscal challenges.
“Major tax reform needs much more than short-term ad hoc measures. It requires a consistent, far reaching, long-term focus on phased changes to keep Australia more competitive and Australians more incentivised to invest, work and save,” Mr Willox said.
