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MEDIA RELEASE: Future proof revenue streams - the clock is ticking

Wednesday, 1 February 2012

The Institute of Public Accountants is calling on the Government to progress tax reform stating that a comprehensive blueprint for the future direction of our tax system is already available.
As part of its Pre-Budget Submission 2012-13, the Institute has recommended that the Government continues the process of reform following the Henry Tax Review and the Tax Forum. The mining boom which is hiding our structural deficits will at some point run out of steam and we need to prepare our economy for looming challenges.
"There is little disagreement that Australia's tax system is cumbersome and complex and it needs to be simplified," said the Institute's chief executive officer, Andrew Conway. "Our current tax system will struggle to achieve revenue adequacy as we face an ageing population. The Institute supports the Henry Review's recommendation that nuisance taxes such as insurance levies need to be removed and replaced with consumption taxes that will encourage taxpayers to save and invest. The tax burden must be shifted to less mobile and less growth damaging bases to support economic growth.
"Whilst we acknowledge the significant challenges of recalibrating the existing tax mix towards a greater degree of reliance on consumption and other efficient taxes, the task of reform will only be achievable if the case for change begins to be made now well ahead of its intended implementation timetable."
The Institute made a number of other recommendations regarding tax and superannuation, including:
• Assist and support small business by introducing a small business tax regime based on a lower rate of tax and removing the complex plethora of existing tax concessions.
• Boost small business cash flow by allowing small businesses to offset losses made in particular years against tax from a preceding year.
• Reduce small business compliance costs by urgently reviewing the outdated and cumbersome Fringe Benefits Tax laws.
• Increase superannuation balances and engagement by incorporating the changing demographics of Australian society into superannuation policy.
The Institute will engage in discussions with the Government in the lead-up to the Federal Budget on Tuesday 8 May 2012. The Institute's comprehensive Pre-Budget Submission is available at publicaccountants.org.au.

The Institute of Public Accountants is calling on the Government to progress tax reform stating that a comprehensive blueprint for the future direction of our tax system is already available.

As part of its Pre-Budget Submission 2012-13, the Institute has recommended that the Government continues the process of reform following the Henry Tax Review and the Tax Forum. The mining boom which is hiding our structural deficits will at some point run out of steam and we need to prepare our economy for looming challenges.

"There is little disagreement that Australia's tax system is cumbersome and complex and it needs to be simplified," said the Institute's chief executive officer, Andrew Conway. "Our current tax system will struggle to achieve revenue adequacy as we face an ageing population. The Institute supports the Henry Review's recommendation that nuisance taxes such as insurance levies need to be removed and replaced with consumption taxes that will encourage taxpayers to save and invest. The tax burden must be shifted to less mobile and less growth damaging bases to support economic growth.

"Whilst we acknowledge the significant challenges of recalibrating the existing tax mix towards a greater degree of reliance on consumption and other efficient taxes, the task of reform will only be achievable if the case for change begins to be made now well ahead of its intended implementation timetable."

The Institute made a number of other recommendations regarding tax and superannuation, including:

  • Assist and support small business by introducing a small business tax regime based on a lower rate of tax and removing the complex plethora of existing tax concessions.
  • Boost small business cash flow by allowing small businesses to offset losses made in particular years against tax from a preceding year.
  • Reduce small business compliance costs by urgently reviewing the outdated and cumbersome Fringe Benefits Tax laws.
  • Increase superannuation balances and engagement by incorporating the changing demographics of Australian society into superannuation policy.
The Institute will engage in discussions with the Government in the lead-up to the Federal Budget on Tuesday 8 May 2012. The Institute's comprehensive Pre-Budget Submission is available here.



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