AUSTRALIA WILL CHOKE WITHOUT TAX OVERHAUL
Australia risks choking and the current tax system is not doing us any favours; in fact it is holding us back, says the Institute of Public Accountants (IPA).
“Australia’s current tax system inhibits growth and stifles entrepreneurialism and innovation,” said IPA chief executive officer, Andrew Conway.
“Do we want a tax system which continues to tax effort or a system that taxes consumption? It is the IPA’s view that the latter should be pursued if Australia is to arrest its productivity decline and make the tax system competitive again.
“Tax reform represents one of the strongest levers the Government has at its disposal to revive productivity, competitiveness and growth.
“Australia faces dual challenges of the need to ensure fiscal sustainability and boost productivity growth to sustain growth in living standards.
“Moving to growth supporting taxes is essential to sustain Australia’s economic momentum and to meet all current and future spending needs.
“Consumption taxes such as the GST represent one of the most efficient and sustainable tax bases available and yet Australia’s GST base remains relatively narrow and covers 47 per cent of private consumption.
“We can’t keep relying on bracket creep but it will be inevitable without a change in the tax mix,” said Mr Conway.
The IPA’s submission to Treasury on the Tax Discussion Paper can be viewed at: www.publicaccountants.org.au/resources/news-and-media/submissions/tax-discussion-paper