OLD MACDONALD FARM APPROACH TO TAX
Amid a period of ‘tax talk crossfire’ between the major political parties, the Institute of Public Accountants (IPA) is making urgent calls for the parties to bring robust and holistic tax reform to fruition.
“With the current, significant political banter, there is no doubt that the Federal Budget and next Federal election are looming closer,” said IPA chief executive officer, Andrew Conway.
“However, there seems to be an ‘old MacDonald had a farm’ ring to it all; with a tax cut here and a benefit loss there and no talk of total tax mix considerations, anywhere.
“There is no doubt that talk of company tax rate cuts and potential personal income tax reductions will be music to many ears; just as some touted measures such as the loss of cash refunds for excess dividend imputation credits and changes to negative gearing will sound alarm bells for some.
“However, Australia is missing the opportunity to get it right, in not allowing for a total overhaul of the tax system.
“The IPA is still advocating for the long promised and fading political memory of the Tax White Paper which was to explore the total tax mix and go beyond some of the shackles that constrained the Henry Tax Review.
“True reform needs to look at all aspects of taxation, including GST, and the need to eradicate nuisance taxes that exist at State and Federal level.
“For example, payroll tax is an example of a tax that is counterproductive to economic growth; it acts as a disincentive to employment and does not motivate small entities to grow. It should be removed.
“We are asking the political parties to put aside rhetoric designed to attract votes from various sectors of the community and get on with the job of true reform to drive productivity and economic prosperity,” said Mr Conway.