The Tax Institute’s Federal Budget submission for 2011-2012 has been submitted to Government. In the submission we call for a robust debate on tax reform and a sustained commitment to a long-term vision for tax reform.
The benefits of a tax system that encourages savings and investment, makes Australia an attractive destination for foreign investment, is simple to understand, equitable in application and certain in effect, will contribute to a stronger economy.
We strongly urge the Government to facilitate the distillation of ideas from the Henry Review in a serious debate during the tax summit to be held this year. It is imperative that the Government harnesses this momentum and seizes the opportunity to set a vision for tax reform that will deliver the tax system that Australia needs.
Taxation revenue collections in Australia are currently greatly dependent on taxes that have an adverse effect on investment and workforce participation (such as income tax). We should consider a shift away from such tax towards the simpler and more stable consumption taxes which have a relatively minor effect on domestic and foreign investment.
Consideration of these matters will also require leadership from the Government on the issue of Federal and State government relations, including on the issue of State taxes and revenues. We urge the Federal Government to take the reins on this issue and bring the States on board with a unified vision for tax reform in Australia which includes the repeal of inefficient State taxes.
State taxes are increasingly irregular, inconsistent, inefficient and a brake on investment and growth. The Federal Government must work with the States to ensure state revenues are protected as inefficient state taxes (including stamp duty, payroll tax and land tax) are abolished.
For a full copy of the submission, please click here.
Please see below for details of other activities this week.
Robert Jeremenko FTIA