Pitcher Partners has called on both government and opposition to prioritise tax reform ahead of the upcoming double dissolution election.
“Pitcher Partners is calling on all political parties to make this election a tax reform election,” said John Brazzale, the managing partner at Pitcher Partners.
According to Mr Brazzale, the stalling of the tax eeform white paper process has left Australia “operating in the dark”.
“Our tax system needs to reflect a world that looks very different in 2016 than it did in 2006,” he said.
“We have a revenue and spending imbalance at the heart of the Australian economy, and it’s time to get serious about solving that – not just so it’s easier for businesses to grow and continue to provide employment now, but also to insulate ourselves against the future,” Mr Brazzale added.
“With continued uncertainty over commodity prices, China and Europe, now is the time to outline an economic vision backed by commitment to tax reform.”
Pitcher Partners outlined a series of reforms it believes will assist the government in “designing a better tax system”, with the firm noting that it will be seeking pre-election commitments from all parties on the following:
◾“We support the increase of the GST to 15 per cent on the current base, or an increase to 12.5 per cent on a broader base, with exclusions for health and education and balanced by appropriate compensation measures for Australians on lower incomes. We want government to be visionary in outlining a long-term commitment to replacing less-efficient means of taxation with a more stable long-term revenue source.
◾We support a cut in the corporate tax rate. The current corporate tax rate compromises our ability to compete for foreign investment and is a drag on business growth, especially for the middle market.
◾We support Division 7A reform. Division 7A rules are needlessly complicated and do not represent the best approach to taxation for mid-market business.
◾Red tape and compliance reduction is critical. Government needs to focus on reducing complexity and compliance for the middle market and to make the tax system more efficient for those taxpayers.
◾Continuous attempts by governments of all persuasions has compromised public confidence in superannuation, undermining its premise. Australians need superannuation certainty if it is going to function as an optimal savings vehicle.
◾And instead of demonising foreign investors, we should be looking at ways to attract foreign capital and investment while expanding our trade links with the rest of the world.”
Publication date: 20 Apr 16
Source: Publicaccountant, Institute of Public Accountants