Business Council of Australia (BCA) president Catherine Livingstone has told Malcolm Turnbull he has had an “almost unparalleled” impact on national sentiment since becoming prime minister.
Introducing Turnbull at a BCA dinner on Thursday night, Livingstone also made a strong pitch for the planned tax package to include help on business tax.
In a speech reflecting the big end of town’s relief at the end of the Abbott government, she said there was a new sense of optimism around the country. “You have given us the permission to have conversations about things that matter to people, and helped, through your own example, to make those conversations positive.”
She said that for some time the BCA had been trying to start a conversation around fostering an innovation-capable economy to drive the next decade of growth and job creation. It now had permission to build on what it had been saying about the impact of disruptive forces; keeping Australia competitive in a vastly more competitive global economy; and the role of liveable cities, “a topic on which Lucy Turnbull is an acknowledged leader”.
On tax, Livingstone said while recognising personal income tax reform was critically important, “the experience of other countries has shown that nothing will stimulate innovation and growth more than a reduction in the tax rate for all businesses, as part of a broader tax reform agenda”.
“The income tax rate really matters, whether personal or business,” she said.
“If there is no growth dividend from tax reform it will be a missed opportunity. We run the risk of undertaking a tax mix change that simply underwrites increased spending.
“Just as the company tax rate is essential in driving a more innovation-capable economy, so too are specific tax measures such as employee share schemes, tax incentives for start-ups, and the continuity of the R&D tax incentives for businesses,” she said.
Earlier Turnbull, addressing the 2015 economic and social outlook conference hosted by the Melbourne Institute and The Australian, said a tax reform package must raise the revenue needed, share the burden fairly across the community and do so in a way that incentivised employment, investment and innovation.
“Fairness, I repeat, is absolutely critical. Any package of reforms which is not and is not seen as fair will not and cannot achieve the public support without which it simply will not succeed,” he said.
The Australian Council of Social Service has released modelling showing the regressiveness of increasing or broadening the GST.
Treasurer Scott Morrison told the conference that income tax had “become the silent tax for many Australians, particularly young Australians.
“When they go to the ATM to draw out their cash they do not see, as they do with the GST on their sales receipt, the 19 cents or 32.5 cents or 37 cents or 45 cents that has been deducted in income tax – let alone the extra 2 cents for the Medicare levy. They just take the cash.
“Income tax has become too often out of sight and therefore too often out of mind in comparison to the GST, yet the tax you are paying is just as real and a lot higher.”
Morrison said the government had not yet put forward any preferred option for change. “The only current public advocates for changing the GST are state governments and former Labor premiers. We will continue to build accord on the objectives and benefits of creating better tax systems that supports jobs and growth in our economy and will not allow the process to be undermined by ‘rule in’ or ‘rule out’ debates.”
Shadow Treasurer Chris Bowen said there was “more and more evidence that the Turnbull-Morrison plan is simply to hit low-income earners the hardest” in their tax changes. He called on Turnbull “to stop talking and to start laying out his plans”.
Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.
Authors: The Conversation Contributor