Fed: Budget must contain tax reform - ACCI

AAP General News (Australia)
04-11-2006
Fed: Budget must contain tax reform - ACCI

CANBERRA, April 11 AAP - Failure to address significant tax reform in the coming federal
budget would an opportunity lost, says Australian Chamber of Commerce and Industry (ACCI)
chief executive Peter Hendy.

Mr Hendy said mere income tax cuts, which might only reflect a trade-off for bracket
creep, would not be enough.

He called for reform of the income tax system, superannuation, retirement income tax
and state taxes.

The comments from the influential employers' group is at odds with recent commentary
by Treasurer Peter Costello which have quelled expectation of tax reform.

"If there is not significant tax reform announced in this budget, or a process for
significant tax reform, it will be a lost opportunity, yes," Mr Hendy told reporters.

"There needs to be more than just tax cuts in the Budget.

"Basically, every Budget needs to look at tax cuts because we have bracket creep in
the income tax system, so you have to continually address bracket creep."

In February, Mr Costello announced that leading businessmen Dick Warburton and Mr Hendy
would investigate how Australia's tax system compared with other developed countries.

That report has been handed to the government but not released publicly.

Mr Hendy said that changes to the tax system were needed to address the challenges
to the economy, such as the ageing population, skills shortages and a lack of spending
on research and development.

"They all need to be addressed," he said.

Mr Hendy would not comment today on the tax report he helped compile but said he hoped
it would be made public before the budget.

He said it would include the latest data from the OECD, intimating that new OECD data
reflecting a comparatively high top tax rate in Australia would be reflected in it.

"Suffice it to say Australia has a high top marginal tax rate. That is the view of
the chamber," he said.

"It should be cut."

Figures from the OECD reportedly show that Australia's top tax is 4.5 points higher
than the average for the industrial world.

AAP dep/so/it/de

KEYWORD: TAX HENDY

2006 AAP Information Services Pty Limited (AAP) or its Licensors.