The stand-out job for all Australian governments in 2012 was further reform of the tax and transfer system, a local MP says.
Independent MP for Lyne Rob Oakeshott was speaking following the release of the Business Tax Working Group’s Interim report on the tax treatment of losses.
“If governments are serious about productivity and the many other risks to our economic performance, then tax and transfer reform is the answer,” Mr Oakeshott said.
“The October Tax Forum has again showed its value, with last week’s axing of the “fat cat’ living away from home allowance, identified at the Forum as a $170 million a year unjustifiable loss to taxpayers.
“The report from the Business Tax Working Group chaired by Chris Jordan, shows how our uneven approach to taxing business profits and losses discourages investments.
“A too conservative business tax system protects itself at the expense of small business entrepreneurs, who cannot always realise tax relief from genuine losses.
“That means entrepreneurs employ fewer potential income taxpayers, and business structures fail to evolve for fear of falling into “tax traps’.
“Australia can’t afford these distortions at a time when finance is scarce and small business is under stress, as the mining boom changes our economic fundamentals.
“Success will need good faith and hard work by the federal, state and territory governments.
“This is the opportunity for 2012, and the opportunity must not be missed,” Mr Oakeshott said.
