Business Community Awaits Federal Budget with Tax Reform High on the Agenda
As anticipation builds for the release of the federal budget, accounting firms and associations are vocalizing the critical need for tax reform to mitigate the cost of business and strengthen business resilience. RSM Australia has proposed a set of six tax reforms, advocating for the permanent integration of business loss carry back offset rules into the Australian income tax system. Tony Fulton, RSM Australia’s tax services director, emphasized the role of such measures in maintaining cash flow and business continuity, especially in light of challenges posed by the COVID-19 pandemic.
Fulton pointed out that several countries already have similar provisions, and although the temporary loss carry back regime in Australia has led to a revenue shortfall estimated at $6 billion, he argues that the long-term economic benefits outweigh these costs. Liam Telford, RSM Australia’s national tax technical director, echoed the sentiment for targeted tax reform to revitalize Australia’s economy and attract investment.
Amidst calls for relief from the rising cost of living, Telford and other industry leaders are urging the government not to overlook the pressures of the cost of business. They suggest that initiatives aimed at boosting sovereign capability, such as increased investment in manufacturing, should be supported by tax policies that encourage stability and growth.
RSM Australia’s recommendations also include a reduction in corporate tax rates, incentives for clean energy adoption and R&D investment, an increase in GST rate, and broader employment tax reforms. Similarly, CA ANZ is advocating for a comprehensive discussion on tax system reform. Simon Grant, CA ANZ group executive, stressed the importance of sustainable reform over temporary fixes and highlighted the need for a skilled workforce supported by training incentives.
The Tax Institute is calling for an overhaul of both tax and superannuation systems to address complexity and inefficiency. They also seek resolution on a backlog of unenacted measures from previous budgets and announcements to provide clarity and certainty.
As the federal budget unveiling approaches, the business sector remains hopeful that their calls for substantial tax reform will be addressed, setting a course for economic recovery and long-term prosperity.
