THE Institute of Public Accountants (IPA) chief executive is urging the Federal Government to think more broadly and implement holistic tax reform to drive productivity, innovation, jobs, and economic growth.
“We are expecting that the Federal Budget to be handed down in less than three weeks’ time, to deliver business incentives, tax cuts and other measures to create jobs and assist businesses to climb out of the COVID-19 mire,” IPA chief executive officer, Andrew Conway said.
“While these will be positive steps to begin the road to recovery post-pandemic, Australia desperately needs holistic, genuine and robust tax reform.
“Tax cuts, whilst welcome by most consumers, will lead to sub-optimal results if implemented in isolation and not in the context of holistic reform," he said.
“The IPA has long advocated for a tax system overhaul, having yet again reinforced this message in our pre-Budget submissions and countless others going all the way back to the Henry Review in 2008.
“Our tax system is not fit for the purpose ahead of recovery from the pandemic, so it is not easy to just make tax changes without considering the broader impact on other aspects of the economy. The various elements are closely intertwined including the tax mix, personal services income, the plethora of inefficient state-based taxes such as payroll tax and stamp duty and other aspects of the economy including our regulatory framework. .
“Holistic reform won’t be easy or without controversy, however, it is essential if we are to unshackle the restrictions and realise the potential of the economy in a post-COVID-19 environment," Mr Conway said.
“It needs everyone on board, at both Federal and State levels, and working to the one reform agenda. If the pandemic has taught us just one thing, it is the need to work together. National Cabinet has shown what can be achieved.
“Reform of this nature does not happen overnight but if we are to see a rejuvenated Australian economy, it is now time to start the process,” Mr Conway said.