As part of the now defunct Re:think/ Tax White Paper process there was at least one paper showing that reducing the tax burden on businesses lifts productivity, and increases both business' competitiveness and their capacity to grow. Importantly it also creates jobs. Further, the tax incidence of higher company taxes falls on workers as lower wages, less jobs - or even both. For these reasons we support a lower corporate tax rate.
Reducing the company tax rate is crucial in a global market-place where many competitor jurisdictions have reduced their corporate tax rate in order to both retain business and attract new investment. Australia’s current headline corporate tax rate of 30 per cent is simply not competitive.
Further we cannot assume that other jurisdictions will maintain their current corporate tax rates. It is of note that following the recent Brexit vote the Chancellor of the Exchequer floated the idea of the UK moving to a 15 per cent company tax rate in the near future.
This requires a substantive change to tax policy and is outside the scope of Sounding Board. This idea has been passed to Treasury for their consideration.