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Tax reform top Budget priority for business

Cutting the company tax rate in next week's Federal Budget is the leading priority for Australian businesses - according to an Australian Industry Group survey released today.

Among the sample of 236 companies surveyed across the manufacturing, services and construction sectors, the top three priorities are: reducing the company tax rate (26% nominating this as their first and 16% as second priority); balancing the Budget within the next five years (18% as first and 20% as second priority); and reforming or reducing personal income tax (14% as first and 22% as second priority).

Innes Willox, Chief Executive of the Ai Group said, "Businesses are looking to the upcoming budget for the Government to encourage and facilitate investment and innovation. Reducing the company tax rate is the most decisive way to encourage the private sector investment that will lift productivity and competitiveness. Businesses also see the need to accelerate the pace of infrastructure development - particularly in the face of growing urban congestion. Developing the skills of the current and future workforce also ranks highly among the areas into which business would like to see the Government make inroads," Mr Willox said.

Other areas on which businesses would like action include increased spending on infrastructure - including telecommunications and transport; lifting investments in training and apprentices; and maintaining or increasing incentives for innovation and R&D.
Across the sectors, training expenditure is the main concern for manufacturers (22%) whereas services and construction businesses both ranked company tax as their leading budget priority (35% and 38% respectively).

Chart 1: Top Two Business Priorities for the 2016-17 Federal Budget

Full survey: http://pdf.aigroup.asn.au/Budget/2016/2016-17_Budget_Priorities_final_report.pdf

Background: Ai Group Pre-Budget submission: http://go.aigroup.com.au/bq

Innes Willox blog piece on the need to cut the company tax rate: http:/go.aigroup.com.au/bj

Media Enquiries: Tony Melville - 0419 190 347