"We need to shape up not only in lifting productivity and competitiveness but also we need to shape up in building an inclusive approach towards these objectives so that the benefits of successful engagement in the global economy are broadly available for all Australians.
"Reactions around the globe are clear warnings that pursuit of objectives like growth and competitiveness while necessary are not in themselves sufficient for community well-being. Community support during times of transition will be tenuous at best without commensurate attention to the management of change and to the distribution of its benefits," Mr Willox said.
"This starting point informs Ai Group's priorities for the Federal Government's May Budget:
- Greater and smarter investments in the education and training of the current and future workforce;
- Active development of Australia's innovation and business capabilities;
- A clear trajectory to budget sustainability while facilitating new infrastructure investment; and
- A first step in a holistic reappraisal of Australia's taxation arrangements.
"Investing in education and training is critical to lifting the productivity and competitiveness of our economy; assisting the workforce and businesses adjust to change; and in ensuring the benefits of our participation in the global economy are broadly distributed across the Australian community. Similarly, innovation and the development of business capabilities are central to the success of the Australian economy; its ability to generate well-paid and challenging jobs; and to the creation of dynamic and competitive industries that are necessary underpinnings to the building of strong, resilient and cohesive communities.
"On the critical issue of tax reform, Ai Group proposes the following business tax measures as a first step in a more holistic reappraisal of our approach to taxation:
- Lifting the small business entity threshold from aggregated turnover of $2 million per annum to aggregated turnover of $10 million per annum;
- Increasing the tax discount for unincorporated small business entities from its current level of 5 per cent to 8 per cent effective from the 2016-17 year; and
- Phasing in the 27.5 per cent company tax rate for companies with turnovers below $100 million by the start of the 2019-20 year.
"We have also suggested that the remainder of the Government's Enterprise Tax Plan, namely extending the 27.5 per cent rate to larger companies and to phase a further reduction of the company tax rate to 25 per cent, be re-prosecuted by the Government and others ahead of the next election in the context of a broader reappraisal of Australian tax arrangements," Mr Willox said.
Read a summary of Ai Group's Budget priorities
Read our full Pre-Budget Submission
Media Enquiries: Tony Melville – 0419 190 347