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Review of Business Taxation

A Strong Foundation

1. Introduction

The Review of Business Taxation has invited submissions on its paper - "A Strong Foundation".

The Australian Companies Institute welcomes this invitation.

In our view the national objectives to guide the design and operation of Australia’s business tax system can only be properly formulated by regard to international considerations.

Foreign investment in Australia, foreign competition in Australia, Australian investment overseas and Australian competition overseas are an essential part of the Australian business scene. Remove these and not much is left.

To formulate objectives without regard to these matters perpetuates the Australian fortress mentality.

2. Fourth National Objective

In our view a fourth national objective should be added to the three proposed in the paper, namely:

    • Be internationally competitive

Competition is essential to Australian business - and so is competition to the Australian business tax system.

A business tax system which is not competitive with those of the leading economies of the world will not serve Australia well.

A business tax system which does not have as one of its objectives being internationally competitive has a deficient foundation.

    • Australian business must be internationally competitive.

    • The Australian business tax system must be internationally competitive.

Any proposal to alter the Australian business tax system must be judged by reference to a number of matters, including overseas business tax systems.

It is not in Australia’s best interests for Australian business to leave Australia and locate overseas.

3. Conclusion

In our view to provide a strong foundation to guide the design and operation of the Australian business system a fourth national objective should be added, namely:

"Be internationally competitive"

 

The Australian Companies Institute Limited

22 December 1998