Not all accountants are bean counters!
In a 38-page submission to The Treasurer, Chartered Accountants Australia and New Zealand advocate what they see as the way forward for Aussie small business at Budget time and nailed a few issues on the head!
Australia is in a period of transition
Rather than just focusing on reducing welfare fraud and increasing efficiency, the Government must continue to invest in infrastructure, education, childcare and digital access to raise the possibility of reaping double dividend growth and equity:
- For tax, this means ensuring that the tax system does not distort investment decisions and that it operates as seamlessly as possible by reducing complexity.
- For super, this means ensuring that Australians have sustainable retirement incomes policies that allow them to invest and plan for the future with confidence.
- For governance, it requires better budgetary analysis, clear communication with the Australian people of the challenges ahead, and decision-making based on long-term, nation-building goals.
Australia’s tax system needs to become sustainable
To ensure Australia’s long-term fiscal stability there is a need to increase the rate and base of the GST and explore scope for environmental taxes. To encourage risk-taking and personal endeavour, we need to reduce relatively high personal and corporate tax rates. Until this is done Australia will struggle to fund the expected increases in expenditure that are largely driven by an aging population.
Tax efficiency and equity
Ensuring that all pay the appropriate amount of tax is integral to both the equity and efficiency of the tax system. It also helps ensure that there is a level playing field between businesses. The ATO has identified the cash economy as a major tax integrity risk, and is investigating the extent to which it has become systemic.
Greater alignment of the treatment of capital gains and ordinary income could improve both equity and simplicity. A substantial amount of tax planning can also occur due to the significant differential in tax rates between entities.
Sustainable retirement income policies
Investors who are forced participants in the superannuation sector must be more confident and engaged in the super system. Regulatory settings must foster competition and be more efficient and cost effective to ensure the objectives of the super system are met over the medium to longer term. In addition the government must address the income and assets tests for the aged pension.
Red tape battle has not been won
Australians need assurance that our government services are efficient and effective, and that our governments operate seamlessly to reduce the costs of doing business in our country. This involves revisiting policy to ensure that regulations are aligned. To the extent solutions are found in greater use of government online services, it also involves discussions about cyber security, privacy and rights to access information by both citizens about themselves and between government organisations.
Education, childcare and workforce
Australia needs to have an educated, creative and flexible workforce. This is best achieved by ensuring that Australians continue to have good access to the education system and childcare, with a focus on encouraging workforce participation.
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