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Australia’s leading commerce association’s take on Carbon Tax

April 10, 2011  |   Posted by :   |   News   |   0 Comment»

Peter Anderson ACCI AustraliaPeter Anderson, Chief Executive of the Australian Chamber of Commerce and Industry (ACCI), has responded to the Leader of the Green Party’s demand that revenue from carbon tax be spent on tackling social problems as “quite short sighted and indeed quite counter-productive”.

He says that Australia needs, in order to meet its social objectives, a strong economy, strong investment in industry and the capacity for businesses that are profitable to reinvest in jobs and economic growth. “That is the way that governments can provide the sorts of social services that governments provide, not what Dr Brown has proposed which is a divisive corporate distinction between businesses of different sizes in Australia. That would really be going down the wrong path and reeks of using the tax system to play out the politics of envy,” he said.

He also disagrees with suggestions from Bob Brown that there be a two-tiered approach with different rates for small and large businesses, saying that a single uniform rate has the effect of requiring larger amounts of tax revenue to come from larger businesses because the rate is a percentage of profitability.

He says that there is no basis at all to create a divisive corporate tax rate in Australia other than to opportunistically redistribute wealth from larger businesses into a range of social services which should be funded from the country’s overall tax revenue. “I think that this type of call really does take Australia down a slippery path where we are almost wanting to punish businesses that are making profits, that are reinvesting profits, that are growing our economy and that are operating in a fierce globally competitive environment”, he said.

Referring to the possibility of an increase in compulsory employer contributions without a cut in the corporate tax rate, which could happen when the Greens gain the balance of power in the Senate in July, Mr Anderson suggested that Bob Brown should show his sympathy for the small business community of Australia by standing back and asking whether they should be hit with another payroll tax.

“Businesses of all sizes in Australia are entitled to some tax relief through proper structured tax reform. The tax burden on Australian business as a whole is quite excessive and the proposed changes to superannuation constitute an increase of 3% on the payroll of all Australian employers, and it won’t be funded through the mining tax. So smaller businesses are in the gun even under government proposals, let alone Dr Brown’s proposal for an increased superannuation levy”.

The ACCI chairman believes strongly that there should not be a compulsory increase in the superannuation payments, with or without the mining tax, because the tax will not be funding them, and neither was it recommended by the Henry Tax Review. “That is a mistake by the Commonwealth Government, and one which Dr Brown should hold the Government to account for, rather than proposing a divisive distinction between corporate tax rates in Australia,” he said.

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