Recent Media Coverage
Australian Government 2011 Tax Forum: Jennifer Westacott Talks to the ABC Lateline Business Program
4 October 2011
Transcript of comments made by Business Council of Australia Chief Executive Jennifer Westacott on Lateline Business, ABC TV on 4 October 2011.
‘Tax forum opens with predictable debate’, first broadcast on Lateline Business, 4 October 2011 is reproduced by permission of the Australian Broadcasting Corporation and ABC Online. (c) 2011 ABC. All rights reserved.
Ticky Fullerton, Presenter: As you heard earlier, the man who headed the federal government’s inquiry into the tax system has described the debate at the opening session of the tax forum in Canberra as “predictable” and something he “could have written beforehand”.
Discussion around business tax saw business leaders arguing for tax cuts, with unions and social welfare groups rejecting those calls.
Andrew Robertson was there.
Andrew Robertson, Reporter: As invited guests arrived for the two day talkfest on tax, the Prime Minister warned them not to get too carried away.
Julia Gillard, Prime Minister: Clever ideas about spending money have to be matched with clever ideas about where that money is coming from.
Andrew Robertson: But when the forum got down to the business of taxes on business, it wasn’t clever ideas which dominated, but old ones along well-worn lines.
Jennifer Westacott, CEO, Business Council of Australia: Reductions in corporate tax can help boost overall investment, improve productivity and spur inflows of foreign investment.
Heather Ridout, Chief Executive, Australian Industry Group: But the issue that the tax reduction to 25 per cent was all about, was a reform not a tax cut.
Andrew Robertson: Other business leaders expressed similar views. Union representatives didn’t share them.
Conference Attendee: Australia is in fact a relatively lowly taxed country.
Louise Tarrant, National Secretary, United Voice: There’s got to be a very compelling argument that needs to be put to argue for a decrease in the corporate tax rates.
Andrew Robertson: Comments which prompted this from former Treasury Secretary, Dr Ken Henry, the author of the 2009 review of the tax system:
Ken Henry, Former Secretary, Federal Treasury: Much of what has been said is quite predictable, could have written the script for this before coming in.
Andrew Robertson: It was the Henry report which first recommended cutting the company tax rate to 25 per cent. Dr Henry says tax reform is about much more than that, but nonetheless he stands by his views of two years ago.
Ken Henry: The consensus of public finance theorists is that, in Australia, if the company income tax were to be cut the principal beneficiaries would be workers.
Andrew Robertson: Outside the forum, the Business Council of Australia backed that stance.
Jennifer Westacott: If we can get the courage to have a comprehensive approach to tax reform, we can actually make it a lot easier to do business and that will grow the economy.
Peter Anderson, CEO, Australian Chamber of Commerce and Industry: If the tax system constrains business growth and business investment, then it’s not just unions who will lose out but their members.
Andrew Robertson: For one of the more neutral observers at the forum though, arguing the case for lowering business taxes still has a long way to go.
Yasser El Ansary, Tax Counsel, Institute of Chartered Accountants: What became evident out of this discussion was the need for us to do a lot more work to evidence the importance of cutting the corporate income tax rate in Australia to drive greater investment, and help businesses at small, medium and large scale.
Andrew Robertson: Debate on the corporate tax rate dominated the time allocated to business, to the point where other issues such as tax losses, capital gains tax and problems affecting small business got scant mention.
As the government facilitates discussion on tax reform, a black hole in tax collections is focusing its mind.
Unintended consequences of changes last year to tax laws are allowing companies involved in takeovers to claim huge deductions for losses. The Institute of Chartered Accountants says it’s an issue which is threatening to scupper the government’s plans to bring the budget back to surplus.
Yasser El Ansary: It’s very, very difficult to quantity at the moment, but the number is certainly into the tens of billions of dollars.
Andrew Robertson: The government is believed to be considering retrospective legislation to close the loophole.
The Business Council of Australia does not guarantee the accuracy of this transcript, which was supplied by an external transcription service.