CANBERRA: Australia has failed to keep pace with other nations on corporate tax rates. Mr Frydenberg said Australia’s corporate tax rate of 30 per cent was harming foreign investment here.
“Australia’s corporate tax rate at 30 per cent is high compared to many of the countries we compete with for investment,” he said.
“Corporate income tax rates have fallen worldwide in recent years – but Australia has not kept pace.”
But Mr Frydenberg indicated tax reform would not be completed with the stroke of a pen, and that an “extended process” including negotiation with the states would be required.
“It is quite clear we need the deep engagement of the states … clearly if you are going to get some consolidation of the tax system and get simpler and lower taxes you are going to need some trade-offs and that is going to involve the states,” he said.
On the issue of multinational companies shifting profits to low tax jurisdictions, Mr Frydenberg said Australia could yet act before the OECD completes its review of the issue.
“We are continuing to examine ways to strengthen Australia’s tax laws and monitor its overseas developments and will not hesitate to take immediate action if that is what is required, any action will be very much cognisant of the G20 and OECD projects,” he said
The opposition’s shadow assistant treasurer Andrew Leigh spoke at the same event on Friday and declared Labor would not revive the mining tax.
Mr Leigh said the ALP had learnt valuable lessons from the troubled mining tax it introduced during the Gillard and Rudd governments.
“We are not looking to take a mining tax to the next election, I’ve heard no conversations internally about a revised resources tax,” he said.
Plans to introduce a super profits tax on coal and iron ore miners played a role in the downfall of prime minister Kevin Rudd in 2010, and the proposal was watered down to the Minerals Rent Resource Tax by his successor Julia Gillard.
But that tax repeatedly failed to deliver the revenues that Treasury and the government had expected, in an embarrassing blow to the former government.
It has since been repealed by the Abbott government, and Mr Leigh said Labor had not forgotten the turmoil that resources taxation caused.
“We have taken that lesson squarely on the chin,” he said on Friday.
In a diversion from Labor’s stance in government, Mr Leigh said Labor would support moves to allow employee share options, and also turned the spotlight on stamp duty.
“The notion that in a country with a housing affordability crisis we require you to pay a stamp duty in many cases, which is equal to the value of a car in order to downsize a home, doesn’t seem best-practice tax.
