Already a subscriber?Treasurer Jim Chalmers is wrong to rule out reforms to Australia’s corporate tax regime, business leaders and experts say, urging Labor to take up calls from Industry Minister Ed Husic for overdue change.director Robert Breunig urged the Albanese government to consider an allowance for corporate equity, meaning marginal firms would pay no tax, while the big banks and mining giants would remain on the current 30 per cent headline rate.
But the call fell flat with Dr Chalmers, who declined to endorse the comments. He said production tax credits for critical minerals refining and hydrogen production, introduced in the May budget, were an example of the government using the tax system to encourage investment. “The longer we ignore the inadequacies of our corporate tax system and avoid facing the need for an honest conversation about its current shortcomings and the issues confronting it, the faster we will drift away from our expected standards of living,” she said.
Business investment has been weak for a decade since the mining investment boom that ended in 2012, and capital expenditure is more than 30 per cent below the peak as a share of the economy.that businesses are not investing enough in new machinery, plant, equipment and technology to keep pace with the growing workforce, a rare trend known as “capital shallowing”.
Real capital expenditure increased 7.9 per cent in the 12 months to December, driven by strength in building and structure investment.