"The Productivity Commission's interim proposals are welcome as a discussion starter on how to reform a taxation system that fails to encourage the heart-starting business investment our economy needs. The problem is the proposals themselves suffer serious flaws and may well further distort our tax system," said Innes Willox, chief executive of the national employers association, Australian Industry Group.
"The proposal as it stands will unfortunately reduce simplicity, efficiency and horizontal equity at a time these need to be improved. It targets only capex, failing to recognise the broader forms of investment which are critical for productivity and growth.
"It also ignores the opportunity to reform the least efficient business taxes which have the greatest impact on investment and productivity in Australia.
"At face value the proposal has some attractions but as a whole the package fails the test of driving business investment across the economy. That said, we look forward to a broad discussion on tax reform at the upcoming Roundtable," Mr Willox said.
