The Productivity Commission's proposal to increase taxes will risk worsening the cost-of-living for all Australians while sending investment offshore, according to the Business Council.
Business Council Chief Executive Bran Black said the tax increase proposal does not fix the current productivity problem and will put at risk business investment, job growth and innovation in Australia.
"You don't fix Australia's lagging productivity and investment by taxing businesses more and making Australia less competitive," Mr Black said.
"This approach punishes some of our most productive companies and industries, and will cost Australia investment and jobs.
"These changes would only further complicate our tax system with more red tape and place more pressure on Australia's cost-of-living problem.
"Hiking up taxes on large and mobile investors will only make us an even less competitive place to do business and make it harder to overcome some of our biggest challenges, such as the energy transition.
"This proposal fails to acknowledge the role larger businesses play in bringing investment into Australia and the positive flow-on effect that has for workers, small businesses and consumers."
Mr Black noted the Productivity Commission has recognised the need to attract investment, and said that ongoing discussion on wider tax reform would be critical to addressing the systemic problems contributing to lagging productivity growth.
"The road to a more competitive tax system and better productivity growth is not through adding another company tax system," Mr Black said.
"This is a package that has been designed around one tax, when we really need to have a discussion about holistic tax reform that works for the entire economy.
"Capital is mobile, and so when we're designing tax proposals we need to ensure all potential real-world impacts, particularly on consumers, workers and investment, are properly considered."
