06 Mar 2018

Tax reform needs to go beyond company tax cuts

Colin and Marisa Pasquale embody the entrepreneurial spirit and drive to succeed, common among Australia’s small business community.

Operating for more than 16 years, their company, Compas Transport, has rapidly grown to become one of regional Australia’s most in-demand, independent freight businesses.

Treasurer Scott Morrison wants to follow America’s lead and extend lower corporate tax rates to all businesses. He has the support of the PM who says businesses need incentives to invest.

Colin and Marisa have ambition – but they are spending more time on compliance and red tape than meeting with customers and growing their business.

They are not alone.

Research shows that on average, business owners like Colin and Marisa spend over 250 hours a year just on tax compliance.

That’s almost six working weeks which could be spent on growing their business – creating opportunity and jobs.

But instead they are navigating the complexity of a tax system that has at least 100 different forms of tax. Then consider that only 10 of these taxes generate 90 per cent of government revenue.

To make it even more complicated, there are at least six different ‘‘small business’’ definitions used by governments.

There has to be a better way.

Our chairman, Ken Henry, is calling for a public debate on holistic tax reform.

Ken is right. It’s been almost a decade since he led the last in-depth review of Australia’s tax system.

It’s clear we need reform.

NAB is committed to working with our customers, government, all levels of business and the community to develop a long-term approach to tax policy that will serve Australia into the future.

The current debate we are having on tax reform looks only at company tax cuts – and has pitted business interests against community interests.

My view is that the interests of business – small and big – and the community are one and the same. When our communities grow, business grows too.

Having a globally competitive company tax rate is how we can attract investment and stimulate growth. That means new jobs and more opportunity for all Australians.

The conversation however, needs to be broader and the collective benefits need to be clearer.

We all have a responsibility to make sure Australia continues to be a great place to live, work and do business.

This week, I have been on the road talking to customers. They are looking for confidence in the future, for a belief that Australia will continue to grow and be prosperous.

We have more than 2.2 million actively trading businesses in Australia, run by people who are more than just ‘‘business people’’. They are part of our communities.

They are our local butchers, hairdressers, dentists and electricians. They are the everyday business entrepreneurs like Colin and Marisa, doing great things.

They are our greatest opportunity for economic growth in years to come.

But we are holding ourselves back with complexity.

As Australia’s leading business bank, we love backing people like Colin and Marisa who are prepared to have a go.

We are finding ways to become simpler and faster at NAB, to help customers and remain competitive in a fast-changing world.

As a nation, we need to become simpler and faster too – starting with the way we look at our tax system. This is how we’ll drive economic growth and create new jobs and wealth.

— Andrew Thorburn, NAB Group CEO

This article was originally published in the Sydney Morning Herald: https://www.smh.com.au/business/banking-and-finance/tax-reform-needs-to-go-beyond-company-tax-cuts-20180304-p4z2r9.html

Want to receive the latest news from NAB?

Subscribe to our mobile news room

To Unsubscribe please enter your details