Figures from the Australian Taxation Office’s annual tax transparency report released earlier this month show the average tax paid of 1520 companies with more than $100 million in revenue was 27.4 per cent – below the statutory rate of 30 per cent – after carrying forward losses and claiming deductions.
In a submission that covers the need to address skilled visa shortages, investment allowances, research and development tax incentives and regional infrastructure, the BCA argues the government needs to maintain at least a “small surplus” to protect Australia from economic shocks to give it a crucial platform to grow the economy.
The BCA will say the downsides of another period of low economic growth are “very real”, finding if wages were to grow at 3.2 per cent (the average over the past 20 years) rather than 2.1 per cent (the average over the past five years), this could translate into wages being about $11,000 higher a year from 2029 for a full-time worker.
The submission says in the absence of a reduction in the company tax rate for larger companies, Australia should introduce a broad-based, permanent investment allowance. For example, a 10 per cent investment allowance would allow companies to deduct an additional 10 per cent of the value of an asset in its first year.
“We actually want change,” BCA chief executive Jennifer Westacott said in an interview on Thursday.
“We want to see that these ideas are taken seriously. We have to start making the changes that get the economy growing faster and get investment going.”
Australian Bureau of Statistics figures show annual gross domestic product lifted to 1.7 per cent in the three months to September 30. But it remains well short of what is considered necessary by the Reserve Bank of Australia to drive down unemployment and lift wages.