GST backdown 'a blow to business', says Pitcher Partners
Pitcher Partners has issued its criticism following the government's decision to back down on GST-led tax reform, claiming that it has compromised the ability to deliver broader tax reform.
Craig Whatman, executive director of the mid-tier firm, noted that he failed to see how the revenue necessary to deliver a corporate tax cut to Australian businesses would be funded if the GST was not raised.
"At 30 per cent, Australia's corporate tax rate compromises the ability of Australian businesses to remain competitive with their international counterparts," said Mr Whatman.
"Tax reform may be electorally difficult but it's critical for Australia's future economic growth."
Mr Whatman also expressed his concerns that a lack of increased GST-accrued revenue would cause Australian businesses to remain bogged down by what he deemed "inefficient and growth-stunting state-administered taxes," compromising their ability to prosper and drive economic growth.
According to Mr Whatman, Australia is failing to adopt the OECD trend of shifting towards consumption taxes as a means of generating and raising revenue.
“If GST reform is off the table, Australia will retain one of the lowest rates of GST/VAT in the OECD, which means that we will continue to be reliant on other forms of tax to support the revenue base.
“This is in contrast to the OECD trend, where its members are gradually increasing their reliance on consumption taxes as a source of government revenue.”