DEBT LEVY ISN'T THE SOLUTION: BCA
29 April 2014,
THE Federal Government’s plan to hit high income earners with a debt levy isn’t the way to tackle the fiscal problem, according to the Business Council of Australia.
The budget submission 2014-15 proposes an extra one per cent tax for workers earning between $80,000 and $180,000 - and an extra two per cent for incomes above $180,000.Chief executive Jennifer Westacott says the government should find a structural solution to bring the budget back into surplus.
“Temporary tax increases are no substitute for the reforms that are needed to bring spending back under control and put the budget onto a more sustainable footing.“We’re spending more than we are earning and if not corrected, this will only get worse as the population ages and the cost of health and aged care services becomes unaffordable,” she says.
Westacott says the budget should focus on improving government efficiency and target resources to those who need them most.“Any changes to revenue should be done as part of comprehensive tax reform and the tax white paper process later this year provides the best opportunity to look at options for improving revenue and better supporting growth.
“Australia needs comprehensive tax reform implemented over the medium term, rather than ad hoc levies in this budget.“In short, what we need is a new approach to budget and fiscal management that ensures we are on the right path for the future.”
Westacott says increasing the dependence on personal income tax will burden workers and slow economic growth.“If we are serious about lifting our productivity and competitiveness, we should be lowering taxes, not increasing them.”