Pre-Budget submission to the Federal Government from PwC Australia
An economic growth agenda fuelled by workforce participation, labour productivity and ease of business: PwC Australia’s five-part plan for tax reform to propel Australia to new heights
As Australia awaits the third-straight Federal Budget set amidst the backdrop of the COVID-19 pandemic, the tax system has the potential to play an important role in helping generate economic growth, get more Australians working, and bust costly compliance headaches for Australian businesses.
That’s why our pre-budget submission to Federal Treasury includes achievable and sensible amendments to Australia’s tax law settings that can be introduced quickly in recognition of the impacts COVID-19 continues to have on Australian businesses and households.
We continue to hold the view that Australia needs major tax reform, which is critical for the economy to scale new heights and ensure we remain globally competitive, however, with the shocks of the pandemic still being felt across the nation, we know that now is not the time for such profound change.
For now, our recommendations focus on achievable but important changes to our tax laws that can be made now, without delay, in order to give our economy a boost, encourage greater workforce participation and labour productivity, and drive down compliance costs on businesses.
Our submission to Federal Treasury includes:
- Proposed Fringe Benefits Tax (FBT) changes to facilitate better access to mental health and wellbeing support for Australian workers, and allow families greater access to affordable childcare;
- Support to attract talent from overseas by expanding the application of the ‘temporary residents’ tax rules to incentivise professional expatriates to return home;
- Tax changes to help Australia realise its net zero emissions commitments, through changes to FBT and the income tax treatment of electric vehicles;
- New opportunities to give small and medium businesses the confidence they need to invest - first, by extending the temporary full expensing mechanism set to expire next year, secondly, by making the loss carry-back regime permanent, and by giving certainty to the collection of small business taxation debts that have been uneconomical for the Australian Taxation Office to collect; and
- Sensible measures to modernise and simplify the tax system in order to reduce the costs of compliance.