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- The Working Group has considered whether Australia should pursue a cut in the company tax rate accompanied by measures that fully offset the cost by broadening the business tax base. The Working Group believes that a lower company tax rate would encourage new investment and enhance productivity across the economy, supporting Australia's growth prospects and living standards. However, the Working Group has found that there is a lack of agreement in the business community to trade off the base broadening options identified in the Discussion Paper for a cut in the company tax rate.
- In coming to the view that a cut in the company tax rate funded from within the business tax system should not be pursued at this time, the Working Group has developed and applied a number of design principles and has made its judgments in the context of significant structural shifts in the domestic and world economy, and against the backdrop of an uncertain global economic outlook. The Working Group and stakeholders also identified risks associated with pursuing proposals to offset the costs of a company tax rate cut when the potential revenue saving from those proposals are uncertain.
- While the Working Group is not able to recommend a revenue neutral package to lower the company tax rate, it considers that Australia should have an ambition to reduce its company tax rate as economic and fiscal circumstances permit. Of course, any future proposal in this area will need to be considered against other budget priorities.