Friday, April 19, 2024

ARA says ‘it’s time to get moving’ to ensure economic growth

The Australian Retailers Association (ARA) says a push by business leaders for more spending on infrastructure, alongside sweeping reform of taxation and regulatory arrangements, is “critical” if Australia’s GDP growth and prosperity are to continue.

“27 years of continuous economic growth doesn’t just happen – you have to work at it,” ARA Executive Director Russell Zimmerman said.

“Unfortunately, the reform process undertaken by the Hawke, Keating and Howard governments that unlocked huge economic dividends for this country has ground to a complete halt over the past decade or so.

“In the face of softening indicators in a number of sections of the economy, it’s time to get moving.”

A new reform agenda 

Echoing calls from the property sector, senior corporate leaders and the Business Council of Australia, Mr Zimmerman says that rather than accepting slowing conditions in the face of global economic headwinds, state and federal governments should be proactive in identifying and executing opportunities for a new reform agenda.

“When Australia has some of the highest rates of business taxation in the developed world, for example, cutting the company tax rate to 25 per cent is an absolute no-brainer – especially when this would still leave Australian businesses at a competitive disadvantage compared to their international counterparts,” Mr Zimmerman said.

“Similarly, a fresh look at GST and PAYE taxes is overdue: it’s internationally accepted that consumption taxes are far more efficient for collecting revenue than taxing income. The introduction of the GST in 2000 aimed to switch the tax mix away from income and onto expenditure, but income taxes have crept back up.”

Hindering meaningful reform

Mr Zimmerman says politically-charged rhetoric claiming business tax cuts were “handouts to billionaires” or that cutting income tax for middle earners was “stealing from the poor” was irresponsible, and called on all parties to resist the temptation to take cheap political shots at the expense of meaningful reform.

“The fact is that Australia is resting on its laurels; the politicisation of economic reform to the point nobody undertakes it is a huge risk to our prosperity and continued growth and, unlike the Global Financial Crisis a decade ago, the mining sector won’t necessarily bail the economy out next time,” Mr Zimmerman said.

He also says the “blame game” between Canberra and the states – with governments of different political stripes playing the national interest off against their own political interests – had gotten so out of hand that it was actively damaging Australia’s economic reputation and prospects. This practice, Mr Zimmerman says, has to stop.

Unlocking the potential of our major cities 

“From broadening the GST base and cutting income taxes, lowering corporate taxes, and re-examining tax compliance structures for business, to seeking agreements between the states to align taxes such as payroll tax to give certainty and foster efficiencies for businesses operating across state borders, and to identifying, funding and building infrastructure projects that will unlock the potential of our major cities and regions – from roads to dams and to ports and rail – the list is literally endless,” Mr Zimmerman said.

“Rome wasn’t built in a day, of course, and it’s impossible to do everything at once. But I would urge governments of all colours to work together, to use these opportunities to develop reform agendas for the next decade, and – as I said at the outset – to get moving.”

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