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Economy

Big issues results 2015

Addressing tax evasion, the critical importance of innovation, education and skills, and opportunities for services industries have been highlighted in CEDA’s 2015 Big Issues survey as key drivers in improving the Australian economy.

Other key results were that a Federal Budget surplus should be achieved through both expenditure cuts and revenue increases.

Controversially cuts to defence and welfare were rated as the priority areas for expenditure reductions and increasing the GST ranked the best option for increasing revenue.

More than 1000 people completed this year’s annual CEDA Big Issues survey, conducted over a two week period commencing mid-November. The short 12 question survey’s aim is to capture a snapshot of the business community’s views on the critical policy choices – the big issues – in the year ahead.

Releasing the survey results, CEDA Chief Executive Professor the Hon. Stephen Martin said they show that the business community wants fair reform of the taxation system and genuine efforts to repair Australia’s chronic underlying Federal Budget problem.

“Perhaps surprisingly, given the current preoccupation with a limited debate around the GST, addressing tax evasion ranked as the number one aim for reforming the tax system. Clearly there is growing concern in the business community about company tax evasion that has been highlighted extensively this year in the media,” he said.
 
CEDA research has previously examined tax evasion and more particularly base erosion and profit shifting. The G20 Summit in Brisbane saw the Government agree to work with the OECD on the issue, but little apparent progress has been seen by the business community.

“Our recommendation was that Government should look at new taxation models that could be introduced to combat tax avoidance, rather than trying to fix broken models. It was considered this be an integral part of a broader consideration of genuine taxation reform, not simply taxation changes that ruled out proposals that were politically unpalatable.

“Given we have a growing Federal Budget deficit and are facing slower economic growth, business considers fixing tax avoidance to be a priority as one way to increase government revenue.”

Professor Martin said another key result from the survey was that incentivising innovation has become a top priority in three significant areas.

“It ranked as the top policy priority for the Federal Government in 2016, for improving Australia’s international competitiveness and for how the Federal Government should respond to an expected low-growth environment,” he said.

“These results show that the business community recognises that with a slowing economy, innovation is vital to ensure we can continue to compete globally.

“Australia has fallen behind other advanced economies in driving a culture of innovation, which will be necessary if our economy is to successfully transition away from mining and resources.

“The Federal Government is due to release an innovation agenda this month which is a step in the right direction but it must be followed up with action.”

Professor Martin said other key results from the survey included:

  • To improve Australia’s workforce capabilities the top ranked response was a consistent strategy for education, that promotes the appropriate skills for driving Australia’s economic sustainability.
  • Lack of long-term planning and commitment by government was again ranked number one as the biggest factor hindering adequate provision of transport infrastructure.
  • The key sectors predicted to provide future growth for our economy were education services, healthcare and agriculture.
  • The survey again showed support for broadening or increasing the GST along with tackling middle class and business welfare tax breaks as the top areas of focus for taxation reform.