“By ruling out serious structural reforms, such as working with the states to eliminate inefficient taxes and changes to the base and rate of the GST in this term of government, Budget 2014-15 goes only part of the way to addressing the risk of ongoing revenue shortfalls,” said CPA chief executive Alex Malley.
Lee White, chief executive officer at the Institute of Chartered Accountants Australia, said we cannot cut our way to prosperity.
“While the government appears to have its house in order on the spending front, this Budget shows we need to look at both sides of the ledger to balance the books in the long run.
“The Institute is disappointed that there isn’t a clearer roadmap for the tax reform process,” he said. “We have been calling for broader tax reform, which would need to look at the GST rate and base. We also need to build a community consensus on the need for meaningful tax reform and that dialogue needs to be prioritised now,” added Mr White.
Echoing CPA’s and the ICAA’s calls, Andrew Conway, chief executive officer at the Institute of Public Accountants, said temporary taxes are no panacea for genuine tax reform.
“Short-term initiatives to fill the revenue gap can be damaging to a fragile economy, particularly in terms of small business,” he said.
“Piecemeal tax hikes can erode business confidence and may not produce the anticipated revenue levels as it can lead to behavioural changes.
“The promised tax reform white paper can’t come quickly enough to restore productivity and growth in the Australian economy,” Mr Conway added.