Statement from Australian Industry Group Chief Executive Innes Willox
Capital gains tax changes passed in the senate today will not only damage investment and enterprise, but send a signal that Australia no longer welcomes international capital.
These changes have been rushed through without proper consultation and without an understanding of the unintended consequences. They cannot be called real reform.
We can now boast about being the country with some of the highest capital gains taxes in the world.
The changes now retrospectively apply higher tax rates to existing investments, deter risk-taking through asymmetric treatment of capital gains and losses, impose a distortive minimum CGT rate that arbitrarily punishes some taxpayers, and fail to implement income averaging that recognises business growth is achieved over many years.
They do nothing for the economy and nothing for productivity, which is the key to delivering better standards of living and higher wages for all Australians.
We welcome tax reform but the word reform should carry the principles of fairness, simplicity and reducing complexity across the system. These changes do the opposite, adding complexity and complication that will actually drive out investment and jobs.
Many of the companies we represent have said they will reconsider investment in Australia and, as we all know, capital is global and can move around the world with ease. Investment that was destined for Australia will now undoubtedly go to the countries that have made it easier and more certain.
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