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Australia: Big Tax Reform May Be Difficult - Swan |
| Source: |
news.com.au |
| Source Date: |
Friday, March 16, 2012 |
| Focus: |
ICT for MDGs
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| Country: |
Australia |
| Created: |
Mar 20, 2012 |
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AUSTRALIA'S challenging fiscal position has made "big bang" tax reform harder, says Treasurer Wayne Sawn.
In his address to the Tax Institute in Canberra, Mr Swan said the Government was still on track to deliver a budget surplus despite uncertain economic times.
But he warned major tax reform could be a challenge.
"Our surplus will be delivered in spite of the global financial crisis ripping $140 billion from government revenues," he said today.
"But Australia's fiscal position, enviable though it is, does limit our ability to buy 'big bang' tax reform.
"Gone are the days when tax reform is accompanied by big bribes that get communities or industries on board."
Mr Swan said Australia's economy was sailing through uncharted waters, as it navigated "unprecedented changes and big transitional pressures".
"The key to our sound fiscal management has been a combination of prudent spending and sustainable tax policies," he said.
"This is a lesson that many European economies are learning too late."
Meanwhile, Mr Swan said the business tax working group, tasked with finding ways of reforming the taxation system, will deliver its report on the tax treatment of losses in the next two weeks.
Australia lagged many other countries in giving businesses access to tax deductions on losses.
In Germany, Ireland and the UK losses can be carried back to the previous year, while the US, Canada and France allow a three-year carry back, he said.
"It may make sense for Australia to have a carry back period within this range ... perhaps with a cap, like many of these countries, to protect the integrity of the tax system," Mr Swan said.
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