Entrepreneurialism, innovation, and growth is stifled by Australia’s current tax system, according to the Institute of Public Accountants (IPA).
IPA chief executive, Andrew Conway, said the country will choke on the tax system that is holding productivity back.
“Do we want a tax system which continues to tax effort or a system that taxes consumption? It is the IPA’s view that the latter should be pursued if Australia is to arrest its productivity decline and make the tax system competitive again,” he said.
“Australia faces dual challenges of the need to ensure fiscal sustainability and boost productivity growth to sustain growth in living standards.”
Conway said that moving to growth supporting taxes is essential in sustaining economic momentum and to meet all current and future spending needs.
“We can’t keep relying on bracket creep but it will be inevitable without a change in the tax mix,” he said.
