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Chairperson of 'A vision for Australia', a committee set up by the Business Council of Australia, outlines the aim of the committee

MARK COLVIN: Well, tax reform could cause friction between the Federal Government and business groups. Already today, several small business lobby groups have criticised the Government's approach on tax and other business concerns, but the big end of town is keen at least to start off on the right foot.

The Business Council has strongly supported the Treasurer's statement on the need to reform the system. The Council has set up a committee on its future policy direction under the banner of 'A vision for Australia'. The committee is being run by Tony Berg, Managing Director of the construction and engineering company, Boral. Mr Berg told Karon Snowdon that one of his main jobs was to get the wider community on the side of business.

TONY BERG: We need the community onside because Australia still needs to do quite a number of things to improve our standard of living and improve our growth. And if the community doesn't see the benefits of that then they may opt for solutions that are populist and simplistic, but don't work.

KARON SNOWDON: Stan Wallis, the Chair of the Business Council, has said that the Council will maintain a very hard edge on the reform agenda - what you're working on. Is your job really to package it attractively for the community?

TONY BERG: Well, our job is to outline a vision for Australia which shows that we can have increased growth, an increased standard of living, we can have jobs for all who want them and we can have a better lifestyle and increased security. In particular, we believe that we have to solve, or show what the solutions to the unemployment problem are, because when the community sees that there are large numbers of people unemployed, they don't really believe that the reform process is working and so that is going to be a major focus for us.

KARON SNOWDON: If unemployment is a priority, what are the solutions?

TONY BERG: I believe the solutions are on, what I call, the demand side and the supply side. On the demand side we have got to create incentives for business to employ people and that potentially means more flexibility in the workplace and the removal of taxes such as payroll taxes, but it also ... there needs to be more flexibility on the supply side as well. And one of the things that we have found out, which was a great surprise to me I must admit, was that if you move from the dole - unemployment benefits - to gainful employment, there's very heavy taxes on that. You lose, obviously, the dole and you pay tax and, in some cases, the effective marginal tax rate on moving from unemployment to employment can be as high as 130 per cent.

KARON SNOWDON: Now, the Council is right behind the Government on its tax reform agenda, which means it's supporting the introduction of a GST. Will that be the platform you run with on this that overall tax levels will be lower as a result?

TONY BERG: Well, we believe the GST would be a major step forward.

KARON SNOWDON: Is this the Business Council getting in, as it were, on the bottom rung, on the policy agenda for an election that's due fairly soon?

TONY BERG: Well, the Business Council is very assiduous in saying it's apolitical. So we are really proposing policies that we think are in the best interests of Australia. We don't side with government or opposition and we try to keep away from election campaigns.

KARON SNOWDON: But at the same time substantial businesses in Australia are contributing to political parties through financial donations including, I might add, your company, Boral. That's not remaining apolitical, is it?

TONY BERG: Well, each company decides what it wants to do in terms of supporting the political process and supporting the election process. I can tell you that in Boral's case we support both ... well, all the major parties, including Liberal, Labor and National parties.

KARON SNOWDON: But not equally?

TONY BERG: Not necessarily equally but we support them all, and I think that's a question for each company to decide as to how it supports the political process.

MARK COLVIN: Tony Berg, Managing Director of Boral, and head of the new Business Council policy task force.