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Tuesday, 11 October 2016
Page: 1525


Senator CORMANN (Western AustraliaMinister for Finance and Deputy Leader of the Government in the Senate) (18:54): Treasury modelled the long-term economic effect of the government's tax and superannuation plan announced in the 2016-17 budget, which included the personal income tax rate changes, as well as changes to superannuation. In the proposal to lower the company tax rate, Treasury also separately modelled the long-term economic effect of lowering the company tax rate to 25 per cent. The modelling suggests that the effect of our overall proposal would improve the growth friendliness of our tax system and it would increase the level of GDP by around one per cent over the long term, which of course will help generate better opportunities for people across Australia to get ahead, to get better jobs and better paying jobs. The modelling also suggested the overall tax and superannuation plan raises the long-term level of GDP by a similar amount. Treasury released results of this modelling exercise to the public on 3 May 2016 via its website. The economy-wide model examined how significant tax changes affect key income indicators, taking into account interactions between different taxes and second-round effects on incentives. The general point I would make is that, of course, all measures in the budget are modelled in terms of their fiscal impact, and that is reflected in the budget papers.