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Thursday, 22 August 2002
Page: 5486

Mr LINDSAY (2:16 PM) —My question is to the Treasurer. Would the Treasurer inform the House of further initiatives in tax reform that the government is undertaking to ensure that Australian companies remain competitive and to enhance Australia's attractiveness as a business location?

Mr COSTELLO (Treasurer) —I thank the honourable member for his question. I can inform the House that today, further to its election commitment, the government has released a review of international taxation arrangements, for consultation with the business community, on making Australia's tax system internationally competitive for those Australian companies seeking to do business outside Australia or to bring new investment into this country. These proposals build on what the government has already achieved in relation to a competitive business tax regime: bringing the company tax rate down to 30 per cent, abolishing wholesale sales taxes and taxes on exports, introducing the goods and services tax, halving capital gains tax for individuals, introducing rollovers to allow scrip for scrip rollover and rollover for small business from one business to another, and negotiating changes to the Australia-US tax treaty in late 2001.

The consultation paper looks particularly at whether the tax on overseas earnings of Australian companies could be alleviated by giving credit for dividend withholding taxes. It looks at improving Australia's attractiveness as a location for internationally focused companies by examining the question of conduit income. It proposes modernising our tax treaties with other countries overseas, and it looks also at controlled foreign companies and foreign investment fund rules.

Many Australian companies are now going out into the world and seeking to do business on behalf of their employees and their shareholders and bringing income back through the Australian taxation system. We want our tax system to have integrity, but we want it to be internationally competitive. Reforming our Australian taxation system will make for a stronger economy. A stronger economy means more jobs for Australians and more job opportunities for younger Australians in an economy which is internationally attractive. We do not want a situation where Australian companies feel that, for tax reasons, they must move overseas.

The government's Board of Taxation will be looking at the consultation process, and it will be making recommendations back to the government. We hope to be in a position to produce legislation next year. The important work of government in improving Australia's taxation system will continue under the leadership of this government, which has brought Australia forward but wants to make Australia even more internationally competitive.