The heads of the big four accounting firms have joined forces to call on Canberra to stop playing politics and push ahead with a cut to the company tax rate for all business to create more jobs and boost average wages by up to $1000.
Treasurer Scott Morrison has vowed to take a "pragmatic" approach to his $47.8 billion company tax reforms but the business community is increasingly concerned the government plans to split its election package to win immediate relief for small business with an annual turnover of up to $10 million.
The big four accounting CEOs: Deloitte's Cindy Hook, EY's Tony Johnson, PwC's Luke Sayers and KPMG's Gary Wingrove, said while they are usually fierce rivals, they all agree on the need to cut tax rates for all companies or risk losing out to places like the UK which is cutting its rate to 20 per cent.
"We are adding our voices to the many, including the Federal Treasury, the Organisation for Economic Co-operation and Development and the International Monetary Fund, all of whom believe lower company taxes can deliver sustained benefits for Australian workers, businesses and the community more broadly," the CEOs write in an opinion piece published in The Australian Financial Review on Monday.
Mr Morrison has refused to pledge that the government will preserve the entire bill if the Senate demands changes with Labor, the Greens and other crossbenchers certain to move amendments to the package.
$1000 extra per worker
"We'll work with the parliament to maximise everything we can achieve in this parliament, and where I can get 100 per cent of 100 per cent, I will go for 100 per cent of 100 per cent," he said last month. "But 100 per cent of nothing is not the sort of pragmatic approach that I think the Australian people expect of this government."
The big four accounting CEOs point to Treasury modelling which estimates the company tax cut will eventually generate an additional $16 billion in GDP each year and a 1.2 per cent increase in the purchasing power of wages – around $1000 a year extra for the average full-time worker.
While the National Competition Policy reforms benefited the economy by over $40 billion, they took the combined efforts of all levels of government and the review of 1800 pieces of legislation – a decade-long process from 1995 to 2005.
"In comparison to the mammoth effort of those reforms, a five percentage-point reduction in the company tax rate is a low-cost, low-effort and efficient way of permanently boosting Australians' living standards," the CEOs said.
Australia stands still
The CEOs warned that a mid-sized economy like Australia, which competes for highly mobile capital, is set to lose out as the UK cuts its rate to 20 per cent.
"We don't need to have the lowest tax rate, and we will never have a rate as low as Singapore or some other countries, but we can put Australia in a more competitive position," they said. "It's clear that the world will not stand still just because Australia fails to act."
The accountants acknowledge community concern over multinationals not paying their fair share of tax. "On this point, we fully support the OECD actions to address tax base erosion and profit shifting," they said.
"Take the politics out of it and do something that will boost Australia's competitiveness, create more local jobs and contribute to our shared prosperity for years to come."
