Pillar 1: Creating a more dynamic and resilient economy
The Tax Institute welcomes the opportunity to make a submission to the Productivity Commission in respect of its consultation on Pillar 1: creating a more dynamic and resilient economy (Consultation).
We commend the Government for considering the role of our tax system and opening the door to changes that may need to be made to enhance productivity and create a more dynamic and resilient economy. We also thank the Productivity Commission for the opportunity to discuss our recommendations prior to making this submission.
In the development of this submission, we have consulted with our National Technical Committees to provide feedback that is representative of our broader membership.
Our preliminary comments in this submission focus on the role of the taxation system in shaping the Australian business landscape and fostering investment and productivity growth. We have addressed consultation questions regarding pillar 1: creating a more dynamic and resilient economy, and section 2: support business investment through corporate tax reform.
We welcome the Government’s approach to identifying priority areas for reform and considering implementing meaningful and measurable productivity-enhancing reforms. Superficial legislative amendments are inefficient, leading to greater complexity and uncertainty for all Australians and undermine the fundamental principles of good tax policy and law design. Further, while we recognise that this Consultation is focused on corporate tax elements of the system, it will be necessary to consider other aspects of the broader system and Australia’s overall tax mix in due course. This will be particularly important when considering shifts in revenue sources to account for any corporate tax concessions that may be made. Doing so will support the sustainability of our tax system into the future and ensure a lasting positive impact for the economy and all Australians.
Our 2021 landmark discussion paper, Case for Change, identifies the aspects of the Australian tax system that are performing well and those that are lacking. Looking at the system holistically, it proposes a range of options for reform aimed at stimulating investment to enhance Australia’s productivity growth, reducing the compliance burden on taxpayers and ensuring a fairer system for all Australians. A bold tax reform strategy is essential for supporting Australia's economy and communities, now and in the future.
The Tax Institute has also recently released its Incoming Government Brief: June 2025 (the Brief), detailing key tax and superannuation measures announced by previous governments that remain unenacted before the 48th Parliament. It also identifies important measures not yet announced by the Government that we consider require prompt attention. The Brief aims to assist the Government to prioritise essential tax and superannuation measures, and in some cases, suggests amendments and further consultation before certain measures progress.
Our detailed response and recommendations are contained in Appendix A. We look forward to providing further input as this Consultation progresses.
The Tax Institute is the leading forum for the tax community in Australia. We are committed to shaping the future of the tax profession and the continuous improvement of the tax system for the benefit of all. In this regard, The Tax Institute seeks to influence tax and revenue policy at the highest level with a view to achieving a better Australian tax system for all. Please refer to Appendix B for more information about The Tax Institute.