The Art of Tax Reform: Unlocking opportunities to improve taxation for Australian creative industries
The Tax Institute welcomes the opportunity to make a submission to the NSW Government in respect of its consultation regarding the Art of Tax Reform: Unlocking opportunities to improve taxation for Australian creative industries (Discussion Paper). We also take this opportunity to thank the representatives of the NSW Government for meeting with us to discuss our preliminary feedback on the Discussion Paper.
In the development of this submission, we have consulted with our National Technical Committees and our New South Wales State Taxes Committee to provide feedback that is representative of our broader membership.
Our overarching comment is that there is an imminent need for comprehensive tax reform at the federal and state level. Taking a holistic approach to tax reform will improve the system overall for all taxpayers, and in doing so can address the specific needs of the arts community. While we acknowledge the government’s focus on creative industries, we advocate for a cautious approach to implementing measures solely targeted at a certain industry or segment of an industry.
There are areas of our tax system that are in desperate need of reform and simplification, and some of these areas have a disproportionate impact on the arts community. Some examples considered further in this submission are:
- the low turnover threshold at which small businesses must register for GST;
- the myriad definitions of what constitutes a ‘small business’ and the complexity of the tax rules that apply to small businesses generally; and
- the high compliance burden imposed by the Fringe Benefits Tax (FBT) and superannuation guarantee (SG) systems.
Improving these issues would benefit the broader Australian community, and would have an especially positive impact on the arts community, as many performers and artists operate as micro and small businesses. In this regard, we note feedback from our members that FBT and SG compliance is a particular deterrent to engaging performers.
Comprehensive tax reform can alleviate the need, at least in part, for special measures exclusively for the arts community. Defining who qualifies for such targeted measures runs the risk of increasing the complexity of the tax system and creating market distortions. Industry specific measures may also prompt other industries to seek special treatment, leading to an unhealthy focus on lobbying rather than creating a level, fair and optimal playing field for all.
Addressing systemic issues should be the primary focus.
However, we also acknowledge that the special cultural role played by Australia’s creative industries may warrant special measures, or that after broader reforms are implemented, some specific measures may still be required to boost support for creative industries.
Where targeted measures are deemed necessary, we have set out below comments that we consider will help to ensure that they are as targeted, fair, and integrated as possible into the system and a wider tax reform strategy.
Our detailed responses to questions raised in the Discussion Paper are contained in Appendix A.
To further assist the NSW Government in progressing tax reform, The Tax Institute has published, among other materials, the following key products:
- the Case for Change, our 2021 landmark discussion paper, considers the Australian tax system holistically. It identifies the aspects of the system that are performing well, and those that are lacking, proposing a range of options for reform which remain relevant today. The Case for Change aims to inform policy discussions and drive meaningful changes in Australia’s tax framework to bolster business growth and economic resilience;
- Incoming Government Brief: June 2025, which, following the federal election on 3 May 2025, details key tax and superannuation measures announced by previous governments that remain unenacted ahead of the commencement of the 48th Parliament, and certain other aspects of the system in dire need of reform;
- our recent submission to the Productivity Commission in response to its consultation on Pillar 1: Creating a More Dynamic and Resilient Economy, which outlines the crucial role of the tax system in shaping the Australian business landscape and key changes that can be made to foster investment and productivity growth; and
- our submission to the federal Treasury consultation ahead of the upcoming Economic Reform Roundtable.
We would be pleased to arrange a further meeting at your convenience to workshop any of the matters discussed in this submission ahead of the Art Reform Tax Summit, and to participate in that forum.
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.