... the challenges of the 21st century
The Government will undertake a comprehensive review of Australia's tax system to create a tax structure that will position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century. The review will encompass Australian Government and State taxes and interactions with the transfer system, while observing the Government's commitment not to increase the GST and its aspirational goals for the income tax scale.
Positioning Australia's tax system
The 21st century will pose some significant challenges and opportunities for Australia, including:
- demographic shifts associated with an ageing population
- the rise of China, India and other emerging market economies
- responding to climate change and the introduction of an emission trading system.
With increasing globalisation, differences between countries in terms of factors such as legal frameworks,
political stability, and infrastructure are diminishing, bringing tax into sharper focus as a determinant of international competitiveness. As such, the impact of our personal and business tax regimes on economic performance is sensitive to how it compares with that of other countries.
While Australia's tax settings are comparable to those in countries with Governments of similar size and function, we cannot afford to be complacent. Across the OECD, and more broadly, there is ongoing interest in maintaining tax competitiveness.
Within this context, the review will make recommendations to enhance the overall economic, social and environmental wellbeing of Australians. It will do this within the context of:
- not raising the rate or broadening the base of the GST
- preserving tax‑free superannuation payments for those over 60 years of age
- the Government's announced aspirational personal income tax goals.
Corporate tax rates in Australia and the OECD 2008