Tax assistance and digitisation will attract investment and grow our economy, while major childcare and aged care reforms will give families the support they need

Tax assistance and digitisation will attract investment and grow our economy, while major childcare and aged care reforms will give families the support they need

• Employee share scheme reforms, a patent box tax regime to keep homegrown medical innovation in Australia, and incentives and streamlined assistance to better attract international investors and financial services providers will grow our economy
• An extension of the full expensing mechanism will continue to help Australian businesses grow themselves out of economic difficulty
• A $1.2 billion package to shore up Australia’s future as a leading digital economy and help businesses grow

AUSTRALIA – PwC Chief Executive Tom Seymour has tonight congratulated the Federal Government for delivering a budget that supports the next phase of Australia’s business-led economic recovery and positions business at the centrepoint of Australia’s return to growth.

“This is a Budget that puts business squarely in the engine room of our economic repair and recovery. Tax measures and deregulation initiatives mean businesses have the confidence they need to take risks, grow, employ more Australians and lead through innovation,” Seymour said.

“We are pleased the Federal Government has heeded calls for reforms to grow our startup and innovation industries with changes to employee share ownership rules and the introduction of a ‘patent box’ to incentivise investment in the medical and biotechnology industries.

“We know that in order to return to a consistent position of economic growth, we need to back the sectors that best drive our future economy. That’s why we’re delighted to see support for our burgeoning innovation sector and targeted incentives to attract international talent which has the potential to propel our growth to new heights.

“We are pleased to see a continued focus on deregulation as the Federal Government continues with its agenda. While regulation is important, the settings badly need a refresh so that it strikes the right balance between providing the consumer protections our nation needs, but not at an unnecessary impediment to productivity and growth.

“COVID-19 has prompted the world to fit a decade’s worth of digitisation in a few short months. Our handling of the pandemic puts us at an advantage over many parts of the world, but we can’t protect those hard-won gains without fully embracing the digital transformation. The Budget helps businesses embrace digital opportunities through a $1.2 billion package that includes upskilling, artificial intelligence capabilities, enhanced government services and through unlocking the value of data to the economy.”

Budget helps chart a course towards a business-led recovery

“This is a Budget that helps propel the nation from a state of economic rescue to a position of economic growth. We know that it’s the businesses across the nation that are critical to ensuring Australia maintains its advantage over the rest of the world to achieve this growth - and this is a Budget that helps them do just that,” said Seymour.

“2020 saw unprecedented measures designed to protect and preserve livelihoods and shield as many businesses as possible from the brunt of the pandemic, but this time around, the Federal Budget is a blueprint for sustainable and achievable economic growth - all while improving the nation’s fiscal position.

“The Budget helps address the challenge of how we progress the litany of projects in our infrastructure pipeline, and ensures we can take a longer-term and bigger picture approach to building Australia’s future. Rather than waiting to see how COVID-19 dictates our new normal, we have an opportunity to shape it.

“Perhaps most importantly of all, the Budget recognises the challenges working parents face every day juggling their dual roles. We know that what’s good for parents is invariably going to be good for our economy, thanks to increased productivity, workforce participation and household income - it makes so much sense.

“Funding to deliver aged care reforms will give Australian families a system they can count on. We believe these are essential reforms that will give more families, older Australians and their loved ones the flexibility, support and confidence they need.”

Sustainable tax measures to drive down compliance costs, maintain economic growth and ensure sensible fiscal management

Tax measures announced by Federal Treasurer Josh Frydenberg in the Federal Budget will further drive our recovery and return Australia to sustained economic growth - encouraging those businesses ready to take the next step in their recovery, and supporting those who are not.

“As we recover from the pandemic and find our new normal, Australia’s great strengths as a leader in research and development, innovation and technology will become more important than ever before. We have the talent here in Australia to make big inroads in this sector, and now, we have the support needed from the tax system to grow that innovation here - and keep it here.

“The full expensing mechanism from last year’s Budget has and will continue to help Australian businesses grow themselves out of economic difficulty - it is the very hallmark of a business-led recovery. We have long called for this initiative to be extended. We’re equally pleased to see a further extension to the temporary loss carry back regime - another tool to help businesses recover.

“We know that there is enormous potential for economic growth in our financial services sector. Our competitiveness with our neighbours is critical when it comes to attracting investment in Australia. The Budget helps incentivise this investment.”

But according to PwC Australia, while now is not the time for wholesale tax reform, a broader and more substantial overhaul of Australia’s tax legislation is ultimately required to address the over-reliance on personal and corporate taxes, intergenerational inequities, a reliance on unsustainable tax bases, the misalignment between revenues and responsibilities, and tax avoidance through the cash economy.

“While it’s reasonable to hold off on wholesale tax reform while we recover from the COVID-19 economic crisis, these are conversations that have to be had,” said Seymour.

“Now is the time for our leaders to be planning these major reforms. Tax reform will become all the more important as the Government seeks to find new ways to support expenditure, improve equity and promote economic growth.”

Notes to Editors

To request an interview with a PwC Australia expert, please contact Media Relations Manager Patrick Lane on 0437 884 010 or Head of Media Rachel Mulholland on 0467 654 011