The likely July 2 federal election has put the prospect of any real tax reform on the backburner, an accountancy firm says.
BDO expects the election will overshadow the May 3 budget and the federal government’s promised wide-ranging tax reform package that will be unveiled with it.
“I think the thing that is more likely than not to get put on the backburner is a serious conversation about tax reform,” BDO tax partner David Blake told AAP.
He said the consistent message from business has been the government needs to get on with it.
“Our clients are saying `we’re a little bit sick and tired of all this reform being proposed and then nothing happens’.”
The election is also expected to limit any real measures in the federal budget.
“The forthcoming election casts a very big shadow over this budget, so I’m expecting we will see a lot of rhetoric but not much in the way of real reform on 3 May,” BDO tax partner Mark Molesworth said.
Mr Blake said the real tax reform being sought by business meant rate reductions and removing the duplicity in the federal and state tax systems in terms of state imposts such as stamp duty, land tax and payroll tax.
“If you’re going to reform the system you ought not have so many layers of taxation,” he said.
Mr Blake said business also wanted the government to take a long-term view.
“If you’re taking a long-term view it seems to us that infrastructure would be the one place where you could make a serious productivity change.”
He said an infrastructure bond would provide a mechanism for direct investment in infrastructure by all superannuation funds for the long-term benefit of the country.